42772 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 410, 414, 415, and 495 

[CMS–1524–P] 

RIN 0938–AQ25 

Medicare Program; Payment Policies 

Under the Physician Fee Schedule and 

Other Revisions to Part B for CY 2012 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This 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. It also addresses, 

implements or discusses certain 

provisions of the Patient Protection and 

Affordable Care Act, as amended by the 

Health Care and Education 

Reconciliation Act of 2010 (collectively 

known as the Affordable Care Act) and 

the Medicare Improvements for Patients 

and Providers Act of 2008. In addition, 

this proposed rule discusses payments 

for Part B drugs; Physician Quality 

Reporting System; the Electronic 

Prescribing (eRx) Incentive Program; the 

Physician Resource-Use Feedback 

Program and the value modifier; 

productivity adjustment for ambulatory 

surgical center payment system and the 

ambulance, clinical laboratory, and 

durable medical equipment prosthetics 

orthotics and supplies (DMEPOS) fee 

schedules; and other Part B related 

issues. (See the Table of Contents for a 

listing of the specific issues addressed 

in this proposed rule.) 

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 

August 30, 2011. 

ADDRESSES: In commenting, please refer 

to file code CMS–1524–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the instructions for ‘‘submitting a 

comment.’’ 

2. By regular mail. You may mail 

written comments to the following 

address only: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: 

CMS–1524–P, P.O. Box 8013, Baltimore, 

MD 21244–8013. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address only: 

Centers for Medicare & Medicaid 

Services,Department of Health and 

Human Services,Attention: 

CMS–1524–P,Mail Stop C4–26–05,7500 

Security Boulevard,Baltimore, MD 

21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments before the close 

of the comment period to either of the 

following addresses: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services,Department of Health and 

Human Services,Room 445–G, Hubert 

H. Humphrey Building,200 

Independence Avenue, 

SW.,Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services,Department of Health and 

Human Services,7500 Security 

Boulevard,Baltimore, MD 21244–1850. 

If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786– 

1066 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: 

Ryan Howe, (410) 786–3355, for 

issues related to the physician fee 

schedule practice expense methodology, 

direct practice expense inputs, and 

telehealth services. 

Elizabeth Truong, (410) 786–6005, or 

Sara Vitolo, (410) 786–5714, for issues 

related to potentially misvalued 

services. 

Ken Marsalek, (410) 786–4502, for 

issues related the multiple procedure 

payment reduction and pathology 

services. 

Sara Vitolo, (410) 786–5714, for issues 

related to malpractice RVUs. 

Michael Moore, (410) 786–6830, for 

issues related to geographic practice 

cost indices. 

Elizabeth Truong, (410) 786–6005, for 

issues related to the sustainable growth 

rate, or the anesthesia or physician fee 

schedule conversion factors. 

Bonny Dahm, (410) 786–4006, for 

issues related to payment for covered 

outpatient drugs and biologicals. 

Claudia Lamm, (410) 786–3421, for 

issues related to the chiropractic 

services demonstration budget 

neutrality issue. 

Jamie Hermansen, (410) 786–2064, or 

Stephanie Frilling, (410) 786–4507 for 

issues related to the annual wellness 

visit. 

Christine Estella, (410) 786–0485, for 

issues related to the physician quality 

reporting system, incentives for 

Electronic Prescribing (eRx) and 

Physician Compare. 

Gift Tee, (410) 786–9316, for issues 

related to the Physician Resource Use 

Feedback Program and physician value 

modifier. 

Stephanie Frilling, (410) 786–4507 for 

issues related to the 3-day Payment 

Window. 

Pam West, (410) 786–2302, for issues 

related to the technical corrections. 

Rebecca Cole or Erin Smith, (410) 

786–4497, for issues related to 

physician payment not previously 

identified. 

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 regulations.gov 

Web site (http://www.regulations.gov) as 

soon as possible after they have been 

received: Follow the search instructions 

on that Web site to view public 

comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

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Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42773 

Table of Contents 

To assist readers in referencing 

sections contained in this preamble, we 

are providing a table of contents. Some 

of the issues discussed in this preamble 

affect the payment policies, but do not 

require changes to the regulations in the 

Code of Federal Regulations (CFR). 

Information on the regulations impact 

appears throughout the preamble and, 

therefore, is not discussed exclusively 

in section VII. of this proposed rule. 

I. Background 

A. Development of the Relative Value 

System 

1. Work RVUs 

2. Practice Expense Relative Value Units 

(PE RVUs) 

3. Resource-Based Malpractice RVUs 

4. Refinements to the RVUs 

5. Application of Budget Neutrality to 

Adjustments of RVUs 

B. Components of the Fee Schedule 

Payment Amounts 

C. Most Recent Changes to Fee Schedule 

II. Provisions of the Proposed Rule for the 

Physician Fee Schedule 

A. Resource-Based Practice Expense (PE) 

Relative Value Units (RVUs) 

1. Overview 

2. Practice Expense Methodology 

a. Direct Practice Expense 

b. Indirect Practice Expense per Hour Data 

c. Allocation of PE to Services 

(1) Direct Costs 

(2) Indirect Costs 

d. Facility and Nonfacility Costs 

e. Services With Technical Components 

(TCs) and Professional Components 

(PCs) 

f. PE RVU Methodology 

(1) Setup File 

(2) Calculate the Direct Cost PE RVUs 

(3) Create the Indirect Cost PE RVUs 

(4) Calculate the Final PE RVUs 

(5) Setup File Information 

(6) Equipment Cost per Minute 

3. Changes to Direct PE Inputs 

a. Inverted Equipment Minutes 

b. Labor and Supply Input Duplication 

c. AMA RUC Recommendations for 

Moderation Sedation Direct PE Inputs 

d. Updates to Price and Useful Life for 

Existing Direct Inputs 

4. Development of Code-Specific PE RVUs 

5. Physician Time for Select Services 

B. Potentially Misvalued Services Under 

the Physician Fee Schedule 

1. Valuing Services Under the PFS 

2. Identifying, Reviewing, and Validating 

the RVUs of Potentially Misvalued 

Services Under the PFS 

a. Background 

b. Progress in Identifying and Reviewing 

Potentially Misvalued Codes 

c. Validating RVUs of Potentially 

Misvalued Codes 

3. Consolidating Reviews of Potentially 

Misvalued Codes 

4. Proposed Public Nomination Process 

5. CY 2012 Identification and Review of 

Potentially Misvalued Services 

a. Code Lists 

b. Specific Codes 

(1) Codes Potentially Requiring Updates to 

Direct PE Inputs 

(2) Codes Without Direct Practice Expense 

Inputs in the Non-Facility Setting 

(3) Codes Potentially Requiring Updates to 

Physician Work 

6. Code-Specific Issues 

a. CY 2012 Codes With Site-of-Service 

Anomalies 

(1) Background 

(2) Revised Work RVUs for Codes With 

Site-of-Service Anomalies 

(A) Foot Arthrodesis 

(B) Submandibular Gland Excision 

(C) Urological Procedures 

(D) Epidural Lysis 

(E) Intrathecal Epidural Catheters and 

Pumps 

(F) Neurostimulators 

(G) Repair of Eye Wound 

b. Payment for Bone Density Tests 

C. Expanding the Multiple Procedure 

Payment Reduction (MPPR) Policy 

1. Background 

2. CY 2012 Expansion of the MPPR Policy 

to the Professional Component of 

Advance Imaging Services 

3. Further Expansion of the MPPR Under 

Consideration for Future Year 

D. Malpractice RVUs 

1. Overview of the Methodology for 

Calculation of Malpractice RVUs 

2. Proposed Revisions to Malpractice RVUs 

for Certain Cardiothoracic Surgery 

Services 

E. Geographic Practice Cost Indices (GPCIs) 

1. Background 

2. Proposed GPCI Revisions for CY 2012 

a. Physician Work GPCIs 

b. Practice Expense GPCIs 

(1) Affordable Care Act Analysis and 

Revisions for PE GPCIs 

(A) General Analysis for the CY 2012 PE 

GPCIs 

(B) Analysis of ACS Rental Data 

(C) Employee Wage Analysis 

(D) Purchased Services Analysis 

(E) Determining the PE GPCI Cost Share 

Weights 

(i) Practice Expense 

(ii) Employee Compensation 

(iii) Office Rent 

(iv) Purchased Services 

(v) Equipment, Supplies, and Other Misc 

Expenses 

(vi) Physician Work and Malpractice GPCIs 

(F) PE GPCI Floor for Frontier States 

(2) Summary of CY 2012 PE Proposal 

c. Malpractice GPCIs 

3. Payment Localities 

4. Report From the Institute of Medicine 

III. Medicare Telehealth Services for the 

Physician Fee Schedule 

A. Billing and Payment for Telehealth 

Services 

1. History 

2. Current Telehealth Billing and Payment 

Policies 

B. Requests for Adding Services to the List 

of Medicare Telehealth Services 

C. Submitted Requests for Addition to the 

List of Telehealth Services for CY 2012 

1. Smoking Cessation Services 

2. Critical Care Services 

3. Domiciliary or Rest Home Evaluation 

and Management Services 

4. Genetic Counseling Services 

5. Online Evaluation and Management 

Services 

6. Data Collection Services 

7. Audiology Services 

D. The Process for Adding HCPCS Codes 

as Medicare Telehealth Services 

E. Telehealth Consultations in Emergency 

Departments 

IV. Other Provisions of the Proposed 

Regulation 

A. Part B Drug Payment: Average Sales 

Price (ASP) Issues 

1. Widely Available Market Price (WAMP)/ 

Average Manufacturer Price (AMP) 

2. AMP Threshold and Price Substitutions 

a. AMP Threshold 

b. AMP Price Substitution 

(1) Inspector General Studies 

(2) Proposal 

(3) Timeframe for and Duration of Price 

Substitutions 

3. ASP Reporting Update 

a. ASP Reporting Template Update 

b. Reporting of ASP Units and Sales 

Volume for Certain Products 

B. Discussion of Budget Neutrality for the 

Chiropractic Services Demonstration 

C. Proposed Productivity Adjustment for 

the Ambulatory Surgical Center Payment 

System, and the Ambulance, Clinical 

Laboratory and DMEPOS Fee Schedules 

D. Section 105: Extension of Payment for 

Technical Component of Certain 

Physician Pathology Services 

1. Background and Statutory Authority 

2. Proposed Revisions to Payment for TC 

of Certain Physician Pathology Services 

E. Section 4103 of the Affordable Care Act: 

Medicare Coverage and Payment of the 

Annual Wellness Visit Providing 

aPersonalized Prevention Plan Covered 

Under Medicare Part B 

1. Incorporation of a Health Risk 

Assessment as Part of the Annual 

Wellness Visit 

a. Background and Statutory Authority— 

Medicare Part B Coverage of an Annual 

Wellness Visit Providing Personalized 

Prevention Plan Services 

b. Implementation 

(1) Definition of a ‘‘Health Risk 

Assessment’’ 

(2) Proposed Changes to the Definitions of 

First Annual Wellness Visit and 

Subsequent Annual Wellness Visit 

2. The Addition of a Health Risk 

Assessment as a Required Element for 

the Annual Wellness Visit Beginning in 

2012 

a. Payment for AWV Services With the 

Inclusion of an HRA Element 

F. Quality Reporting Initiatives 

1. Physician Payment, Efficiency, and 

Quality Improvements—Physician 

Quality Reporting System 

a. Program Background and Statutory 

Authority 

b. Methods of Participation 

(1) Individual Eligible Professionals 

(2) Group Practices 

(A) Background and Authority 

(B) Proposed Definition of Group Practice 

(C) Proposed Process for Physician Group 

Practices to Participate as Group 

Practices 

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42774 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

c. Proposed Reporting Period 

d. Proposed Reporting Mechanisms— 

Individual Eligible Professionals 

(1) Claims-Based Reporting 

(2) Registry-Based Reporting 

(A) Proposed Requirements for the 

Registry-Based Reporting Mechanism— 

Individual Eligible Professionals 

(B) 2012 Proposed Qualification 

Requirements for Registries 

(3) EHR-Based Reporting 

(A) Direct EHRs 

(i) Proposed Requirements for the Direct 

EHR-Based Reporting Mechanism— 

Individual Eligible Professionals 

(ii) 2012 Proposed Qualification 

Requirements for Direct EHRs 

(B) EHR Data Submission Vendors 

(i) 2012 Proposed Qualification 

Requirements for EHR Data Submission 

Vendors 

(C) Proposed Qualification Requirements 

for EHR Direct and Data Submission 

Vendors and Their Products for the 2013 

Physician Quality Reporting System 

e. Incentive Payments for the 2012 

Physician Quality Reporting System 

(1) Proposed Criteria for Satisfactory 

Reporting of Individual Quality 

Measures for Individual Eligible 

Professionals via Claims 

(2) Proposed 2012 Criteria for Satisfactory 

Reporting of Individual Quality 

Measures for Individual Eligible 

Professionals via Registry 

(3) Proposed Criteria for Satisfactory 

Reporting of Individual Quality 

Measures for Individual Eligible 

Professionals via EHR 

(4) Proposed Criteria for Satisfactory 

Reporting of Measures Groups via 

Claims—Individual Eligible 

Professionals 

(5) Proposed 2012 Criteria for Satisfactory 

Reporting of Measures Groups via 

Registry—Individual Eligible 

Professionals 

(6) Proposed 2012 Criteria for Satisfactory 

Reporting on Physician Quality 

Reporting System Measures by Group 

Practices Under the GPRO 

f. 2012 Physician Quality Reporting System 

Measures 

(1) Statutory Requirements for the 

Selection of Proposed 2012 Physician 

Quality Reporting System Measures 

(2) Other Considerations for the Selection 

of Proposed 2012 Physician Quality 

Reporting System Measures 

(3) Proposed 2012 Physician Quality 

Reporting System Individual Measures 

(A) Proposed 2012 Physician Quality 

Reporting System Core Measures 

Available for Claims, Registry, and/or 

EHR-Based Reporting 

(B) Proposed 2012 Physician Quality 

Reporting System Individual Measures 

for Claims and Registry Reporting 

(C) Proposed 2012 Measures Available for 

EHR-Based Reporting 

(4) 2012 Physician Quality Reporting 

System Measures Groups 

(5) Proposed 2012 Physician Quality 

Reporting System Quality Measures for 

Group Practices Selected To Participate 

in the GPRO (GPRO) 

g. Maintenance of Certification Program 

Incentive 

h. Feedback Reports 

i. Informal Review 

j. Future Payment Adjustments for the 

Physician Quality Reporting System 

2. Incentives and Payment Adjustments for 

Electronic Prescribing (eRx)—The 

Electronic Prescribing Incentive Program 

a. Program Background and Statutory 

Authority 

b. Eligibility 

(1) Individual Eligible Professionals 

(A) Definition of Eligible Professional 

(2) Group practices 

(A) Proposed Definition of ‘‘Group 

Practice’’ 

(B) Proposed Process To Participate in the 

eRx Incentive Program—eRx GPRO 

c. Proposed Reporting Periods 

(1) Proposed Reporting Periods for the 

2012 and 2013 eRx Incentives 

(2) Proposed Reporting Periods for the 

2013 and 2014 eRx Payment 

Adjustments 

d. Proposed Criteria for Determining 

Successful Electronic Prescribers 

(1) Reporting the Electronic Prescribing 

Quality Measure 

(2) The Reporting Denominator for the 

Electronic Prescribing Measure 

(3) The Numerator for the Electronic 

Prescribing Measure 

e. Required Functionalities and Part D 

Electronic Prescribing Standards 

(1) ‘‘Qualified’’ Electronic Prescribing 

System 

(2) Part D Electronic Prescribing Standards 

f. Proposed Reporting Mechanisms for the 

2012 and 2013 Reporting Periods 

(1) Claims-Based Reporting 

(2) Registry-Based Reporting 

(3) EHR-Based Reporting 

g. The 2012 and 2013 eRx Incentives 

(1) Applicability of 2012 and 2013 eRx 

Incentives for Eligible Professionals and 

eRx GPROs 

(2) Proposed Reporting Criteria for Being a 

Successful Electronic for the 2012 and 

2013 eRx Incentives—Individual Eligible 

Professionals 

(3) Proposed Criteria for Being a Successful 

Electronic Prescriber 2012 and 2013 eRx 

Incentives—Group Practices 

(4) No Double Payments 

h. The 2013 and 2014 Electronic 

Prescribing Payment Adjustments 

(1) Proposed Limitations to the 2013 and 

2014 eRx Payment Adjustments— 

Individual Eligible Professionals 

(2) Proposed Requirements for the 2013 

and 2014 eRx Payment Adjustments— 

Individual Eligible Professionals 

(3) Proposed Requirements for the 2013 

and 2014 eRx Payment Adjustments— 

Group Practices 

(4) Significant Hardship Exemptions 

(A) Proposed Significant Hardship 

Exemptions 

(i) Inability to Electronically Prescribe Due 

to Local, State, or Federal Law or 

Regulation 

(ii) Eligible Professionals Who Prescribe 

Fewer Than 100 Prescriptions During a 

6-Month, Payment Adjustment Reporting 

Period 

(B) Process for Submitting Significant 

Hardship Exemptions—Individual 

Eligible Professionals 

G. Physician Compare Web Site 

1. Background and Statutory Authority 

2. Proposed Plans 

H. Medicare EHR Incentive Program for 

Eligible Professionals for the 2012 

Payment Year 

1. Background 

2. The Proposed Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot 

a. EHR Data Submission Vendor-Based 

Reporting Option 

b. EHR-Based Reporting Option 

3. Method for EPs To Indicate Election To 

Participate in the Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot for Payment Year 2012 

I. Improvements to the Physician Feedback 

Program and Establishment of the ValueBased Payment Modifier (Effect of 

Sections 3003 and 3007 of the Affordable 

Care Act on the Program) 

1. Overview 

2. Background 

3. Future Considerations for Phase III 

Physician Feedback Program 

a. Phase III Physician Feedback Reports 

(Fall 2011) Feedback Program 

(1) Physician Group Reports 

(2) Reports to Individual Physicians 

b. Refinement of the Physician Feedback 

Program in 2011: Individual Physicians/ 

Medical Group Practices/Specialties 

c. Beyond 2011: Future Scale Up and 

Dissemination for Increased Physician 

Feedback Reporting 

4. The Value-Based Payment Modifier: 

Section 3007 of the Affordable Care Act 

a. Measures of Quality of Care and Costs 

(1) Quality of Care Measures 

(A) Proposed Quality of Care Measures for 

the Value-Modifier 

(B) Potential Quality of Care Measures for 

Additional Dimensions of Care in the 

Value Modifier 

(i) Outcome Measures 

(ii) Care Coordination/Transition Measures 

(iii) Patient Safety, Patient Experience and 

Functional Status 

(2) Cost Measures 

(A) Proposed Cost Measures for the Value 

Modifier 

(B) Potential Cost Measures for Future Use 

in the Value Modifier 

b. Assessing Physician Performance and 

Applying the Value Modifier 

c. Dates for Implementation of the Value 

Modifier 

d. Initial Performance Period 

e. Other Issues 

(1) Systems-Based Care 

(2) Special Circumstances for Physicians in 

Rural Areas and Other Underserved 

Communities 

J. Bundling of Payments for Services 

Provided to Outpatients Who Later Are 

Admitted as Inpatients: 3-Day Payment 

Window Policy and the Impact on 

Wholly Owned or Wholly Operated 

Physician Practices 

1. Introduction 

2. Background 

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Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42775 

3. Applicability of the 3-Day Payment 

Window Policy for Services Furnished in 

Physician Practices 

a. Payment Methodology 

b. Identification of Wholly Owned or 

Wholly Operated Physician Practices 

K. Hospital Discharge Care Coordination 

L. Technical Corrections 

1. Outpatient Speech-Language Pathology 

Services: Conditions and Exclusions 

2. Outpatient Diabetes Self-Management 

Training and Diabetes Outcome 

Measurements 

a. Proposed Changes to the Definition of 

Deemed Entity 

b. Proposed Changes to the Condition of 

Coverage Regarding Training Orders 

3. Practice Expense Relative Value Units 

(RVUs) 

V. Collection of Information Requirements 

A. Part B Drug Payment 

B. The Physician Quality Reporting System 

(formerly the Physician Quality 

Reporting Initiative (PQRI)) 

C. Electronic Prescribing (eRx) Incentive 

Program 

D. Proposed Changes to the Medicare 

Electronic Health Record (EHR) 

Incentive Program for Eligible 

Professionals for the 2012 Payment Year 

VI. Response to Comments 

VII. Regulatory Impact Analysis 

A. Statement of Need 

B. Overall Impact 

C. RVU Impacts 

1. Resource-Based Work, PE, and 

Malpractice RVUs 

2. CY 2012 PFS Impact Discussion 

a. Changes in RVUs 

b. Combined Impact 

D. Effects of Proposal To Review 

Potentially Misvalued Codes on an 

Annual Basis Under the PFS 

E. Effect of Proposed Revisions to 

Malpractice RUVs 

F. Effect of Proposed Changes to 

Geographic Practice Cost Indices (GPCIs) 

G. Effects of Proposed Changes to Medicare 

Telehealth Services Under the Physician 

Fee Schedule 

H. Effects of Impact of Other Provisions of 

the Proposed Rule 

1. Part B Drug Payment: ASP Issues 

2. Discussion of Budget Neutrality for the 

Chiropractic Services Demonstration 

3. Extension of Payment for Technical 

Component of Certain Physician 

Pathology Services 

4. Section 4103: Medicare Coverage of 

Annual Wellness Visit Providing a 

Personalized Prevention Plan: 

Incorporation of a Health Risk 

Assessment as Part of the Annual 

Wellness Visit. 

5. Physician Payment, Efficiency, and 

Quality Improvements—Physician 

Quality Reporting System 

6. Incentives for Electronic Prescribing 

(eRx)—The Electronic Prescribing 

Incentive Program 

7. Physician Compare Web Site 

8. Medicare EHR Incentive Program 

9. Physician Feedback Program/Value 

Modifier Payment 

10. Bundling of Payments for Services 

Provided to Outpatients Who Later Are 

Admitted as Inpatients: 3-Day Payment 

Window Policy and the Impact on 

Wholly Owned or Wholly Operated 

Physician Offices 

I. Alternatives Considered 

J. Impact on Beneficiaries 

K. Accounting Statement 

L. Conclusion 

VIII. Addenda Referenced in This Proposed 

Rule and Available Only Through the 

Internet on the CMS Web Site 

Regulations Text 

Acronyms 

In addition, because of the many 

organizations and terms to which we 

refer by acronym in this proposed rule, 

we are listing these acronyms and their 

corresponding terms in alphabetical 

order as follows: 

AA—Anesthesiologist assistant 

AACE—American Association of Clinical 

Endocrinologists 

AACVPR—American Association of 

Cardiovascular and Pulmonary 

Rehabilitation 

AADE—American Association of Diabetes 

Educators 

AANA—American Association of Nurse 

Anesthetists 

ABMS—American Board of Medical 

Specialties 

ABN—Advanced Beneficiary Notice 

ACC—American College of Cardiology 

ACGME—Accreditation Council on Graduate 

Medical Education 

ACLS—Advanced cardiac life support 

ACP—American College of Physicians 

ACR—American College of Radiology 

ACS—American Community Survey 

ADL—Activities of daily living 

AED—Automated external defibrillator 

AFROC—Association of Freestanding 

Radiation Oncology Centers 

AFS—Ambulance Fee Schedule 

AHA—American Heart Association 

AHFS–DI—American Hospital Formulary 

Service-Drug Information 

AHRQ—[HHS] Agency for Healthcare 

Research and Quality 

AMA—American Medical Association 

AMA RUC—[AMA’s Specialty Society] 

Relative (Value) Update Committee 

AMA–DE—American Medical Association 

Drug Evaluations 

AMI—Acute Myocardial Infarction 

AMP—Average Manufacturer Price 

AO—Accreditation organization 

AOA—American Osteopathic Association 

APA—American Psychological Association 

APC—Administrative Procedures Act 

APTA—American Physical Therapy 

Association 

ARRA—American Recovery and 

Reinvestment Act (Pub. L. 111–5) 

ASC—Ambulatory surgical center 

ASP—Average Sales Price 

ASPE—Assistant Secretary of Planning and 

Evaluation (ASPE) 

ASRT—American Society of Radiologic 

Technologists 

ASTRO—American Society for Therapeutic 

Radiology and Oncology 

ATA—American Telemedicine Association 

AWP—Average wholesale price 

AWV—Annual Wellness Visit 

BBA—Balanced Budget Act of 1997 (Pub. L. 

105–33) 

BBRA—[Medicare, Medicaid and State Child 

Health Insurance Program] Balanced 

Budget Refinement Act of 1999 (Pub. L. 

106–113) 

BIPA—Medicare, Medicaid, and SCHIP 

Benefits Improvement Protection Act of 

2000 (Pub. L. 106–554) 

BLS—Bureau of Labor and Statistics 

BMD—Bone mineral density 

BMI—Body mass index 

BN—Budget neutrality 

BPM—Benefit Policy Manual 

CABG—Coronary artery bypass graft 

CAD—Coronary artery disease 

CAH—Critical Access Hospital 

CAHEA—Committee on Allied Health 

Education and Accreditation 

CAP—Competitive acquisition program 

CARE—Continuity Assessment Record and 

Evaluation 

CBIC—Competitive Bidding Implementation 

Contractor 

CBP—Competitive Bidding Program 

CBSA—Core-Based Statistical Area 

CDC—Centers for Disease Control and 

Prevention 

CEM—Cardiac Event Monitoring 

CF—Conversion Factor 

CFC—Conditions for Coverage 

CFR—Code of Federal Regulations 

CKD—Chronic kidney disease 

CLFS—Clinical laboratory fee schedule 

CMA—California Medical Association 

CMD—Contractor Medical Director 

CME—Continuing medical education 

CMHC—Community Mental Health Center 

CMPs—Civil money penalties 

CMS—Centers for Medicare & Medicaid 

Services 

CNS—Clinical Nurse Specialist 

CoP—Condition of participation 

COPD—Chronic obstructive pulmonary 

disease 

CORF—Comprehensive Outpatient 

Rehabilitation Facility 

COS—Cost of service 

CPEP—Clinical Practice Expert Panel 

CPI—Consumer Price Index 

CPI–U Consumer price index for urban 

consumers 

CPR—Cardiopulmonary resuscitation 

CPT—[Physicians] Current Procedural 

Terminology (4th Edition, 2002, 

copyrighted by the American Medical 

Association) 

CQM—Clinical quality measures 

CR—Cardiac rehabilitation 

CRF—Chronic Renal Failure 

CRNA—Certified registered nurse anesthetist 

CROs—Clinical research organizations 

CRP—Canalith repositioning 

CRT—Certified respiratory therapist 

CSC—Computer Sciences Corporation 

CSW—Clinical social worker 

CT—Computed Tomography 

CTA—Computed Tomography Angography 

CWF—Common Working File 

CY—Calendar Year 

D.O.—Doctor of Osteopathy 

DEA—Drug Enforcement Agency 

DHHS—Department of Health and Human 

Services 

DHS—Designated health services 

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DME—Durable Medical Equipment 

DMEPOS—Durable medical equipment, 

prosthetics, orthotics, and supplies 

DOJ—Department of Justice 

DOQ—Doctors Office Quality 

DOS—Date of service 

DOTPA—Development of Outpatient 

Therapy Alternatives 

DRA—Deficit Reduction Act of 2005 (Pub. L. 

109–171) 

DSMT—Diabetes Self-Management Training 

Services 

DXA CPT—Dual energy X-ray absorptiometry 

E/M—Evaluation and Management Medicare 

Services 

ECG—Electrocardiogram 

EDI—Electronic data interchange 

EEG—Electroencephalogram 

EGC—Electrocardiogram 

EHR—Electronic health record 

EKG—Electrocardiogram 

EMG—Electromyogram 

EMTALA—Emergency Medical Treatment 

and Active Labor Act 

EOG—Electro-oculogram 

EPO—Erythopoeitin 

EPs—Eligible Professional 

eRx—Electronic Prescribing 

ESO—Endoscopy Supplies 

ESRD—End-Stage Renal Disease 

FAA—Federal Aviation Administration 

FAX—Facsimile 

FDA—Food and Drug Administration (HHS) 

FFS—Fee-for-service 

FISH—In Situ Hybridization Testing 

FOTO—Focus On Therapeutic Outcomes 

FQHC—Federally Qualified Health Center 

FQHC—Federally Qualified Health Center 

FR—Federal Register 

FTE—full time equivalent 

GAF—Geographic adjustment factor 

GAFs—Geographic Adjustment Factors 

GAO—Government Accountability Office 

GEM—Generating Medicare [Physician 

Quality Performance Measurement 

Results] 

GFR—Glomerular filtration rate 

GME—Graduate Medical Education 

GPCIs—Geographic Practice Cost Indices 

GPO—Group purchasing organization 

GPOs—Group purchasing organizations 

GPRO—Group Practice Reporting Option 

GPS—Geographic Positioning System 

GQ—Via asynchronous telecommunications 

system 

GSA—General Services Administration 

GT—Growth Target 

HAC—Hospital-acquired conditions 

HBAI—Health and Behavior Assessment and 

Intervention 

HCC—Hierarchal Condition Category 

HCPAC—Health Care Professionals Advisory 

Committee 

HCPCS—Healthcare Common Procedure 

Coding System 

HCRIS—Healthcare Cost Report Information 

System 

HDL/LDL—High-density lipoprotein/Lowdensity lipoprotein 

HDRT—High dose radiation therapy 

HEMS—Helicopter Emergency Medical 

Services 

HH PPS—Home Health Prospective Payment 

System 

HHA—Home health agency 

HHRG—Home health resource group 

HHS—[Department of] Health and Human 

Services 

HIPAA—Health Insurance Portability and 

Accountability Act of 1996 (Pub. L. 104– 

191) 

HIT—Health information technology 

HITECH—Health Information Technology for 

Economic and Clinical Health Act (Title 

IV of Division B of the Recovery Act, 

together with Title XIII of Division A of 

the Recovery Act) 

HITSP—Healthcare Information Technology 

Standards Panel 

HIV—Human immunodeficiency virus 

HMO—Health Maintenance Organization 

HOPD—Hospital outpatient department 

HPSA—Health Professional Shortage Area 

HRA—Health Risk Assessment 

HRSA—Health Resources Services 

Administration (HHS) 

HSIP—HPSA Surgical Incentive Program 

HUD—Department of Housing and Urban 

Development 

HUD—Housing and Urban Development 

IACS—Individuals Access to CMS Systems 

IADL—Instrumental activities of daily living 

ICD—International Classification of Diseases 

ICF—Intermediate care facilities 

ICF—International Classification of 

Functioning, Disability and Health 

ICR—Intensive cardiac rehabilitation 

ICR—Information collection requirement 

IDE—Investigational device exemption 

IDTF—Independent diagnostic testing facility 

IFC—Interim final rule with comment period 

IGI—IHS Global Insight, Inc. 

IME—Indirect Medical Education 

IMRT—Intensity-Modulated Radiation 

Therapy 

INR—International Normalized Ratio 

IOM—Institute of Medicine 

IOM—Internet Only Manual 

IPCI—indirect practice cost index 

IPPE—Initial preventive physical 

examination 

IPPS—Inpatient prospective payment system 

IRS—Internal Revenue Service 

ISO—Insurance services office 

IVD—Ischemic Vascular Disease 

IVIG—Intravenous immune globulin 

IWPUT—Intra-service work per unit of time 

JRCERT—Joint Review Committee on 

Education in Radiologic Technology 

KDE—Kidney Disease Education 

LCD—Local coverage determination 

LOPS—loss of protective sensation 

LUGPA—Large Urology Group Practice 

Association 

M.D.—Doctor of Medicine 

MA—Medicare Advantage program 

MAC—Medicare Administrative Contractor 

MA–PD—Medicare Advantage-Prescription 

Drug Plans 

MAV—Measure Applicability Validation 

MCMP—Medicare Care Management 

Performance 

MCP—Monthly Capitation Payment 

MDRD—Modification of Diet in Renal 

Disease 

MedCAC—Medicare Evidence Development 

and Coverage Advisory Committee 

(formerly the Medicare Coverage 

Advisory Committee (MCAC)) 

MedPAC—Medicare Payment Advisory 

Commission 

MEI—Medicare Economic Index 

MGMA—Medical Group Management 

Association 

MIEA–TRHCA—Medicare Improvements and 

Extension Act of 2006 (that is, Division 

B) of the Tax Relief and Health Care Act 

of 2006 (TRHCA) (Pub. L. 109–432) 

MIPPA—Medicare Improvements for Patients 

and Providers Act of 2008 (Pub. L. 110– 

275) 

MMA—Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (Pub. L. 108–173) 

MMEA—Medicare and Medicaid Extenders 

Act of 2010 (Pub. L. 111–309) 

MMSEA—Medicare, Medicaid, and SCHIP 

Extension Act of 2007 (Pub. L. 110–173) 

MNT—Medical Nutrition Therapy 

MOC—Maintenance of certification 

MP—Malpractice 

MPC—Multispecialty Points of Comparison 

MPPR—Multiple Procedure Payment 

Reduction Policy 

MQSA—Mammography Quality Standards 

Act of 1992 (Pub. L. 102–539) 

MRA—Magnetic Resonance Angiography 

MRI—Magnetic Resonance Imaging 

MSA—Metropolitan Statistical Area 

MSP—Medicare Secondary Payer 

MUE—Medically Unlikely Edit 

NAICS—North American Industry 

Classification System 

NBRC—National Board for Respiratory Care 

NCCI—National Correct Coding Initiative 

NCD—National Coverage Determination 

NCQA—National Committee for Quality 

Assurance 

NCQDIS—National Coalition of Quality 

Diagnostic Imaging Services 

NDC—National Drug Codes 

NF—Nursing facility 

NISTA—National Institute of Standards and 

Technology Act 

NP—Nurse practitioner 

NPI—National Provider Identifier 

NPP—Nonphysician practitioner 

NPPES—National Plan & Provider 

Enumeration System 

NPPs—Nonphysician Practioners 

NQF—National Quality Forum 

NRC—Nuclear Regulatory Commission 

NSQIP—National Surgical Quality 

Improvement Program 

NTSB—National Transportation Safety Board 

NUBC—National Uniform Billing Committee 

OACT—[CMS] Office of the Actuary 

OBRA—Omnibus Budget Reconciliation Act 

OCR—Optical Character Recognition 

ODF—Open door forum 

OES—Occupational Employment Statistics 

OGPE—Oxygen generating portable 

equipment 

OIG—Office of the Inspector General 

OMB—Office of Management and Budget 

ONC—[HHS] Office of the National 

Coordinator for Health IT 

OPPS—Outpatient prospective payment 

system 

OSCAR—Online Survey and Certification 

and Reporting 

PA—Physician Assistant 

PACE—Program of All-inclusive Care for the 

Elderly 

PACMBPRA—Preservation of Access to Care 

for Medicare Beneficiaries and Pension 

Relief Act of 2010 (Pub. L. 111–192) 

PAT—Performance assessment tool 

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PC—Professional Components 

PCI—Percutaneous coronary intervention 

PCIP—Primary Care Incentive Payment 

Program 

PDP—Prescription drug plan 

PE—Practice Expense 

PE/HR—Practice expense per hour 

PEAC—Practice Expense Advisory 

Committee 

PECOS—Provider Enrollment Chain and 

Ownership System 

PERC—Practice Expense Review Committee 

PFS—Physician Fee Schedule 

PGP—[Medicare] Physician Group Practice 

PHI—Protected health information 

PHP—Partial hospitalization program 

PIM—[Medicare] Program Integrity Manual 

PLI—Professional liability insurance 

POA—Present on admission 

POC—Plan of care 

PODs—Physician owned distributors 

PPATRA—Physician Payment and Therapy 

Relief Act 

PPI—Producer price index 

PPIS—Physician Practice Expense 

Information Survey 

PPPS—Personalized Prevention Plan 

Services 

PPS—Prospective payment system 

PPTA—Plasma Protein Therapeutics 

Association 

PQRI—Physician Quality Reporting Initiative 

PR—Pulmonary rehabilitation 

PRA—Paperwork Reduction Act 

PSA—Physician scarcity areas 

PT—Physical therapy 

PTA—Physical therapy assistant 

PTCA—Percutaneous transluminal coronary 

angioplasty 

PVBP—Physician and Other Health 

Professional Value-Based Purchasing 

Workgroup 

QDCs—(Physician Quality Reporting System) 

Quality Data Codes 

RA—Radiology assistant 

RAC—Medicare Recovery Audit Contractor 

RBMA—Radiology Business Management 

Association 

RFA—Regulatory Flexibility Act 

RHC—Rural Health Clinic 

RHQDAPU—Reporting Hospital Quality Data 

Annual Payment Update Program 

RIA—Regulatory impact analysis 

RN—Registered nurse 

RNAC—Reasonable net acquisition cost 

RPA—Radiology practitioner assistant 

RRT—Registered respiratory therapist 

RUC—[AMA’s Specialty Society] Relative 

(Value) Update Committee 

RVRBS—Resource-Based Relative Value 

Scale 

RVU—Relative Value Unit 

SBA—Small Business Administration 

SCHIP—State Children’s Health Insurance 

Programs 

SDW—Special Disability Workload 

SGR—Sustainable growth rate 

SLP—Speech-language pathology 

SMS—Socioeconomic Monitoring Surveys 

SMS—Monitoring Survey 

SMS—[AMAs] Socioeconomic Monitoring 

System 

SNF—Skilled Nursing Facility 

SOR—System of record 

SRS—Stereotactic radiosurgery 

SSA—Social Security Administration 

SSI—Social Security Income 

STARS—Services Tracking and Reporting 

System 

STATS—Short Term Alternatives for 

Therapy Services 

STS—Society for Thoracic Surgeons 

TC—Technical Components 

TIN—Tax identification number 

TJC—Joint Commission 

TRHCA—Tax Relief and Health Care Act of 

2006 (Pub. L. 109–432) 

TTO—Transtracheal oxygen 

UAF—Update Adjustment Factor 

UPMC—University of Pittsburgh Medical 

Center 

URAC—Utilization Review Accreditation 

Committee 

USDE—United States Department of 

Education 

USP–DI—United States Pharmacopoeia-Drug 

Information 

VA—Department of Veterans Affairs 

VBP—Value-based purchasing 

WAC—Wholesale Acquisition Cost 

WAMP—Widely available market price 

WAMP—Widely Available Market Price 

WHO—World Health Organization 

Addenda Available Only Through the 

Internet on the CMS Web Site 

In the past, the Addenda referred to 

throughout the preamble of our annual 

PFS proposed and final rules with 

comment period were included in the 

printed Federal Register. However, 

beginning with the CY 2012 PFS 

proposed rule, the PFS Addenda will no 

longer appear in the Federal Register. 

Instead these Addenda to the annual 

proposed and final rules with comment 

period will be available only through 

the Internet. The PFS Addenda along 

with other supporting documents and 

tables referenced in this proposed rule 

are available through the Internet on the 

CMS Web site 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 2012 PFS proposed rule, 

refer to item CMS–1524–P. For complete 

details on the availability of the 

Addenda referenced in this proposed 

rule, we refer readers to section VIII. of 

this proposed rule. Readers who 

experience any problems accessing any 

of the Addenda or other documents 

referenced in this proposed rule and 

posted on the CMS Web site identified 

above should contact Erin Smith at 

(410) 786–4497. 

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 2010 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. Background 

Since January 1, 1992, Medicare has 

paid for physicians’ services under 

section 1848 of the Social Security Act 

(the Act), ‘‘Payment for Physicians’ 

Services.’’ The Act requires that 

payments under the physician fee 

schedule (PFS) are based on national 

uniform relative value units (RVUs) 

based on the relative resources used in 

furnishing a service. Section 1848(c) of 

the Act requires that national RVUs be 

established for physician work, practice 

expense (PE), and malpractice expense. 

Before the establishment of the 

resource-based relative value system, 

Medicare payment for physicians’ 

services was based on reasonable 

charges. We note that throughout this 

proposed rule, unless otherwise noted, 

the term ‘‘practitioner’’ is used to 

describe both physicians and 

nonphysician practitioners (such as 

physician assistants, nurse practitioners, 

clinical nurse specialists, certified 

nurse-midwives, psychologists, or social 

workers) that are permitted to furnish 

and bill Medicare under the PFS for 

their services. 

A. Development of the Relative Value 

System 

1. Work RVUs 

The concepts and methodology 

underlying the PFS were enacted as part 

of the Omnibus Budget Reconciliation 

Act (OBRA) of 1989 (Pub. L. 101–239), 

and OBRA 1990, (Pub. L. 101–508). The 

final rule, published on November 25, 

1991 (56 FR 59502), set forth the fee 

schedule for payment for physicians’ 

services beginning January 1, 1992. 

Initially, only the physician work RVUs 

were resource-based, and the PE and 

malpractice RVUs were based on 

average allowable charges. 

The physician work RVUs established 

for the implementation of the fee 

schedule in January 1992 was 

developed with extensive input from 

the physician community. A research 

team at the Harvard School of Public 

Health developed the original physician 

work RVUs for most codes in a 

cooperative agreement with the 

Department of Health and Human 

Services (DHHS). In constructing the 

code-specific vignettes for the original 

physician work RVUs, Harvard worked 

with panels of experts, both inside and 

outside the Federal government, and 

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obtained input from numerous 

physician specialty groups. 

Section 1848(b)(2)(B) of the Act 

specifies that the RVUs for anesthesia 

services are based on RVUs from a 

uniform relative value guide, with 

appropriate adjustment of the 

conversion factor (CF), in a manner to 

assure that fee schedule amounts for 

anesthesia services are consistent with 

those for other services of comparable 

value. We established a separate CF for 

anesthesia services, and we continue to 

utilize time units as a factor in 

determining payment for these services. 

As a result, there is a separate payment 

methodology for anesthesia services. 

We establish physician work RVUs for 

new and revised codes based, in part, on 

our review of recommendations 

received from the American Medical 

Association’s (AMA’s) Specialty Society 

Relative Value Update Committee 

(RUC). 

2. Practice Expense Relative Value Units 

(PE RVUs) 

Section 121 of the Social Security Act 

Amendments of 1994 (Pub. L. 103–432), 

enacted on October 31, 1994, amended 

section 1848(c)(2)(C)(ii) of the Act and 

required us to develop resource-based 

PE RVUs for each physicians service 

beginning in 1998. We were to consider 

general categories of expenses (such as 

office rent and wages of personnel, but 

excluding malpractice expenses) 

comprising PEs. 

Section 4505(a) of the Balanced 

Budget Act of 1997 (BBA) (Pub. L. 105– 

33), amended section 1848(c)(2)(C)(ii) of 

the Act to delay implementation of the 

resource-based PE RVU system until 

January 1, 1999. In addition, section 

4505(b) of the BBA provided for a 4-year 

transition period from charge-based PE 

RVUs to resource-based RVUs. 

We established the resource-based PE 

RVUs for each physician’s service in a 

final rule, published November 2, 1998 

(63 FR 58814), effective for services 

furnished in 1999. Based on the 

requirement to transition to a resourcebased system for PE over a 4-year 

period, resource-based PE RVUs did not 

become fully effective until 2002. 

This resource-based system was based 

on two significant sources of actual PE 

data: The Clinical Practice Expert Panel 

(CPEP) data and the AMA’s 

Socioeconomic Monitoring System 

(SMS) data. The CPEP data were 

collected from panels of physicians, 

practice administrators, and 

nonphysician health professionals (for 

example, registered nurses (RNs)) 

nominated by physician specialty 

societies and other groups. The CPEP 

panels identified the direct inputs 

required for each physician’s service in 

both the office setting and out-of-office 

setting. We have since refined and 

revised these inputs based on 

recommendations from the AMA RUC. 

The AMA’s SMS data provided 

aggregate specialty-specific information 

on hours worked and PEs. 

Separate PE RVUs are established for 

procedures that can be performed in 

both a nonfacility setting, such as a 

physician’s office, and a facility setting, 

such as a hospital outpatient 

department (HOPD). The difference 

between the facility and nonfacility 

RVUs reflects the fact that a facility 

typically receives separate payment 

from Medicare for its costs of providing 

the service, apart from payment under 

the PFS. The nonfacility RVUs reflect all 

of the direct and indirect PEs of 

providing a particular service. 

Section 212 of the Balanced Budget 

Refinement Act of 1999 (BBRA) (Pub. L. 

106–113) directed the Secretary of 

Health and Human Services (the 

Secretary) to establish a process under 

which we accept and use, to the 

maximum extent practicable and 

consistent with sound data practices, 

data collected or developed by entities 

and organizations to supplement the 

data we normally collect in determining 

the PE component. On May 3, 2000, we 

published the interim final rule (65 FR 

25664) that set forth the criteria for the 

submission of these supplemental PE 

survey data. The criteria were modified 

in response to comments received, and 

published in the Federal Register (65 

FR 65376) as part of a November 1, 2000 

final rule. The PFS final rules published 

in 2001 and 2003, respectively, (66 FR 

55246 and 68 FR 63196) extended the 

period during which we would accept 

these supplemental data through March 

1, 2005. 

In the calendar year (CY) 2007 PFS 

final rule with comment period (71 FR 

69624), we revised the methodology for 

calculating direct PE RVUs from the topdown to the bottom-up methodology 

beginning in CY 2007 and provided for 

a 4-year transition for the new PE RVUs 

under this new methodology. This 

transition ended in CY 2010 and direct 

PE RVUs are calculated in CY 2012 

using this methodology, unless 

otherwise noted. 

In the CY 2010 PFS final rule with 

comment period (74 FR 61749), we 

updated the PE/hour (PE/HR) data that 

are used in the calculation of PE RVUs 

for most specialties. For this update, we 

used the Physician Practice Information 

Survey (PPIS) conducted by the AMA. 

The PPIS is a multispecialty, nationally 

representative, PE survey of both 

physicians and nonphysician 

practitioners (NPPs) using a survey 

instrument and methods highly 

consistent with those of the SMS and 

the supplemental surveys used prior to 

CY 2010. We note that in CY 2010, for 

oncology, clinical laboratories, and 

independent diagnostic testing facilities 

(IDTFs), we continued to use the 

supplemental survey data to determine 

PE/HR values (74 FR 61752). Beginning 

in CY 2010, we provided for a 4-year 

transition for the new PE RVUs using 

the updated PE/HR data. In CY 2012, 

the third year of the transition, PE RVUs 

are calculated based on a 75/25 blend of 

the new PE RVUs developed using the 

PPIS data and the previous PE RVUs 

based on the SMS and supplemental 

survey data. 

3. Resource-Based Malpractice RVUs 

Section 4505(f) of the BBA amended 

section 1848(c) of the Act to require that 

we implement resource-based 

malpractice RVUs for services furnished 

on or after CY 2000. The resource-based 

malpractice RVUs were implemented in 

the PFS final rule published November 

2, 1999 (64 FR 59380). The MP RVUs 

were based on malpractice insurance 

premium data collected from 

commercial and physician-owned 

insurers from all the States, the District 

of Columbia, and Puerto Rico. In the CY 

2010 PFS final rule with comment 

period (74 FR 61758), we implemented 

the Second Five-Year Review and 

update of the malpractice RVUs. In the 

CY 2011 PFS final rule with comment 

period, we described our approach for 

determining malpractice RVUs for new 

or revised codes that become effective 

before the next Five Year Review and 

update (75 FR 73208). Accordingly, to 

develop the CY 2012 malpractice RVUs 

for new or revised codes we crosswalked the new or revised code to the 

malpractice RVUs of a similar source 

code and adjusted for differences in 

work (or, if greater, the clinical labor 

portion of the fully implemented PE 

RVUs) between the source code and the 

new or revised code. 

4. 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. The First FiveYear Review of Work RVUs was 

published on November 22, 1996 (61 FR 

59489) and was effective in 1997. The 

Second Five-Year Review of Work RVUs 

was published in the CY 2002 PFS final 

rule with comment period (66 FR 

55246) and was effective in 2002. The 

Third Five-Year Review of Work RVUs 

was published in the CY 2007 PFS final 

rule with comment period (71 FR 

69624) and was effective on January 1, 

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2007. The Fourth Five-Year Review of 

Work RVUs was initiated in the CY 

2010 PFS final rule with comment 

period where we solicited candidate 

codes from the public for this review (74 

FR 61941). Proposed revisions to work 

RVUs and corresponding changes to PE 

and malpractice RVUs affecting 

payment for physicians’ services for the 

Fourth Five-Year Review of Work RVUs 

were published in a separate notice (76 

FR 32410). We will review public 

comments, make adjustments to our 

proposals in response to comments, as 

appropriate, and include final values in 

the CY 2012 PFS final rule with 

comment period, effective for services 

furnished beginning January 1, 2012. 

In 1999, the AMA RUC established 

the Practice Expense Advisory 

Committee (PEAC) for the purpose of 

refining the direct PE inputs. Through 

March 2004, the PEAC provided 

recommendations to CMS for over 7,600 

codes (all but a few hundred of the 

codes currently listed in the AMA’s 

Current Procedural Terminology (CPT) 

codes). As part of the CY 2007 PFS final 

rule with comment period (71 FR 

69624), we implemented a new bottomup methodology for determining 

resource-based PE RVUs and 

transitioned the new methodology over 

a 4-year period. A comprehensive 

review of PE was undertaken prior to 

the 4-year transition period for the new 

PE methodology from the top-down to 

the bottom-up methodology, and this 

transition was completed in CY 2010. In 

CY 2010, we also incorporated the new 

PPIS data to update thespecialty specific 

PE/HR data used to develop PE RVUs, 

adopting a 4-year transition to PE RVUs 

developed using the PPIS data. 

In the CY 2005 PFS final rule with 

comment period (69 FR 66236), we 

implemented the First Five-Year Review 

of the malpractice RVUs (69 FR 66263). 

Minor modifications to the methodology 

were addressed in the CY 2006 PFS 

final rule with comment period (70 FR 

70153). The Second Five-Year Review 

and update of resource-based 

malpractice RVUs was published in the 

CY 2010 PFS final rule with comment 

period (74 FR 61758) and was effective 

in CY 2010. 

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 section 3134 of the 

Affordable Care Act, which requires the 

agency to periodically identify, review 

and adjust values for potentially 

misvalued codes with an emphasis on 

the following categories: (1) Codes and 

families of codes for which there has 

been the fastest growth; (2) codes or 

families of codes that have experienced 

substantial changes in practice 

expenses; (3) codes that are recently 

established for new technologies or 

services; (4) multiple codes that are 

frequently billed in conjunction with 

furnishing a single service; (5) codes 

with low relative values, particularly 

those that are often billed multiple 

times for a single treatment; (6) codes 

which have not been subject to review 

since the implementation of the RBRVS 

(the so-called ‘Harvard valued codes’); 

and (7) other codes determined to be 

appropriate by the Secretary. 

5. Application of Budget Neutrality to 

Adjustments of RVUs 

Budget neutrality typically requires 

that expenditures not increase or 

decrease as a result of changes or 

revisions to policy. However, section 

1848(c)(2)(B)(ii)(II) of the Act requires 

adjustment only if the change in 

expenditures resulting from the annual 

revisions to the PFS exceeds a threshold 

amount. Specifically, adjustments in 

RVUs for a year may not cause total PFS 

payments to differ by more than $20 

million from what they would have 

been if the adjustments were not made. 

In accordance with section 

1848(c)(2)(B)(ii)(II) of the Act, if 

revisions to the RVUs cause 

expenditures to change by more than 

$20 million, we make adjustments to 

ensure that expenditures do not increase 

or decrease by more than $20 million. 

B. Components of the Fee Schedule 

Payment Amounts 

To calculate the payment for every 

physician’s service, the components of 

the fee schedule (physician work, PE, 

and malpractice RVUs) are adjusted by 

a geographic practice cost index (GPCI). 

The GPCIs reflect the relative costs of 

physician work, PE, and malpractice in 

an area compared to the national 

average costs for each component. 

RVUs are converted to dollar amounts 

through the application of a CF, which 

is calculated by CMS’ Office of the 

Actuary (OACT). 

The formula for calculating the 

Medicare fee schedule payment amount 

for a given service and fee schedule area 

can be expressed as: 

Payment = [(RVU work × GPCI work) + 

(RVU PE × GPCI PE) + (RVU 

Malpractice × GPCI Malpractice)] × 

CF. 

C. Most Recent Changes to the Fee 

Schedule 

The CY 2011 PFS final rule with 

comment period (75 FR 73170) 

implemented changes to the PFS and 

other Medicare Part B payment policies. 

It also finalized many of the CY 2010 

interim RVUs and implemented interim 

RVUs for new and revised codes for CY 

2011 to ensure that our payment 

systems are updated to reflect changes 

in medical practice and the relative 

values of services. The CY 2011 PFS 

final rule with comment period also 

addressed other policies, as well as 

certain provisions of the Affordable Care 

Act and the Medicare Improvements for 

Patients and Providers Act of 2008 

(MIPPA). 

In the CY 2011 PFS final rule with 

comment period, we announced the 

following for CY 2011: the total PFS 

update of ¥10.1 percent; the initial 

estimate for the sustainable growth rate 

of ¥13.4 percent; and the CF of 

$25.5217. These figures were calculated 

based on the statutory provisions in 

effect on November 2, 2010, when the 

CY 2011 PFS final rule was issued. 

On December 30, 2010, we published 

a correction notice (76 FR 1670) to 

correct several technical and 

typographical errors that occurred in the 

CY 2011 PFS final rule with comment 

period. This correction notice 

announced a revised CF for CY 2011 of 

$25.4999. 

On November 30, 2010, the Physician 

Payment and Therapy Relief Act of 2010 

(PPATRA) (Pub. L. 111–286) was signed 

into law. Section 3 of Public Law 111– 

286 modified the policy finalized in the 

CY 2011 PFS final rule with comment 

period (75 FR 73241), effective January 

1, 2011, regarding the payment 

reduction applied to multiple therapy 

services provided to the same patient on 

the same day in the office setting by one 

provider and paid for under the PFS 

(hereinafter, the therapy multiple 

procedure payment reduction (MPPR)). 

The PPATRA provision changed the 

therapy MPPR percentage from 25 to 20 

percent of the PE component of 

payment for the second and subsequent 

‘‘always’’ therapy services furnished in 

the office setting on the same day to the 

same patient by one provider, and 

excepted the payment reductions 

associated with the therapy MPPR from 

budget neutrality under the PFS. 

On December 15, 2010, the Medicare 

and Medicaid Extenders Act of 2010 

(MMEA) (Pub. L. 111–309) was signed 

into law. Section 101 of Public Law 

111–309 provided for a 1-year zero 

percent update for the CY 2011 PFS. As 

a result of the MMEA, the CY 2011 PFS 

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conversion factor was revised to 

$33.9764. 

II. Provisions of the Proposed Rule for 

the Physician Fee Schedule 

A. Resource-Based Practice Expense 

(PE) Relative Value Units (RVUs) 

1. Overview 

Practice expense (PE) is the portion of 

the resources used in furnishing the 

service that reflects the general 

categories of physician and practitioner 

expenses, such as office rent and 

personnel wages but excluding 

malpractice expenses, as specified in 

section 1848(c)(1)(B) of the Act. Section 

121 of the Social Security Amendments 

of 1994 (Pub. L. 103–432), enacted on 

October 31, 1994, required 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 been if the adjustments 

were not made. Therefore, if revisions to 

the RVUs cause expenditures to change 

by more than $20 million, we make 

adjustments to ensure that expenditures 

do not increase or decrease by more 

than $20 million. We refer readers to the 

CY 2010 PFS final rule with comment 

period (74 FR 61743 through 61748) for 

a more detailed history of the PE 

methodology. 

2. Practice Expense Methodology 

a. Direct Practice Expense 

We use a bottom-up approach to 

determine the direct PE by adding the 

costs of the resources (that is, the 

clinical staff, equipment, and supplies) 

typically required to provide each 

service. The costs of the resources are 

calculated using the refined direct PE 

inputs assigned to each CPT code in our 

PE database, which are based on our 

review of recommendations received 

from the AMA RUC. For a detailed 

explanation of the bottom-up direct PE 

methodology, including examples, we 

refer readers to the Five-Year Review of 

Work Relative Value Units Under the 

PFS and Proposed Changes to the 

Practice Expense Methodology proposed 

notice (71 FR 37242) and the CY 2007 

PFS final rule with comment period (71 

FR 69629). 

b. Indirect Practice Expense per Hour 

Data 

We use survey data on indirect 

practice expenses incurred per hour 

worked (PE/HR) in developing the 

indirect portion of the PE RVUs. Prior 

to CY 2010, we primarily used the 

practice expense per hour (PE/HR) by 

specialty that was obtained from the 

AMA’s Socioeconomic Monitoring 

Surveys (SMS). The AMA administered 

a new survey in CY 2007 and CY 2008, 

the Physician Practice Expense 

Information Survey (PPIS), which was 

expanded (relative to the SMS) to 

include nonphysician practitioners 

(NPPs) paid under the PFS. 

The PPIS is a multispecialty, 

nationally representative, PE survey of 

both physicians and NPPs using a 

consistent survey instrument and 

methods highly consistent with those 

used for the SMS and the supplemental 

surveys. The PPIS gathered information 

from 3,656 respondents across 51 

physician specialty and healthcare 

professional groups. We believe the 

PPIS is the most comprehensive source 

of PE survey information available to 

date. Therefore, we used the PPIS data 

to update the PE/HR data for almost all 

of the Medicare-recognized specialties 

that participated in the survey for the 

CY 2010 PFS. 

When we changed over to the PPIS 

data beginning in CY 2010, we did not 

change the PE RVU methodology itself 

or the manner in which the PE/HR data 

are used in that methodology. We only 

updated the PE/HR data based on the 

new survey. Furthermore, as we 

explained in the CY 2010 PFS final rule 

with comment period (74 FR 61751), 

because of the magnitude of payment 

reductions for some specialties resulting 

from the use of the PPIS data, we 

finalized a 4-year transition (75 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. 

Section 303 of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) (Pub. 

L. 108–173) added section 

1848(c)(2)(H)(i) of the Act, which 

requires us to use the medical oncology 

supplemental survey data submitted in 

2003 for oncology drug administration 

services. Therefore, the PE/HR for 

medical oncology, hematology, and 

hematology/oncology reflects the 

continued use of these supplemental 

survey data. 

We do not use the PPIS data for 

reproductive endocrinology, sleep 

medicine, and spine surgery since these 

specialties are not separately recognized 

by Medicare, nor do we have a method 

to blend these data with Medicarerecognized specialty data. 

Supplemental survey data on 

independent labs, from the College of 

American Pathologists, were 

implemented for payments in CY 2005. 

Supplemental survey data from the 

National Coalition of Quality Diagnostic 

Imaging Services (NCQDIS), 

representing 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 

supplemental surveys for medical 

oncology, independent laboratories, and 

IDTFs were updated to CY 2006 using 

the MEI to put them on a comparable 

basis with the PPIS data. 

Previously, we have established PE/ 

HR values for various specialties 

without SMS or supplemental survey 

data by crosswalking them to other 

similar specialties to estimate a proxy 

PE/HR. For specialties that were part of 

the PPIS for which we previously used 

a crosswalked PE/HR, we instead use 

the PPIS-based PE/HR. We continue 

previous crosswalks for specialties that 

did not participate in the PPIS. 

However, beginning in CY 2010 we 

changed the PE/HR crosswalk for 

portable x-ray suppliers from radiology 

to IDTF, a more appropriate crosswalk 

because these specialties are more 

similar to each other with respect to 

physician time. 

For registered dietician services, the 

proposed 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). 

There are four specialties whose 

utilization data will be newly 

incorporated into ratesetting for CY 

2012. We are proposing to use proxy 

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PE/HR values for these specialties by 

crosswalking values from other, similar 

specialties as follows: Speech Language 

Pathology from Physical Therapy; 

Hospice and Palliative Care from All 

Physicians; Geriatric Psychiatry from 

Psychiatry; and Intensive Cardiac 

Rehabilitation from Cardiology. 

Additionally, since section 1833(a)(1)(K) 

of the Act (as amended by section 3114 

of the Affordable Care Act) requires that 

payment for services provided by a 

certified nurse midwife be paid at 100 

percent of the PFS amount, this 

specialty will no longer be excluded 

from the ratesetting calculation. We are 

proposing to crosswalk the PE\HR data 

from Obstetrics/gynecology to Certified 

Nurse Midwife. These newly proposed 

changes are reflected in the ‘‘PE HR’’ file 

available on the CMS Web site under 

the supporting data files for the CY 2012 

PFS proposed rule at http:// 

www.cms.gov/PhysicianFeeSched/. 

As provided in the CY 2010 PFS final 

rule with comment period (74 FR 

61751), CY 2012 is the third year of the 

4 year transition to the PE RVUs 

calculated using the PPIS data. 

Therefore, in general, the CY 2012 PE 

RVUs are a 25 percent/75 percent blend 

of the previous PE RVUs based on the 

SMS and supplemental survey data and 

the new PE RVUS developed using the 

PPIS data as described previously. 

c. Allocation of PE to Services 

To establish PE RVUs for specific 

services, it is necessary to establish the 

direct and indirect PE associated with 

each service. 

(1) Direct Costs 

The relative relationship between the 

direct cost portions of the PE RVUs for 

any two services is determined by the 

relative relationship between the sum of 

the direct cost resources (that is, the 

clinical staff, equipment, and supplies) 

typically required to provide the 

services. The costs of these resources are 

calculated from the refined direct PE 

inputs in our PE database. For example, 

if one service has a direct cost sum of 

$400 from our PE database and another 

service has a direct cost sum of $200, 

the direct portion of the PE RVUs of the 

first service would be twice as much as 

the direct portion of the PE RVUs for the 

second service. 

(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 allocate the 

indirect costs to the code level on the 

basis of the direct costs specifically 

associated with a code and the greater 

of either the clinical labor costs or the 

physician work RVUs. We also 

incorporate the survey data described 

earlier in the PE/HR discussion. The 

general approach to developing the 

indirect portion of the PE RVUs is 

described 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 perform the service 

to determine an initial indirect 

allocator. For example, if the direct 

portion of the PE RVUs for a given 

service were 2.00 and direct costs, on 

average, represented 25 percent of total 

costs for the specialties that performed 

the service, the initial indirect allocator 

would be 6.00 since 2.00 is 25 percent 

of 8.00. 

• We then add the greater of the work 

RVUs or clinical labor portion of the 

direct portion of the PE RVUs to this 

initial indirect allocator. In our 

example, if this service had work RVUs 

of 4.00 and the clinical labor portion of 

the direct PE RVUs was 1.50, we would 

add 6.00 plus 4.00 (since the 4.00 work 

RVUs are greater than the 1.50 clinical 

labor portion) to get an indirect allocator 

of 10.00. In the absence of any further 

use of the survey data, the relative 

relationship between the indirect cost 

portions of the PE RVUs for any two 

services would be determined by the 

relative relationship between these 

indirect cost allocators. For example, if 

one service had an indirect cost 

allocator of 10.00 and another service 

had an indirect cost allocator of 5.00, 

the indirect portion of the PE RVUs of 

the first service would be twice as great 

as the indirect portion of the PE RVUs 

for the second service. 

• We next incorporate the specialtyspecific indirect PE/HR data into the 

calculation. As a relatively extreme 

example for the sake of simplicity, 

assume in our previous example that, 

based on the survey data, the average 

indirect cost of the specialties 

performing the first service with an 

allocator of 10.00 was half of the average 

indirect cost of the specialties 

performing the second service with an 

indirect allocator of 5.00. In this case, 

the indirect portion of the PE RVUs of 

the first service would be equal to that 

of the second service. 

d. Facility and Nonfacility Costs 

For procedures that can be furnished 

in a physician’s office, as well as in a 

hospital or facility setting, we establish 

two PE RVUs: facility and nonfacility. 

The methodology for calculating PE 

RVUs is the same for both the facility 

and nonfacility RVUs, but is applied 

independently to yield two separate PE 

RVUs. Because Medicare makes a 

separate payment to the facility for its 

costs of furnishing a service, the facility 

PE RVUs are generally lower than the 

nonfacility PE RVUs. 

e. Services With Technical Components 

(TCs) and Professional Components 

(PCs) 

Diagnostic services are generally 

comprised of two components: a 

professional component (PC) and a 

technical component (TC), each of 

which may be performed independently 

or by different providers, or they may be 

performed together as a ‘‘global’’ 

service. When services have PC and TC 

components that can be billed 

separately, the payment for the global 

component equals the sum of the 

payment for the TC and PC. This is a 

result of using a weighted average of the 

ratio of indirect to direct costs across all 

the specialties that furnish the global 

components, TCs, and PCs; that is, we 

apply the same weighted average 

indirect percentage factor to allocate 

indirect expenses to the global 

components, PCs, and TCs for a service. 

(The direct PE RVUs for the TC and PC 

sum to the global under the bottom-up 

methodology.) 

f. PE RVU Methodology 

For a more detailed description of the 

PE RVU methodology, we refer readers 

to the CY 2010 PFS final rule with 

comment period (74 FR 61745 through 

61746). 

(1) Setup File 

First, we create a setup file for the PE 

methodology. The setup file contains 

the direct cost inputs, the utilization for 

each procedure code at the specialty 

and facility/nonfacility place of service 

level, and the specialty-specific PE/HR 

data 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. 

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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. 

(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 

components. 

Step 8: Calculate the service level 

allocators for the indirect PEs based on 

the percentages calculated in Step 7. 

The indirect PEs are allocated based on 

the three components: the direct PE 

RVUs, the clinical PE RVUs, and the 

work RVUs. 

For most services the indirect 

allocator is: indirect percentage * (direct 

PE RVUs/direct percentage) + work 

RVUs. 

There are two situations where this 

formula is modified: 

• If the service is a global service (that 

is, a service with global, professional, 

and technical components), then the 

indirect allocator is: indirect percentage 

(direct PE RVUs/direct percentage) + 

clinical PE RVUs + work RVUs. 

• If the clinical labor PE RVUs exceed 

the work RVUs (and the service is not 

a global service), then the indirect 

allocator is: indirect percentage (direct 

PE RVUs/direct percentage) + clinical 

PE RVUs. 

Note: For global services, the indirect 

allocator is based on both the work RVUs and 

the clinical labor PE RVUs. We do this to 

recognize that, for the PC service, indirect 

PEs will be allocated using the work RVUs, 

and for the TC service, indirect PEs will be 

allocated using the direct PE RVUs and the 

clinical labor PE RVUs. This also allows the 

global component RVUs to equal the sum of 

the PC and TC RVUs. 

For presentation purposes in the 

examples in Table 2, the formulas were 

divided into two parts for each service. 

• The first part does not vary by 

service and is the indirectpercentage 

(direct PE RVUs/direct percentage). 

• The second part is either the work 

RVUs, clinical PE RVUs, or both 

depending on whether the service is a 

global service and whether the clinical 

PE RVUs exceed the work RVUs (as 

described earlier in this step). 

Apply a scaling adjustment to the 

indirect allocators. 

Step 9: Calculate the current aggregate 

pool of indirect PE RVUs by multiplying 

the current aggregate pool of PE RVUs 

by the average indirect PE percentage 

from the survey data. 

Step 10: Calculate an aggregate pool of 

indirect PE RVUs for all PFS services by 

adding the product of the indirect PE 

allocators for a service from Step 8 and 

the utilization data for that service. 

Step 11: Using the results of Step 9 

and Step 10, calculate an indirect PE 

adjustment so that the aggregate indirect 

allocation does not exceed the available 

aggregate indirect PE RVUs and apply it 

to indirect allocators calculated in Step 

8. 

Calculate the indirect practice cost 

index. 

Step 12: Using the results of Step 11, 

calculate aggregate pools of specialtyspecific adjusted indirect PE allocators 

for all PFS services for a specialty by 

adding the product of the adjusted 

indirect PE allocator for each service 

and the utilization data for that service. 

Step 13: Using the specialty-specific 

indirect PE/HR data, calculate specialtyspecific aggregate pools of indirect PE 

for all PFS services for that specialty by 

adding the product of the indirect PE/ 

HR for the specialty, the physician time 

for the service, and the specialty’s 

utilization for the service across all 

services performed by the specialty. 

Step 14: Using the results of Step 12 

and Step 13, calculate the specialtyspecific indirect PE scaling factors. 

Step 15: Using the results of Step 14, 

calculate an indirect practice cost index 

at the specialty level by dividing each 

specialty-specific indirect scaling factor 

by the average indirect scaling factor for 

the entire PFS. 

Step 16: Calculate the indirect 

practice cost index at the service level 

to ensure the capture of all indirect 

costs. Calculate a weighted average of 

the practice cost index values for the 

specialties that furnish the service. 

(Note: For services with TCs and PCs, 

we calculate the indirect practice cost 

index across the global components, 

PCs, and TCs. Under this method, the 

indirect practice cost index for a given 

service (for example, echocardiogram) 

does not vary by the PC, TC, and global 

component.) 

Step 17: Apply the service level 

indirect practice cost index calculated 

in Step 16 to the service level adjusted 

indirect allocators calculated in Step 11 

to get the indirect PE RVUs. 

(4) Calculate the Final PE RVUs 

Step 18: Add the direct PE RVUs from 

Step 6 to the indirect PE RVUs from 

Step 17 and apply the final PE budget 

neutrality (BN) adjustment. 

The final PE BN adjustment is 

calculated by comparing the results of 

Step 18 to the current pool of PE RVUs. 

This final BN adjustment is required 

primarily because certain specialties are 

excluded from the PE RVU calculation 

for ratesetting purposes, but all 

specialties are included for purposes of 

calculating the final BN adjustment. 

(See ‘‘Specialties excluded from 

ratesetting calculation’’ later in this 

section.) 

(5) Setup File Information 

• Specialties excluded from 

ratesetting calculation: For the purposes 

of calculating the PE RVUs, we exclude 

certain specialties, such as certain 

nonphysician practitioners paid at a 

percentage of the PFS and low-volume 

specialties, from the calculation. These 

specialties are included for the purposes 

of calculating the BN adjustment. They 

are displayed in Table 1. We note that 

since specialty code 97 (physician 

assistant) is paid at a percentage of the 

PFS and therefore excluded from the 

ratesetting calculation, this specialty has 

been added to the table for CY 2012. 

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 prosthetistorthotist. 

58 ........... Individuals not included in 55, 56, 

or 57. 

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TABLE 1—SPECIALTIES EXCLUDED

FROM RATESETTING CALCULATION— 

Continued 

Specialty 

code Specialty description 

59 ........... Ambulance service supplier, e.g., 

private ambulance companies, 

funeral homes, etc. 

60 ........... Public health or welfare agencies. 

61 ........... Voluntary health or charitable 

agencies. 

73 ........... Mass immunization roster biller. 

74 ........... Radiation therapy centers. 

87 ........... All other suppliers (e.g., drug and 

department stores). 

88 ........... Unknown supplier/provider specialty. 

89 ........... Certified clinical nurse specialist. 

95 ........... Competitive Acquisition Program 

(CAP) Vendor. 

96 ........... Optician. 

97 ........... Physician assistant. 

A0 .......... Hospital. 

A1 .......... SNF. 

A2 .......... Intermediate care nursing facility. 

A3 .......... Nursing facility, other. 

A4 .......... HHA. 

A5 .......... Pharmacy. 

A6 .......... Medical supply company with respiratory therapist. 

A7 .......... Department store. 

1 ............. Supplier of oxygen and/or oxygen 

related equipment. 

2 ............. Pedorthic personnel. 

3 ............. Medical supply company with 

pedorthic personnel. 

• Crosswalk certain low volume 

physician specialties: Crosswalk the 

utilization of certain specialties with 

relatively low PFS utilization to the 

associated specialties. 

• Physical therapy utilization: 

Crosswalk the utilization associated 

with all physical therapy services to the 

specialty of physical therapy. 

• Identify professional and technical 

services not identified under the usual 

TC and 26 modifiers: Flag the services 

that are PC and TC services, but do not 

use TC and 26 modifiers (for example, 

electrocardiograms). This flag associates 

the PC and TC with the associated 

global code for use in creating the 

indirect PE RVUs. For example, the 

professional service, CPT code 93010 

(Electrocardiogram, routine ECG with at 

least 12 leads; interpretation and report 

only), is associated with the global 

service, CPT code 93000 

(Electrocardiogram, routine ECG with at 

least 12 leads; with interpretation and 

report). 

• Payment modifiers: Payment 

modifiers are accounted for in the 

creation of the file. For example, 

services billed with the assistant at 

surgery modifier are paid 16 percent of 

the PFS amount for that service; 

therefore, the utilization file is modified 

to only account for 16 percent of any 

service that contains the assistant at 

surgery modifier. 

• Work RVUs: The setup file contains 

the work RVUs from this final rule with 

comment period. 

(6) Equipment Cost per Minute 

The equipment cost per minute is 

calculated as: 

(1/(minutes per year * usage)) * price * 

((interest rate/(1¥(1/((1 + interest 

rate) ∧ life of equipment)))) + 

maintenance) 

Where: 

minutes per year = maximum minutes per 

year if usage were continuous (that is, 

usage = 1); generally 150,000 minutes. 

usage = equipment utilization assumption; 

0.75 for certain expensive diagnostic 

imaging equipment (see 74 FR 61753 

through 61755 and section II.A.3. of the 

CY 2011 PFS final rule with comment 

period) and 0.5 for others. 

price = price of the particular piece of 

equipment. 

interest rate = 0.11. 

life of equipment = useful life of the 

particular piece of equipment. 

maintenance = factor for maintenance; 0.05. 

This interest rate was proposed and 

finalized during rulemaking for CY 1998 

PFS (62 FR 33164). We solicit comment 

regarding reliable data on current 

prevailing loan rates for small 

businesses. 

Note: The use of any particular conversion 

factor (CF) in Table 2 to illustrate the PE 

calculation has no effect on the resulting 

RVUs. 

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3. Changes to Direct PE Inputs 

In this section, we discuss other 

specific CY 2012 proposals and changes 

related to direct PE inputs. The 

proposed changes that follow are 

included in the proposed CY 2012 

direct PE database, which is available 

on the CMS Web site under the 

supporting data files for the CY 2012 

PFS proposed rule at http:// 

www.cms.gov/PhysicianFeeSched/. 

a. Inverted Equipment Minutes 

It has come to our attention that the 

minutes allocated for two particular 

equipment items have been inverted. 

This inversion affects three codes: 

37232 (Revascularization, endovascular, 

open or percutaneous, tibial/peroneal 

artery, unilateral, each additional vessel; 

with transluminal angioplasty (List 

separately in addition to code for 

primary procedure)), 37233 

(Revascularization, endovascular, open 

or percutaneous, tibial/peroneal artery, 

unilateral, each additional vessel; with 

atherectomy, includes angioplasty 

within the same vessel, when performed 

(List separately in addition to code for 

primary procedure)), and 37234 

(Revascularization, endovascular, open 

or percutaneous, tibial/peroneal artery, 

unilateral, each additional vessel; with 

transluminal stent placement(s), 

includes angioplasty within the same 

vessel, when performed (List separately 

in addition to code for primary 

procedure)). In each case, the number of 

minutes allocated to the ‘‘printer, dye 

sublimation (photo, color)’’ (ED031) 

should be appropriately allocated to the 

‘‘stretcher’’ (EF018). The number of 

minutes allocated to the stretcher 

should be appropriately allocated to the 

printer. Therefore, the proposed CY 

2012 database includes direct PE input 

corrections to the times associated with 

the two equipment items in the three 

codes. 

b. Labor and Supply Input Duplication 

We recently identified a number of 

CPT codes with inadvertently 

duplicated labor and supply inputs in 

the PE database. We are proposing to 

remove the duplicate labor and supply 

inputs in the proposed CY 2012 

database as detailed in Table 3. 

TABLE 3—LABOR AND SUPPLY INPUT DUPLICATION

CPT Code Short code descriptor CMS Labor/ 

supply code Description of labor/supply 

12011 ............... Repair superficial wound(s) ......................................................... SA048 pack, minimum multi-specialty visit 

15360 ............... Apply cult derm sub t/a/l .............................................................. SA054 pack, post-op incision care (suture) 

19361 ............... Breast reconstr w/lat flap ............................................................. L037D RN/LPN/MTA 

21147 ............... Reconstruct midface lefort ........................................................... SA054 pack, post-op incision care (suture) 

23515 ............... Treat clavicle fracture .................................................................. SA052 pack, post-op incision care (staple) 

25415 ............... Repair radius & ulna .................................................................... SA052 pack, post-op incision care (staple) 

Repair radius & ulna .................................................................... SA052 pack, post-op incision care (staple) 

28005 ............... Treat foot bone lesion .................................................................. SA054 pack, post-op incision care (suture) 

28456 ............... Treat midfoot fracture .................................................................. SA054 pack, post-op incision care (suture) 

28485 ............... Treat metatarsal fracture ............................................................. SA054 pack, post-op incision care (suture) 

32998 ............... Perq rf ablate tx pul tumor ........................................................... SG079 tape, surgical paper 1in (Micropore) 

35501 ............... Artery bypass graft ...................................................................... L037D RN/LPN/MTA 

Artery bypass graft ...................................................................... SA048 pack, minimum multi-specialty visit 

35509 ............... Artery bypass graft ...................................................................... L037D RN/LPN/MTA 

Artery bypass graft ...................................................................... SA048 pack, minimum multi-specialty visit 

35601 ............... Artery bypass graft ...................................................................... L037D RN/LPN/MTA 

Artery bypass graft ...................................................................... SA048 pack, minimum multi-specialty visit 

36147 ............... Access av dial grft for eval .......................................................... SB008 drape, sterile, c-arm, fluoro 

Access av dial grft for eval .......................................................... SH026 Conray Inj (iothalamate 43%) 

Access av dial grft for eval .......................................................... SK093 x-ray ID card (flashcard) 

37231 ............... Tib/per revasc stent & ather ........................................................ SK034 film, x-ray 14in × 17in 

45541 ............... Correct rectal prolapse ................................................................ SJ032 lubricating jelly (K–Y) (5gm uou) 

45550 ............... Repair rectum/remove sigmoid .................................................... SJ032 lubricating jelly (K–Y) (5gm uou) 

46258 ............... Remove in/ex hem grp w/fistu ..................................................... SD003 anoscope 

Remove in/ex hem grp w/fistu ..................................................... SD003 anoscope 

Remove in/ex hem grp w/fistu ..................................................... SD003 anoscope 

46261 ............... Remove in/ex hem grps & fiss .................................................... SD003 anoscope 

Remove in/ex hem grps & fiss .................................................... SD003 anoscope 

Remove in/ex hem grps & fiss .................................................... SD003 anoscope 

58563 ............... Hysteroscopy ablation ................................................................. SB027 gown, staff, impervious 

64704 ............... Revise hand/foot nerve ................................................................ SA054 pack, post-op incision care (suture) 

64726 ............... Release foot/toe nerve ................................................................ SA054 pack, post-op incision care (suture) 

64782 ............... Remove limb nerve lesion ........................................................... SA054 pack, post-op incision care (suture) 

65810 ............... Drainage of eye ........................................................................... SA082 pack, ophthalmology visit (w-dilation) 

67228 ............... Treatment of retinal lesion ........................................................... L038A COMT/COT/RN/CST

Treatment of retinal lesion ........................................................... SA082 pack, ophthalmology visit (w-dilation) 

Treatment of retinal lesion ........................................................... SH049 lidocaine 2% w-epi inj (Xylocaine w-epi) 

76813 ............... Ob us nuchal meas 1 gest .......................................................... SK022 film, 8in × (ultrasound, MRI) 

78730 ............... Urinary bladder retention ............................................................. SB044 underpad 2ft × 3ft (Chux) 

88365 ............... Insitu hybridization (fish) .............................................................. SM016 eye shield, splash protection 

91038 ............... Esoph imped funct test > 1h ....................................................... SJ016 denture cup 

95875 ............... Limb exercise test ........................................................................ SC051 syringe 10–12ml 

BILLING CODE 4120–01–C 

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c. AMA RUC Recommendations for 

Moderation Sedation Direct PE Inputs 

For services described by certain 

codes, the direct PE database includes 

nonfacility inputs that reflect the 

assumption that moderation sedation is 

inherent in the procedure. These codes 

are listed in Table 4. The AMA RUC has 

recently provided CMS with a 

recommendation that standardizes the 

nonfacility direct PE inputs that account 

for moderate sedation as typically 

furnished as part of these services. 

Specifically, the RUC recommended 

that the direct PE inputs allocated for 

moderate sedation include the 

following: 

Clinical Labor Inputs: Registered 

Nurse (L051A) time that includes two 

minutes of time to initiate sedation, the 

number of minutes associated with the 

physician intra-service work time, and 

15 minutes for every hour of patient 

recovery time for post-service patient 

monitoring. 

Supply Inputs: ‘‘Pack, conscious 

sedation’’ (SA044) that includes: an 

angiocatheter 14g–24g, bandage, strip 

0.75in × 3in, catheter, suction, dressing, 

4in × 4.75in (Tegaderm), electrode, ECG 

(single), electrode, ground, gas, oxygen, 

gauze, sterile 4in × 4in, gloves, sterile, 

gown, surgical, sterile, iv infusion set, 

kit, iv starter, oxygen mask (1) and 

tubing (7 ft), pulse oximeter sensor 

probe wrap, stop cock, 3-way, swab-pad, 

alcohol, syringe 1ml, syringe-needle 3ml 

22–26g, tape, surgical paper 1in 

(Micropore), tourniquet, and non-latex 

1in × 18in. 

Equipment Inputs: ‘‘table, instrument, 

mobile’’ (EF027), ‘‘ECG, 3-channel (with 

SpO2, NIBP, temp, resp)’’ (EQ011), ‘‘IV 

infusion pump’’ (EQ032), ‘‘pulse 

oxymetry recording software (prolonged 

monitoring)’’ (EQ212), and ‘‘blood 

pressure monitor, ambulatory, w-battery 

charger’’ (EQ269). 

We have reviewed this 

recommendation and generally agree 

with these inputs. However, we note 

that the equipment item ‘‘ECG, 3- 

channel (with SpO2, NIBP, temp, resp)’’ 

(EQ011) incorporates the functionality 

of the equipment items ‘‘pulse oxymetry 

recording software (prolonged 

monitoring)’’ (EQ212), and ‘‘blood 

pressure monitor, ambulatory, w-battery 

charger’’ (EQ269). Therefore we have 

not included these two items as 

standard nonfacility inputs for 

moderation sedation. 

We propose to accept the AMA RUC 

recommendation with the refinement as 

stated. The CY 2012 direct PE database 

reflects these proposed changes and is 

available on the CMS Web site under 

the supporting data files for the CY 2012 

PFS proposed rule at http:// 

www.cms.gov/PhysicianFeeSched/. 

TABLE 4—INHERENT MODERATE SEDATION CODES VALUED IN THE NONFACILITY SETTING

CPT 

Code Short descriptor 

19298 Place breast rad tube/caths 

20982 Ablate bone tumor(s) perq 

22520 Percut vertebroplasty thor 

22521 Percut vertebroplasty lumb 

22526 Idet single level 

22527 Idet 1 or more levels 

31615 Visualization of windpipe 

31620 Endobronchial us add-on 

31622 Dx bronchoscope/wash 

31623 Dx bronchoscope/brush 

31624 Dx bronchoscope/lavage 

31625 Bronchoscopy w/biopsy(s) 

31626 Bronchoscopy w/markers 

31627 Navigational bronchoscopy 

31628 Bronchoscopy/lung bx each 

31629 Bronchoscopy/needle bx each 

31634 Bronch w/balloon occlusion 

31635 Bronchoscopy w/fb removal 

31645 Bronchoscopy clear airways 

31646 Bronchoscopy reclear airway 

31656 Bronchoscopy inj for x-ray 

32201 Drain percut lung lesion 

32550 Insert pleural cath 

32553 Ins mark thor for rt perq 

35471 Repair arterial blockage 

35472 Repair arterial blockage 

35475 Repair arterial blockage 

35476 Repair venous blockage 

36147 Access av dial grft for eval 

36148 Access av dial grft for proc 

36200 Place catheter in aorta 

36245 Place catheter in artery 

36481 Insertion of catheter vein 

36555 Insert non-tunnel cv cath 

36557 Insert tunneled cv cath 

36558 Insert tunneled cv cath 

36560 Insert tunneled cv cath 

36561 Insert tunneled cv cath 

36563 Insert tunneled cv cath 

36565 Insert tunneled cv cath 

36566 Insert tunneled cv cath 

36568 Insert picc cath 

36570 Insert picvad cath 

36571 Insert picvad cath 

36576 Repair tunneled cv cath 

36578 Replace tunneled cv cath 

36581 Replace tunneled cv cath 

36582 Replace tunneled cv cath 

36583 Replace tunneled cv cath 

36585 Replace picvad cath 

36590 Removal tunneled cv cath 

36870 Percut thrombect av fistula 

37183 Remove hepatic shunt (tips) 

37184 Prim art mech thrombectomy 

37185 Prim art m-thrombect add-on 

37186 Sec art m-thrombect add-on 

37187 Venous mech thrombectomy 

37188 Venous m-thrombectomy add-on 

37203 Transcatheter retrieval 

37210 Embolization uterine fibroid 

37220 Iliac revasc 

37221 Iliac revasc w/stent 

37222 Iliac revasc add-on 

37223 Iliac revasc w/stent add-on 

37224 Fem/popl revas w/tla 

TABLE 4—INHERENT MODERATE SEDATION CODES VALUED IN THE NONFACILITY SETTING—Continued 

CPT 

Code Short descriptor 

37225 Fem/popl revas w/ather 

37226 Fem/popl revasc w/stent 

37227 Fem/popl revasc stnt & ather 

37228 Tib/per revasc w/tla 

37229 Tib/per revasc w/ather 

37230 Tib/per revasc w/stent 

37231 Tib/per revasc stent & ather 

37232 Tib/per revasc add-on 

37233 Tibper revasc w/ather add-on 

37234 Revsc opn/prq tib/pero stent 

37235 Tib/per revasc stnt & ather 

43200 Esophagus endoscopy 

43201 Esoph scope w/submucous inj 

43202 Esophagus endoscopy biopsy 

43216 Esophagus endoscopy/lesion 

43217 Esophagus endoscopy 

43234 Upper gi endoscopy exam 

43235 Uppr gi endoscopy diagnosis 

43236 Uppr gi scope w/submuc inj 

43239 Upper gi endoscopy biopsy 

43453 Dilate esophagus 

43456 Dilate esophagus 

43458 Dilate esophagus 

44385 Endoscopy of bowel pouch 

44386 Endoscopy bowel pouch/biop 

44388 Colonoscopy 

44389 Colonoscopy with biopsy 

44390 Colonoscopy for foreign body 

44391 Colonoscopy for bleeding 

44392 Colonoscopy & polypectomy 

44393 Colonoscopy lesion removal 

44394 Colonoscopy w/snare 

44901 Drain app abscess percut 

45303 Proctosigmoidoscopy dilate 

45305 Proctosigmoidoscopy w/bx 

45307 Proctosigmoidoscopy fb 

45308 Proctosigmoidoscopy removal 

45309 Proctosigmoidoscopy removal 

45315 Proctosigmoidoscopy removal 

45317 Proctosigmoidoscopy bleed 

45320 Proctosigmoidoscopy ablate 

45332 Sigmoidoscopy w/fb removal 

45333 Sigmoidoscopy & polypectomy 

45335 Sigmoidoscopy w/submuc inj 

45338 Sigmoidoscopy w/tumr remove 

45339 Sigmoidoscopy w/ablate tumr 

45340 Sig w/balloon dilation 

45378 Diagnostic colonoscopy 

45379 Colonoscopy w/fb removal 

45380 Colonoscopy and biopsy 

45381 Colonoscopy submucous inj 

45382 Colonoscopy/control bleeding 

45383 Lesion removal colonoscopy 

45384 Lesion remove colonoscopy 

45385 Lesion removal colonoscopy 

45386 Colonoscopy dilate stricture 

47000 Needle biopsy of liver 

47382 Percut ablate liver rf 

47525 Change bile duct catheter 

48511 Drain pancreatic pseudocyst 

49021 Drain abdominal abscess 

49041 Drain percut abdom abscess 

49061 Drain percut retroper absc 

49411 Ins mark abd/pel for rt perq 

49418 Insert tun ip cath perc 

49440 Place gastrostomy tube perc 

49441 Place duod/jej tube perc 

49442 Place cecostomy tube perc 

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TABLE 4—INHERENT MODERATE SEDATION CODES VALUED IN THE NONFACILITY SETTING—Continued 

CPT 

Code Short descriptor 

49446 Change g-tube to g-j perc 

50021 Renal abscess percut drain 

50200 Renal biopsy perq 

50382 Change ureter stent percut 

50384 Remove ureter stent percut 

50385 Change stent via transureth 

50386 Remove stent via transureth 

50387 Change ext/int ureter stent 

50592 Perc rf ablate renal tumor 

50593 Perc cryo ablate renal tum 

57155 Insert uteri tandems/ovoids 

58823 Drain pelvic abscess percut 

66720 Destruction ciliary body 

69300 Revise external ear 

77371 Srs multisource 

77600 Hyperthermia treatment 

77605 Hyperthermia treatment 

77610 Hyperthermia treatment 

77615 Hyperthermia treatment 

92960 Cardioversion electric ext 

93312 Echo transesophageal 

93314 Echo transesophageal 

93451 Right heart cath 

93452 Left hrt cath w/ventrclgrphy 

93453 R&l hrt cath w/ventriclgrphy 

93454 Coronary artery angio s&i 

93455 Coronary art/grft angio s&i 

93456 Rhrt coronary artery angio 

93457 Rhrt art/grft angio 

93458 Lhrt artery/ventricle angio 

93459 Lhrt art/grft angio 

93460 R&l hrt art/ventricle angio 

93461 R&l hrt art/ventricle angio 

93464 Exercise w/hemodynamic meas 

93505 Biopsy of heart lining 

93566 Inject r ventr/atrial angio 

93568 Inject pulm art hrt cath 

93642 Electrophysiology evaluation 

d. Updates to Price and Useful Life for 

Existing Direct Inputs 

In the CY 2011 PFS final rule with 

comment period (75 FR 73205), we 

finalized a process to act on public 

requests to update equipment and 

supply price and equipment useful life 

inputs through annual rulemaking 

beginning with the CY 2012 PFS 

proposed rule. 

During 2010, we received a request to 

update the price of ‘‘tray, bone marrow 

biopsy-aspiration’’ (SA062) from $24.27 

to $34.47. The request included 

multiple invoices that documented 

updated prices for the supply item. We 

also received a request to update the 

useful life of ‘‘holter monitor’’ (EQ127) 

from 7 years to 5 years, based on its 

entry in the AHA’s publication, 

’’Estimated Useful Lives of Depreciable 

Hospital Assets,’’ which we use as a 

standard reference. In each of these 

cases, we are proposing to accept the 

updated inputs, as requested. The CY 

2012 direct PE database reflects these 

proposed changes and is available on 

the CMS Web site under the supporting 

data files for the CY 2012 PFS proposed 

rule at http://www.cms.gov/ 

PhysicianFeeSched/. 

4. Development of Code-Specific PE 

RVUs 

When creating G codes, we often 

develop work, PE, and malpractice 

RVUs by crosswalking the RVUs from 

similar (reference) codes. In most of 

these cases, the PE RVUs are directly 

crosswalked pending the availability of 

utilization data. Once that data is 

available, we crosswalk the direct PE 

inputs and develop PE RVUs using the 

regular practice expense methodology, 

including allocators that are derived 

from utilization data. For CY 2012, we 

are using this process to develop PE 

RVUs for the following services: G0245 

(Initial physician evaluation and 

management of a diabetic patient with 

diabetic sensory neuropathy resulting in 

a loss of protective sensation (LOPS) 

which must include: (1) The diagnosis 

of LOPS, (2) a patient history, (3) a 

physical examination that consists of at 

least the following elements: (a) Visual 

inspection of the forefoot, hindfoot and 

toe web spaces, (b) evaluation of a 

protective sensation, (c) evaluation of 

foot structure and biomechanics, (d) 

evaluation of vascular status and skin 

integrity, and (e) evaluation and 

recommendation of footwear and (4) 

patient education); G0246 (Follow-up 

physician evaluation and management 

of a diabetic patient with diabetic 

sensory neuropathy resulting in a loss of 

protective sensation (LOPS) to include 

at least the following: (1) A patient 

history, (2) a physical examination that 

includes: (a) Visual inspection of the 

forefoot, hindfoot and toe web spaces, 

(b) evaluation of protective sensation, 

(c) evaluation of foot structure and 

biomechanics, (d) evaluation of vascular 

status and skin integrity, and (e) 

evaluation and recommendation of 

footwear, and (3) patient education); 

G0247 (Routine foot care by a physician 

of a diabetic patient with diabetic 

sensory neuropathy resulting in a loss of 

protective sensation (LOPS) to include, 

the local care of superficial wounds (for 

example, superficial to muscle and 

fascia) and at least the following if 

present: (1) Local care of superficial 

wounds, (2) debridement of corns and 

calluses, and (3) trimming and 

debridement of nails); G0341 

(Percutaneous islet cell transplant, 

includes portal vein catheterization and 

infusion); G0342 (Laparoscopy for islet 

cell transplant, includes portal vein 

catheterization and infusion); G0343 

(Laparotomy for islet cell transplant, 

includes portal vein catheterization and 

infusion); and G0365 (Vessel mapping 

of vessels for hemodialysis access 

(services for preoperative vessel 

mapping prior to creation of 

hemodialysis access using an 

autogenous hemodialysis conduit, 

including arterial inflow and venous 

outflow)). The values in Addendum B 

reflect the updated PE RVUs. 

In addition, there is a series of Gcodes describing surgical pathology 

services with PE RVUs historically 

valued outside of the regular PE 

methodology. These codes are: G0416 

(Surgical pathology, gross and 

microscopic examination for prostate 

needle saturation biopsy sampling, 1–20 

specimens); G0417 (Surgical pathology, 

gross and microscopic examination for 

prostate needle saturation biopsy 

sampling, 21–40 specimens); G0418 

(Surgical pathology, gross and 

microscopic examination for prostate 

needle saturation biopsy sampling, 41– 

60 specimens); and G0419 (Surgical 

pathology, gross and microscopic 

examination for prostate needle 

saturation biopsy sampling, greater than 

60 specimens.) The PE RVUs for these 

codes were established as described in 

the CY 2009 PFS final rule with 

comment period (73 FR 69751). In 

reviewing these values for CY 2012, we 

noted that because the PE RVUs 

established through rulemaking in CY 

2009 were neither developed using the 

regular PE methodology nor directly 

crosswalked from other codes, the PE 

RVUs for these codes were not adjusted 

to account for the CY 2011 MEI rebasing 

and revising, which is discussed in the 

CY 2011 PFS final rule with comment 

period (75 FR 73262). While it was 

technically appropriate to insulate the 

PE RVUs from that adjustment in CY 

2011, upon further review, we believe 

adjusting these PE RVUs would result in 

more accurate payment rates relative to 

the RVUs for other PFS services. 

Therefore, we are proposing to adjust 

the PE RVUs for these codes by 1.182, 

the adjustment rate that accounted for 

the MEI rebasing and revising for CY 

2011. The PE RVUs in Addendum B 

reflect the proposed updates. 

5. Physician Time for Select Services 

As we describe in section II.A.2.f. of 

this proposed rule with comment 

period, in creating the indirect practice 

cost index, we calculate specialtyspecific aggregate pools of indirect PE 

for all PFS services for that specialty by 

adding the product of the indirect PE/ 

HR for the specialty, the physician time 

for the service, and the specialty’s 

utilization for the service across all 

services performed by the specialty. 

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During a review of the physician time 

data for the CY 2012 PFS rulemaking, 

we noted an anomaly regarding the 

physician time allotted to a series of 

group service codes that are listed in 

Table 5. We believe that the time 

associated with these codes reflects the 

typical amount of time spent by the 

practitioner in furnishing the group 

service. However, because the services 

are billed per patient receiving the 

service, the time for these codes should 

be divided by the typical number of 

patients per session. In reviewing the 

data used in the valuation of work RVUs 

for these services, we noted that in one 

vignette for these services, the typical 

group session consisted of 6 patients. 

Therefore we are proposing adjusted 

times for these services based on 6 

patients. However, we seek comment on 

the typical number of patients seen per 

session for each of these services. 

As a result of our review, we are also 

proposing to update our physician time 

file to reflect the physician time 

associated with certain G-codes that 

were previously missing from the file. 

Our proposed time values for these Gcodes as well as the group service codes 

described previously can be found in 

the proposed CY 2012 Physician Time 

file, which is available on the CMS Web 

site under the supporting data files for 

the CY 2012 PFS proposed rule at 

http://www.cms.gov/ 

PhysicianFeeSched/. 

TABLE 5—GROUP EDUCATION AND

THERAPY CODES WITH PROPOSED

TIME CHANGES

CPT 

Code Short descriptor 

90849 Multiple family group psytx 

90853 Group psychotherapy 

90857 Intac group psytx 

92508 Speech/hearing therapy 

96153 Intervene hlth/behave group 

97150 Group therapeutic procedures 

97804 Medical nutrition group 

G0271 Group mnt 2 or more 30 mins 

G0421 Ed svc ckd grp per session 

G0109 Diab manage trn ind/group 

B. Potentially Misvalued Services Under 

the Physician Fee Schedule 

1. Valuing Services Under the PFS 

As discussed in section I. of this 

proposed rule, in order to value services 

under the PFS, section 1848(c) of the 

Act requires the Secretary to determine 

relative values for physicians’ services 

based on three components: Work, 

practice expense (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.’’ Additionally, 

the statute provides that the work 

component shall include activities that 

occur before and after direct patient 

contact. Furthermore, the statute 

specifies that with respect to surgical 

procedures, the valuation of the work 

component for the code must reflect a 

‘‘global’’ concept in which pre-operative 

and post-operative physicians’ services 

related to the procedure are also 

included. 

In addition, section 1848(c)(2)(C)(i) of 

the Act specifies that ‘‘the Secretary 

shall determine a number of work 

relative value units (RVUs) for the 

service based on the relative resources 

incorporating physician time and 

intensity required in furnishing the 

service.’’ As discussed in detail in 

sections I.A.2. and I.A.3. of this 

proposed rule, the statute also defines 

the PE and malpractice components and 

provides specific guidance in the 

calculation of the RVUs for each of these 

components. Section 1848(c)(1)(B) of 

the Act defines the PE component as 

‘‘the portion of the resources used in 

furnishing the service that reflects the 

general categories of expenses (such as 

office rent and wages of personnel, but 

excluding malpractice expenses) 

comprising practice expenses.’’ 

Section 1848(c)(2)(C)(ii) of the Act 

specifies that the ‘‘Secretary shall 

determine a number of practice expense 

relative value units for the services for 

years beginning with 1999 based on the 

relative practice expense resources 

involved in furnishing the service.’’ 

Furthermore, section 1848(c)(2)(B) of 

the Act directs the Secretary to conduct 

a periodic review, not less often than 

every 5 years, of the RVUs established 

under the PFS. On March 23, 2010, the 

Affordable Care Act was enacted, 

further requiring the Secretary to 

periodically identify and review and 

identify potentially misvalued codes, 

and make appropriate adjustments to 

the relative values of those services 

identified as being potentially 

misvalued. Section 3134(a) of the 

Affordable Care Act added a new 

section 1848(c)(2)(K) of the Act which 

requires the Secretary to periodically 

identify potentially misvalued services 

using certain criteria, and to review and 

make appropriate adjustments to the 

relative values for those services. 

Section 3134(a) of the Affordable Care 

Act also added a new section 

1848(c)(2)(L) of the Act which requires 

the Secretary to develop a validation 

process to validate the RVUs of certain 

potentially misvalued codes under the 

PFS, identified using the same 

categorical criteria used to identify 

potentially misvalued codes, and to 

make appropriate adjustments. 

As discussed in section I.A.1. of this 

proposed rule, we generally establish 

physician work RVUs for new and 

revised codes based on our review of 

recommendations received from the 

AMA RUC. We also receive 

recommendations from the AMA RUC 

regarding direct PE inputs for services, 

which we evaluate in order to develop 

the PE RVUs under the PFS. The AMA 

RUC also provides recommendations to 

us on the values for codes that have 

been identified as potentially 

misvalued. To respond to concerns 

expressed by MedPAC, the Congress, 

and other stakeholders regarding 

accurate valuation of services under the 

PFS, the AMA RUC created the FiveYear Review Identification Workgroup 

in 2006. In addition to providing 

recommendations to us for work RVUs 

and physician times, the AMA RUC’s 

Practice Expense Subcommittee reviews 

direct PE inputs (clinical labor, medical 

supplies, and medical equipment) for 

individual services. 

In accordance with section 1848(c) of 

the Act, we determine appropriate 

adjustments to the RVUs, taking into 

account the recommendations provided 

by the AMA RUC and MedPAC, explain 

the basis of these adjustments, and 

respond to public comments in the PFS 

proposed and final rules. We note that 

section 1848(c)(2)(A)(ii) of the Act 

authorizes the use of extrapolation and 

other techniques to determine the RVUs 

for physicians’ services for which 

specific data are not available, in 

addition to taking into account the 

results of consultations with 

organizations representing physicians. 

2. Identifying, Reviewing, and 

Validating the RVUs of Potentially 

Misvalued Services under the PFS 

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 for a number of reasons: For 

example, 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 

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decline as physicians become more 

familiar with the service and more 

efficient in furnishing it.’’ That is, the 

amount of physician work needed to 

furnish an existing service may decrease 

when new technologies are 

incorporated. Services can also become 

overvalued when practice expenses 

decline. This can happen when the 

costs of equipment and supplies fall, or 

when equipment is used more 

frequently, reducing its cost per use. 

Likewise, services can become 

undervalued when physician work 

increases or practice expenses rise. In 

the ensuing years since MedPAC’s 2006 

report, additional groups of potentially 

misvalued services have been identified 

by the Congress, CMS, MedPAC, the 

AMA RUC, and other stakeholders. 

In recent years CMS and the AMA 

RUC have taken increasingly significant 

steps to address potentially misvalued 

codes. As MedPAC noted in its March 

2009 Report to the 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 seven categories 

as follows: 

• Codes and families of codes for 

which there has been the fastest growth. 

• Codes or families of codes that have 

experienced substantial changes in 

practice expenses. 

• Codes that are recently established 

for new technologies or services. 

• Multiple codes that are frequently 

billed in conjunction with furnishing a 

single service. 

• Codes with low relative values, 

particularly those that are often billed 

multiple times for a single treatment. 

• Codes which have not been subject 

to review since the implementation of 

the RBRVS (the so-called ‘‘Harvardvalued codes’’). 

• 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 

the RVUs 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) which 

may include consolidation of individual 

services into bundled codes for payment 

under the physician fee schedule. 

b. Progress in Identifying and Reviewing 

Potentially Misvalued Codes 

Over the last several years, CMS, in 

conjunction with the AMA RUC, has 

identified and reviewed numerous 

potentially misvalued codes in all seven 

of the categories specified in section 

1848(c)(2)(K)(ii) of the Act, and we plan 

to continue our work examining 

potentially misvalued codes in these 

areas over the upcoming years, 

consistent with the new legislative 

requirements on this issue. In the 

current process, we request the AMA 

RUC to review potentially misvalued 

codes that we identify and make 

recommendations on revised work 

RVUs and/or direct PE inputs for those 

codes to us. The AMA RUC, through its 

own processes, also might identify and 

review potentially misvalued 

procedures. We then assess the 

recommended revised work RVUs and/ 

or direct PE inputs and, in accordance 

with section 1848(c) of the Act, we 

determine if the recommendations 

constitute appropriate adjustments to 

the RVUs under the PFS. 

Since CY 2009, as a part of the annual 

potentially misvalued code review, we 

have reviewed over 700 potentially 

misvalued codes to refine work RVUs 

and direct PE inputs in addition to 

continuing the comprehensive FiveYear Review process. We have adopted 

appropriate work RVUs and direct PE 

inputs for these services as a result of 

these reviews. 

Our prior reviews of codes under the 

potentially misvalued codes initiative 

has included codes in all seven 

categories specified in section 

1848(c)(2)(K)(ii) of the Act. That is, we 

have reviewed and assigned more 

appropriate values to— 

• Codes and families of codes for 

which there has been the fastest growth; 

• Codes or families of codes that have 

experienced substantial changes in 

practice expenses; 

• Codes that were 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 had not been subject 

to review since the implementation of 

the RBRVS (‘‘Harvard valued’’); and 

• Codes potentially misvalued as 

determined by the Secretary. 

In this last category, we have 

previously proposed policies in CYs 

2009, 2010, and 2011, and requested 

that the AMA RUC review codes for 

which there have been shifts in the siteof-service (that is, codes that were 

originally valued as being furnished in 

the inpatient setting, but that are now 

predominantly furnished on an 

outpatient basis), as well as codes that 

qualify as ‘‘23-hour stay’’ outpatient 

services (these services typically have 

lengthy hospital outpatient recovery 

periods). We note that a detailed 

discussion of the extensive prior 

reviews of potentially misvalued codes 

is included in the CY 2011 PFS final 

rule with comment period (75 FR 73215 

through 73216). 

In CY 2011, we identified additional 

codes under section 1848(c)(2)(K)(ii) of 

the Act that we believe are ripe for 

review and referred them to the AMA 

RUC (75 FR 73215 through 73216). 

Specifically, we identified potentially 

misvalued codes in the category of 

‘‘Other codes determined to be 

appropriate by the Secretary,’’ referring 

lists of codes with low work RVUs but 

that are high volume based on claims 

data as well as targeted key codes that 

the AMA RUC uses as reference services 

for valuing other services, termed 

‘‘multispecialty points of comparison’’ 

services. 

Since the publication of the CY 2011 

PFS final rule with comment period, we 

released the Fourth Five-Year Review of 

Work (76 FR 32410), which discussed 

the identification and review of an 

additional 173 potentially misvalued 

codes. We initiated the Fourth Five-Year 

Review of work RVUs by soliciting 

public comments on potentially 

misvalued codes for all services 

included in the CY 2010 PFS final rule 

with comment period that was 

published in the Federal Register on 

November 25, 2009. In addition to the 

codes submitted by the commenters, we 

identified a number of potentially 

misvalued codes and requested the 

AMA RUC to review and provide 

recommendations. Our identification of 

potentially misvalued codes for the 

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Fourth Five-Year Review focused on 

two Affordable Care Act categories: Siteof-service anomaly codes and ‘‘Harvard 

valued’’ codes. As discussed in the 

Fourth Five-Year Review of Work (76 

FR 32410), we sent the AMA RUC an 

initial list of 219 codes for review. 

Consistent with our past practice, we 

requested the AMA RUC to review 

codes on a ‘‘family’’ basis rather than in 

isolation in order to ensure that 

appropriate relativity in the system was 

retained. Consequently, the AMA RUC 

included additional codes for review, 

resulting in a total of 290 codes for the 

Fourth Five-Year Review of Work. Of 

those 290 codes, 53 were subsequently 

sent to the CPT Editorial Panel to 

consider coding changes, 14 were not 

reviewed by the AMA RUC (and 

subsequently not reviewed by us) 

because the specialty society that had 

originally requested the review in its 

public comments on the CY 2010 PFS 

final rule with comment period elected 

to withdraw the codes, 36 were not 

reviewed by the AMA RUC because 

their values were set as interim final in 

the CY 2011 PFS final rule with 

comment period, and 14 were not 

reviewed by us because they were 

noncovered services under Medicare. 

Therefore, the AMA RUC reviewed 173 

of the 290 codes initially identified for 

the Fourth Five-Year Review of Work, 

and provided the recommendations that 

were addressed in detail in the Fourth 

Five-Year Review of Work (76 FR 

32410). In addition, under the Fourth 

Five-Year Review of Work, we reviewed 

recommendations for five additional 

potentially misvalued codes from the 

Health Care Professionals Advisory 

Committee (HCPAC), a deliberative 

body of nonphysician practitioners that 

also convenes during the AMA RUC 

meeting. The HCPAC represents 

physician assistants, chiropractors, 

nurses, occupational therapists, 

optometrists, physical therapists, 

podiatrists, psychologists, audiologists, 

speech pathologists, social workers, and 

registered dieticians. 

In summary, since CY 2009, CMS and 

the AMA RUC have addressed a number 

of potentially misvalued codes. For CY 

2009, the AMA RUC recommended 

revised work values and/or PE inputs 

for 204 misvalued services (73 FR 

69883). For CY 2010, an additional 113 

codes were identified as misvalued and 

the AMA RUC provided us new 

recommendations for revised work 

RVUs and/or PE inputs for these codes 

to us as discussed in the CY 2010 PFS 

final rule with comment period (74 FR 

61778). For CY 2011, CMS reviewed and 

adopted more appropriate values for 209 

codes under the annual review of 

potentially misvalued codes. For CY 

2012, we recently released the Fourth 

Five-Year Review of Work, which 

discussed the review of 173 potentially 

misvalued codes and proposed 

appropriate adjustments to RVUs. In 

section II.B.5.of this proposed rule, we 

also provide a list of codes identified for 

future consideration as part of the 

potentially misvalued codes initiative, 

that is, in addition to the codes that are 

part of the Fourth Five-Year Review of 

Work, as discussed in that section, we 

are requesting the AMA RUC review 

these codes and submit 

recommendations to us. 

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 a new section 1848(c)(2)(L) of 

the Act, which specifies that the 

Secretary shall establish a formal 

process to validate RVUs value units 

under the PFS. The validation process 

may include validation of work 

elements (such as time, mental effort 

and professional judgment, technical 

skill and physical effort, and stress due 

to risk) involved with furnishing a 

service and may include validation of 

the pre-, post-, and intra-service 

components of work. The Secretary is 

directed to validate a sampling of the 

work RVUs of codes identified through 

any of the seven categories of 

potentially misvalued codes specified 

by section 1848(c)(2)(K)(ii) 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), we solicited public 

comments on possible approaches and 

methodologies that we should consider 

for a validation process. We received a 

number of comments regarding possible 

approaches and methodologies for a 

validation process. As discussed in the 

CY 2011 PFS final rule with comment 

period (75 FR 73217), some commenters 

were skeptical that there could be viable 

alternative methods to the existing AMA 

RUC code review process for validating 

physician time and intensity that would 

preserve the appropriate relativity of 

specific physician’s services under the 

current payment system. These 

commenters generally urged us to rely 

solely on the AMA RUC to provide 

valuations for services under the PFS. 

While a number of commenters 

strongly opposed our plans to develop 

a formal validation process, many other 

commenters expressed support for the 

development and establishment of a 

system-wide validation process of the 

work RVUs under the PFS. As noted in 

the CY 2011 PFS final rule with 

comment period (75 FR 73217 through 

73218), these commenters commended 

us for seeking new approaches to 

validation, as well as being open to 

suggestions from the public on this 

process. A number of commenters 

submitted technical advice and offered 

their time and expertise as resources for 

us to draw upon in any examination of 

possible approaches to developing a 

formal validation process. 

However, in response to our 

solicitation of comments regarding time 

and motion studies, a number of 

commenters opposed the approach of 

using time and motion studies to 

validate estimates of physician time and 

intensity, stating that properly 

conducted time and motion studies are 

extraordinarily expensive and, given the 

thousands of codes paid under the PFS, 

it would be unlikely that all codes could 

be studied. As we stated in the CY 2011 

PFS final rule with comment period (75 

FR 73218), we understand that these 

studies would require significant 

resources and we remain open to 

suggestions for other approaches to 

developing a formal validation process. 

We note that MedPAC suggested in its 

comment letter (75 FR 73218) that we 

should consider ‘‘collecting data on a 

recurring basis from a cohort of 

practices and other facilities where 

physicians and nonphysician clinical 

practitioners work.’’ As we stated 

previously, we intend to establish a 

more extensive validation process of 

RVUs in the future in accordance with 

the requirements of section 1848(c)(2)(L) 

of the Act. 

While we received a modest number 

of comments specifically addressing 

technical and methodological aspects of 

developing a validation system, we 

believe it would be beneficial to provide 

an additional opportunity for 

stakeholders to submit comments on 

data sources and possible 

methodologies for developing a systemwide validation system. We are 

particularly interested in comments 

regarding data sources and studies 

which may be used to validate estimates 

of physician time and intensity that 

could be factored into the work RVUs, 

especially for services with rapid 

growth in Medicare expenditures, 

which is one of the Affordable Care Act 

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categories that the statute specifically 

directs us to examine. We are also 

soliciting comments regarding 

MedPAC’s suggestion of ‘‘collecting data 

on a recurring basis from a cohort of 

practices and other facilities where 

physicians and nonphysician clinical 

practitioners work.’’ 

We plan to discuss the validation 

process in more detail in a future PFS 

rule once we have considered the matter 

further in conjunction with the public 

comments received on the CY 2011 

rulemaking, as well as this proposed 

rule. We note that any proposals we 

would make on the formal validation 

process would be subject to public 

comment, and we would consider those 

comments before finalizing the policies. 

3. Consolidating Reviews of Potentially 

Misvalued Codes 

As previously discussed, we are 

statutorily required to review the RVUs 

of services paid under the PFS no less 

often than every 5 years. In the past, we 

have satisfied this requirement by 

conducting periodic reviews of work, 

PE, and malpractice RVUs for 

established services every 5 years in 

what is commonly known as CMS’ FiveYear Reviews of Work, PE, and 

Malpractice RVUs. Recently, on May 24, 

2011, we released the proposed notice 

regarding the Fourth Five-Year Review 

of Work RVUs. The most recent 

comprehensive Five-Year Review of PE 

RVUs occurred for CY 2010; the same 

year we began using the Physician 

Practice Information Survey (PPIS) data 

to update the PE RVUs. The last FiveYear Review of Malpractice RVUs also 

occurred for CY 2010. These Five-Year 

Reviews have historically included 

codes identified and nominated by the 

public for review, as well as those 

identified by CMS and the AMA RUC. 

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 using various 

identification screens, such as codes 

with high growth rates, codes that are 

frequently billed together in one 

encounter, and codes that are valued as 

inpatient services but that are now 

predominately furnished as outpatient 

services. These annual reviews have not 

included codes identified by the public 

as potentially misvalued since 

historically, the public has the 

opportunity to submit potentially 

misvalued codes during the Five-Year 

Review process. 

With the enactment of the Affordable 

Care Act in 2010, which endorsed our 

initiative to identify and review 

potentially misvalued codes and 

emphasized the importance of our 

ongoing work in this area to improve 

accuracy and appropriateness of 

payments under the PFS, we believe 

that continuing the annual 

identification and review of potentially 

misvalued codes is necessary. Given 

that we are engaging in extensive 

reviews of work RVUs and direct PE 

inputs of potentially misvalued codes 

on an annual basis, we believe that 

separate and ‘‘freestanding’’ Five-Year 

Reviews of Work and PE may have 

become redundant with our annual 

efforts. Therefore, for CY 2012 and 

forward, we propose to consolidate the 

formal Five-Year Review of Work and 

PE with the annual review of potentially 

misvalued codes. That is, we would 

begin meeting the statutory requirement 

to review work and PE RVUs for 

potentially misvalued codes at least 

once every 5 years through an annual 

process, rather than once every 5 years. 

Furthermore, to allow for public input 

and to preserve the public’s ability to 

identify and nominate potentially 

misvalued codes for review, we are 

proposing a process by which the public 

could submit codes for our potential 

review, along with supporting 

documentation, on an annual basis. Our 

review of these codes would be 

incorporated into our potentially 

misvalued codes initiative. This 

proposal is further discussed in section 

II.B.4. of this proposed rule. We are 

soliciting comments on our proposal to 

consolidate the formal Five-Year 

Reviews of Work and PE with the 

annual review of potentially misvalued 

codes. 

We note that while we are proposing 

to review the physician work RVUs and 

direct PE inputs of potentially 

misvalued codes on an annual basis, we 

are not proposing at this time to review 

malpractice RVUs on an annual basis. 

As discussed in section II.D. of this 

proposed rule, in general, malpractice 

RVUs are based on malpractice 

insurance premium data on a specialty 

level. The last comprehensive review 

and update of the malpractice RVUs 

occurred for CY 2010 using data 

obtained from the PPIS data. Since it is 

not feasible to conduct such extensive 

physician surveys to obtain updated 

specialty level malpractice insurance 

premium data on an annual basis, we 

believe the comprehensive review of 

malpractice RVUs should continue to 

occur at 5-year intervals. 

Furthermore, in identifying and 

reviewing potentially misvalued codes 

on an annual basis, we note that this 

new proposed process presents us with 

the opportunity to review 

simultaneously both the work RVUs and 

the direct PE inputs, in conjunction, for 

each code. Heretofore, the work RVUs 

and direct PE inputs of potentially 

misvalued codes were commonly 

reviewed separately and at different 

times. For example, a code may have 

been identified as potentially misvalued 

based solely on its work RVUs so the 

AMA RUC would have reviewed the 

code and provided us with 

recommendations on the physician 

times and work RVUs. However, the 

code’s direct PE inputs would not have 

necessarily been reviewed concurrently 

and therefore, the AMA RUC would not 

have necessarily provided us with 

recommendations for any changes in the 

direct PE inputs of the code that could 

have been necessary to ensure that the 

PE RVUs of the code are determined 

more appropriately. Therefore, while 

this code may have been recently 

reviewed and revised under the 

potentially misvalued codes initiative 

for physician work, the PE component 

of the code could still be potentially 

misvalued. Going forward, we believe 

combining the review of both physician 

work and PE for each code under our 

potentially misvalued codes initiative 

will more accurately align the review of 

these codes and lead to more accurate 

and appropriate payments under the 

PFS. 

Finally, it is important to note that the 

code-specific resource based relative 

value framework under the PFS system 

is one in which services are ranked 

relative to each other. That is, the work 

RVUs assigned to a code are based on 

the physician time and intensity 

expended on that particular service as 

compared to the physician time and 

intensity of the other services paid 

under the PFS. This concept of relativity 

to other services also applies to the PE 

RVUs, particularly when it comes to 

reviewing and assigning correct direct 

PE inputs that are relative to other 

similar services. Consequently, we are 

emphasizing the need to review codes 

that are identified as part of the 

potentially misvalued initiative to 

ensure that appropriate relativity is 

constructed and maintained in several 

key relationships: 

• The work and PE RVUs of codes are 

ranked appropriately within the code 

family. That is, the RVUs of services 

within a family should be ranked 

progressively so that less intensive 

services and/or services that require less 

physician time and/or require fewer or 

less expensive direct PE inputs should 

be assigned lower work or PE RVUs 

relative to other codes within the 

family. For example, if a code for 

treatment of elbow fracture is under 

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codes initiative, we would expect the 

work and PE RVUs for all the codes in 

the family also be reviewed in order to 

ensure that relativity is appropriately 

constructed and maintained within this 

family. Furthermore, as we noted in the 

CY 2010 PFS final rule with comment 

period (74 FR 61941), when we submit 

codes to the AMA RUC and request 

their review, in order to maintain 

relativity, we emphasized the 

importance of reviewing the base code 

of a family. The base code is the most 

important code to review because it is 

the basis for the valuation of other codes 

within the family and allows for all 

related codes to be reviewed at the same 

time (74 FR 61941). 

• The work and PE RVUs of codes are 

appropriately relative based on 

comparison of physician time and/or 

intensity and/or direct inputs to other 

services furnished by physicians in the 

same specialty. To continue the 

example shown previously, if a code for 

treatment of elbow fracture is under 

review, we would expect this code to be 

compared to other codes, such as codes 

for treatment of humerus fracture, or 

other codes furnished by physicians in 

the same specialty, in order to ensure 

that the work and PE RVUs are 

appropriately relative within the 

specialty. 

• The work and PE RVUs of codes are 

appropriately relative when compared 

to services across specialties. While it 

may be challenging to compare codes 

that describe completely unrelated 

services, since the entire PFS is a budget 

neutral system where payment 

differentials are dependent on the 

relative differences between services, it 

is essential that services across 

specialties are appropriately valued 

relative to each other. To illustrate the 

point, if a service furnished primarily by 

dermatology is analogous in physician 

time and intensity to another service 

furnished primarily by allergy/ 

immunology, then we would expect the 

work RVUs for the two services to be 

similar, even though the two services 

may be otherwise unrelated. 

4. Proposed Public Nomination Process 

Under the previous Five-Year 

Reviews, the public was provided with 

the opportunity to nominate potentially 

misvalued codes for review. To allow 

for public input and to preserve the 

public’s ability to identify and nominate 

potentially misvalued codes for review 

under our annual potentially misvalued 

codes initiative, we are proposing a 

process by which on an annual basis the 

public could submit codes, along with 

documentation supporting the need for 

review. We are proposing that 

stakeholders may nominate potentially 

misvalued codes 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. We 

would evaluate the supporting 

documentation and decide whether the 

nominated code should be reviewed as 

potentially misvalued during the 

following year. If we were to receive an 

overwhelming number of nominated 

codes that qualified as potentially 

misvalued in any given year, we would 

prioritize the codes for review and 

could decide to hold our review of some 

of the potentially misvalued codes for a 

future year. We note that we may 

identify additional potentially 

misvalued codes for review by the AMA 

RUC based on the seven statutory 

categories under section 

1848(c)(2)(K)(ii) of the Act. 

We encourage stakeholders who 

believe they have identified a 

potentially misvalued code, supported 

by documentation, to nominate codes 

through the public process. We 

emphasize that in order to ensure that 

a nominated code will be fully 

considered to qualify as a potentially 

misvalued code to be reviewed under 

our annual process, accompanying 

documentation must be provided to 

show evidence of the code’s 

inappropriate valuation, either in terms 

of inappropriate physician times, work 

RVUs, and/or direct PE inputs. The 

AMA RUC developed certain 

‘‘Guidelines for Compelling Evidence’’ 

for the Third Five-Year Review which 

we believe could be applicable for 

members of the public as they gather 

supporting documentation for codes 

they wish to publicly nominated for the 

annual review of potentially misvalued 

codes. The specific documentation that 

we would seek under this proposal 

includes 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. 

++ Physician time. 

• An anomalous relationship between 

the code being proposed for review and 

other codes. For example, if code ‘‘A’’ 

describes a service that requires more 

work than codes ‘‘B,’’ ‘‘C,’’ and ‘‘D,’’ but 

is nevertheless valued lower. The 

commenter would need to assemble 

evidence on service time, technical 

skill, patient severity, complexity, 

length of stay and other factors for the 

code being considered and the codes to 

which it is compared. These reference 

services may be both inter- and intraspecialty. 

• 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), and the Physician 

Quality Reporting Initiative (PQRI) 

databases). 

• National surveys of physician time 

and intensity from professional and 

management societies and 

organizations, such as hospital 

associations. 

We note that when a code is 

nominated, and supporting 

documentation is provided, we would 

expect to receive a description of the 

reasons for the code’s misvaluation with 

the submitted materials. That is, we 

would require a description and 

summary of the evidence is required 

that shows how the service may have 

changed since the original valuation or 

may have been inappropriately valued 

due to an incorrect assumption. We 

would also appreciate specific Federal 

Register citations, if they exist, where 

commenters believe the nominated 

codes were previously valued 

erroneously. We are also proposing to 

consider only nominations of active 

codes that are covered by Medicare at 

the time of the nomination. 

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 

intend to review the supporting 

documentation and determine whether 

they appear to be potentially misvalued 

codes appropriate for review under the 

annual process. We are proposing that, 

in the following PFS proposed rule, we 

would publish a list of the codes 

received under the public nomination 

process during the previous year and 

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indicate whether the codes would be 

included in our annual review of 

potentially misvalued codes. We would 

also indicate the codes that we would 

not be including in our annual review, 

whether due to insufficient 

documentation or for other reasons. 

Under this proposed process, the first 

opportunity for the public to nominate 

codes would be during the public 

comment period for the CY 2012 PFS 

final rule with comment period. We 

would publish in the CY 2013 PFS 

proposed rule, the list of nominated 

codes, and whether they will be 

reviewed as potentially misvalued 

codes. We would request the AMA RUC 

review these potentially misvalued 

codes identified by the public, along 

with any other codes identified by us, 

and provide to us recommendations for 

appropriate physician times, work 

RVUs, and direct PE inputs. We are 

soliciting public comments on this 

proposed code nomination process and 

we will consider any suggestions to 

modify and improve the proposed 

process. 

5. CY 2012 Identification and Review of 

Potentially Misvalued Services 

a. Code Lists 

While we anticipate receiving 

nominations from the public for 

potentially misvalued codes in 

conjunction with rulemaking, we 

believe it is imperative that we continue 

the work of the review initiatives over 

the last several years and drive the 

agenda forward to identify, review, and 

adjust values for potentially misvalued 

codes for CY 2012. 

In the CY 2011 PFS proposed rule (75 

FR 40068 through 40069), we identified, 

and referred to the AMA RUC, a list of 

potentially misvalued codes in three 

areas: 

• Codes on the AMA RUC’s multispecialty points of comparison (MPC) 

list (used as reference codes in the 

valuation of other codes), 

• Services with low work RVUs that 

are billed in multiples (a statutory 

category); and 

• Codes that have low work RVUs for 

which CMS claims data show high 

volume (that is, high utilization of these 

codes represents a significant dollar 

impact in the payment system). 

Our understanding is that the AMA 

RUC is currently working towards 

reviewing these codes at our request. 

We intend to provide an update and 

discuss any RVU adjustments to codes 

that have been identified as potentially 

misvalued in the CY 2012 PFS final 

rule, as they move through the review 

process. 

Meanwhile, for CY 2012, we are 

continuing with the work to identify 

and review additional services under 

the potentially misvalued codes 

initiative. Stakeholders have noted that 

many of the services previously 

identified under the potentially 

misvalued codes initiative were 

concentrated in certain specialties. To 

develop a robust and representative list 

of codes for review under the 

potentially misvalued codes initiative, 

we examined the highest PFS 

expenditure services by specialty (based 

on our most recently available claims 

data and using the specialty categories 

listed in the PFS specialty impact table, 

see Table 64 in section VII.B. of this 

proposed rule) and identified those that 

have not been reviewed since CY 2006 

(which was the year we completed the 

Third Five-Year Review of Work and 

before we began our potentially 

misvalued codes initiative). 

In our examination of the highest PFS 

expenditure codes for each specialty 

(we used the specialty categories listed 

in the PFS specialty impact table, see 

Table 64 in section VII.B. of this 

proposed rule), we noted that E/M 

services consistently appeared in the 

top 20 high PFS expenditure services. 

We noted as well that most of the E/M 

services have not been reviewed since 

the comprehensive review of services 

for the Third Five-Year Review of Work 

in CY 2006. Therefore, after an 

examination of the highest PFS 

expenditure codes for each specialty, we 

have developed two code lists of 

potentially misvalued codes which we 

are proposing to refer to the AMA RUC 

for review. 

First, we are requesting that the AMA 

RUC conduct a comprehensive review 

of all E/M codes, including the codes 

listed in Table 6. During the intervening 

years, there has been significant interest 

in delivery system reform, such as 

patient-centered medical homes and 

making the primary care physician the 

focus of managing the patient’s chronic 

conditions. The chronic conditions 

challenging the Medicare population 

include heart disease, diabetes, 

respiratory disease, breast cancer, 

allergy, Alzheimer’s disease, and factors 

associated with obesity. Thus, as the 

focus of primary care has evolved from 

an episodic treatment-based orientation 

to a focus on comprehensive patientcentered care management in order to 

meet the challenges of preventing and 

managing chronic disease, we believe a 

more current review of E/M codes is 

warranted. We note that although 

physicians in primary care specialties 

bill a high percentage of their services 

using the E/M codes, physicians in nonprimary care specialties also bill these 

codes for some of their services. 

Since we believe the focus of primary 

care has evolved to meet the challenges 

of preventing and managing chronic 

disease since the last comprehensive 

review of the E/M codes, we would like 

the AMA RUC to prioritize review of the 

E/M codes and provide us with 

recommendations on the physician 

times, work RVUs and direct PE inputs 

of at least half of the E/M codes listed 

in Table 6 by July 2012 in order for us 

to include any revised valuations for 

these codes in the CY 2013 PFS final 

rule with comment period. We would 

expect the AMA RUC to review the 

remaining E/M codes listed in Table 6 

by July 2013 in order for us to complete 

the comprehensive re-evaluation of E/M 

services and include the revised 

valuations for these codes in the CY 

2014 PFS final rule with comment 

period. 

TABLE 6—E/M CODES REFERRED FOR

AMA RUC REVIEW

CPT 

Code Short descriptor 

99201 Office/outpatient visit new 

99202 Office/outpatient visit new 

99203 Office/outpatient visit new 

99204 Office/outpatient visit new 

99205 Office/outpatient visit new 

99211 Office/outpatient visit est 

99212 Office/outpatient visit est 

99213 Office/outpatient visit est 

99214 Office/outpatient visit est 

99215 Office/outpatient visit est 

99217 Observation care discharge 

99218 Initial observation care 

99219 Initial observation care 

99220 Initial observation care 

99221 Initial hospital care 

99222 Initial hospital care 

99223 Initial hospital care 

99224 Subsequent observation care 

99225 Subsequent observation care 

99226 Subsequent observation care 

99231 Subsequent hospital care 

99232 Subsequent hospital care 

99233 Subsequent hospital care 

99234 Observ/hosp same date 

99235 Observ/hosp same date 

99236 Observ/hosp same date 

99238 Hospital discharge day 

99239 Hospital discharge day 

99281 Emergency dept visit 

99282 Emergency dept visit 

99283 Emergency dept visit 

99284 Emergency dept visit 

99285 Emergency dept visit 

99291 Critical care first hour 

99292 Critical care addl 30 min 

99304 Nursing facility care init 

99305 Nursing facility care init 

99306 Nursing facility care init 

99307 Nursing fac care subseq 

99308 Nursing fac care subseq 

99309 Nursing fac care subseq 

99310 Nursing fac care subseq 

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TABLE 6—E/M CODES REFERRED FOR

AMA RUC REVIEW—Continued 

CPT 

Code Short descriptor 

99315 Nursing fac discharge day 

99316 Nursing fac discharge day 

99318 Annual nursing fac assessmnt 

99324 Domicil/r-home visit new pat 

99325 Domicil/r-home visit new pat 

99326 Domicil/r-home visit new pat 

99327 Domicil/r-home visit new pat 

99328 Domicil/r-home visit new pat 

99334 Domicil/r-home visit est pat 

99335 Domicil/r-home visit est pat 

99336 Domicil/r-home visit est pat 

99337 Domicil/r-home visit est pat 

99341 Home visit new patient 

99342 Home visit new patient 

99343 Home visit new patient 

99344 Home visit new patient 

99345 Home visit new patient 

99347 Home visit est patient 

99348 Home visit est patient 

99349 Home visit est patient 

99350 Home visit est patient 

99354 Prolonged service office 

99355 Prolonged service office 

99356 Prolonged service inpatient 

99357 Prolonged service inpatient 

99406 Behav chng smoking 3–10 min 

99407 Behav chng smoking > 10 min 

99460 Init nb em per day hosp 

99461 Init nb em per day non-fac 

99462 Sbsq nb em per day hosp 

99463 Same day nb discharge 

99464 Attendance at delivery 

99465 Nb resuscitation 

99466 Ped crit care transport 

99467 Ped crit care transport addl 

99468 Neonate crit care initial 

99469 Neonate crit care subsq 

99471 Ped critical care initial 

99472 Ped critical care subsq 

99475 Ped crit care age 2–5 init 

99476 Ped crit care age 2–5 subsq 

99477 Init day hosp neonate care 

99478 Ic lbw inf < 1500 gm subsq 

99479 Ic lbw inf 1500–2500 g subsq 

99480 Ic inf pbw 2501–5000 g subsq 

92002 Eye exam new patient 

92004 Eye exam new patient 

92012 Eye exam established pat 

92014 Eye exam & treatment 

Second, we are also providing a select 

list of high PFS expenditure procedural 

codes representing services furnished by 

an array of specialties, as listed in Table 

7. These procedural codes have not been 

reviewed since CY 2006 (before we 

began our potentially misvalued codes 

initiatives in CY 2008) and, based on the 

most recently available data, have CY 

2010 allowed charges of greater than 

$10 million at the specialty level (based 

on the specialty categories listed in the 

PFS specialty impact table and CY 2010 

Medicare claims data). A number of the 

codes in Table 7 would not otherwise be 

identified as potentially misvalued 

services using the screens we have used 

in recent years with the AMA RUC or 

based on one of the six specific statutory 

categories under section 1848(c)(2)(k)(ii) 

of the Act. However, we identified the 

potentially misvalued codes listed in 

Table 7 under the seventh statutory 

category, ‘‘other codes determined to be 

appropriate by the Secretary.’’ We 

selected these codes based on the fact 

that they have not been reviewed for at 

least 6 years, and in many cases the last 

review occurred more than 10 years ago. 

They represent high Medicare 

expenditures under the PFS; thus, we 

believe that a review to assess changes 

in physician work and update direct PE 

inputs is warranted. Furthermore, since 

these codes have significant impact on 

PFS payment on a specialty level, a 

review of the relativity of the code to 

ensure that the work and PE RVUs are 

appropriately relative within the 

specialty and across specialties, as 

discussed previously, is essential. For 

these reasons, we have identified these 

codes as potentially misvalued and are 

requesting that the AMA RUC review 

the codes listed in Table 7 and provide 

us with recommendations on the 

physician times, work RVUs and direct 

PE inputs in a timely manner. That is, 

similar to our request for the AMA RUC 

to review E/M codes in a timely manner, 

we are requesting that the AMA RUC 

review at least half of the procedural 

codes listed in Table 7 by July 2012 in 

order for us to include any revised 

valuations for these codes in the CY 

2013 PFS final rule with comment 

period. 

TABLE 7—SELECT LIST OF PROCEDURAL CODES REFERRED FOR AMA 

RUC REVIEW

CPT 

Code Short descriptor 

95117 Immunotherapy Injections 

33533 Cabg, Arterial, Single 

33405 Replacement Of Aortic Valve 

33430 Replacement Of Mitral Valve 

93015 Cardiovascular Stress Test 

93880 Extracranial Study 

93000 Electrocardiogram, Complete 

17311 Mohs, 1 Stage, H/N/Hf/G 

17312 Mohs Addl Stage 

17004 Destroy Premlg Lesions 15+ 

45378 Diagnostic Colonoscopy 

43235 Uppr Gi Endoscopy, Diagnosis 

47562 Laparoscopic Cholecystectomy 

47563 Laparo Cholecystectomy/Graph 

49505 Prp I/Hern Init Reduc > 5 Yr 

96413 Chemo, Iv Infusion, 1 Hr 

96367 Tx/Proph/Dg Addl Seq Iv Inf 

96365 Ther/Proph/Diag Iv Inf, Init 

62311 Inject Spine L/S (Cd) 

35476 Repair Venous Blockage 

36870 Percut Thrombect Av Fistula 

35475 Repair Arterial Blockage 

95903 Motor Nerve Conduction Test 

95819 Eeg, Awake And Asleep 

TABLE 7—SELECT LIST OF PROCEDURAL CODES REFERRED FOR AMA 

RUC REVIEW—Continued 

CPT 

Code Short descriptor 

95861 Muscle Test, 2 Limbs 

22612 Lumbar Spine Fusion 

63047 Removal Of Spinal Lamina 

22851 Apply Spine Prosth Device 

76830 Transvaginal Us, Non-Ob 

67028 Injection Eye Drug 

92235 Eye Exam With Photos 

66982 Cataract Surgery, Complex 

27447 Total Knee Arthroplasty 

27130 Total Hip Arthroplasty 

27236 Treat Thigh Fracture 

69210 Remove Impacted Ear Wax 

31237 Nasal/Sinus Endoscopy, Surg 

88342 Immunohistochemistry 

88112 Cytopath, Cell Enhance Tech 

88312 Special Stains Group 1 

97140 Manual Therapy 

90862 Medication Management 

90801 Psy Dx Interview 

90805 Psytx, Off, 20-30 Min W/E&M 

94720 Monoxide Diffusing Capacity 

94240 Residual Lung Capacity 

77014 Ct Scan For Therapy Guide 

77301 Radiotherapy Dose Plan, Imrt 

77421 Stereoscopic X-Ray Guidance 

70450 Ct Head/Brain W/O Dye 

70553 Mri Brain W/O & W/Dye 

72148 Mri Lumbar Spine W/O Dye 

20610 Drain/Inject, Joint/Bursa 

53850 Prostatic Microwave Thermotx 

50590 Fragmenting Of Kidney Stone 

76872 Us, Transrectal 

35301 Rechanneling Of Artery 

98941 Chiropractic Manipulation 

98940 Chiropractic Manipulation 

98942 Chiropractic Manipulation 

90806 Psytx, Off, 45–50 Min 

90818 Psytx, Hosp, 45–50 Min 

90808 Psytx, Office, 75–80 Min 

72141 Mri Neck Spine W/O Dye 

73221 Mri Joint Upr Extrem W/O Dye 

70551 Mri Brain W/O Dye 

92083 Visual Field Examination(S) 

97530 Therapeutic Activities 

97112 Neuromuscular Reeducation 

97001 Pt Evaluation 

b. Specific Codes 

On an ongoing basis, public 

stakeholders (including physician 

specialty societies, beneficiaries, and 

other members of the public) bring 

concerns to us regarding direct PE 

inputs and physician work. In the past, 

we would consider these concerns and 

address them through proposals in 

annual rulemaking, technical 

corrections, or by requesting that the 

AMA RUC consider the issue. 

Since last year’s rulemaking, the 

public has brought a series of issues to 

our attention that relate directly to 

direct PE inputs and physician work. 

We believe that some of these issues 

will serve as examples of codes that 

might be brought forward by the public 

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as potentially misvalued in the 

proposed nomination process as 

discussed previously in section II.B.4. of 

this proposed rule. 

(1) Codes Potentially Requiring Updates 

to Direct PE Inputs 

Abdomen and Pelvis CT. For CY 2011, 

AMA CPT created a series of new codes 

that describe combined CTs of the 

abdomen and pelvis. Prior to 2011, 

these services would have been billed 

using multiple stand-alone codes for 

each body region. The new codes are: 

74176 (Computed tomography, 

abdomen and pelvis; without contrast 

material); 74177 (Computed 

tomography, abdomen and pelvis; with 

contrast material); and 74178 

(Computed tomography, abdomen and 

pelvis; without contrast material in one 

or both body regions, followed by with 

contrast material(s) and further sections 

in one or both body regions.) 

As stated in the CY 2011 PFS final 

rule with comment period (75 FR 

73350), we accepted the AMA RUCrecommended direct PE inputs for these 

codes, with refinements to the 

equipment minutes to assure that the 

time associated with the equipment 

items reflected the time during the intraservice period when a clinician is using 

the piece of equipment, plus any 

additional time the piece of equipment 

is not available for use for another 

patient due to its use during the 

designated procedure. We believe that 

the direct PE inputs of the new codes 

reflect the typical resources required to 

furnish the services in question. 

However, stakeholders have alerted us 

that the resulting PE RVUs for the new 

codes reflect an anomalous rank order 

in comparison to the previously existing 

stand-alone codes. Specifically, the PE 

RVUs for the codes that describe CT 

scans without contrast for either body 

region are greater than the PE RVUs for 

74176, which describes a CT scan of 

both body regions. We believe that the 

anomalous rank order of the PE RVUs 

for this series of codes may be the result 

of outdated direct PE inputs for the 

previously existing stand-alone codes. 

The physician work for those codes was 

last reviewed by the AMA RUC during 

the Third Five-Year Review of Work for 

CY 2007. However, the direct PE inputs 

for the codes have not been reviewed 

since 2003. Therefore, we are requesting 

that the AMA RUC review both the 

direct PE inputs and work values of the 

following codes in accordance with the 

consolidated approach to reviewing 

potentially misvalued codes as outlined 

in section II.B.2.c. of this proposed rule: 

• 72192 Computed tomography, 

pelvis; without contrast material 

• 72193 Computed tomography, 

pelvis; with contrast material(s) 

• 72194 Computed tomography, 

pelvis; without contrast material, 

followed by contrast material(s) and 

further sections 

• 74150 Computed tomography, 

abdomen; without contrast material 

• 74160 Computed tomography, 

abdomen; with contrast material(s) 

• 74170 Computed tomography, 

abdomen; without contrast material, 

followed by contrast material(s) and 

further sections 

Tissue Pathology. A stakeholder 

informed us that the direct PE inputs 

associated with a particular tissue 

examination code are atypical. 

Specifically, the stakeholder suggested 

that the AMA RUC relied upon an 

atypical clinical vignette in identifying 

the direct PE inputs for the service 

associated with CPT code 88305 (Level 

IV—Surgical pathology, gross and 

microscopic examination Abortion— 

spontaneous/missed, Artery, biopsy, 

Bone marrow, biopsy, Bone exostosis, 

Brain/meninges, other than for tumor 

resection, Breast, biopsy, not requiring 

microscopic evaluation of surgical 

margins, Breast, reduction 

mammoplasty, Bronchus, biopsy, Cell 

block, any source, Cervix, biopsy, 

Colon, biopsy, Duodenum, biopsy, 

Endocervix, curettings/biopsy, 

Endometrium, curettings/biopsy, 

Esophagus, biopsy, Extremity, 

amputation, traumatic, Fallopian tube, 

biopsy, Fallopian tube, ectopic 

pregnancy, Femoral head, fracture, 

Fingers/toes, amputation, nontraumatic, Gingiva/oral mucosa, biopsy, 

Heart valve, Joint, resection, Kidney, 

biopsy, Larynx, biopsy, Leiomyoma(s), 

uterine myomectomy—without uterus, 

Lip, biopsy/wedge resection, Lung, 

transbronchial biopsy, Lymph node, 

biopsy, Muscle, biopsy, Nasal mucosa, 

biopsy, Nasopharynx/oropharynx, 

biopsy, Nerve, biopsy, Odontogenic/ 

dental cyst, Omentum, biopsy, Ovary 

with or without tube, non-neoplastic, 

Ovary, biopsy/wedge resection, 

Parathyroid gland, Peritoneum, biopsy, 

Pituitary tumor, Placenta, other than 

third trimester, Pleura/pericardium— 

biopsy/tissue, Polyp, cervical/ 

endometrial, Polyp, colorectal, Polyp, 

stomach/small intestine, Prostate, 

needle biopsy, Prostate, TUR, Salivary 

gland, biopsy, Sinus, paranasal biopsy, 

Skin, other than cyst/tag/debridement/ 

plastic repair, Small intestine, biopsy, 

Soft tissue, other than tumor/mass/ 

lipoma/debridement, Spleen, Stomach, 

biopsy, Synovium, Testis, other than 

tumor/biopsy/castration, Thyroglossal 

duct/brachial cleft cyst, Tongue, biopsy, 

Tonsil, biopsy, Trachea, biopsy, Ureter, 

biopsy, Urethra, biopsy, Urinary 

bladder, biopsy, Uterus, with or without 

tubes and ovaries, for prolapse, Vagina, 

biopsy, Vulva/labia, biopsy). 

The stakeholder claims that in 

furnishing the typical service, the 

required material includes a single 

block of tissue and 1–3 slides. The 

stakeholder argues that the typical costs 

for the service amount is approximately 

$18, but the PE RVUs for 2011 result in 

a national payment rate of $69.65 for the 

technical component of the service. 

Because the direct PE inputs associated 

with this code have not been reviewed 

since 1999, we are asking that the AMA 

RUC review both the direct PE inputs 

and work values of this code as soon as 

possible in accordance with the 

consolidated approach to reviewing 

potentially misvlaued codes as outlined 

in section II.B.2.c. of this proposed rule 

though the work for this code was 

reviewed in April 2010. 

In Situ Hybridization Testing. We 

received comments from the Large 

Urology Group Practice Association 

(LUGPA) regarding two new 

cytopathology codes that describe in 

situ hybridization testing of urine 

specimens. Prior to CY 2011, all in situ 

hybridization testing was coded and 

billed using CPT Codes 88365 (In situ 

hybridization (eg, FISH), each probe), 

88367 (Morphometric analysis, in situ 

hybridization (quantitative or semiquantitative) each probe; using 

computer-assisted technology) and 

88368 (Morphometric analysis, in situ 

hybridization (quantitative or semiquantitative) each probe; manual). The 

appropriate CPT code listed would be 

billed one time for each probe used in 

the performance of the test, regardless of 

the medium of the specimen (that is, 

blood, tissue, tumor, bone marrow or 

urine). 

For CY 2011, the AMA’s CPT 

Editorial Panel created two new 

cytopathology codes that describe in 

situ hybridization testing using urine 

samples: CPT code 88120 

(Cytopathology, in situ hybridization 

(eg, FISH), urinary tract specimen with 

morphometric analysis, 3–5 molecular 

probes, each specimen; manual) and 

CPT code 88121 (Cytopathology, in situ 

hybridization (eg, FISH), urinary tract 

specimen with morphometric analysis, 

3–5 molecular probes, each specimen; 

using computer-assisted technology). 

Because the descriptors indicate that 

the new codes account for 

approximately 4 probes, whereas 88367 

and 88368 describe each probe, there 

are more PE RVUs associated with the 

new codes than with the previously 

existing codes that are currently still 

used for any specimen except for urine. 

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However, because the previously 

existing codes are billed per probe, the 

payment for a test using a different 

specimen type could vary depending 

upon the number of probes. For 

example, a practitioner furnishing a test 

involving a blood specimen and using 

two probes would bill CPT code 88368 

(total RVUs: 6.28) three times with the 

result of 18.84 RVUs. A practitioner 

furnishing the same test but using a 

urine sample instead of a blood sample 

would receive payment based on the 

13.47 RVUs associated with CPT code 

88120. 

CMS accepted the RUCrecommended work values and direct 

PE inputs, without refinement, for the 

two new cytopathology codes that 

describe in situ hybridization testing 

using urine samples. We have reviewed 

the direct PE recommendations made by 

the AMA RUC and, at this time, believe 

that these inputs are appropriate. 

However, we share LUGPA’s concerns 

regarding the potential payment 

discrepancies between the codes that 

describe the same test using different 

specimen media. Therefore, we are 

asking the AMA RUC to review the both 

the direct PE inputs and work values of 

the following codes in accordance with 

the consolidated approach to reviewing 

potentially misvlaued codes as outlined 

in section II.B.2.c. of this proposed rule: 

CPT codes 88365 (In situ hybridization 

(e.g., FISH), each probe); 88367 

(Morphometric analysis, in situ 

hybridization (quantitative or semiquantitative) each probe; using 

computer-assisted technology); and 

88368 (Morphometric analysis, in situ 

hybridization (quantitative or semiquantitative) each probe; manual.) 

(2) Codes Without Direct Practice 

Expense Inputs in the Non-Facility 

Setting 

Certain stakeholders have requested 

that we create nonfacility PE values for 

a series of kyphoplasty services CPT 

codes: 

• 22523 (Percutaneous vertebral 

augmentation, including cavity creation 

(fracture reduction and bone biopsy 

included when performed) using 

mechanical device, 1 vertebral body, 

unilateral or bilateral cannulation (e.g., 

kyphoplasty); thoracic), 

• 22524 (Percutaneous vertebral 

augmentation, including cavity creation 

(fracture reduction and bone biopsy 

included when performed) using 

mechanical device, 1 vertebral body, 

unilateral or bilateral cannulation (e.g., 

kyphoplasty); lumbar). 

• 22525 (Percutaneous vertebral 

augmentation, including cavity creation 

(fracture reduction and bone biopsy 

included when performed) using 

mechanical device, 1 vertebral body, 

unilateral or bilateral cannulation (e.g., 

kyphoplasty); each additional thoracic 

or lumbar vertebral body (List separately 

in addition to code for primary 

procedure). 

In the case of these codes, we are 

asking the RUC to make 

recommendations regarding the 

appropriateness of creating nonfacility 

direct PE inputs. If the RUC were to 

recommend direct PE recommendations, 

we would review those 

recommendations as part of the annual 

process. 

Ultrasound Equipment. A stakeholder 

has raised concern about potential 

inconsistencies with the inputs and the 

prices related to ultrasound equipment 

in the direct PE database. Upon 

reviewing inputs and prices for 

ultrasound equipment, we have noted 

that there are 17 different pieces of 

ultrasound and ultrasound-related 

equipment in the database that are 

associated with 110 CPT Codes. The 

price inputs for ultrasound equipment 

range from $1,304.33 to $466,492.00. 

Therefore, we are asking the AMA RUC 

to review the ultrasound equipment 

included in those codes as well as how 

the way the equipment is described and 

priced in the direct PE database. 

In the past, the AMA RUC has 

provided us with valuable 

recommendations regarding particular 

categories of equipment and supply 

items that are used as direct PE inputs 

for a range of codes. For example, in the 

2011 PFS final rule (75 FR 73204), we 

made changes to a series of codes 

following the RUC’s review of services 

that include the radiographic 

fluoroscopic room (CMS Equipment 

Code EL014) as a direct PE input. The 

RUC review revealed the use of the item 

to no longer be typical for certain 

services in which it had been specified 

within the direct cost inputs. These 

recommendations have often prompted 

our proposals that have served to 

maintain appropriate relativity within 

the PFS, and we hope that the RUC will 

continue to address issues relating to 

equipment and supply inputs that affect 

many codes. Furthermore, we believe 

that in these kinds of cases, it may be 

appropriate to make changes to the 

related direct PE inputs for a series of 

codes without reevaluating the 

physician work or other direct PE inputs 

for the individual codes. In other words, 

while we generally believe that both the 

work and the direct practice expense 

inputs should be reviewed whenever 

the RUC makes recommendations 

regarding either component of a code’s 

value, we recognize the value of discrete 

RUC reviews of direct PE items that 

serve as inputs for a series of service 

codes. 

(3) Codes Potentially Requiring 

Updates to Physician Work 

Cholecystectomy. We received a 

comment regarding a potential relativity 

problem between two cholecystectomy 

(gall bladder removal) CPT codes. CPT 

code 47600 (Cholecystectomy;) has a 

work RVU of 17.48, and CPT code 

47605 (Cholecystectomy; with 

cholangiography) has a work RVU of 

15.98. Upon examination of the 

physician time and visits associated 

with these codes, we found that CPT 

code 47600 includes 115 minutes of 

intra-service time and a total time of 420 

minutes, including 3 office visits, 3 

subsequent hospital care days, and 1 

hospital discharge management day. 

CPT code 47605 includes 90 minutes of 

intra-service time and a total time of 387 

minutes, including 2 office visits, 3 

subsequent hospital care days, and 1 

hospital discharge management day. We 

believe that the difference in physician 

time and visits is the cause for the 

difference in work RVU for these codes. 

However, upon clinical review, it does 

not appear that these visits 

appropriately reflect the relativity of 

these two services, as CPT code 47600 

should not have more time and visits 

associated with the service than CPT 

code 47605. Therefore, we are asking 

the AMA RUC to review these two 

cholecystectomy CPT codes, 47600 and 

47605. 

We thank the public for bringing these 

issues to our attention and kindly 

request that the public continue to do 

so. Please see section II.B.4. of this 

proposed notice for more information 

on the proposed public process for the 

nomination of potentially misvalued 

codes. 

6. Code-Specific Issues 

a. CY 2012 Codes With Site-of-Service 

Anomalies 

(1) Background 

The AMA RUC reviewed a number of 

site-of-service anomaly codes for CY 

2012, many of which are site-of-service 

anomaly codes that have had interim 

values in place since CY 2009. These are 

CPT codes that have experienced a 

change in the typical site-of-service 

since the original valuation of the codes. 

Specifically, these codes were originally 

furnished in the inpatient setting, but 

Medicare claims data show that the 

typical case has shifted to being 

furnished in the outpatient setting. 

Since the procedures were typically 

furnished in the inpatient setting when 

the codes were originally valued, the 

work RVUs for these codes would have 

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been valued to include the inpatient 

physician work furnished, as well as to 

reflect the intensive follow-up care 

normally associated with an inpatient 

procedure. As we discussed in the CY 

2011 final rule with comment period (75 

FR 73221), when the typical case for a 

service has shifted from the inpatient 

setting to an outpatient or physician’s 

office setting, we do not believe the 

inclusion of inpatient hospital visits in 

the post-operative period is appropriate. 

For example, inpatient E/M visit codes 

such as CPT codes 99231 (Level 1 

subsequent hospital care, per day); 

99232 (Level 2 subsequent hospital care, 

per day); and 99233 (Level 3 subsequent 

hospital care, per day), should not be 

included in the valuation of these 

services. Additionally, we believe that it 

is reasonable to expect that there have 

been changes in medical practice for 

these services, and that such changes 

would represent a decrease in physician 

time or intensity or both. The AMA RUC 

reviewed 40 CPT codes that were 

identified as having site-of-service 

anomalies and recommended revised 

RVUs to CMS for 29 codes for CY 2009 

and 11 codes for CY 2010. In the CY 

2010 PFS proposed rule and final rule 

with comment period (74 FR 33556 and 

74 FR 61777, respectively), we 

encouraged the AMA RUC to utilize the 

building block methodology when 

revaluing services with site-of-service 

anomalies. In the CY 2011 PFS final rule 

with comment period (75 FR 73221), we 

also stated that in the CYs 2009 and 

2010 PFS final rules with comment 

period (73 FR 69883 and 74 FR 61776 

through 61778, respectively), we 

indicated that although we would 

accept the AMA RUC valuations for 

these site-of-service anomaly codes on 

an interim basis through CY 2010, we 

had ongoing concerns about the 

methodology used by the AMA RUC to 

value these services. We requested that 

the AMA RUC re-examine the site-ofservice anomaly codes and adjust the 

work RVU, time, and post-service visits 

to reflect those typical of a service 

furnished in an outpatient or 

physician’s office setting. 

Following our request in the CY 2011 

PFS final rule with comment period, the 

AMA RUC re-reviewed these site-ofservice anomaly codes and 

recommended work RVUs to us. Of the 

40 CPT codes on the CY 2009 and CY 

2010 site-of-service anomaly code lists 

in the CY 2011 PFS final rule with 

comment period, 1 CPT code was not rereviewed, as it was addressed in the CY 

2011 PFS final rule with comment 

period as a part of the vagal nerve 

stimulator family of services. Ten of the 

remaining 39 site-of-service anomaly 

codes were addressed in the Five-Year 

Review of Work, published in the 

Federal Register on June 6, 2011 (76 FR 

32410). The remaining 29 CPT codes are 

addressed in this CY 2012 PFS proposed 

rule. We will summarize and respond to 

public comments, and adopt final work 

RVUs for all 40 CPT codes on the CY 

2009 and CY 2010 site-of-service 

anomaly lists in the CY 2012 PFS final 

rule with comment period. In addition, 

several other CPT codes have since been 

identified as having site-of-service 

anomalies and were addressed in the 

Five-Year Review of Work (76 FR 

32410). We will respond to public 

comments and adopt final work values 

for these codes in the CY 2012 PFS final 

rule with comment period. A complete 

list of the 40 CPT codes with site-ofservice anomalies identified in CY 2009 

and CY 2010, the rule in which each 

code was addressed, the AMA RUCrecommended work RVU, and the CMS 

proposed or interim work RVU can be 

found in Table 8. 

When Medicare claims data show that 

the typical setting for a CPT code has 

shifted from the inpatient setting to the 

outpatient setting, we continue to 

believe that the work RVU, time, and 

post-service visits of the code should 

reflect the current outpatient setting. For 

many of the site-of-service anomaly CPT 

codes, we believe that the AMA RUC 

appropriately accounted for this site-ofservice shift in its recommendations to 

us, and we agree with the AMA RUCrecommended work RVU for 19 of the 

40 CY 2009 and CY 2010 site-of-service 

anomaly codes. However, we found that 

for the remainder of these site-of-service 

anomaly codes (21 of 40), the AMA RUC 

often recommended maintaining 

inpatient visits or removing inpatient 

visits and/or time without a 

corresponding decrease in work RVU. In 

those cases, we disagreed with the AMA 

RUC-recommended work RVU and 

adjusted the work RVU, time, and visits 

to reflect those typical of a service 

furnished in an outpatient or 

physician’s office setting. In the Fourth 

Five-Year Review of Work (76 FR 

32410), we discussed in detail our 

methodology for revaluing the site-ofservice anomaly codes addressed in that 

proposed notice. We continue that 

discussion here, and a full description 

of our methodology for revaluing the 

site-of-service anomaly codes for CY 

2012 is included later in this section. 

TABLE 8—CMS DECISIONS ON CODES WITH SITE-OF-SERVICE ANOMALIES

CPT Code Short descriptor CMS Work RVU decision publication 

AMA RUC 

Recommended 

work RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed/ 

interim 

Work RVU 

21025 ....... Excision of bone, lower jaw ...................... CY 2012 PFS NPRM ................................ 10.03 Agree ...... 10.03 

23415 ....... Release of shoulder ligament ................... CY 2012 PFS NPRM ................................ 9.23 Agree ...... 9.23

25116 ....... Remove wrist/forearm lesion .................... CY 2012 PFS NPRM ................................ 7.56 Agree ...... 7.56

28120 ....... Part removal of ankle/heel ........................ Fourth Five-Year Review of Work ............ 8.27 Disagree 7.31 

28122 ....... Partial removal of foot bone ..................... Fourth Five-Year Review of Work ............ 7.72 Disagree 6.76 

28725 ....... Fusion of foot bones ................................. CY 2012 PFS NPRM ................................ 12.18 Disagree 11.22 

28730 ....... Fusion of foot bones ................................. CY 2012 PFS NPRM ................................ 12.42 Disagree 10.70 

36825 ....... Artery-vein autograft ................................. Fourth Five-Year Review of Work ............ 15.13 Disagree 14.17 

42415 ....... Excise parotid gland/lesion ....................... Fourth Five-Year Review of Work ............ 18.12 Disagree 17.16 

42420 ....... Excise parotid gland/lesion ....................... Fourth Five-Year Review of Work ............ 21.00 Disagree 19.53 

42440 ....... Excise submaxillary gland ........................ CY 2012 PFS NPRM ................................ 7.13 Disagree 6.14 

49507 ....... Prp i/hern init block >5 yr ......................... Fourth Five-Year Review of Work ............ 10.05 Disagree 9.09 

49521 ....... Rerepair ing hernia, blocked .................... Fourth Five-Year Review of Work ............ 12.44 Disagree 11.48 

49587 ....... Rpr umbil hern, block > 5 yr ..................... Fourth Five-Year Review of Work ............ 8.04 Disagree 7.08 

52341 ....... Cysto w/ureter stricture tx ......................... CY 2012 PFS NPRM ................................ 5.35 Agree ...... 5.35 

52342 ....... Cysto w/up stricture tx .............................. CY 2012 PFS NPRM ................................ 5.85 Agree ...... 5.85 

52343 ....... Cysto w/renal stricture tx .......................... CY 2012 PFS NPRM ................................ 6.55 Agree ...... 6.55 

52344 ....... Cysto/uretero, stricture tx ......................... CY 2012 PFS NPRM ................................ 7.05 Agree ...... 7.05 

52345 ....... Cysto/uretero w/up stricture ...................... CY 2012 PFS NPRM ................................ 7.55 Agree ...... 7.55 

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TABLE 8—CMS DECISIONS ON CODES WITH SITE-OF-SERVICE ANOMALIES—Continued 

CPT Code Short descriptor CMS Work RVU decision publication 

AMA RUC 

Recommended 

work RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed/ 

interim 

Work RVU 

52346 ....... Cystouretero w/renal strict ........................ CY 2012 PFS NPRM ................................ 8.58 Agree ...... 8.58 

52400 ....... Cystouretero w/congen repr ..................... CY 2012 PFS NPRM ................................ 8.69 Agree ...... 8.69

52500 ....... Revision of bladder neck .......................... CY 2012 PFS NPRM ................................ 8.14 Agree ...... 8.14 

52640 ....... Relieve bladder contracture ...................... Fourth Five-Year Review of Work ............ 4.79 Agree ...... 4.79 

53445 ....... Insert uro/ves nck sphincter ..................... CY 2012 PFS NPRM ................................ 15.39 Disagree 13.00 

54410 ....... Remove/replace penis prosth ................... CY 2012 PFS NPRM ................................ 15.18 Agree ...... 15.18 

54530 ....... Removal of testis ...................................... CY 2012 PFS NPRM ................................ 8.46 Agree ...... 8.46 

57287 ....... Revise/remove sling repair ....................... Fourth Five-Year Review of Work ............ 11.15 Agree ...... 11.15 

61885 ....... Insrt/redo neurostim 1 array ..................... CY 2011 PFS Final Rule .......................... 6.44 Disagree 6.05 

62263 ....... Epidural lysis mult sessions ..................... CY 2012 PFS NPRM ................................ 6.54 Disagree 5.00 

62350 ....... Implant spinal canal cath .......................... CY 2012 PFS NPRM ................................ 6.05 Agree ...... 6.05 

62355 ....... Remove spinal canal catheter .................. CY 2012 PFS NPRM ................................ 4.35 Disagree 3.55 

62360 ....... Insert spine infusion device ...................... CY 2012 PFS NPRM ................................ 4.33 Agree ...... 4.33 

62361 ....... Implant spine infusion pump ..................... CY 2012 PFS NPRM ................................ 5.65 Disagree 5.00 

62362 ....... Implant spine infusion pump ..................... CY 2012 PFS NPRM ................................ 6.10 Disagree 5.60 

62365 ....... Remove spine infusion device .................. CY 2012 PFS NPRM ................................ 4.65 Disagree 3.93 

63650 ....... Implant neuroelectrodes ........................... CY 2012 PFS NPRM ................................ 7.20 Disagree 7.15

63685 ....... Insrt/redo spine n generator ..................... CY 2012 PFS NPRM ................................ 6.05 Disagree 5.19 

64708 ....... Revise arm/leg nerve ................................ CY 2012 PFS NPRM ................................ 6.36 Agree ...... 6.36 

64831 ....... Repair of digit nerve ................................. CY 2012 PFS NPRM ................................ 9.16 Agree ...... 9.16 

65285 ....... Repair of eye wound ................................ CY 2012 PFS NPRM ................................ 16.00 Disagree 15.36 

(2) Revised Work RVUs for Codes With 

Site-of-Service Anomalies 

(A) Foot Arthrodesis 

CPT Code Short descriptor 

AMA RUC 

Recommended 

work RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed 

work RVU 

28725 .................. Fusion of foot bones ................................................................................. 12.18 Disagree ............. 11.22 

28730 .................. Fusion of foot bones ................................................................................. 12.42 Disagree ............. 10.70 

For CPT code 28725 (Arthrodesis; 

subtalar) and 28730 (Arthrodesis, 

midtarsal or tarsometatarsal, multiple or 

transverse) the most recently available 

Medicare claims data suggests that these 

site-of-service anomaly codes could be 

‘‘23-hour stay’’ outpatient services. As 

we discussed in the CY 2011 PFS final 

rule with comment period (75 FR 73226 

through 73227) and the Five-Year 

Review of Work (76 FR 32410), the 

‘‘23-hour stay service’’ is a term of art 

describing services that typically have 

lengthy hospital outpatient recovery 

periods. For these 23-hour stay services, 

the typical patient is commonly at the 

hospital for less than 24-hours, but often 

stays overnight at the hospital. Unless a 

treating physician has written an order 

to admit the patient as an inpatient, the 

patient is considered for Medicare 

purposes to be a hospital outpatient, not 

an inpatient, and our claims data 

support that the typical 23-hour stay 

service is billed as an outpatient service. 

As we discussed in the Five-Year 

Review of Work (76 FR 32410), we 

believe that the values of the codes that 

fall into the 23-hour stay category 

should not reflect work that is typically 

associated with an inpatient service. 

However, as we stated in the CY 2011 

PFS final rule with comment period (75 

FR 73226 through 73227), we find it is 

plausible that while the patient 

receiving the outpatient 23-hour stay 

service remains a hospital outpatient, 

the patient would typically be cared for 

by a physician during that lengthy 

recovery period at the hospital. While 

we do not believe that post-procedure 

hospital visits would be at the inpatient 

level since the typical case is an 

outpatient who would be ready to be 

discharged from the hospital in 23- 

hours or less, we believe it is generally 

appropriate to include the intra-service 

time of the inpatient hospital visit in the 

immediate post-service time of the 23- 

hour stay code under review. In 

addition, we indicated that we believe 

it is appropriate to include a half day, 

rather than a full day, of a discharge day 

management service. We finalized this 

policy in the CY 2011 PFS final rule 

with comment period (75 FR 73226 

through 73227) and encouraged the 

AMA RUC to apply this methodology in 

developing the recommendations it 

provides to us for valuing 23-hour stay 

codes, in order to ensure the consistent 

and appropriate valuation of the 

physician work for these services. 

For CY 2010, CPT codes 28725 and 

28730 were identified as potentially 

misvalued through the site-of-service 

anomaly screen and were reviewed by 

the AMA RUC. For both of these 

services, based on reference services 

and specialty survey data, the AMA 

RUC recommended maintaining the 

current (CY 2009) work RVU, which we 

then increased slightly based on the 

redistribution of RVUs that resulted 

from the CY 2010 policy to no longer 

recognize the CPT consultation codes 

(74 FR 61775). The AMA RUC rereviewed CPT codes 28725 and 28730 

for CY 2012 and, contrary to the 23-hour 

stay policy we finalized in the CY 2011 

PFS final rule with comment period (75 

FR 73226 through 73227), 

recommended replacing the hospital 

inpatient post-operative visit in the 

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current work values with a subsequent 

observation care service, specifically 

CPT code 99224 (Level 1 subsequent 

observation care, per day) and 

recommended maintaining the current 

interim value of the two CPT codes. 

Specifically, for CY 2012 the AMA RUC 

recommended a work RVU of 12.18 for 

CPT code 28725 and a work RVU of 

12.42 for CPT code 28730. 

We disagree with the AMA RUCrecommended values for CPT codes 

28725 and 28730. We believe the 

appropriate methodology for valuing 

these codes entails accounting for the 

removal of the inpatient visits in the 

work value for the site-of-service 

anomaly codes since these services are 

no longer typically furnished in the 

inpatient setting. We do not believe it is 

appropriate to simply exchange the 

inpatient post-operative visits in the 

original value with subsequent 

observation care visits and maintain the 

current work RVUs. 

As the data suggests, these two siteof-service anomaly codes resemble 23- 

hour stay outpatient services, and since 

the AMA RUC’s recommended value 

continues to include inpatient visits (or 

subsequent observation care codes) in 

the post-operative period, we applied 

the 23-hour stay policy described 

previously. Specifically, we removed 

the subsequent observation care service, 

reduced the one day of discharge 

management service to one-half day, 

and adjusted physician work RVUs and 

times accordingly. As a result, for CY 

2012 we are proposing a work RVU of 

11.22 for CPT code 28725, and a work 

RVU of 10.70 for CPT code 28730, with 

aforementioned refinements to time. A 

complete list of CMS time refinements 

can be found in Table 9. 

(B) Submandibular Gland Excision 

CPT Code Short descriptor 

AMA RUC 

Recommended 

work RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed 

work RVU 

42440 .................. Excise submaxillary gland ......................................................................... 7.13 Disagree ............. 6.14 

For CY 2009, CPT code 42440 

(Excision of submandibular 

(submaxillary) gland) was identified as 

potentially misvalued through the siteof-service anomaly screen and was 

reviewed by the AMA RUC. Based on 

reference services and specialty survey 

data, the AMA RUC recommended 

maintaining the current (CY 2008) work 

RVU of 7.05 for this service and 

removing the inpatient subsequent 

hospital care visit blocks to reflect the 

current outpatient place of service. In 

CY 2010, while CMS adopted the AMA 

RUC-recommended work value on an 

interim final basis and referred the 

service back to the AMA RUC to be 

reexamined, the work RVU for CPT code 

42440 used under the PFS was 

increased to 7.13 based on the 

redistribution of RVUs that resulted 

from our policy to no longer recognize 

the CPT consultation codes (74 FR 

61775). Upon re-review for CY 2012, the 

AMA RUC resubmitted its previous 

recommendation and again 

recommended that the current work 

RVU of 7.13 for CPT code 42440 be 

maintained. 

We disagree with the AMA RUCrecommended work RVU of 7.13 for 

CPT code 42440 and believe a work 

RVU of 6.14 is more appropriate for this 

service. As stated previously, we believe 

the appropriate methodology for valuing 

site-of-service anomaly codes entails not 

just removing the inpatient visits, but 

also accounting for the removal of the 

inpatient visits in the work value of the 

CPT code. To appropriately revalue this 

CPT code to reflect an outpatient service 

we started with the original CY 2008 

work RVU of 7.05 then, in accordance 

with the policy discussed in section 

II.B. of this proposed notice, we 

removed the value of the subsequent 

hospital care service and one-half 

discharge day management service, and 

added back the subsequent hospital care 

intra-service time to the immediate postoperative care service. As a result, we 

are proposing an alternative work RVU 

of 6.14 with refinements to the time for 

CPT code 42440 for CY 2012. A 

complete list of CMS time refinements 

can be found in Table 9. 

(C) Urological Procedures 

CPT Code Short descriptor 

AMA RUC 

Recommended 

work RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed 

work RVU 

53445 .................. Insert uro/ves nck sphincter ...................................................................... 15.39 Disagree ............. 13.00 

54410 .................. Remove/replace penis prosth ................................................................... 15.18 Agree .................. 15.18 

54530 .................. Removal of testis ....................................................................................... 8.46 Agree .................. 8.46 

For CY 2009, CPT code 53445 

(Insertion of inflatable urethral/bladder 

neck sphincter, including placement of 

pump, reservoir, and cuff) was 

identified as potentially misvalued 

through the site-of-service anomaly 

screen and was reviewed by the AMA 

RUC. The AMA RUC recommended that 

CPT code 53445 should be removed 

from the site-of-service anomaly screen 

and that the current work RVU of 15.21 

should be maintained because, although 

the Medicare claims data indicated that 

this service is predominately furnished 

in the outpatient setting, survey 

respondents indicated this service is 

typically furnished in the facility 

setting. In CY 2010, while we adopted 

the AMA RUC-recommended work 

value on an interim final basis and 

referred the service back to the AMA 

RUC to be reexamined, the work RVU 

for CPT code 53445 used under the PFS 

was increased to 15.39 based on the 

redistribution of RVUs that resulted 

from our policy to no longer recognize 

the CPT consultation codes (74 FR 

61775). Upon re-review for CY 2012, the 

AMA RUC reaffirmed its previous 

recommendation. Despite Medicare 

claims data showing that this service is 

typically furnished in the outpatient 

setting, the AMA RUC believes it is 

appropriate for CPT code 53445 to have 

inpatient visits because the specialty 

society that most commonly furnishes 

these procedures asserts that the typical 

patient spends at least one night in the 

hospital. The AMA RUC has requested 

that the specialty society conduct an 

additional survey to address more 

specifically whether an overnight stay is 

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typical for CPT code 53445 and 54410. 

The AMA RUC recommended that the 

current work RVU of 15.39 for CPT code 

53445 be maintained. 

We disagree with the AMA RUCrecommended work RVU of 15.39 for 

CPT code 53445 and believe a work 

RVU of 13.00 is more appropriate for 

this service. As stated previously in our 

discussion of 23-hour stay codes, as 

well as in the CY 2010 PFS final rule 

with comment period (74 FR 61777), 

even though a service may typically 

have a lengthy hospital outpatient 

recovery period, it should not reflect 

work that is typically associated with an 

inpatient service. Upon clinical review 

of this service and the time and visits 

associated with it, we believe that the 

survey 25th percentile work RVU of 

13.00 appropriately accounts for the 

work required to furnish this service. 

Therefore, we are proposing a work 

RVU of 13.00 for CPT code 53445 for CY 

2012. 

(D) Epidural Lysis 

CPT Code Short descriptor 

AMA RUC 

Recommended 

work 

RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed 

work RVU 

62263 .................. Epidural lysis mult sessions ...................................................................... 6.54 Disagree ............. 5.00 

For CY 2009, CPT code 62263 

(Percutaneous lysis of epidural 

adhesions using solution injection (eg, 

hypertonic saline, enzyme) or 

mechanical means (eg, catheter) 

including radiologic localization 

(includes contrast when administered), 

multiple adhesiolysis sessions; 2 or 

more days,) was identified as potentially 

misvalued through the site-of-service 

anomaly screen and was reviewed by 

the AMA RUC. Based on reference 

services and specialty survey data, the 

AMA RUC recommended maintaining 

the current (CY 2008) work RVU of 6.41 

for this service and removing the 

inpatient subsequent hospital care visits 

to reflect the current outpatient place of 

service. In CY 2010, while we adopted 

the AMA RUC-recommended work 

value on an interim final basis and 

referred the service back to the AMA 

RUC to be reexamined, the work RVU 

for CPT code 62263 used under the PFS 

was increased to 6.54 based on the 

redistribution of RVUs that resulted 

from our policy to no longer recognize 

the CPT consultation codes (74 FR 

61775). Upon re-review for CY 2012, the 

AMA RUC reaffirmed its previous 

recommendation and recommended that 

the current work RVU of 6.54 for CPT 

code 62263 be maintained. 

We disagree with the AMA RUCrecommended work RVU of 6.45 for 

CPT code 62263. As stated previously, 

we believe the appropriate methodology 

for valuing site-of-service anomaly 

codes entails not just removing the 

inpatient visits, but also accounting for 

the removal of the inpatient visits in the 

work value of the CPT code. Upon 

clinical review, we believe that the 

survey median work RVU of 5.00 

appropriately accounts for the removal 

of the inpatient visits as well as the 

increase in intra-service time and postoperative office visits in this service. 

Therefore, we are proposing a work 

RVU of 5.00 for CPT code 62263 for CY 

2012. 

(E) Intrathecal Epidural Catheters and 

Pumps 

CPT Code Short descriptor 

AMA RUC 

Recommended 

work RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed 

work 

RVU 

62350 .................. Implant spinal canal cath .......................................................................... 6.05 Agree .................. 6.05 

62355 .................. Remove spinal canal catheter ................................................................... 4.35 Disagree ............. 3.55 

62360 .................. Insert spine infusion device ....................................................................... 4.33 Agree .................. 4.33 

62361 .................. Implant spine infusion pump ..................................................................... 5.65 Disagree ............. 5.00 

62362 .................. Implant spine infusion pump ..................................................................... 6.10 Disagree ............. 5.60 

62365 .................. Remove spine infusion device .................................................................. 4.65 Disagree ............. 3.93 

For CY 2009, CPT code 62355 

(Removal of previously implanted 

intrathecal or epidural catheter) was 

identified as potentially misvalued 

through the site-of-service anomaly 

screen and was reviewed by the AMA 

RUC. Based on reference services and 

specialty survey data, the AMA RUC 

recommended a work RVU of 4.30, 

approximately midway between the 

survey median and 75th percentile. The 

AMA RUC recommended removing the 

inpatient building blocks to reflect the 

outpatient site-of-service, removing all 

but 1 of the post-procedure office visits 

to reflect the shift in global period from 

90 days to 10 days, and reducing the 

physician time associated with this 

service. In CY 2010, while we adopted 

the AMA RUC-recommended work 

value on an interim final basis and 

referred the service back to the AMA 

RUC to be reexamined, the work RVU 

for CPT code 62355 used under the PFS 

was increased to 4.35 based on the 

redistribution of RVUs that resulted 

from the CMS policy to no longer 

recognize the CPT consultation codes 

(74 FR 61775). Upon re-review for CY 

2012, the AMA RUC reaffirmed its 

previous recommendation and 

ultimately recommended that the 

current work RVU of 4.35 for CPT code 

62355 be maintained. 

We disagree with the AMA RUCrecommended work RVU of 4.35 for 

CPT code 62355. As stated previously, 

we believe the appropriate methodology 

for valuing site-of-service anomaly 

codes entails not just removing the 

inpatient visits, but also accounting for 

the removal of the inpatient visits in the 

work value of the CPT code. We do not 

believe that the reduction from the CY 

2008 work RVU of 6.60 to the CY 2009 

work RVU of 4.30 adequately accounts 

for the removal of 3 subsequent hospital 

care visits and half a discharge 

management day, which together 

represent a work RVU of 5.40. Also, the 

time required to furnish this service 

dropped significantly, even after 

considering the global period change. 

Upon clinical review, we believe that 

the survey median work RVU of 3.55 

appropriately accounts for the removal 

of the inpatient visits and decreased 

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time for this service. Therefore, we are 

proposing a work RVU of 3.55 for CPT 

code 62355 for CY 2012. 

For CY 2009, CPT code 62361 

(Implantation or replacement of device 

for intrathecal or epidural drug infusion; 

nonprogrammable pump) was identified 

as potentially misvalued through the 

site-of-service anomaly screen and was 

reviewed by the AMA RUC. Based on 

reference services and specialty survey 

data, the AMA RUC recommended a 

work RVU of 5.60, approximately 

midway between the survey median and 

75th percentile. The AMA RUC 

recommended removing the inpatient 

visits to reflect the outpatient site-ofservice, removing all but 1 of the postprocedure office visits to reflect the shift 

in global period from 90 days to 10 

days, and reducing the physician time 

associated with this service. In CY 2010, 

while we adopted the AMA RUCrecommended work value on an interim 

final basis and referred the service back 

to the AMA RUC to be reexamined, the 

work RVU for CPT code 62361 used 

under the PFS was increased to 5.65 

based on the redistribution of RVUs that 

resulted from our policy to no longer 

recognize the CPT consultation codes 

(74 FR 61775). Upon re-review for CY 

2012, the AMA RUC reaffirmed its 

previous recommendation and 

ultimately recommended that the 

current work RVU of 5.65 for CPT code 

62361 be maintained. 

We disagree with the AMA RUCrecommended work RVU of 5.65 for 

CPT code 62361. As stated previously, 

we believe the appropriate methodology 

for valuing site-of-service anomaly 

codes entails not just removing the 

inpatient visits, but also accounting for 

the removal of the inpatient visits in the 

work value of the CPT code. We do not 

believe that the reduction from the CY 

2008 work RVU of 6.59 to the CY 2009 

work RVU of 5.60 adequately accounts 

for the removal of 3 subsequent hospital 

care visits and half a discharge 

management day, which together 

represent a work RVU of 5.40. Also, the 

time required to furnish this service 

dropped significantly, even after 

considering the global period change. 

Upon clinical review, we believe that 

the survey 25th percentile work RVU of 

5.00 appropriately accounts for the 

removal of the inpatient visits and 

decreased time for this service. 

Therefore, we are proposing a work 

RVU of 5.00 for CPT code 62361 for CY 

2012. 

For CY 2009, CPT code 62362 

(Implantation or replacement of device 

for intrathecal or epidural drug infusion; 

programmable pump, including 

preparation of pump, with or without 

programming) was identified as 

potentially misvalued through the siteof-service anomaly screen and was 

reviewed by the AMA RUC. Based on 

reference services and specialty survey 

data, the AMA RUC recommended a 

work RVU of 6.05, approximately 

midway between the survey median and 

75th percentile. The AMA RUC 

recommended removing the inpatient 

visits to reflect the outpatient site-ofservice, removing all but 1 of the postprocedure office visits to reflect the shift 

in global period from 90 days to 10 

days, and reducing the physician time 

associated with this service. In CY 2010, 

while CMS adopted the AMA RUCrecommended work value on an interim 

final basis and referred the service back 

to the AMA RUC to be reexamined, the 

work RVU for CPT code 62362 used 

under the PFS was increased to 6.10 

based on the redistribution of RVUs that 

resulted from our policy to no longer 

recognize the CPT consultation codes 

(74 FR 61775). Upon re-review for CY 

2012, the AMA RUC reaffirmed its 

previous recommendation and 

ultimately recommended that the 

current work RVU of 6.10 for CPT code 

62362 be maintained. 

We disagree with the AMA RUCrecommended work RVU of 6.10 for 

CPT code 62362. As stated previously, 

we believe the appropriate methodology 

for valuing site-of-service anomaly 

codes entails not just removing the 

inpatient visits, but also accounting for 

the removal of the inpatient visits in the 

work value of the CPT code. We do not 

believe that the reduction from the CY 

2008 work RVU of 8.58 to the CY 2009 

work RVU of 6.05 adequately accounts 

for the removal of 3 subsequent hospital 

care visits and half a discharge 

management day, which together 

represent a work RVU of 5.40. Also, the 

time required to furnish this service 

dropped significantly, even after 

considering the global period change. 

Upon clinical review, we believe that 

the survey median work RVU of 5.60 

appropriately accounts for the removal 

of the inpatient visits and decreased 

time for this service. Therefore, we are 

proposing a work RVU of 5.60 for CPT 

code 62362 for CY 2012. 

For CY 2009, CPT code 62365 

(Removal of subcutaneous reservoir or 

pump, previously implanted for 

intrathecal or epidural infusion) was 

identified as potentially misvalued 

through the site-of-service anomaly 

screen and was reviewed by the AMA 

RUC. Based on reference services and 

specialty survey data, the AMA RUC 

recommended a work RVU of 4.60, the 

survey median. The AMA RUC 

recommended removing the inpatient 

visits to reflect the outpatient site-ofservice, removing all but 1 of the postprocedure office visits to reflect the shift 

in global period from 90 days to 10 

days, and reducing the physician time 

associated with this service. In CY 2010, 

while CMS adopted the AMA RUCrecommended work value on an interim 

final basis and referred the service back 

to the AMA RUC to be reexamined, the 

work RVU for CPT code 62365 used 

under the PFS was increased to 4.65 

based on the redistribution of RVUs that 

resulted from our policy to no longer 

recognize the CPT consultation codes 

(74 FR 61775). Upon re-review for CY 

2012, the AMA RUC reaffirmed its 

previous recommendation and 

ultimately recommended that the 

current work RVU of 4.65 for CPT code 

62365 be maintained. 

We disagree with the AMA RUCrecommended work RVU of 4.65 for 

CPT code 62365. As stated previously, 

we believe the appropriate methodology 

for valuing site-of-service anomaly 

codes entails not just removing the 

inpatient visits, but also accounting for 

the removal of the inpatient visits in the 

work value of the CPT code. We do not 

believe that the reduction from the CY 

2008 work RVU of 6.57 to the CY 2009 

work RVU of 4.60 adequately accounts 

for the removal of 3 subsequent hospital 

care visits and half a discharge 

management day, which together 

represent a work RVU of 5.40. Also, the 

time required to furnish this service 

dropped significantly, even after 

considering the global period change. 

We believe that this service is similar to 

that of CPT code 33241 (Subcutaneous 

removal of single or dual chamber 

pacing cardioverter-defibrillator pulse 

generator) which has a work RVU of 

3.29 but does not include a half day of 

discharge management service. Upon 

clinical review, we believe that a work 

RVU of 3.93, that is a work RVU of 3.29 

plus a work RVU of 0.64 to account for 

the half day of discharge management 

service, appropriately accounts for the 

removal of the inpatient visits and 

decreased time for this service. 

Therefore, we are proposing a work 

RVU of 3.93 for CPT code 62365 for CY 

2012. 

(F) Neurostimulators 

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CPT Code Short descriptor 

AMA RUC 

Recommended 

work 

RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed 

work RVU 

63650 .................. Implant neuroelectrodes ............................................................................ 7.20 Disagree ............. 7.15 

63685 .................. Insrt/redo spine n generator ...................................................................... 6.05 Disagree ............. 5.19 

For CY 2009, CPT code 63650 

(Percutaneous implantation of 

neurostimulator electrode array, 

epidural) or mechanical means (such as, 

catheter) including radiologic 

localization (includes contrast when 

administered), multiple adhesiolysis 

sessions; 2 or more days, was identified 

as potentially misvalued through the 

site-of-service anomaly screen and was 

reviewed by the AMA RUC. Based on 

reference services and specialty survey 

data, the AMA RUC recommended the 

survey median work RVU of 7.15, and 

removing the inpatient subsequent 

hospital care visits to reflect the current 

outpatient place of service. In CY 2010, 

while we adopted the AMA RUCrecommended work value on an interim 

final basis and referred the service back 

to the AMA RUC to be reexamined, the 

work RVU for CPT code 63650 used 

under the PFS was increased to 7.20 

based on the redistribution of RVUs that 

resulted from the our policy to no longer 

recognize the CPT consultation codes 

(74 FR 61775). Upon re-review for CY 

2012, the AMA RUC reaffirmed its 

previous recommendation and 

ultimately recommended that the 

current work RVU of 7.20 for CPT code 

63650 be maintained. 

We disagree with the AMA RUCrecommended work RVU of 7.20 for 

CPT code 63650. As stated previously, 

we believe the appropriate methodology 

for valuing site-of-service anomaly 

codes entails not just removing the 

inpatient visits, but also accounting for 

the removal of the inpatient visits in the 

work value of the CPT code. Upon 

clinical review, we believe that the 

survey median work RVU of 7.15 

appropriately accounts for the removal 

of the inpatient visits, as well as the 

physician time and post-operative office 

visit changes. Therefore, we are 

proposing a work RVU of 7.15 for CPT 

code 63650 for CY 2012. 

For CY 2009, CPT code 63685 

(Insertion or replacement of spinal 

neurostimulator pulse generator or 

receiver, direct or inductive coupling) 

was identified as potentially misvalued 

through the site-of-service anomaly 

screen and was reviewed by the AMA 

RUC. Based on reference services and 

specialty survey data, the AMA RUC 

recommended the survey median work 

RVU of 6.00, and removing the inpatient 

subsequent hospital care visits to reflect 

the current outpatient place of service. 

In CY 2010, while we adopted the AMA 

RUC-recommended work value on an 

interim final basis and referred the 

service back to the AMA RUC to be 

reexamined, the work RVU for CPT code 

63685 used under the PFS was 

increased to 7.05 based on the 

redistribution of RVUs that resulted 

from the our policy to no longer 

recognize the CPT consultation codes 

(74 FR 61775). Upon re-review for CY 

2012, the AMA RUC reaffirmed its 

previous recommendation and 

ultimately recommended that the 

current work RVU of 6.05 for CPT code 

63685 be maintained. 

We disagree with the AMA RUCrecommended work RVU of 6.05 for 

CPT code 63685. As stated previously, 

we believe the appropriate methodology 

for valuing site-of-service anomaly 

codes entails not just removing the 

inpatient visits, but also accounting for 

the removal of the inpatient visits in the 

work value of the CPT code. Upon 

clinical review, we believe that the 

survey 25th percentile work RVU of 

5.19 appropriately accounts for the 

removal of the inpatient visits, as well 

as the physician time and post-operative 

office visit changes. Therefore, we are 

proposing a work RVU of 5.19 for CPT 

code 63685 for CY 2012. 

(G) Repair of Eye Wound 

CPT Code Short descriptor 

AMA RUC 

Rec′ommended 

work 

RVU 

CMS 

Work 

RVU 

decision 

CMS 

Proposed 

work RVU 

65285 .................. Repair of eye wound .............................................................................. 16.00 Disagree ............ 15.36 

Data suggest that CPT code 65285 

(Repair of laceration; cornea and/or 

sclera, perforating, with reposition or 

resection of uveal tissue) is a ‘‘23-hour 

stay’’ outpatient service. For these 23- 

hour stay services, the typical patient is 

commonly at the hospital for less than 

24 hours, but often stays overnight at 

the hospital. As we discussed 

previously and in the Five-Year Review 

of Work (76 FR 32410), we believe that 

the values of the codes that fall into the 

23-hour stay category should not reflect 

work that is typically associated with an 

inpatient service. 

For CY 2009, CPT code 65285 was 

identified as potentially misvalued 

through the site-of-service anomaly 

screen and was reviewed by the AMA 

RUC. Based on specialty survey data 

indicating that this service typically 

requires an overnight stay, the AMA 

RUC recommended removing the CPT 

code from the site-of-service anomaly 

list and maintaining the current (CY 

2008) work RVU of 14.43, as well as 

current physician times and visits. In 

CY 2010, while we adopted the AMA 

RUC-recommended work value on an 

interim final basis and referred the 

service back to the AMA RUC to be 

reexamined, the work RVU for CPT code 

65285 used under the PFS was 

increased to 14.71 based on the 

redistribution of RVUs that resulted 

from the our policy to no longer 

recognize the CPT consultation codes 

(74 FR 61775). 

The AMA RUC re-reviewed CPT code 

65285 for CY 2012 and recommended 

removing the half day of subsequent 

hospital care service, but contrary to the 

23-hour stay policy we finalized in the 

CY 2011 PFS final rule with comment 

period (75 FR 73226 through 73227), 

recommended maintaining the one full 

day of discharge management service. 

The AMA RUC also recommended an 

increase in intra-service time and postprocedure office visits. Ultimately, the 

AMA RUC recommended a work RVU 

of 16.00 for CPT code 65285 for CY 

2012. 

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We disagree with the AMA RUC 

recommended value for CPT code 

65285. As the most recently available 

Medicare claims data suggest these two 

site-of-service anomaly codes resemble 

23-hour stay outpatient services, and 

since the AMA RUC’s recommended 

value continues to include one full day 

of discharge management service, we 

applied the 23-hour stay policy 

described previously. That is, we 

reduced the one day of discharge 

management service to one-half day, 

and adjusted physician work RVUs and 

times accordingly. As a result, we are 

proposing an alternative work RVU of 

15.36 with refinements to the time for 

CPT code 65285 for CY 2012. 

A complete list of CMS time 

refinements can be found in Table 9. 

BILLING CODE 4120–01–P 

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BILLING CODE 4120–01–C 

b. Payment for Bone Density Tests 

Section 1848(b)(6) of the Act (as 

amended by section 3111(a) of the 

Affordable Care Act) changed the 

payment calculation for dual-energy 

x-ray absorptiometry (DXA) services 

described by two specified DXA CPT 

codes for CYs 2010 and 2011. This 

provision required payment for these 

services at 70 percent of the product of 

the CY 2006 RVUs for these DXA codes, 

the CY 2006 CF, and the geographic 

adjustment for the relevant payment 

year. 

Effective January 1, 2007, the CPT 

codes for DXA services were revised. 

The former DXA CPT codes 76075 (Dual 

energy X-ray absorptiometry (DXA), 

bone density study, one or more sites; 


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axial skeleton (eg, hips, pelvis, spine)); 

76076 (Dual energy X-ray 

absorptiometry (DXA), bone density 

study, one or more sites; appendicular 

skeleton (peripheral) (for example, 

radius, wrist, heel)); and 76077 (Dual 

energy X-ray absorptiometry (DXA), 

bone density study, one or more sites; 

vertebral fracture assessment) were 

deleted and replaced with new CPT 

codes 77080, 77081, and 77082 that 

have the same respective code 

descriptors as the predecessor codes. 

Section 1848(b) of the Act, as amended, 

specifies that the revised payment 

applies to two of the predecessor codes 

(CPT codes 76075 and 76077) and ‘‘any 

succeeding codes,’’ which are, in this 

case, CPT codes 77080 and 77082. 

As mentioned previously, section 

1848(b) of the Act revised the payment 

for CPT codes 77080 and 77082 during 

CY 2010 and CY 2011. We provided for 

payment in CYs 2010 and 2011 under 

the PFS for CPT codes 77080 and 77082 

at the specified rates (70 percent of the 

product of the CY 2006 RVUs for these 

DXA codes, the CY 2006 conversion 

factor (CF), and the geographic 

adjustment for the relevant payment 

year). Because the statute specifies a 

payment calculation for these services 

for CYs 2010 and 2011 as described 

previously, for those years we 

implemented the payment provision by 

imputing RVUs for these services that 

would provide the specified payment 

amount for these services when 

multiplied by the current year’s 

conversion factor. 

For CY 2012, the payment rate for 

CPT codes 77080 and 77082 will be 

based upon resource-based, rather than 

imputed, RVUs, and the current year’s 

conversion factor. The CY 2012 work, 

PE, and malpractice RVUs for these 

codes are shown in Table 10, as well as 

in Addendum B of this proposed rule. 

TABLE 10—CY 2012 RVUS FOR DXA CPT CODES 77080 AND 77082 

CPT Code Modifier Physician 

work RVU 

Fully 

implemented 

non-facility 

PE RVU 

Transitional 

non-facility 

PE RVU 

Fully 

implemented 

facility 

PE RVU 

Transitional 

facility 

PE RVU 

Malpractice 

RVU 

77080 ............................... .................... 0.20 1.26 1.44 NA NA 0.02 

77080 ............................... TC 0.00 1.18 1.36 NA NA 0.01 

77080 ............................... 26 0.20 0.08 0.08 0.08 0.08 0.01 

77082 ............................... .................... 0.17 0.63 0.65 NA NA 0.02 

77082 ............................... TC 0.00 0.56 0.58 NA NA 0.01 

77082 ............................... 26 0.17 0.07 0.07 0.07 0.07 0.01 

In addition to temporarily changing 

the payment rate for the two DXA CPT 

codes, section 3111(b) of the Affordable 

Care Act also authorizes the Secretary to 

enter into agreement with the Institute 

of Medicine of the National Academies 

to conduct a study on the ramifications 

of Medicare payment reductions for 

dual-energy x-ray absorptiometry (as 

described in section 1848(b)(6) of the 

Act) during years 2007, 2008, and 2009 

on beneficiary access to bone mass 

density tests. This study has not yet 

been conducted. In the absence of this 

study, we request that the AMA RUC 

review CPT codes 77080 and 77082 

during CY 2012. 

C. Expanding the Multiple Procedure 

Payment Reduction (MPPR) Policy 

1. Background 

Medicare has a longstanding policy to 

reduce payment by 50 percent for the 

second and subsequent surgical 

procedures furnished to the same 

patient by the same physician on the 

same day, largely based on the presence 

of efficiencies in the practice expense 

(PE) and pre- and post-surgical 

physician work. Effective January 1, 

1995, the MPPR policy, with the same 

percentage reduction, was extended to 

nuclear medicine diagnostic procedures 

(CPT codes 78306, 78320, 78802, 78803, 

78806, and 78807). In the CY 1995 PFS 

final rule with comment period (59 FR 

63410), we indicated that we would 

consider applying the policy to other 

diagnostic tests in the future. 

Consistent with recommendations of 

MedPAC in its March 2005 Report to the 

Congress on Medicare Payment Policy, 

under the CY 2006 PFS, the MPPR 

policy was extended to the technical 

component (TC) of certain diagnostic 

imaging procedures performed on 

contiguous areas of the body in a single 

session (70 FR 70261). The reduction 

recognizes that, for the second and 

subsequent imaging procedures, there 

are some efficiencies in clinical labor, 

supplies, and equipment time. In 

particular, certain clinical labor 

activities and supplies are not 

duplicated for subsequent procedures 

and, because equipment time and 

indirect costs are allocated based on 

clinical labor time, those would also be 

reduced accordingly. 

The imaging MPPR policy 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. When we adopted the policy in 

CY 2007, we stated that we believed 

efficiencies were most likely to occur 

when imaging procedures are performed 

on contiguous body areas because the 

patient and equipment have already 

been prepared for the second and 

subsequent procedures, potentially 

yielding resource savings in areas such 

as clerical time, technical preparation, 

and supplies (70 FR 45850). The MPPR 

policy originally applied only to 

procedures furnished in a single session 

involving contiguous body areas within 

a family of codes, not across families. 

Additionally, while the MPPR policy 

applies to TC-only services and to the 

TC of global services, it does not apply 

to professional component (PC) services. 

Under the current imaging MPPR 

policy, full payment is made for the TC 

of the highest paid procedure, and 

payment is reduced by 50 percent of the 

TC for each additional procedure when 

an MPPR scenario applies. 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, the 

Deficit Reduction Act of 2005 (DRA) 

(Pub. L. 109–171) 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 the new OPPS 

payment cap added by the DRA, we 

decided in the PFS final rule with 

comment period for 2006 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 

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budget neutrality provision. Effective 

July 1, 2010, section 3135(b) of the 

Affordable Care Act amended the statute 

to increase the MPPR on the TC of 

imaging services under the policy 

established in the CY 2006 PFS final 

rule with comment period from 25 to 50 

percent, and exempted the reduced 

expenditures attributable to this further 

change from the PFS budget neutrality 

provision. 

In the July 2009 GAO report entitled, 

‘‘Medicare Physician Payments: Fees 

Could Better Reflect Efficiencies 

Achieved when Services are Provided 

Together,’’ the GAO recommended that 

we take further steps to ensure that fees 

for services paid under the PFS reflect 

efficiencies that occur when services are 

furnished by the same physician to the 

same beneficiary on the same day. The 

GAO 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 CYs 2009 and 2010 PFS 

proposed rules (73 FR 38586 and 74 FR 

33554, respectively), we stated that we 

planned to analyze nonsurgical services 

commonly furnished together (for 

example, 60 to 75 percent of the time) 

to assess whether an expansion of the 

MPPR policy could be warranted. 

MedPAC encouraged us to consider 

duplicative physician work, as well as 

PE, in any expansion of the MPPR 

policy. 

Section 1848(c)(2)(K) of the Act (as 

added by section 3134(a) of the 

Affordable Care 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 services furnished to the 

same patient in the same session, 

regardless of the imaging modality, and 

is not limited to contiguous body areas. 

We note that section 

1848(c)(2)(B)(v)(VI) of the Act (as added 

by section 3135(b) of the Affordable 

Care 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. That is, the 

reduced payments for code 

combinations within a family of codes 

(contiguous body areas) are excluded 

from budget neutrality. However, this 

exclusion only applies to reduced 

expenditures attributable to the increase 

in the MPPR percentage from 25 to 50 

percent, and not to reduced 

expenditures attributable to our policy 

change regarding additional code 

combinations across code families (noncontinguous body areas) that are subject 

to budget neutrality under the PFS. 

The complete list of codes subject to 

the CY 2011 MPPR policy for diagnostic 

imaging services is included in 

Addendum F. 

As a further step in applying the 

provisions of section 3134(a) of the 

Affordable Care Act, effective 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. Contractor-priced 

codes, bundled codes, and add-on codes 

are excluded because an MPPR would 

not be applicable for ‘‘always therapy’’ 

services furnished in combination with 

these codes. The complete list of codes 

subject to the MPPR policy for therapy 

services is included in Addendum H. 

In the CY 2011 proposed rule (75 FR 

44075), we proposed to apply a 50 

percent payment reduction to the PE 

component of the second and 

subsequent therapy services for multiple 

‘‘always therapy’’ services furnished to 

a single patient in a single day. 

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 patient 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 

(Pub. L. 111–286) revised the payment 

reduction percentage from 25 percent to 

20 percent for therapy services 

furnished in office settings. The 

payment reduction percentage remains 

at 25 percent for services furnished in 

institutional settings. Section 4 of the 

Physician Payment and Therapy Relief 

Act of 2010 exempted the reduced 

expenditures attributable to the therapy 

MPPR policy from the PFS budget 

neutrality provision. Under our current 

policy as amended by the Physician 

Payment and Therapy Relief Act, for 

institutional services, full payment is 

made for the service or unit with the 

highest PE and payment for the PE 

component for the second and 

subsequent procedures or additional 

units of the same service is reduced by 

25 percent. For non-institutional 

services, full payment is made for the 

service or unit with the highest PE and 

payment for the PE component for the 

second and subsequent procedures or 

additional units of the same service is 

reduced by 20 percent. 

The MPPR policy applies to multiple 

units of the same therapy service, as 

well as to multiple different services, 

when furnished to the same patient on 

the same day. It applies to services 

furnished by an individual or group 

practice or ‘‘incident to’’ a physician’s 

service. The MPPR applies when 

multiple therapy services are billed on 

the same date of service for one patient 

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 speechlanguage pathology. 

The MPPR policy applies in all 

settings where outpatient therapy 

services are paid under Part B. This 

includes both services paid under the 

PFS that are furnished in the office 

setting, as well as to institutional 

services paid at the PFS rates that are 

furnished by outpatient hospitals, home 

health agencies, comprehensive 

outpatient rehabilitation facilities 

(CORFs), and other entities that are paid 

under Medicare Part B for outpatient 

therapy services. 

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2. CY 2012 Proposed Expansion of the 

MPPR Policy to the Professional 

Component of Advanced Imaging 

Services 

Over the past 3 years, as part of the 

potentially misvalued service initiative, 

the AMA RUC has examined several 

services that are billed together at least 

90 percent of the time as part of the 

potentially misvalued service initiative. 

In several cases, the AMA RUC 

recommended work values for new 

codes that describe the combined 

services, and those recommended 

values reflected the expected 

efficiencies. For example, for CY 2011, 

the AMA RUC valued the work for a 

series of new codes that describe CT of 

the abdomen and pelvis, specifically 

CPT codes: 

• 74176 (Computed tomography, 

abdomen and pelvis; without contrast 

material). 

• 74177 (Computed tomography, 

abdomen and pelvis; with contrast 

material). 

• 74178 (Computed tomography, 

abdomen and pelvis; without contrast 

material in one or both body regions, 

followed by with contrast material(s) 

and further sections in one or both body 

regions). 

We accepted the AMA RUCrecommended work values for these 

codes in the CY 2011 PFS final rule 

with comment period (75 FR 73229). 

The AMA RUC-recommended work 

values reflected an expected efficiency 

for the typical combined service that 

paralleled the reductions that would 

typically result from a MPPR 

adjustment. For example, in support of 

the recommended work value of 1.74 

RVUs for 74176, the AMA RUC 

explained that the full value of 74150 

(Computed tomography, abdomen; 

without contrast material) (Work RVU = 

1.19) plus half the value of 72192 

(Computed tomography, pelvis; without 

contrast material) (1⁄2 Work RVU = 0.55) 

equals 1.74 work RVUs. The AMA RUC 

stated that its recommended valuation 

was appropriate even though the 

combined current work RVUs for 74150 

and 72192 would result in a total work 

RVU of 2.28. Furthermore, the AMA 

RUC validated its estimation of work 

efficiency for the combined service by 

comparing the code favorably with the 

work value associated with 74182 

(Magnetic resonance, for example, 

proton imaging, abdomen; with contrast 

material(s)) (Work RVU = 1.73), which 

has a similar intra-service time, 20 

minutes. Thus, we believe our current 

and proposed MPPR formulations are 

consistent with the AMA RUC’s work to 

review code pairs for unaccounted-for 

efficiencies and to appropriately value 

comprehensive codes for a bundle of 

component services. 

We continue to believe that there may 

be additional imaging and other 

diagnostic services for which there are 

efficiencies in work when furnished 

together, resulting in potentially 

excessive payment for these services 

under current policy. 

As noted, Medicare has a 

longstanding policy to reduce payment 

by 50 percent for the second and 

subsequent surgical procedures and 

nuclear medicine diagnostic procedures 

furnished to the same patient by the 

same physician on the same day. In 

continuing to apply the provisions of 

section 3134(a) of the Affordable Care 

Act, for CY 2012 we are proposing to 

expand 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 applies (see 

Addendum F). Thus, the MPPR would 

apply to the PC and the TC of the codes. 

Specifically, we propose to expand the 

50 percent payment reduction currently 

applied to the TC to apply also to the 

PC of the second and subsequent 

advanced imaging services furnished in 

the same session. Full payment would 

be made for the PC and TC of the 

highest paid procedure, and payment 

would be reduced by 50 percent for the 

PC and TC for each additional 

procedure furnished to the same patient 

in the same session. This proposal is 

based on the expected efficiencies in 

furnishing multiple services in the same 

session due to duplication of physician 

work—primarily in the pre- and postservice periods, with smaller 

efficiencies in the intraservice period. 

This proposal is consistent with the 

statutory requirement for the Secretary 

to identify, review, and adjust the 

relative values of potentially misvalued 

services under the PFS as specified by 

section 3134(a) of the Affordable Care 

Act. The proposal is also consistent both 

with our longstanding policy on surgical 

and nuclear medicine diagnostic 

procedures, which apply a 50 percent 

reduction to second and subsequent 

procedures. Furthermore, it is 

responsive to continued concerns about 

significant growth in imaging spending, 

and to MedPAC (March 2010) and GAO 

(July 2009) recommendations regarding 

the expansion of MPPR policies under 

the PFS to account for additional 

efficiencies. 

Finally, as noted, the proposal is 

consistent with the RUC’s recent 

methodology and rationale in valuing 

the work for a combined CT of the 

pelvis (CPT codes 72192, 72193 and 

72194), and abdomen (CPT codes 74150, 

74160 and 74170) where the RUC 

assumed the work efficiency for the 

second service was 50 percent. Savings 

resulting from this proposal would be 

redistributed to other PFS services as 

required by the general statutory PFS 

budget neutrality provision. 

3. Further Expansion of the MPPR 

Under Consideration for Future Years 

Currently, the MPPR focuses only on 

a select number of codes. We will be 

aggressively looking for efficiencies in 

other sets of codes during the following 

years and will consider implementing 

more expansive reduction policies in 

CY 2013 and beyond. We invite public 

comment on the following MPPR 

policies which are under consideration. 

Any proposals would be presented in 

future rulemaking and subject to further 

public comment: 

• Apply the MPPR to the TC of All 

Imaging Services. This approach would 

apply a payment reduction to the TC of 

the second and subsequent imaging 

services performed in the same session. 

Such an approach could define imaging 

consistent with our existing definition 

of imaging for purposes of the statutory 

cap on payment at the OPPS rate 

(including x-ray, ultrasound (including 

echocardiography), nuclear medicine 

(including positron emission 

tomography), magnetic resonance 

imaging, computed tomography, and 

fluoroscopy, but excluding diagnostic 

and screening mammography). Add-on 

codes that are always furnished with 

another service and have been valued 

accordingly could be excluded. 

Such an approach would be based on 

the expected efficiencies due to 

duplication of clinical labor activities, 

supplies, and equipment time. This 

approach would apply to approximately 

530 HCPCS codes, including the 119 

codes to which the current imaging 

MPPR applies. Savings would be 

redistributed to other PFS services as 

required by the statutory PFS budget 

neutrality provision. 

• Apply the MPPR to the PC of All 

Imaging Services. This approach would 

apply a payment reduction to the PC of 

the second or subsequent imaging 

services furnished in the same 

encounter. Such an approach could 

define imaging consistent with our 

existing definition of imaging for the 

cap on payment at the OPPS rate. Addon codes that are always furnished with 

another service and have been valued 

accordingly could be excluded. 

This approach would be based on 

efficiencies due to duplication of 

physician work primarily in the preand post-service periods, with smaller 

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efficiencies in the intraservice period. 

This approach would apply to 

approximately 530 HCPCS codes, 

including the 119 codes to which the 

current imaging MPPR applies. Savings 

would be redistributed to other PFS 

services as required by the statutory PFS 

budget neutrality provision. 

• Apply the MPPR to the TC of All 

Diagnostic Tests. This approach would 

apply a payment reduction to the TC of 

the second and subsequent diagnostic 

tests (such as radiology, cardiology, 

audiology, etc.) furnished in the same 

encounter. Add-on codes that are 

always furnished with another service 

and have been valued accordingly could 

be excluded. 

The approach would be based on the 

expected efficiencies due to duplication 

of clinical labor activities, supplies, and 

equipment time. The approach would 

apply to approximately 700 HCPCS 

codes, including the approximately 560 

HCPCS codes subject to the OPPS cap. 

The savings would be redistributed to 

other PFS services as required by the 

statutory PFS budget neutrality 

provision. 

D. Malpractice RVUs 

1. Overview of the Methodology for 

Calculation of Malpractice RVUs 

Section 1848(c) of the Act requires 

that each service paid under the PFS be 

comprised of three components: work, 

PE, and malpractice. From 1992 to 1999, 

malpractice RVUs were charge-based, 

using weighted specialty-specific 

malpractice expense percentages and 

1991 average allowed charges. 

Malpractice RVUs for new codes after 

1991 were extrapolated from similar 

existing codes or as a percentage of the 

corresponding work RVU. Section 

4505(f) of the BBA amended section 

1848(c) of the Act which 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 resourcebased malpractice RVUs was addressed 

in the CY 2005 PFS final rule with 

comment period (69 FR 66263). Minor 

modifications to the methodology were 

addressed in the CY 2006 PFS final rule 

with comment period (70 FR 70153). In 

the CY 2010 PFS final rule with 

comment period, we implemented the 

second review and update of 

malpractice RVUs. For a discussion of 

the second review and update of 

malpractice RVUs, see the CY 2010 PFS 

proposed rule (74 FR 33537) and final 

rule with comment period (74 FR 

61758). 

As explained in the CY 2011 PFS final 

rule with comment period, malpractice 

RVUs for new and revised codes 

effective before the next Five-Year 

Review (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 to 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 (75 FR 73208). For the modified 

crosswalk approach, we adjust (or 

‘‘scale’’) the malpractice RVU for the 

new/revised code to reflect the 

difference in work RVU between the 

source code and the new/revised work 

value (or, if greater, the clinical labor 

portion of the 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 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 risk-of-service. For codes reviewed 

in this proposed rule the source code for 

each code is the code itself. Therefore, 

we calculated the revised malpractice 

RVU for these codes by scaling the 

current malpractice RVU by the percent 

difference in work RVU between the 

current (CY 2011) work RVU and the 

work RVU proposed in section II.B. of 

this proposed rule. Typically, the 

assigned malpractice RVUs for new/ 

revised codes effective between updates 

remain in place until the next Five-Year 

Review of Malpractice, which is 

expected to occur for CY 2015. We 

anticipate soliciting public comments in 

the CY 2013 PFS proposed rule on 

matters relating to the CY 2015 FiveYear Review of Malpractice. 

2. Proposed Revisions to Malpractice 

RVUs for Certain Cardiothoracic Surgery 

Services 

In addition to the scaling of 

malpractice RVUs to account for the 

proportionate difference between 

current and proposed work RVUs 

(proposed work RVU changes are 

discussed previously in section II.B.of 

this proposed rule) there are 19 

cardiothoracic surgery codes for which 

we propose to scale the malpractice 

RVUs to account for the proportionate 

difference between the current and 

proposed revised specialty risk factor. 

These codes and their short descriptors 

are listed below in Table 11. As 

discussed in the CY 2010 PFS proposed 

rule (74 FR 33539), we assign 

malpractice RVUs to each service based 

upon a weighted average of the 

malpractice risk factors of all specialties 

that furnish the service. For the CY 2010 

review of malpractice RVUs, we used 

CY 2008 Medicare claims data on 

allowed services to establish the 

frequency of a service by specialty. For 

a number of cardiothoracic surgery CPT 

codes representing major open heart 

procedures performed primarily on 

neonates and infants, CY 2008 Medicare 

claims data showed zero allowed 

services. Therefore, our contractor set 

the number of services to 1, and 

assigned a risk factor according to the 

average risk factor for all services that 

do not explicitly have a separate 

technical or professional component 

(average risk factor = 1.95). In the CY 

2010 PFS final rule with comment 

period, we published interim final 

malpractice RVUs for these codes 

calculated using the average physician 

risk factor, and finalized them in the CY 

2011 PFS final rule with comment 

period. 

However, since publication of the CY 

2010 PFS final rule with comment 

period, stakeholders have expressed 

concern that the average risk factor is 

not appropriate for these services, and 

that a cardiac surgery risk factor would 

be more appropriate (cardiac surgery 

risk factor = 6.93). While these CPT 

codes continue to have little to no 

Medicare claims data, upon clinical 

review we agree that these CPT codes 

represent cardiac surgery services and 

that the malpractice RVUs should be 

calculated using the cardiac surgery risk 

factor. Accordingly, we propose to scale 

the malpractice RVUs for these CPT 

codes to reflect the proportionate 

difference between the average risk 

factor and the cardiac surgery risk 

factor. To scale the malpractice RVU we 

used the following formula: (cardiac 

surgery risk factor/average risk factor) * 

CY 2011 malpractice RVU = Proposed 

CY 2012 malpractice RVU. For example, 

CPT code 33471 (Valvotomy, pulmonary 

valve, closed heart; via pulmonary 

artery) has a CY 2011 malpractice RVU 

of 1.62 which was calculated using the 

average risk factor of 1.95. To scale this 

malpractice RVU to reflect the cardiac 

surgery risk factor of 6.93 we used the 

following calculation: (6.93 RF/1.95 

RF)*1.62 MP RVU = 5.76 MP RVU. 

CPT code 33692 (Complete repair 

tetralogy of Fallot without pulmonary 

atresia;) has a CY 2011 work RVU of 

31.54 and a malpractice RVU of 2.23. 

However, in the Fourth Five-Year 

Review of Work (76 FR 32410) we have 

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proposed an interim final work RVU of 

36.15 and adjusted the malpractice RVU 

to 2.56 for this service. Therefore, the 

starting value for calculating the 

proposed revised malpractice RVU 

based on the cardiac surgery risk factor 

is the Five-Year Review malpractice 

RVU instead of the CY 2011 malpractice 

RVU. Similar to the example shown 

previously, the formula for this 

adjustment is as follows: (cardiac 

surgery risk factor/average risk factor) * 

Five-Year Review malpractice RVU = 

Proposed CY 2012 malpractice RVU. 

Table 11 shows the proposed CY 2012 

malpractice RVUs for these 

cardiothoracic surgery codes. 

We also propose to scale the 

malpractice RVU to reflect a change in 

risk factor for CPT code 32442 (Removal 

of lung, total pneumonectomy; with 

resection of segment of trachea followed 

by broncho-tracheal anastomosis (sleeve 

pneumonectomy)). In the CY 2010 

review of malpractice RVUs we assigned 

CPT code 32442 the pulmonary disease 

risk factor (2.09) and published the 

interim final malpractice RVU 

calculated from this risk factor in the CY 

2010 PFS final rule with comment 

period. This value was finalized in the 

CY 2011 PFS final rule with comment 

period. 

Since finalizing this value, 

stakeholders have suggested that a 

blended risk factor of thoracic surgery 

(6.49) and general surgery (5.91) would 

be more appropriate for this service. As 

described in the CY 2010 PFS final rule 

with comment period (74 FR 61760), we 

do not use a blended risk factor for 

services with Medicare utilization under 

100; instead, we use the malpractice risk 

factor of the specialty that performs the 

given service the most (the dominant 

specialty). As CPT code 32442 has 

Medicare utilization well below the 100 

occurrences threshold, and current 

Medicare claims data show that the 

dominant specialty for CPT code 32442 

is thoracic surgery, we believe that the 

thoracic surgery risk factor is the 

appropriate risk factor for this service at 

this time. Applying the formula 

described previously to adjust the 

malpractice RVU to reflect the thoracic 

surgery risk factor rather than the 

pulmonary disease risk factor results in 

a malpractice RVU of 13.21 for CPT 

code 32442. Therefore, we propose a 

malpractice RVU of 13.21 for CPT code 

32442 for CY 2012. Table 11 shows the 

proposed CY 2012 malpractice RVUs for 

the cardiothoracic surgery codes 

described in this section. All 

malpractice RVUs are listed in 

Addendum B of this proposed rule, 

including those that are proposed to be 

revised and those for which there is no 

proposed change for CY 2012. 

TABLE 11—CY 2012 PROPOSED MALPRACTICE (MP) RVUS FOR SELECTED CARDIOTHORACIC SURGERY SERVICES

CPT 

Code Short descriptor 

CY 2012 

proposed 

specialty 

risk factor 

CY 2011 

MP RVU 

Proposed 

CY 2012 MP 

RVU 

33471 Valvotomy pulmonary valve ................................... Cardiac Surgery: 6.93 ............................................ 1.62 5.76 

33472 Revision of pulmonary valve .................................. Cardiac Surgery: 6.93 ............................................ 1.63 5.80 

33676 Close mult vsd w/resection .................................... Cardiac Surgery: 6.93 ............................................ 2.63 9.36 

33677 Cl mult vsd w/rem pul band ................................... Cardiac Surgery: 6.93 ............................................ 2.74 9.75 

33692 Repair of heart defects .......................................... Cardiac Surgery: 6.93 ............................................ * 2.56 9.11 

33762 Major vessel shunt ................................................. Cardiac Surgery: 6.93 ............................................ 1.61 5.73 

33768 Cavopulmonary shunting ....................................... Cardiac Surgery: 6.93 ............................................ 0.56 1.99 

33771 Repair great vessels defect ................................... Cardiac Surgery: 6.93 ............................................ 2.90 10.32 

33775 Repair great vessels defect ................................... Cardiac Surgery: 6.93 ............................................ 2.33 8.29 

33776 Repair great vessels defect ................................... Cardiac Surgery: 6.93 ............................................ 2.45 8.72 

33777 Repair great vessels defect ................................... Cardiac Surgery: 6.93 ............................................ 2.42 8.61 

33778 Repair great vessels defect ................................... Cardiac Surgery: 6.93 ............................................ 3.05 10.85 

33779 Repair great vessels defect ................................... Cardiac Surgery: 6.93 ............................................ 3.09 10.99 

33780 Repair great vessels defect ................................... Cardiac Surgery: 6.93 ............................................ 3.13 11.14 

33781 Repair great vessels defect ................................... Cardiac Surgery: 6.93 ............................................ 3.09 10.99 

33786 Repair arterial trunk ............................................... Cardiac Surgery: 6.93 ............................................ 2.98 10.60 

33788 Revision of pulmonary artery ................................. Cardiac Surgery: 6.93 ............................................ 1.93 6.87 

33822 Revise major vessel ............................................... Cardiac Surgery: 6.93 ............................................ 1.25 4.45 

32442 Sleeve pneumonectomy ......................................... Thoracic Surgery: 6.49 ........................................... 4.25 13.21 

* The malpractice RVU listed for CPT code 33692 is the Five-Year Review of Work-adjusted malpractice RVU, not the CY 2011 malpractice 

RVU. Please see above for additional detail. 

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, 

physician work, practice expense (PE), 

and malpractice). While requiring that 

the PE and malpractice GPCIs reflect the 

full relative cost differences, section 

1848(e)(1)(A)(iii) of the Act requires that 

the physician work GPCIs reflect only 

one-quarter of the relative cost 

differences compared to the national 

average. In addition, section 

1848(e)(1)(G) of the Act sets a 

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 beginning January 1, 

2011. 

Section 1848(e)(1)(E) of the Act 

provides for a 1.0 floor for the work 

GPCIs which was set to expire at the 

end of 2009 until it was extended 

through December 31, 2010 by section 

3102(a) of the Affordable Care Act. 

Because the work GPCI floor was set to 

expire at the end of 2010, the GPCIs 

published in Addendum E of the CY 

2011 PFS final rule with comment 

period did not reflect the 1.0 physician 

work floor. However, section 

1848(e)(1)(E) of the Act was amended on 

December 15, 2010, by section 103 of 

the Medicare and Medicaid Extenders 

Act (MMEA) of 2010 (Pub. L. 111–309) 

to extend the 1.0 work GPCI floor 

through December 31, 2011. 

Appropriate changes to the CY 2011 

GPCIs were made to reflect the 1.0 

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physician work floor required by section 

103 of the MMEA. Since the work GPCI 

floor provided in section 1848(e)(1)(E) 

of the Act is set to expire prior to the 

implementation of the CY 2012 PFS, the 

CY 2012 physician work GPCIs, and 

summarized geographic adjustment 

factors (GAFs), presented in this 

proposed rule do not reflect the 1.0 

work GPCI floor. As required by 

sections 1848(e)(1)(G) and (I) of the Act, 

the 1.5 work GPCI floor for Alaska and 

the 1.0 PE GPCI floor for frontier States 

will be applicable in CY 2012. 

Moreover, the limited recognition of 

cost differences in employee 

compensation and office rent for the PE 

GPCIs, and the related hold harmless 

provision, required under section 

1848(e)(1)(H) of the Act was only 

applicable for CY 2010 and CY 2011 (75 

FR 73253) and, therefore, is no longer 

effective beginning in CY 2012. 

Section 1848(e)(1)(C) of the Act 

requires us to review and, if necessary, 

adjust the GPCIs not less often than 

every 3 years. This section also specifies 

that if more than 1 year has elapsed 

since the last GPCI revision, we must 

phase in the adjustment over 2 years, 

applying only one-half of any 

adjustment in the first year. 

As noted in the CY 2011 PFS final 

rule with comment period (75 FR 73252 

through 73262), for the sixth GPCI 

update, we updated the data used to 

compute all three GPCI components. 

Specifically, we utilized the 2006 

through 2008 Bureau of Labor Statistics 

(BLS) Occupational Employment 

Statistics (OES) to calculate the 

physician work GPCIs (75 FR 73252). In 

addition, we used the 2006 through 

2008 BLS OES data to calculate the 

employee compensation sub-component 

of practice expense (75 FR 73255). 

Consistent with previous updates, we 

used the 2-bedroom residential 

apartment rent data from HUD (2010) at 

the 50th percentile as a proxy for the 

relative cost differences in physician 

office rents (75 FR 73256). Lastly, we 

calculated the malpractice GPCIs using 

malpractice premium data from 2006 

through 2007 (75 FR 73256). 

Since more than 1 year had elapsed 

since the fifth GPCI update, the sixth 

GPCI update changes are being phased 

in over a 2-year period as required by 

law. The current CY 2011 GPCIs reflect 

the first year of the transition. The 

proposed CY 2012 GPCIs reflect the full 

implementation. 

The Affordable Care Act requires that 

we analyze the current methodology 

and data sources used to calculate the 

PE GPCI component. Specifically, 

section 1848(e)(1)(H)(iv) of the Act (as 

added by section 3102(b) of the 

Affordable Care Act) requires the 

Secretary to ‘‘analyze current methods 

of establishing practice expense 

adjustments under subparagraph (A)(i) 

and evaluate data that fairly and reliably 

establishes distinctions in the cost of 

operating a medical practice in different 

fee schedule areas.’’ Section 

1848(e)(1)(H)(iv) of the Act also requires 

that such analysis shall include an 

evaluation of the following: 

• The feasibility of using actual data 

or reliable survey data developed by 

medical organizations on the costs of 

operating a medical practice, including 

office rents and non-physician staff 

wages, in different fee schedule areas. 

• The office expense portion of the 

practice expense geographic adjustment; 

including the extent to which types of 

office expenses are determined in local 

markets instead of national markets. 

• The weights assigned to each area 

of the categories within the practice 

expense geographic adjustment. 

In addition, the weights for different 

categories of practice expense in the 

GPCIs have historically matched the 

weights developed by the CMS Office of 

the Actuary (OACT) for use in the 

Medicare Economic Index (MEI), the 

measure of inflation used as part of the 

basis for the annual update to the 

physician fee schedule payment rates. 

In response to comments received on 

the CY 2011 Physician Fee Schedule 

proposed rule, however, we delayed 

moving to the new MEI weights 

developed by OACT for CY 2011 

pending further analysis. 

Lastly, we asked the Institute of 

Medicine (IOM) to evaluate the accuracy 

of the geographic adjustment factors 

used for Medicare physician payment. 

IOM will prepare three reports for the 

Congress and the Secretary of the 

Department of Health and Human 

Services. The first report (Phase I) was 

released on June 1, 2011, and includes 

an evaluation of the accuracy of 

geographic adjustment factors for the 

hospital wage index and the GPCIs, and 

the methodology and data used to 

calculate them. In addition, IOM is 

expected to release a supplemental GPCI 

report in the summer of 2011. The third 

report, expected in spring 2012, will 

evaluate the effects of the adjustment 

factors on the distribution of the health 

care workforce, quality of care, 

population health, and the ability to 

provide efficient, high value care. Given 

the timing of the release of IOM’s first 

report and the fact that we do not yet 

have the second supplemental report on 

the GPCIs, we are unable to address the 

full scope of the IOM recommendations 

in this proposed rule. The report can be 

accessed on the IOM’s Web site at 

http://www.iom.edu/Reports/2011/ 

Geographic-Adjustment-in-MedicarePayment-Phase-I-ImprovingAccuracy.aspx. Additionally, we have 

included a summary of GPCI-specific 

recommendations in section 4 below. 

2. Proposed GPCI Revisions for CY 2012 

The revised GPCI values we are 

proposing were developed by Acumen, 

LLC (Acumen) under contract to us. As 

mentioned previously, there are three 

GPCI components (physician work, PE, 

and malpractice), and all GPCIs are 

developed through comparison to a 

national average for each component. 

Additionally, each of the three GPCIs 

relies on its own data source(s) and 

methodology for calculating its value, as 

described more fully later in this 

section. As discussed in more detail 

later in this section, we are proposing to 

revise the PE GPCIs for CY 2012, as well 

as the cost share weights which 

correspond to all three GPCIs. 

a. Physician Work GPCIs 

The physician work GPCIs are 

designed to capture the relative cost of 

physician labor by Medicare PFS 

locality. Previously, the physician work 

GPCIs were developed using the median 

hourly earnings from the 2000 Census of 

workers in seven professional specialty 

occupation categories which we used as 

a proxy for physicians’ wages. 

Physicians’ wages are not included in 

the occupation categories because 

Medicare payments are a key 

determinant of physicians’ earnings. 

Including physicians’ wages in the 

physician work GPCIs would, in effect, 

have made the indices dependent upon 

Medicare payments. As required by law, 

the physician work GPCI reflects onequarter of the relative wage differences 

for each locality compared to the 

national average. 

The physician work GPCI updates in 

CYs 2001, 2003, 2005, and 2008 were 

based on professional earnings data 

from the 2000 Census. For the sixth 

GPCI update in CY 2011, we used the 

2006 through 2008 Bureau of Labor 

Statistics (BLS) Occupational 

Employment Statistics (OES) data as a 

replacement for the 2000 Census data. 

We are not proposing to revise the 

physician work GPCI data source for CY 

2012. However, we note that the work 

GPCIs will be revised to account for the 

expiration of the statutory work floor. 

The 1.5 work floor for Alaska is 

permanent and will be applicable in CY 

2012. In addition, we are proposing to 

revise the physician work cost share 

weight from 52.466 to 48.266 in line 

with the 2011 MEI weights, which are 

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based on 2006 data (referred to 

hereinafter as the 2006-based MEI). 

b. Practice Expense GPCIs 

(1) Affordable Care Act Analysis and 

Revisions for PE GPCIs 

(A) General Analysis for the CY 2012 PE 

GPCIs 

As previously mentioned, section 

1848(e)(1)(H)(iv) of the Act (as added by 

section 3102(b) of the Affordable Care 

Act) requires the Secretary to ‘‘analyze 

current methods of practice expense 

adjustments under subparagraph (A)(i) 

and evaluate data that fairly and reliably 

establishes distinctions in the cost of 

operating a medical practice in different 

fee schedule areas.’’ 

Moreover, section 1848(e)(1)(H)(v) of 

the Act requires the Secretary to make 

appropriate adjustments to the PE GPCIs 

as a result of the required analysis no 

later than by January 1, 2012. We are 

proposing to make four revisions to the 

PE data sources and cost share weights 

discussed herein effective January 1, 

2012. Specifically, we are proposing to: 

(1) Revise the occupations used to 

calculate the employee wage component 

of PE using BLS wage data specific to 

the office of physicians’ industry; (2) 

utilize two bedroom rental data from the 

2006–2008 American Community 

Survey as the proxy for physician office 

rent; (3) create a purchased service 

index that accounts for regional 

variation in labor input costs for 

contracted services from industries 

comprising the ‘‘all other services’’ 

category within the MEI office expense 

and the stand alone ‘‘other professional 

expenses’’ category of the MEI and; (4) 

use the 2006-based MEI (most recent 

MEI weights finalized in the CY 2011 

final rule with comment period) to 

determine the GPCI cost share weights. 

These proposals are based on analyses 

we conducted to address commenter 

concerns in the CY 2011 final rule with 

comment period. The main comments 

were related to: (1) The occupational 

groups used to calculate the employee 

wage component of PE, and (2) concerns 

by commenters stating that regional 

variation in purchased services such as 

legal and accounting are not sufficiently 

included in the employee wage index. 

We began analyzing the current 

methods and data sources used in the 

establishment of the PE GPCIs during 

the CY 2011 rulemaking process (75 FR 

40084). With respect to our CY 2011 

analysis, we began with a review of the 

Government Accountability Office’s 

(GAO) March 2005 Report entitled, 

‘‘Medicare Physician Fees: Geographic 

Adjustment Indices Are Valid in Design, 

but Data and Methods Need 

Refinement’’ (GAO–05–119). While we 

have raised concerns in the past about 

some of the GAO’s GPCI 

recommendations, we noted that with 

respect to the PE GPCIs, the GAO did 

not indicate any significant issues with 

the methods underlying the PE GPCIs. 

Rather, the report focused on some of 

the data sources used in the method. For 

example, the GAO stated that the wage 

data used for the PE GPCIs are not 

current. Similarly, commenters on 

previous PE GPCI updates 

predominantly focused on either the 

data sources used in the method or 

raised issues such as incentivizing the 

provision of care in different geographic 

areas. However, the latter issue 

(incentivizing the provision of care) is 

outside the scope of the statutory 

requirement that the PE GPCIs reflect 

the relative costs of the mix of goods 

and services comprising practice 

expenses in the different fee schedule 

areas relative to the national average. 

To further analyze the PE office 

expense in accordance with section 

1848(e)(1)(H)(iv) of the Act, we 

examined the following issues: the 

appropriateness of expanding the 

number of occupations included in the 

employee wage index; the 

appropriateness of replacing rental data 

from the Department of Housing and 

Urban Development (HUD) with data 

from the 2006–2008 American 

Community Survey (ACS) two bedroom 

rental data as a proxy for the office rent 

subcomponent of PE; and the 

appropriateness of adjusting the ‘‘all 

other services’’ and ‘‘other professional 

expenses’’ MEI categories for geographic 

variation in labor-related costs. We also 

examined available ACS occupational 

group data for potential use in 

determining geographic variation in the 

employee wage component of PE. 

An additional component of the 

analysis under section 1848(e)(1)(H)(iv) 

of the Act is to evaluate the weights 

assigned to each of the categories within 

the practice expense geographic 

adjustment. As discussed in the CY 

2011 final rule with comment period (75 

FR 73256), in response to concerns 

raised by commenters and to allow us 

time to conduct additional analysis, we 

did not revise the GPCI cost share 

weights to reflect the weights used in 

the revised and rebased 2006 MEI that 

we adopted beginning in CY 2011. In 

response to those commenters, whom 

raised many points regarding the 

appropriateness of assigning laborrelated costs in the medical equipment 

and supplies and miscellaneous 

component which do not reflect locality 

cost differentials, we agreed to address 

the GPCI cost share weights again in the 

CY 2012 PFS proposal. These issues are 

discussed in greater detail in the section 

of this rule that discusses our 

determination of the cost share weights. 

We also stated in the CY 2011 final 

rule with comment period that we 

would review the findings of the 

Secretary’s Medicare Geographic 

Payment Summit and the MEI technical 

advisory panel during future rulemaking 

(75 FR 73256). The Secretary convened 

the National Summit on Health Care 

Quality and Value on October 4, 2010. 

This Summit was attended by a number 

of policy experts that engaged in 

detailed discussions regarding 

geographic adjustment factors and 

geographic variation in payment and the 

promotion of high quality care. This 

National Summit was useful to 

informing us on issues which we are 

studying further through three Institute 

of Medicine studies (including the 

recently released first of three reports on 

Geographic Adjustment Factors and a 

separate report on Geographic Variation 

in Health Care Spending and the 

Promotion of High Value Care). In 

accordance with Section 3102(b) of the 

Affordable Care Act, we are also 

continuing to consider these issues in 

the course of notice and comment 

rulemaking for the CY 2012 PFS, which 

includes revisions to the GPCI, and 

through preparation of a report to the 

Congress that we will be submitting 

later this year in accordance with 

section 3137(b) of the Affordable Care 

Act on a plan for reforming the hospital 

wage index. In addition, the Agency is 

currently working through the various 

administrative requirements to formally 

organize the MEI technical advisory 

panel. We expect that this panel will be 

convened in the near future. We look 

forward to examining the 

recommendations of this panel once it 

has issued its report. 

(B) Analysis of ACS Rental Data 

In the CY 2011 final rule with 

comment period, we finalized our 

policy to use the 2010 apartment rental 

data produced by HUD at the 50th 

percentile as the proxy for relative cost 

differences in physician office rents. 

However, as part of our analysis 

required by section 1848(e)(1)(H)(iv) of 

the Act, we have now examined the 

suitability of utilizing 3-year (2006– 

2008) ACS rental data to serve as a 

proxy for physician office rents We 

believe that the ACS rental data provide 

a sufficient degree of reliability and are 

an appropriate source on which to base 

our PE GPCI office rent proxy. We also 

believe that the ACS data provide a 

higher degree of accuracy than the HUD 

data since the ACS is updated annually 

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and is not based on data collected by the 

2000 Census long form. Moreover, it is 

our understanding that the Census long 

form, which is utilized to collect the 

necessary base year rents for the HUD 

Fair Market Rent (FMR) data, will no 

longer be available in future years. 

Therefore, we are proposing to use the 

available 2006 through 2008 ACS rental 

data for two bedroom residential units 

as the proxy for physician office rent. 

We were not able to collect and analyze 

5-year ACS rental data in time for this 

proposed rule. We may use 5-year ACS 

data in future rulemaking decisions and 

would welcome public comments 

regarding utilization of the 5-year ACS 

rental data as a proxy for physician 

office rent. 

We believe the ACS data will more 

accurately reflect geographic variation 

in the office rent component. As in past 

GPCI updates, we propose to apply a 

nationally uniform weight to the office 

rent component. Although we 

investigated varying the weight of the 

office rent index for different localities, 

we could not find a comprehensive data 

source that provides office rent 

information that would allow direct 

measurement of the variation in this 

expense among fee schedule areas. 

Therefore, we are proposing to use the 

2006-based MEI weight for fixed capital 

and utilities as the weight for the office 

rent category in the PE GPCI, and using 

the ACS residential rent data to develop 

the practice expense GPCI value. We 

welcome public comments on whether 

there are potential data sources 

(especially publicly available sources) 

that would readily provide 

comprehensive office rent information 

that would allow us to accurately 

measure the geographic variation in this 

expense among fee schedule areas. 

(C) Employee Wage Analysis 

Accurately evaluating the relative 

price that physicians pay for labor 

inputs requires both a mechanism for 

selecting the occupations to include in 

the employee wage index and 

identifying an accurate measure of the 

wages for each occupation. We received 

comments during the CY 2011 

rulemaking cycle noting that the current 

employee wage methodology may omit 

key occupational categories for which 

cost varies significantly across regions. 

Commenters suggested including 

occupations such as accounting, legal, 

and information technology in the 

employee wage component of the PE 

GPCI. To address these concerns, we 

propose to revise the employee wage 

index framework within the practice 

expense (PE) GPCI. Under this new 

methodology, we would only select 

occupational categories relevant to a 

physician’s practice. We would use a 

comprehensive set of wage data from 

the Bureau of Labor Statistics 

Occupational Employment Statistics 

(BLS OES) specific to the offices of 

physicians industry. Utilizing wage and 

national cost share weight data from the 

BLS OES would not only provide a 

more systematic approach to 

determining which occupations should 

be included in the non-physician 

employee wage category of the PE GPCI, 

but would also enable us to determine 

how much weight each occupation 

should receive within the index. 

Due to its reliability, public 

availability, level of detail, and national 

scope, we propose to use BLS OES data 

to estimate both occupation cost shares 

and hourly wages for purposes of the 

non-physician employee wage 

component of the PE GPCI. The OES 

panel data are collected from 

approximately 200,000 establishments, 

and provide employment and wage 

estimates for about 800 occupations. At 

the national level, OES provides 

estimates for over 450 industry 

classifications (using the 3, 4, and 5 

digit North American Industry 

Classification System (NAICS)), 

including the Offices of Physicians 

industry (NAICS 621100). As described 

in the census, the Offices of Physicians 

industry comprises establishments of 

health practitioners having the degree of 

M.D. (Doctor of Medicine) or D.O. 

(Doctor of Osteopathy) primarily 

engaged in the independent practice of 

general or specialized medicine (except 

psychiatry or psychoanalysis) or 

surgery. These practitioners operate 

private or group practices in their own 

offices (such as, centers, clinics) or in 

the facilities of others, such as hospitals 

or Health Maintenance Organization 

(HMO) medical centers. The OES data 

provide significant detail on 

occupational categories and offer 

national level cost share estimates for 

the offices of physicians industry. 

We also evaluated available ACS 

occupational data as a potential data 

source for the non-physician employee 

wage PE GPCI subcomponent. Based on 

the occupations currently used to 

calculate employee wages, the BLS OES 

captures occupations with greater 

relevancy to physician office practices 

and is a more appropriate data source 

than the currently available ACS data. 

However, we intend to study an 

expanded mix of occupations utilizing 

5-year ACS data as that data become 

available. We welcome comments on 

our proposal to use the BLS OES 

specific to the office of physicians 

industry. In this proposed methodology, 

we weight each occupation based on its 

share of total labor cost within the 

offices of physician industry. 

Specifically, each occupation’s weight is 

proportional to the product of its 

occupation’s employment share and 

average hourly wage. In this calculation, 

we use each occupation’s employment 

level rather than hours worked, because 

the BLS OES does not contain industryspecific information describing the 

number of hours worked in each 

occupation (see: http://www.bls.gov/oes/ 

current/naics4_621100.htm). This 

proposed methodology would account 

for 90 percent of the total wage share in 

the office of physicians industry. 

Additionally, this strategy produces 33 

individual occupations with the highest 

wage shares and would account for 

many of the occupations commenters 

have stated were historically excluded 

from the employee wage calculation (for 

example, accounting, auditors, and 

medical transcriptionists), We also 

welcome public comments on the 

potential use of the 5-year ACS data to 

calculate the employee wage component 

of the PE GPCI. 

(D) Purchased Services Analysis 

For CY 2012, we are proposing to 

geographically adjust the labor-related 

industries within the ‘‘all other 

services’’ and ‘‘other professional 

expenses’’ categories of the MEI. In 

response to commenters who stated that 

these purchased services were laborrelated and should be adjusted 

geographically, we agreed to examine 

this issue further in the CY 2011 final 

rule with comment period and refrained 

from making any changes. Based on our 

subsequent examination of this issue, 

we believe it would be appropriate to 

geographically adjust for the laborrelated component of purchased 

services within the ‘‘All Other Services’’ 

and ‘‘Other Professional Expenses’’ 

categories using BLS wage data. In total, 

there are 63 industries, or cost 

categories, accounted for within the ‘‘all 

other services’’ and ‘‘other professional 

services’’ categories of the 2006-based 

MEI. As we established for purposes of 

the hospital wage index in 74 FR 43845, 

we define a cost category as laborrelated if the cost category is defined as 

being both labor intensive and its costs 

vary with, or are influenced by the local 

labor market. The total proposed 

purchased services component accounts 

for 8.095 percent of total practice cost. 

However, only 5.011 percentage points 

(of the total 8.095 percentage points 

assigned to purchased services) are 

defined as labor-related and thus 

adjusted for locality cost differences. 

These 5.011 percentage points represent 

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cost categories that we believe are labor 

intensive and have costs that vary with, 

or are influenced by, the local labor 

market. The labor-related cost categories 

include but are not limited to building 

services (such as janitorial and 

landscaping), security services, and 

advertising services. The remaining 

weight assigned to the non-labor-related 

industries (3.084 percentage points) 

represent industries that do not meet the 

criteria of being labor intensive or 

having their costs vary with the local 

labor market. 

In order to calculate the labor-related 

and non-labor-related shares, we would 

use a similar methodology that is 

employed in estimating the labor-related 

share of various CMS market baskets. A 

more detailed explanation of this 

methodology can be found under the 

supporting documents section of the CY 

2012 PFS proposed rule web page at 

http://www.cms.gov/ 

PhysicianFeeSched/. 

We believe our analysis, during 2010 

and this year, of the current methods of 

establishing PE GPCIs and our 

evaluation of data that fairly and 

reliably establish distinctions in the cost 

of operating a medical practice in the 

different fee schedule areas meet the 

statutory requirements of section 

1848(e)(1)(H)(iv) of the Act. A more 

detailed discussion of our analysis of 

current methods of establishing PE 

GPCIs and evaluation of data sources is 

included in Acumen’s draft report 

entitled, ‘‘Proposed Revisions to the 

Sixth Update of the Geographic Practice 

Cost Index.’’ Acumen’s draft report and 

associated analysis of the proposed 

GPCI revisions, including the PE GPCIs, 

will be made publicly available on the 

CMS Web site. The draft report may be 

accessed from the PFS Web site at: 

http://www.cms.gov/ 

PhysicianFeeSched/ under the 

‘‘Downloads’’ section of the CY 2012 

PFS proposed rule web page. 

Additionally, see section VII.B. of this 

proposed rule for Table 66, which 

reflects the GAF impacts resulting from 

these proposals. As the table 

demonstrates, the primary driver of the 

CY 2012 impact is the expiration of the 

work GPCI floor which had produced 

non-budget neutral increases to the CY 

2011 GPCIs for lower cost areas as 

authorized under the Affordable Care 

Act the Medicare and Medicaid 

Extenders Act (MMEA). 

(E) Determining the PE GPCI Cost Share 

Weights 

To determine the cost share weights 

for the CY 2012 GPCIs, we are proposing 

to use the weights established in the 

2006-based MEI. The MEI was rebased 

and revised in the CY 2011 final rule 

with comment period to reflect the 

weighted-average annual price change 

for various inputs needed to provide 

physicians’ services. As discussed in 

detail in that section (75 FR 73262 

through 73277), the proposed expense 

categories in the MEI, along with their 

respective weights, were primarily 

derived from data collected in the 2006 

AMA PPIS for self-employed physicians 

and selected self-employed non-medical 

doctor specialties. Since we have 

historically updated the GPCI cost share 

weights consistent with the most recent 

update to the MEI, and because we have 

addressed commenter concerns 

regarding the inclusion of the weight 

assigned to utilities with office rent and 

geographically adjusted for the labor 

intensive industries within the ‘‘all 

other services’’ and ‘‘other professional 

expenses’’ MEI categories, we believe it 

is appropriate to adopt the 2006-based 

MEI cost share weights. 

(i) Practice Expense 

For the cost share weight for the 

proposed CY 2012 PE GPCIs, we would 

use the 2006-based MEI weight for the 

PE category of 51.734 percent minus the 

professional liability insurance category 

weight of 4.295 percent. Therefore, we 

propose a cost share weight for the PE 

GPCIs of 47.439 percent. 

(ii) Employee Compensation 

For the employee compensation 

portion of the PE GPCIs, we would use 

the non-physician employee 

compensation category weight of 19.153 

percent reflected in the 2006-based MEI. 

(iii) Office Rent 

We are proposing that the weight for 

the office rent component be revised 

from 12.209 percent to 10.223 percent. 

The 12.209 percent office rent GPCI 

weight was set equal to the 2000-based 

MEI cost weight for office expenses, 

which was calculated using the 

American Medical Association’s (AMA) 

Socioeconomic Monitoring Survey 

(SMS). The 12.209 percent reflected the 

expenses for rent, depreciation on 

medical buildings, mortgage interest, 

telephone, and utilities. We are 

proposing to set the GPCI office rent 

equal to 10.223 percent reflecting the 

2006-based MEI cost weights (75 FR 

73263) for fixed capital (reflecting the 

expenses for rent, depreciation on 

medical buildings and mortgage 

interest) and utilities. We are no longer 

including telephone costs in the GPCI 

office rent cost weight because we 

believe these expenses do not vary by 

geographic area. 

Consistent with the revised and 

rebased 2006-based MEI which was 

adopted in the CY 2011 final rule with 

comment period (75 FR 73263), we 

disaggregated the broader office 

expenses component for the PE GPCI 

into 10 new cost categories. In this 

disaggregation, the fixed capital 

component is the office expense 

category applicable to the office rent 

component of the PE GPCI. As 

discussed in the section dealing with 

office rent, we are proposing to use 

2006–2008 ACS rental data as the proxy 

for physician office rent. This data 

represents a gross rent amount and 

includes data on utilities expenditures. 

Since it is not possible to separate the 

utilities component of rent for all ACS 

survey respondents, it was necessary to 

combine these two components to 

calculate office rent and by extension, 

we propose combining those two cost 

categories when assigning a weight to 

the office rent component. 

(iv) Purchased Services 

As discussed in the previous 

paragraphs, a new purchased services 

index was created to geographically 

adjust the labor-related components of 

the ‘‘All Other Services’’ and ‘‘Other 

Professional Expenses’’ categories of the 

MEI office expense. In order to calculate 

the purchased services index, we are 

proposing to merge the corresponding 

weights of these two categories to form 

a combined purchased services weight 

of 8.095 percent. However, we are 

proposing to only adjust for locality cost 

differences of the labor-related share of 

the industries comprising the ‘‘All Other 

Services’’ and ‘‘Other Professional 

Expenses’’ categories. We have 

determined that only 5.011 percentage 

points of the 8.095 percentage points 

would be adjusted for locality cost 

differences (5.011 adjusted purchased 

service + 3.084 non-adjusted purchased 

services = 8.095 total cost share weight). 

(v) Equipment, Supplies, and Other 

Misc Expenses 

To calculate the proposed medical 

equipment, supplies, and other 

miscellaneous expenses component, we 

removed professional liability (4.295 

percentage points), non-physician 

employee compensation (19.153 

percentage points), fixed capital/utilities 

(10.223 percentage points), and 

purchased services (8.095 percentage 

points) from the PE category weight 

(51.734 percent). Therefore, we are 

proposing a cost share weight for the 

medical equipment, supplies, and other 

miscellaneous expenses component of 

9.968 percent. Consistent with previous 

methodology, this component of the PE 

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GPCI is not adjusted for geographical 

variation. 

(vi) Physician Work and Malpractice 

GPCIs 

Furthermore, we propose to use the 

physician compensation cost category 

weight of 48.266 percent as the 

proposed work GPCI cost share weight; 

and we propose to use the professional 

liability insurance weight of 4.295 

percent for the malpractice GPCI cost 

share weight. We believe our analysis 

and evaluation of the weights assigned 

to each of the categories within the PE 

GPCIs satisfies the statutory 

requirements of section 1848(e)(1)(H)(iv) 

of the Act. 

The proposed cost share weights for 

the CY 2012 GPCIs are displayed in 

Table 12. For a detailed discussion 

regarding the GPCI cost share weights 

and how the weights account for local 

and national adjustments, see Acumen’s 

‘‘Proposed Revisions to the Sixth 

Update of the Geographic Practice Cost 

Index’’ draft report at (http:// 

www.cms.gov/PhysicianFeeSched/) 

TABLE 12—COST SHARE WEIGHTS FOR CY 2012 GPCI UPDATE

Expense category 

Current cost 

share 

weights % 

Proposed 

cost share 

weights % 

Physician Work ........................................................................................................................................................ 52.466 48.266 

Practice Expense ..................................................................................................................................................... 43.669 47.439 

Employee Compensation ......................................................................................................................................... 18.654 19.153 

Office Rent ............................................................................................................................................................... 12.209 1 10.223 

Purchased Services ................................................................................................................................................. N/A 2 8.095 

Equipment, Supplies, and Other ............................................................................................................................. 12.806 9.968 

Malpractice Insurance .............................................................................................................................................. 3.865 4.295 

1ACS rental data is a measurement of gross rent and includes utilities. In order to accurately capture the utility measurement present in the 

ACS two bedroom gross rent data, the cost share weight for utilities is combined with the fixed capital portion to form the office rent index. 2The cost share weight for purchased services contains both an adjusted and non-adjusted portion. (5.011 percentage points geographically 

adjusted purchased services + 3.084 percentage points non-adjusted purchased services). 

(F) 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. There 

are no proposed changes to those states 

identified as ‘‘frontier States’’ for the CY 

2012 proposed rule. The qualifying 

States are reflected in Table 13. In 

accordance with statute, we will apply 

a 1.0 GPCI floor for these states in CY 

2012. 

TABLE 13—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 

(2) Summary of CY 2012 PE GPCI 

Proposal 

The PE GPCIs include four 

components: Employee compensation, 

office rent, purchased services, and 

medical equipment, supplies and 

miscellaneous expenses. Our proposals 

relating to each of these components are 

as follows: 

• Employee Compensation: We are 

proposing to geographically adjust the 

employee compensation using the 2006 

through 2008 BLS OES data specific to 

the offices of physicians industry along 

with nationwide wage data to determine 

the employee compensation component 

of the PE GPCIs. The proposed 

employee compensation component 

accounts for 19.153 percent of total 

practice costs or 40.4 percent of the total 

PE GPCIs. 

• Office Rents: We are proposing to 

geographically adjust office rent using 

the 2006–2008 ACS residential rental 

data for two bedroom units as a proxy 

for the relative cost differences in 

physician office rents. In addition, we 

are proposing to consolidate the utilities 

into the office rent weight to account for 

the utility data present in ACS gross 

rent data. The proposed office rent 

component accounts for 10.223 percent 

of total practice cost or 21.5 percent of 

the PE GPCIs. 

• Purchased Services: We are 

proposing to geographically adjust the 

labor-related component of purchased 

services within the ‘‘All Other Services’’ 

and ‘‘Other Professional Expenses 

‘‘categories using BLS wage data. The 

methodology employed to estimate 

purchased services expenses is based on 

the same data used to estimate the 

employee wage index. Specifically, the 

proposed purchased services framework 

relies on BLS OES wage data to estimate 

the price of labor in industries that 

physician offices frequently rely upon 

for contracted services. As previously 

mentioned, the labor-related share 

adjustment for each industry was 

derived using a similar methodology as 

is employed for estimating the laborrelated shares of CMS’ market baskets. 

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Furthermore, the weight assigned to 

each industry within the purchased 

services index was based on the 2006- 

based MEI. A more detailed discussion 

regarding CMS market baskets, as well 

as the corresponding definitions of a 

‘‘labor- related share’’ and a ‘‘non -laborrelated share’’ can be viewed at (74 FR 

43845). The total proposed purchased 

services component accounts for 8.095 

percent of total practice cost or 17.1 

percent of the PE GPCI. However, the 

proportion of purchased services that is 

geographically adjusted for locality cost 

difference is 5.011 percentage points of 

the 8.095 percentage points or 10.6 

percent of the PE GPCI. 

• Medical Equipment, Supplies, and 

other Miscellaneous Expenses: We 

continue to believe that items such as 

medical equipment and supplies have a 

national market and that input prices do 

not vary appreciably among geographic 

areas. As discussed in previous GPCI 

updates in the CY 2008 and CY 2011 

PFS proposed rules, specifically the 

fifth GPCI update (72 FR 38138) and 

sixth GPCI update (75 FR 73256), 

respectively, some price differences may 

exist, but we believe these differences 

are more likely to be based on volume 

discounts rather than on geographic 

market differences. For example, large 

physicians’ practices may utilize more 

medical equipment and supplies and 

therefore may or may not receive 

volume discounts on some of these 

items. To the extent that such 

discounting may exist, it is a function of 

purchasing volume and not geographic 

location. The proposed medical 

equipment, supplies, and miscellaneous 

expenses component was factored into 

the PE GPCIs with a component index 

of 1.000. The proposed medical 

equipment, supplies, and other 

miscellaneous expense component 

account for 9.968 percent of total 

practice cost or 21.0 percent of the PE 

GPCI. 

c. Malpractice GPCIs 

The malpractice GPCIs are calculated 

based on insurer rate filings of premium 

data for $1 million to $3 million mature 

‘‘claims-made’’ policies (policies for 

claims made rather than services 

furnished during the policy term). We 

chose claims-made policies because 

they are the most commonly used 

malpractice insurance policies in the 

United States. We used claims-made 

policy rates rather than occurrence 

policies because a claims-made policy 

covers physicians for the policy amount 

in effect when the claim is made, 

regardless of the date of event in 

question; whereas an occurrence policy 

covers a physician for the policy 

amount in effect at the time of the event 

in question, even if the policy is 

expired. Based on the data we analyzed, 

we are proposing to revise the cost share 

weight for the malpractice GPCI from 

3.865 percent to 4.295 percent. 

3. Payment Localities 

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 18 States, with 10 States 

having 2 localities, 2 States having 3 

localities, 1 State having 4 localities, 

and 3 States having 5 or more localities. 

The District of Columbia, Maryland, 

Virginia suburbs, Puerto Rico, and the 

Virgin Islands are additional localities 

that make up the remainder of the total 

of 89 localities. The development of the 

current locality structure is described in 

detail in the CY 1997 PFS proposed rule 

(61 FR 34615) and the subsequent final 

rule with comment period (61 FR 

59494). 

As we have previously noted in the 

CYs 2008 and 2009 proposed rules (72 

FR 38139 and 73 FR 38513), any 

changes to the locality configuration 

must be made in a budget neutral 

manner within a State and can lead to 

significant redistributions in payments. 

For many years, we have not considered 

making changes to localities without the 

support of a State medical association in 

order to demonstrate consensus for the 

change among the professionals whose 

payments would be affected (since such 

changes would be redistributive, with 

some increasing and some decreasing). 

However, we have recognized that, over 

time, changes in demographics or local 

economic conditions may lead us to 

conduct a more comprehensive 

examination of existing payment 

localities. 

For the past several years, we have 

been involved in discussions with 

physician groups and their 

representatives about recent shifts in 

relative demographics and economic 

conditions. We explained in the CY 

2008 PFS final rule with comment 

period that we intended to conduct a 

thorough analysis of potential 

approaches to reconfiguring localities 

and would address this issue again in 

future rulemaking. For more 

information, we refer readers to the CY 

2008 PFS proposed rule (72 FR 38139) 

and subsequent final rule with comment 

period (72 FR 66245). 

As a follow-up to the CY 2008 PFS 

final rule with comment period, we 

contracted with Acumen to conduct a 

preliminary study of several options for 

revising the payment localities on a 

nationwide basis. The contractor’s 

interim report was posted on the CMS 

Web site on August 21, 2008, and we 

requested comments from the public. 

The report entitled, ‘‘Review of 

Alternative GPCI Payment Locality 

Structures,’’ remains accessible from the 

CMS PFS Web page under the heading 

‘‘Interim Study of Alternative Payment 

Localities under the PFS.’’ The report 

may also be accessed directly from the 

following link: http://www.cms.hhs.gov/ 

PhysicianFeeSched/ 

10_Interim_Study.asp#TopOfPage. 

We note that the discussion of PFS 

payment localities and our preliminary 

study of alternative payment locality 

configurations in the CY 2011 PFS 

proposed rule was intended for 

informational purposes only. We are not 

making any proposals regarding the PFS 

locality configurations for CY 2012. 

4. Report From the Institute of Medicine 

At our request, the Institute of 

Medicine is conducting a study of the 

geographic adjustment factors in 

Medicare payment. It is a 

comprehensive empirical study of the 

geographic adjustment factors 

established under sections 1848(e) 

(GPCI) and 1886(d)(3)(E) (hospital wage 

index) of the Act. These adjustments are 

designed to ensure Medicare payment 

fees and rates reflect differences in 

input costs across geographic areas. The 

factors IOM is evaluating include the— 

• Accuracy of the adjustment factors; 

• Methodology used to determine the 

adjustment factors, and 

• Sources of data and the degree to 

which such data are representative. 

Within the context of the U.S. health 

care marketplace, the IOM is also 

evaluating and considering the— 

• Effect of the adjustment factors on 

the level and distribution of the health 

care workforce and resources, 

including— 

++ Recruitment and retention taking 

into account mobility between urban 

and rural areas; 

++ Ability of hospitals and other 

facilities to maintain an adequate and 

skilled workforce; and 

++ Patient access to providers and 

needed medical technologies; 

• Effect of adjustment factors on 

population health and quality of care; 

and 

• Effect of the adjustment factors on 

the ability of providers to furnish 

efficient, high value care. 

The first report ‘‘Geographic 

Adjustment in Medicare Payment, Phase 

I: Improving Accuracy’’ is a ‘‘Phase I 

report’’ that was released June 1, 2011 

and is available on the IOM Web site 

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Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42821 

http://www.iom.edu/Reports/2011/ 

Geographic-Adjustment-in-MedicarePayment-Phase-I–ImprovingAccuracy.aspx. It evaluates the accuracy 

of geographic adjustment factors and the 

methodology and data used to calculate 

them. The IOM is conducting further 

study on GPCI payment issues, and a 

supplemental report is expected to be 

issued in the summer of 2011 to address 

those issues. In its final report, 

scheduled to be released in the spring 

of 2012, the IOM will consider the role 

of Medicare payments in addressing 

matters such as the distribution of the 

health care workforce, population 

health, and the ability of providers to 

produce high-value, high-quality health 

care. 

The recommendations specifically 

related to the GPCI included in 

IOM’sfirst phase report are summarized 

below: 

• Recommendation 2–1: The same 

labor market definition should be used 

for both the hospital wage index and the 

physician geographic adjustment factor. 

Metropolitan statistical areas and 

Statewide non-metropolitan statistical 

areas should serve as the basis for 

defining these labor markets. 

• Recommendation 5–1: The IOM 

recommends constructing the 

geographic practice cost indexes with 

the full range of occupations employed 

in physicians’ offices, each with a fixed 

national weight based on the hours of 

each occupation employed in 

physicians’ offices nationwide. 

• Recommendation 5–2. The 

committee recommends that the Centers 

for Medicare and Medicaid Services and 

the Bureau of Labor Statistics develop 

an agreement allowing the Bureau of 

Labor Statistics to analyze confidential 

data for the Centers for Medicare and 

Medicaid Services. 

• Recommendation 5–3: The 

committee recommends that a new 

source of information be identified to 

obtain data on commercial office rent 

per square foot. 

Because of the timeline related to the 

release of the PFS proposed rule, we did 

not have adequate time to fully evaluate 

these recommendations in the CY 2012 

proposed rule. As previously discussed, 

the IOM will be releasing a 

supplemental report in the summer of 

2011 that will address additional 

analysis related to the physician work 

GPCI. We will address the IOM 

recommendations once we are able to 

assess the IOM’s full recommendations 

and have given our stakeholders an 

opportunity to evaluate them. Any 

changes to the GPCIs in response to the 

aforementioned IOM recommendations 

will be proposed through the 

rulemaking process to allow an 

opportunity for public notice comment 

before making revisions. 

III. Medicare Telehealth Services for 

the Physician Fee Schedule 

A. Billing and Payment for Telehealth 

Services 

1. History 

Prior to January 1, 1999, Medicare 

coverage for services delivered via a 

telecommunications system was limited 

to services that did not require a faceto-face encounter under the traditional 

model of medical care. Examples of 

these services included interpretation of 

an x-ray, or electrocardiogram, or 

electroencephalogram tracing, and 

cardiac pacemaker analysis. 

Section 4206 of the BBA provided for 

coverage of, and payment for, 

consultation services delivered via a 

telecommunications system to Medicare 

beneficiaries residing in rural health 

professional shortage areas (HPSAs) as 

defined by the Public Health Service 

Act. Additionally, the BBA required that 

a Medicare practitioner (telepresenter) 

be with the patient at the time of a 

teleconsultation. Further, the BBA 

specified that payment for a 

teleconsultation had to be shared 

between the consulting practitioner and 

the referring practitioner and could not 

exceed the fee schedule payment which 

would have been made to the consultant 

for the service provided. The BBA 

prohibited payment for any telephone 

line charges or facility fees associated 

with the teleconsultation. We 

implemented this provision in the CY 

1999 PFS final rule with comment 

period (63 FR 58814). 

Effective October 1, 2001, section 223 

of the Medicare, Medicaid and SCHIP 

Benefits Improvement Protection Act of 

2000 (Pub. L. 106–554)(BIPA) added a 

new section 1834(m) to the Act which 

significantly expanded Medicare 

telehealth services. Section 

1834(m)(4)(F)(i) of the Act defines 

Medicare telehealth services to include 

consultations, office visits, office 

psychiatry services, and any additional 

service specified by the Secretary, when 

delivered via a telecommunications 

system. We first implemented this 

provision in the CY 2002 PFS final rule 

with comment period (66 FR 55246). 

Section 1834(m)(4)(F)(ii) 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 

the practitioner at the distant site. 

Telephones, facsimile machines, and 

electronic mail systems do not meet the 

definition of an interactive 

telecommunications system. An 

interactive telecommunications system 

is generally required as a condition of 

payment; however, section 1834(m)(1) 

of the Act does allow the use of 

asynchronous ‘‘store-and-forward’’ 

technology in delivering these services 

when the originating site is a Federal 

telemedicine demonstration program in 

Alaska or Hawaii. As specified in 

regulations at § 410.78(a)(1), store and 

forward means the asynchronous 

transmission of medical information 

from an originating site to be reviewed 

at a later time by the practitioner at the 

distant site. 

Medicare telehealth services may be 

provided to an eligible telehealth 

individual notwithstanding the fact that 

the individual practitioner providing 

the telehealth service is not at the same 

location as the beneficiary. An eligible 

telehealth individual means an 

individual enrolled under Part B who 

receives a telehealth service furnished at 

an originating site. As specified in BIPA, 

originating sites are limited under 

section 1834(m)(3)(C) of the 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 (CAH), a rural health 

clinic (RHC), a federally qualified health 

center (FQHC) and a hospital (as 

defined in Section 1861(e)). 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 hospitalbased renal dialysis centers, skilled 

nursing facilities (SNFs), and 

community mental health centers 

(CMHCs). In order to serve as a 

telehealth originating site, these sites 

must be located in an area designated as 

a rural health professional shortage area 

(HPSA), in a county that is not in a 

metropolitan statistical area (MSA), or 

must be an entity that participates in a 

Federal telemedicine demonstration 

project that has been approved by (or 

receives funding from) the Secretary of 

Health and Human Services as of 

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December 31, 2000. Finally, section 

1834(m) of the Act does not require the 

eligible telehealth individual to be 

presented by a practitioner at the 

originating site. 

2. Current Telehealth Billing and 

Payment Policies 

As noted above, Medicare telehealth 

services can only be furnished to an 

eligible telehealth beneficiary in an 

originating site. An originating site is 

defined as one of the specified sites 

where an eligible telehealth individual 

is located at the time the service is being 

furnished via a telecommunications 

system. In general, originating sites 

must be located in a rural HPSA or in 

a county outside of an MSA. The 

originating sites authorized by the 

statute are as follows: 

• Offices of a physician or 

practitioner 

• Hospitals 

• CAHs 

• RHCs 

• FQHCs 

• Hospital-Based Or Critical Access 

Hospital-Based Renal Dialysis Centers 

(including Satellites) 

• SNFs 

• CMHCs 

Currently approved Medicare 

telehealth services include the 

following: 

• Initial inpatient consultations 

• Follow-up inpatient consultations 

• Office or other outpatient visits 

• Individual psychotherapy 

• Pharmacologic management 

• Psychiatric diagnostic interview 

examination 

• End-stage renal disease (ESRD) 

related services 

• Individual 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 selfmanagement training services (DSMT) 

In general, the practitioner at the 

distant site may be any of the following, 

provided that the practitioner is 

licensed under State law to furnish the 

service being furnished via a 

telecommunications system: 

• Physician; 

• Physician assistant (PA); 

• Nurse practitioner (NP); 

• Clinical nurse specialist (CNS); 

• Nurse-midwife; 

• Clinical psychologist; 

• Clinical social worker; or a 

• Registered dietitian or nutrition 

professional. 

Practitioners furnishing Medicare 

telehealth services are located at a 

distant site, and they submit claims for 

telehealth services to the Medicare 

contractors that process claims for the 

service area where their distant site is 

located. Section 1834(m)(2)(A) of the 

Act requires that a practitioner who 

furnishes a telehealth service to an 

eligible telehealth individual be paid an 

amount equal to the amount that the 

practitioner would have been paid if the 

service had been furnished without the 

use of a telecommunications system. 

Distant site practitioners must submit 

the appropriate HCPCS procedure code 

for a covered professional telehealth 

service, appended with the –GT (Via 

interactive audio and video 

telecommunications system) or –GQ 

(Via asynchronous telecommunications 

system) modifier. By reporting the –GT 

or –GQ modifier with a covered 

telehealth procedure code, the distant 

site practitioner certifies that the 

beneficiary was present at a telehealth 

originating site when the telehealth 

service was furnished. The usual 

Medicare deductible and coinsurance 

policies apply to the telehealth services 

reported by distant site practitioners. 

Section 1834(m)(2)(B) of the Act 

provides for payment of a facility fee to 

the originating site. To be paid the 

originating site facility fee, the provider 

or supplier where the eligible telehealth 

individual is located must submit a 

claim with HCPCS code Q3014 

(Telehealth originating site facility fee), 

and the provider or supplier is paid 

according to the applicable payment 

methodology for that facility or location. 

The usual Medicare deductible and 

coinsurance policies apply to HCPCS 

code Q3014. By submitting HCPCS code 

Q3014, the originating site authenticates 

that it is located in either a rural HPSA 

or non-MSA county or is an entity that 

participates in a Federal telemedicine 

demonstration project that has been 

approved by (or receives funding from) 

the Secretary of Health and Human 

Services as of December 31, 2000 as 

specified in section 1834(m)(4)(C)(i)(III) 

of the Act. 

As previously described, certain 

professional services that are commonly 

furnished remotely using 

telecommunications technology, but 

that do not require the patient to be 

present in-person with the practitioner 

when they are furnished, are covered 

and paid in the same way as services 

delivered without the use of 

telecommunications technology when 

the practitioner is in-person at the 

medical facility furnishing care to the 

patient. Such services typically involve 

circumstances where a practitioner is 

able to visualize some aspect of the 

patient’s condition without the patient 

being present and without the 

interposition of a third person’s 

judgment. Visualization by the 

practitioner can be possible by means of 

x-rays, electrocardiogram or 

electroencephalogram tracings, tissue 

samples, etc. For example, the 

interpretation by a physician of an 

actual electrocardiogram or 

electroencephalogram tracing that has 

been transmitted via telephone (that is, 

electronically, rather than by means of 

a verbal description) is a covered 

physician’s service. These remote 

services are not Medicare telehealth 

services as defined under section 

1834(m) of the Act. Rather, these remote 

services that utilize telecommunications 

technology are considered physicians’ 

services in the same way as services that 

are furnished in-person without the use 

of telecommunications technology; they 

are paid under the same conditions as 

in-person physicians’ services (with no 

requirements regarding permissible 

originating sites), and should be 

reported in the same way (that is, 

without the –GT or –GQ modifier 

appended). 

B. Requests for Adding Services to the 

List of Medicare Telehealth Services 

As noted above, in the December 31, 

2002 Federal Register (67 FR 79988), we 

established a process for adding services 

to or deleting services from the list of 

Medicare telehealth services. This 

process provides the public with an 

ongoing opportunity to submit requests 

for adding services. We assign any 

request to make additions to the list of 

Medicare telehealth services to one of 

the following categories: 

• Category 1: Services that are similar 

to professional consultations, office 

visits, and office psychiatry services that 

are currently on the list of telehealth 

services. In reviewing these requests, we 

look for similarities between the 

requested and existing telehealth 

services for the roles of, and interactions 

among, the beneficiary, the physician 

(or other practitioner) at the distant site 

and, if necessary, the telepresenter. We 

also look for similarities in the 

telecommunications system used to 

deliver the proposed service, for 

example, the use of interactive audio 

and video equipment. 

• Category 2: Services that are not 

similar to the current list of telehealth 

services. Our review of these requests 

includes an assessment of whether the 

use of a telecommunications system to 

deliver the service produces similar 

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diagnostic findings or therapeutic 

interventions as compared with the inperson delivery of the same service. 

Requestors should submit evidence 

showing that the use of a 

telecommunications system does not 

affect the diagnosis or treatment plan as 

compared to in-person delivery of the 

requested service. 

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 in order 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 

services (with a minimum of 1 hour of 

in-person instruction to ensure effective 

injection training). 

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 2011 will be 

considered for the CY 2013 proposed 

rule. Each request for adding a service 

to the list of Medicare telehealth 

services must include any supporting 

documentation the requester wishes us 

to consider as we review the request. 

Because we use the annual PFS 

rulemaking process as a vehicle for 

making changes to the list of Medicare 

telehealth services, requestors should be 

advised that any information submitted 

is subject to public disclosure for this 

purpose. For more information on 

submitting a request for an addition to 

the list of Medicare telehealth services, 

including where to mail these requests, 

we refer readers to the CMS Web site at 

http://www.cms.gov/telehealth/. 

C. Submitted Requests for Addition to 

the List of Telehealth Services for CY 

2012 

We received requests in CY 2010 to 

add the following services as Medicare 

telehealth services effective for CY 2012: 

(1) Smoking cessation services; (2) 

critical care services; (3) domiciliary or 

rest home evaluation and management 

services; (4) genetic counseling services; 

(5) online evaluation and management 

services; (6) data collection services; 

and (7) audiology services. The 

following presents a discussion of these 

requests, including our proposals for 

additions to the CY 2012 telehealth list. 

1. Smoking Cessation Services 

The American Telemedicine 

Association and the Marshfield Clinic 

submitted requests to add smoking 

cessation services, reported by CPT 

codes 99406 (Smoking and tobacco use 

cessation counseling visit; intermediate, 

greater than 3 minutes up to 10 minutes) 

and 99407 (Smoking and tobacco use 

cessation counseling visit; intensive, 

greater than 10 minutes) to the list of 

approved telehealth services for CY 

2012 on a category 1 basis. 

Smoking Cessation services are 

defined as face-to-face behavior change 

interventions. We believe the 

interaction between a practitioner and a 

beneficiary receiving smoking cessation 

services is similar to the education, 

assessment, and counseling elements of 

individual KDE reported by HCPCS 

code G0420 (Face-to-face educational 

services related to the care of chronic 

kidney disease; individual, per session, 

per 1 hour), and individual MNT 

services, reported by HCPCS code 

G0270 (Medical nutrition therapy; 

reassessment and subsequent 

intervention(s) following second referral 

in the same year for change in diagnosis, 

medical condition or treatment regimen 

(including additional hours needed for 

renal disease), individual, face-to-face 

with the patient, each 15 minutes); CPT 

code 97802 (Medical nutrition therapy; 

initial assessment and intervention, 

individual, face-to-face with the patient, 

each 15 minutes); and CPT code 97803 

(Medical nutrition therapy; reassessment and intervention, 

individual, face-to-face with the patient, 

each 15 minutes), all services that are 

currently on the telehealth list. 

Therefore, we are proposing to add 

CPT codes 99406 and 99407 to the list 

of telehealth services for CY 2012 on a 

category 1 basis. Additionally, we are 

proposing to add HCPCS codes G0436 

(Smoking and tobacco cessation 

counseling visit for the asymptomatic 

patient; intermediate, greater than 3 

minutes, up to 10 minutes) and G0437 

(Smoking and tobacco cessation 

counseling visit for the asymptomatic 

patient; intensive, greater than 10 

minutes) to the list of telehealth services 

for CY 2012 since these related services 

are similar to the codes for which we 

received formal public requests. 

Consistent with this proposal, we are 

also proposing to revise our regulations 

at § 410.78(b) and § 414.65(a)(1) to 

include these smoking cessation 

services as Medicare telehealth services. 

2. Critical Care Services 

The American Telemedicine 

Association and the Marshfield Clinic 

submitted requests to add critical care 

service CPT codes 99291 (Critical care, 

evaluation and management of the 

critically ill or critically injured patient; 

first 30–74 minutes) and 99292 (Critical 

care, evaluation and management of the 

critically ill or critically injured patient; 

each additional 30 minutes) to the list 

of approved telehealth services. We 

previously received this request for the 

CY 2009 and CY 2010 PFS rulemaking 

cycles (73 FR 38517, 73 FR 69744–5, 74 

FR 33548, and 74 FR 61764) and did not 

add the codes on a category 1 basis due 

to the acute nature of the typical patient. 

We continue to believe that patients 

requiring critical care services are more 

acutely ill than those patients typically 

receiving any service currently on the 

list of telehealth services. Therefore, we 

cannot consider critical care services on 

a category 1 basis. 

In the CY 2009 PFS proposed rule (73 

FR 38517), we explained that we had no 

evidence suggesting that the use of 

telehealth could be a reasonable 

surrogate for the in-person delivery of 

critical care services; therefore, we 

would not add the services on a 

category 2 basis. Requestors submitted 

new studies for CY 2012, but none 

demonstrated that comparable outcomes 

to a face-to-face encounter can be 

achieved using telehealth to deliver 

these services. The studies we received 

primarily addressed other issues 

relating to telehealth services. Some 

studies addressed the cost benefits and 

cost savings of telehealth services. 

Others focused on the positive outcomes 

of telehealth treatment when compared 

with no treatment at all. One submitted 

study addressed the equivalency of 

patient outcomes for telehealth services 

delivered to patients in emergency 

rooms, but the study’s authors 

specifically restricted their population 

to patients whose complaints were not 

considered to be genuine emergencies. 

Given that limitation, it seems unlikely 

that any of these patients would have 

required critical care services as defined 

by CPT codes 99291 and 99292. 

We note that consultations are 

included on the list of Medicare 

telehealth services and may be billed by 

practitioners furnishing services to 

critically ill patients. These services are 

described by the following HCPCS 

codes: G0425 (Initial inpatient 

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telehealth consultation, typically 30 

minutes communicating with the 

patient via telehealth), G0426 (Initial 

inpatient telehealth consultation, 

typically 50 minutes communicating 

with the patient via telehealth), G0427 

(Initial inpatient telehealth consultation, 

typically 70 minutes or more 

communicating with the patient via 

telehealth), G0406 (Follow-up inpatient 

telehealth consultation, limited, 

physicians typically spend 15 minutes 

communicating with the patient via 

telehealth), G0407 (Follow-up inpatient 

telehealth consultation, intermediate, 

physicians typically spend 25 minutes 

communicating with the patient via 

telehealth), and G0408 (Follow-up 

inpatient telehealth consultation, 

complex, physicians typically spend 35 

minutes or more communicating with 

the patient via telehealth). Critical care 

services, as reported by the applicable 

CPT codes and described in the 

introductory language in the CPT book, 

consist of direct delivery by a physician 

of medical care for a critically ill or 

injured patient, including high 

complexity decision-making to assess, 

manipulate, and support vital system 

functions. Critical care requires 

interpretation of multiple physiologic 

parameters and/or application of 

advanced technologies, including 

temporary pacing, ventilation 

management, and vascular access 

services. The payment rates under the 

PFS reflect this full scope of physician 

work. To add the critical services to the 

telehealth list would require the 

physician to be able to deliver this full 

scope of services via telehealth. Based 

on the code descriptions, we have 

previously believed that it is not 

possible to deliver the full range of 

critical care services without a physical 

physician presence with the patient. 

We note that there are existing 

Category III CPT codes (temporary codes 

for emerging services that allow data 

collection) for remote real-time 

interactive video conferenced critical 

care services that, consistent with our 

treatment of other Category III CPT 

codes, are not nationally priced under 

the PFS. The fact that the CPT Editorial 

Panel created these additional Category 

III CPT codes suggests to us that these 

video-conferenced critical care services 

are not the same as the in-person critical 

care services requested for addition to 

the telehealth list. 

Because we did not find evidence that 

use of a telecommunications system to 

deliver critical care services produces 

similar diagnostic or therapeutic 

outcomes as compared with the face-toface deliver of the services, we are not 

proposing to add critical care services 

(as described by CPT codes 99291 and 

99292) to the list of approved telehealth 

services. We reiterate that our decision 

not to propose to add critical care 

services to the list of approved 

telehealth services does not preclude 

physicians from furnishing telehealth 

consultations to critically ill patients 

using the consultation codes that are on 

the list of Medicare telehealth services. 

3. Domiciliary or Rest Home Evaluation 

and Management Services 

The American Telemedicine 

Association and the Marshfield Clinic 

submitted requests to add the following 

domiciliary or rest home evaluation and 

management CPT codes to the telehealth 

list for CY 2012: 

• 99334 (Domiciliary or rest home 

visit for the evaluation and management 

of an established patient, which requires 

at least 2 of these 3 key components: A 

problem focused interval history; a 

problem focused examination; or 

straightforward medical decision 

making. Counseling and/or coordination 

of care with other providers or agencies 

are provided consistent with the nature 

of the problem(s) and the patient’s and/ 

or family’s needs. Usually, the 

presenting problem(s) are self-limited or 

minor. Physicians typically spend 15 

minutes with the patient and/or family 

or caregiver). 

• 99335 (Domiciliary or rest home 

visit for the evaluation and management 

of an established patient, which requires 

at least 2 of these 3 key components: An 

expanded problem focused interval 

history; An expanded problem focused 

examination; Medical decision making 

of low complexity. Counseling and/or 

coordination of care with other 

providers or agencies are provided 

consistent with the nature of the 

problem(s) and the patient’s and/or 

family’s needs. Usually, the presenting 

problem(s) are of low to moderate 

severity. Physicians typically spend 25 

minutes with the patient and/or family 

or caregiver). 

• 99336 (Domiciliary or rest home 

visit for the evaluation and management 

of an established patient, which requires 

at least 2 of these 3 key components: a 

detailed interval history; a detailed 

examination; medical decision making 

of moderate complexity. Counseling 

and/or coordination of care with other 

providers or agencies are provided 

consistent with the nature of the 

problem(s) and the patient’s and/or 

family’s needs. Usually, the presenting 

problem(s) are of moderate to high 

severity. Physicians typically spend 40 

minutes with the patient and/or family 

or caregiver). 

• 99337 (Domiciliary or rest home 

visit for the evaluation and management 

of an established patient, which requires 

at least 2 of these 3 key components: A 

comprehensive interval history; a 

comprehensive examination; medical 

decision making of moderate to high 

complexity. Counseling and/or 

coordination of care with other 

providers or agencies are provided 

consistent with the nature of the 

problem(s) and the patient’s and/or 

family’s needs. Usually, the presenting 

problem(s) are of moderate to high 

severity. The patient may be unstable or 

may have developed a significant new 

problem requiring immediate physician 

attention. Physicians typically spend 60 

minutes with the patient and/or family 

or caregiver). 

A domiciliary or rest home is not 

permitted under current statute to serve 

as an originating site for Medicare 

telehealth services. Therefore, we are 

not proposing to add domiciliary or rest 

home evaluation and management 

services to the list of Medicare 

telehealth services for CY 2012. 

4. Genetic Counseling Services 

The American Telemedicine 

Association and the Marshfield Clinic 

submitted requests to add CPT code 

96040 (Medical genetics and genetic 

counseling services, each 30 minutes 

face-to-face with patient/family) to the 

telehealth list for CY 2012. We note that 

CPT guidance regarding reporting 

genetic counseling and education 

furnished by a physician to an 

individual directs physicians to 

evaluation and management (E/M) CPT 

codes and that services described by 

CPT code 96040 are provided by trained 

genetic counselors. Physicians and 

nonphysician practitioners who may 

independently bill Medicare for their 

service and who are counseling 

individuals would generally report 

office or other outpatient evaluation and 

management (E/M) CPT codes for office 

visits that involve significant 

counseling, including genetic 

counseling, and these office visit CPT 

codes are already on the list of 

telehealth services. CPT code 96040 

would only be reported by genetic 

counselors for genetic counseling 

services. These practitioners cannot bill 

Medicare directly for their professional 

services and they are also not on the list 

of practitioners who can furnish 

telehealth services (specified in section 

1834(m)(4)(E) of the Act). As such, we 

do not believe that it would be 

necessary or appropriate to add CPT 

code 96040 to the list of Medicare 

telehealth services. Therefore, we are 

not proposing to add genetic counseling 

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services to the list of Medicare 

telehealth services for CY 2012. 

5. Online Evaluation and Management 

Services 

The American Telemedicine 

Association and the Marshfield Clinic 

submitted requests to add CPT code 

99444 (Online evaluation and 

management service provided by a 

physician to an established patient, 

guardian, or health care provider not 

originating from a related E/M service 

provided within the previous 7 days, 

using the Internet or similar electronic 

communications network) to the list of 

Medicare telehealth services. 

As we explained in the CY 2008 PFS 

final rule with comment period (72 FR 

66371), we assigned a status indicator of 

‘‘N’’ (Non-covered service) to these 

services because: (1) These services are 

non-face-to-face; and (2) the code 

descriptor includes language that 

recognizes the provision of services to 

parties other than the beneficiary and 

for whom Medicare does not provide 

coverage (for example, a guardian). 

According to section 1834(m)(2)(A) of 

the Act, Medicare is required to pay for 

telehealth services at an amount equal 

to the amount that a practitioner would 

have been paid had such service been 

furnished without the use of a 

telecommunications system. As such, 

we do not believe it would be 

appropriate to make payment for 

services furnished via telehealth when 

those services would not otherwise be 

covered under Medicare. Because CPT 

code 99444 is currently noncovered, we 

are not proposing to add online 

evaluation and management services to 

the list of Medicare Telehealth Services 

for CY 2012. 

6. Data Collection Services 

The American Telemedicine 

Association and the Marshfield Clinic 

submitted requests to add CPT codes 

99090 (Analysis of clinical data stored 

in computers (e.g., ECGs, blood 

pressures, hematologic data)) and 

99091(Collection and interpretation of 

physiologic data (e.g., ECG, blood 

pressure, glucose monitoring) digitally 

stored and/or transmitted by the patient 

and/or caregiver to the physician or 

other qualified health care professional, 

requiring a minimum of 30 minutes of 

time) to the list of Medicare telehealth 

services. 

As we explained in the CY 2002 PFS 

final rule with comment period (66 FR 

55309), we assigned a status indicator of 

‘‘B’’ (Payment always bundled into 

payment for other services not 

specified) to these services because the 

associated work is considered part of 

the pre- and post-service work of an E/ 

M service. We note that many E/M 

codes are on the list of Medicare 

telehealth services. 

According to section 1834(m)(2)(A) of 

the Act, Medicare is required to pay for 

telehealth services an amount equal to 

the amount that a practitioner would 

have been paid had such service been 

furnished without the use of a 

telecommunications system. Similar to 

the point noted above for online E/M 

services, we do not believe it would be 

appropriate to make separate payment 

for services furnished via telehealth 

when Medicare would not otherwise 

make separate payment for the services. 

Moreover, we believe the payment for 

these data collection services should be 

bundled into the payment for E/M 

services, many of which are already on 

the Medicare telehealth list. Because 

CPT codes 99090 and 99091 are 

currently bundled, we are not proposing 

to add data collection services to the list 

of Medicare telehealth services for CY 

2012. 

7. Audiology Services 

The American Academy of Audiology 

submitted a request that CMS add 

services that audiologists provide for 

balance disorders and hearing loss to 

the list of Medicare telehealth services. 

The request did not include specific 

HCPCS codes. Nevertheless, it is not 

within our administrative authority to 

pay audiologists for services furnished 

via telehealth. The statute authorizes the 

Secretary to pay for telehealth services 

only when furnished by a physician or 

a practitioner as physician or 

practitioner are defined in sections 

1834(m)(4)(D) and (E) of the Act. 

Therefore, we are not proposing to add 

services that are primarily provided by 

audiologists to the list of Medicare 

telehealth services for CY2012. 

D. The Process for Adding HCPCS Codes 

as Medicare Telehealth Services 

Along with its submission of codes for 

consideration as additions to the 

Medicare telehealth list for CY 2012, the 

American Telemedicine Association 

(ATA) also requested that CMS consider 

revising the annual process for adding 

to or deleting services from the list of 

telehealth services. The existing 

process, adopted in the CY 2003 PFS 

rulemaking cycle (67 FR 43862 through 

43863 and 67 FR 79988 through 79989), 

is described in section III.B. of this 

proposed rule. The following discussion 

includes a summary of recent requests 

by the ATA and other stakeholders for 

changes to the established process for 

adding services to the telehealth list, an 

assessment of our historical experience 

with the current process including the 

request review criteria, and our 

proposed refinement to the process for 

adding services to the telehealth list that 

would be used in our evaluation of 

candidate telehealth services beginning 

for CY 2013. 

The ATA asked CMS to consider two 

specific changes to the process, 

including: 

• Broadening the factors for 

consideration to include shortages of 

health professionals to provide inperson services, speed of access to inperson services, and other barriers to 

care for beneficiaries; and 

• Equalizing the standard for adding 

telehealth services with the standard for 

deleting telehealth services by adopting 

a standard that allows services that are 

safe, effective or medically beneficial 

when furnished via telehealth to be 

added to the list of Medicare telehealth 

services. Similarly, we have received 

recommendations that CMS place all 

codes payable under the PFS on the 

telehealth list and allow physicians and 

practitioners to make a clinical 

determination in each case about 

whether a medically reasonable and 

necessary service could be appropriately 

furnished to a beneficiary through 

telehealth. Under this scenario, 

stakeholders have argued that CMS 

would only remove services from the 

telehealth list under its existing policy 

for service removal; specifically, that a 

decision to remove a service from the 

list of telehealth services would be 

made using evidence-based, peerreviewed data which indicate that a 

specific service is not safe, effective, or 

medically beneficial when furnished via 

telehealth (67 FR 79988). 

While we share the interests of 

stakeholders in reducing barriers to 

health care access faced by some 

beneficiaries, given that section 

1834(m)(2)(F)(ii) of the Act requires the 

Secretary to establish a process that 

provides, on an annual basis, for the 

addition or deletion of telehealth 

services (and HCPCS codes), as 

appropriate, we do not believe it would 

be appropriate to add all services for 

which payment is made under the PFS 

to the telehealth list without explicit 

consideration as to whether the 

candidate service could be effectively 

furnished through telehealth. For 

example, addition of all codes to the 

telehealth list could result in a number 

of services on the list that could never 

be furnished by a physician or 

nonphysician practitioner who was not 

physically present with the beneficiary, 

such as major surgical procedures and 

interventional radiology services. 

Furthermore, we do not believe it would 

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be appropriate to add services to the 

telehealth list without explicit 

consideration as to whether or not the 

nature of the service described by a 

candidate code allows the service to be 

furnished as effectively through 

telehealth as in a face-to-face encounter. 

Section 1834(m)(2)(A) of the Act 

requires that the distant site physician 

or practitioner furnishing the telehealth 

service must be paid an amount equal 

to the amount the physician or 

practitioner would have been paid 

under the PFS has such service been 

furnished without the use of a 

telecommunications system. Therefore, 

we believe that candidate telehealth 

services must also be covered when 

furnished in-person; and that any 

service that would only be furnished 

through a telecommunications system 

would be a new service and, therefore, 

not a candidate for addition to the 

telehealth list. In view of these 

considerations, we will continue to 

consider candidate additions to the 

telehealth list on a HCPCS code-specific 

basis based on requests from the public 

and our own considerations. 

We also believe it continues to be 

most appropriate to consider candidate 

services for the telehealth list based on 

the two mutually exclusive established 

categories into which all services fall— 

specifically, services that are similar to 

services currently on the telehealth list 

(category 1) and services that are not 

similar to current telehealth services 

(category 2). 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 (67 FR 

43862). Since CY 2003, we have added 

35 services to the telehealth list on a 

category 1 basis based on public 

requests and our own identification of 

such services. We believe it is efficient 

and valuable to maintain the existing 

policy that allows us to consider 

requests for additions to the telehealth 

list on a category 1 basis and propose to 

add them to the telehealth list if the 

existing criteria are met. This procedure 

expedites our ability to identify codes 

for the telehealth list that resemble 

those services already on this list, 

streamlining our review process and the 

public request and informationsubmission process for services that fall 

into this category. Therefore, we believe 

that any changes to the process for 

adding codes to the telehealth list 

should be considered with respect to 

category 2 additions, rather than 

category 1 additions. 

Our existing criteria for consideration 

of codes that would be category 2 

additions, specifically those candidate 

telehealth services that are not similar to 

any current telehealth services, include 

an assessment of whether the use of a 

telecommunications system to deliver 

the services produces similar diagnostic 

findings or therapeutic interventions as 

compared with a face-to-face in-person 

delivery of the same service (67 FR 

43682). In other words, the discrete 

outcome of the interaction between the 

clinician and patient facilitated by a 

telecommunications system should 

correlate well with the discrete outcome 

of the clinician-patient interaction when 

performed face to-face. In the CY 2003 

PFS proposed rule (67 FR 43862), we 

explained that requestors for category 2 

additions to the telehealth list should 

submit evidence that the use of a 

telecommunications system does not 

affect the diagnosis or treatment plan as 

compared to in-person delivery of the 

service. We indicated that if evidence 

shows that the candidate telehealth 

service is equivalent when furnished in 

person or through telehealth, we would 

add it to the list of telehealth services. 

We refer to this criterion in further 

discussion in this proposed rule as the 

‘‘comparability standard.’’ We stated in 

the CY 2003 PFS proposed rule (67 FR 

43862) that if we determine that the use 

of a telecommunications system changes 

the nature or outcome of the service, for 

example, as compared with the inperson delivery of the service, we would 

review the telehealth service addition 

request as a request for a new service, 

rather than a different method of 

delivering an existing Medicare service. 

For coverage and payment of most 

services, Medicare requires that a new 

service must: (1) Fall into a Medicare 

benefit category; (2) be reasonable and 

necessary in accordance with section 

1862(a)(1)(A) of the Act; and (3) not be 

explicitly excluded from coverage. In 

such a case, the requestor would have 

the option of applying for a national 

coverage determination for the new 

service. 

We believe it is most appropriate to 

address the ATA and other stakeholder 

requests to broaden the current factors 

we consider when deciding whether to 

add candidate services to the telehealth 

list—to include factors such as the 

effects of barriers to in-person care and 

the safety, effectiveness, or medical 

benefit of the service furnished through 

telehealth, as potential refinements to 

our category 2 criteria. We initially 

established these category 2 criteria in 

the interest of ensuring that the 

candidate services were safe, effective, 

medically beneficial, and still accurately 

described by the corresponding codes 

when delivered via telehealth, while 

also ensuring that beneficiaries 

furnished telehealth services receive 

high quality care that is comparable to 

in-person care. We believed that the 

demonstration of comparable clinical 

outcomes (diagnostic findings and/or 

therapeutic interventions) from 

telehealth and in-person services would 

prove to be the best indicator that all of 

these conditions were met. While we 

continue to believe that safety, 

effectiveness, and medical benefit, as 

well as accurate description of the 

candidate telehealth services by the CPT 

or HCPCS codes, are necessary 

conditions for adding codes to the list 

of Medicare telehealth services, our 

recent experience in reviewing public 

requests for telehealth list additions and 

our discussions with stakeholders 

regarding contemporary medical 

practice and potential barriers to care, 

have led us to conclude that the 

comparability standard for category 2 

requests should be modified. 

In our annual evaluation of category 

2 requests since we adopted the process 

for evaluating additions to the telehealth 

list almost 10 years ago, we have 

consistently observed that requestors 

have difficulty demonstrating that 

clinical outcomes of a service delivered 

via telehealth are comparable to the 

outcomes of the in-person service. The 

medical literature frequently does not 

include studies of the outcomes of many 

types of in-person services that allow for 

comparison to the outcomes 

demonstrated for candidate telehealth 

services. Furthermore, we know that in 

some cases the alternative to a 

telehealth service may be no service 

rather than an in-person service. The 

comparability standard may not 

sufficiently allow for the opportunity to 

add candidate services to the telehealth 

list that may be safe, effective, and 

medically beneficial when delivered via 

telehealth, especially to beneficiaries 

who experience significant barriers to 

in-person care. While we continue to 

believe that beneficiaries receiving 

services through telehealth are 

deserving of high quality health care 

and that in-person care may be very 

important and potentially preferable for 

some services when in-person care is 

possible, we are concerned that we have 

not added any services to the telehealth 

list on a category 2 basis as a result of 

our reviews. While some candidate 

services appear to have the potential for 

clinical benefit when furnished through 

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telehealth, the requests have not met the 

comparability standard. 

Therefore, we are proposing to refine 

our category 2 review criteria for adding 

codes to the list of Medicare telehealth 

services beginning in CY 2013 by 

modifying the current requirement to 

demonstrate similar diagnostic findings 

or therapeutic interventions with 

respect to a candidate service delivered 

through telehealth compared to inperson delivery of the service (the 

comparability standard). We propose to 

establish a revised standard of 

demonstrated clinical benefit (the 

clinical benefit standard) when the 

service is furnished via telehealth. To 

support our review using this revised 

standard, we would ask requestors to 

specify in their request how the 

candidate telehealth service is still 

accurately described by the 

corresponding HCPCS or CPT code 

when delivered via telehealth as 

opposed to in-person. 

We are proposing that our refined 

criteria for category 2 additions would 

be as follows: 

• Category 2: Services that are not 

similar to the current list of telehealth 

services. Our review of these requests 

would include 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. 

Requestors should submit evidence 

indicating that the use of a 

telecommunications system in 

delivering the candidate telehealth 

service produces clinical benefit to the 

patient. 

The evidence submitted 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. Some examples of 

clinical benefit include the following: 

• Ability to diagnose a medical 

condition in a patient population 

without access to clinically appropriate 

in-person diagnostic services. 

• Treatment option for a patient 

population without access to clinically 

appropriate in-person treatment options. 

• Reduced rate of complications. 

• Decreased rate of subsequent 

diagnostic or therapeutic interventions 

(for example, due to reduced rate of 

recurrence of the disease process). 

• Decreased number of future 

hospitalizations or physician visits. 

• More rapid beneficial resolution of 

the disease process treatment. 

• Decreased pain, bleeding, or other 

quantifiable symptom. 

• Reduced recovery time. 

We believe the adoption of this 

clinical benefit standard for our review 

of candidate telehealth services on a 

category 2 basis is responsive to the 

requests of stakeholders that we broaden 

the factors taken into consideration to 

include barriers to care for beneficiaries. 

It allows us to consider the 

demonstrated clinical benefit of 

telehealth services for beneficiaries who 

might otherwise have no access to 

certain diagnostic or treatment services. 

Furthermore, we believe the focus on 

demonstrated clinical benefit in our 

review of category 2 requests for 

addition to the telehealth lists is 

equivalent to our standard for deleting 

services from the telehealth list that 

rests upon evidence that a service is not 

safe, not effective, or not medically 

beneficial. Finally, we believe the 

proposed clinical benefit standard for 

our review of candidate telehealth 

services on a category 2 basis is fully 

consistent with our responsibility to 

ensure that telehealth services are safe, 

effective, medically beneficial, and still 

accurately described by the 

corresponding codes that would be used 

for the services when delivered inperson. 

We are soliciting public comments on 

this proposed refinement to our 

established process for adding codes to 

the telehealth list, including the 

information that requestors should 

furnish to facilitate our full review of 

requests in preparation for the next 

calendar year’s rulemaking cycle. We 

will respond to comments on our 

proposal and finalize any changes to the 

process for addition codes to the 

telehealth list in the CY 2012 PFS final 

rule with comment period. We would 

use the revised category 2 review 

criteria to review requested additions to 

the telehealth list submitted during CY 

2011 and under consideration for CY 

2013. 

E. Telehealth Consultations in 

Emergency Departments 

We have recently been asked to clarify 

instructions regarding appropriate 

reporting of telehealth services that, 

prior to our policy change regarding 

consultation codes, would have been 

reported as consultations furnished to 

patients in an emergency department. 

When we eliminated the use of all 

consultation codes beginning in CY 

2010, we instructed practitioners, when 

furnishing a service that would have 

been reported as a consultation service, 

to report the E/M code that is most 

appropriate to the particular service for 

all office/outpatient or inpatient visits. 

Since section 1834(m) of the Act 

includes ‘‘professional consultations’’ 

(including the initial inpatient 

consultation codes ‘‘as subsequently 

modified by the Secretary’’) in the 

definition of telehealth services, we 

established several HCPCS codes to 

describe the telehealth delivery of initial 

inpatient consultations. For inpatient 

hospital and skilled nursing facility care 

telehealth services, we instructed 

practitioners to use the inpatient 

telehealth consultation G-codes listed in 

table 14 to report those telehealth 

services (74 FR 61763, 61774). However, 

we neglected to account for the fact that 

E/M emergency department visit codes 

(99281–99285) are not on the telehealth 

list. As such, there has not been a clear 

means for practitioners to bill a 

telehealth consultation furnished in an 

emergency department. In order to 

address this issue, we are proposing to 

change the code descriptors for the 

inpatient telehealth consultation Gcodes to include emergency department 

telehealth consultations effective 

January 1, 2012. However, we are 

seeking public comment regarding other 

options, including creating G-codes 

specific to these services when 

furnished to patients in the emergency 

department. 

TABLE 14—INPATIENT TELEHEALTH CONSULTATION G–CODES

HCPCS Code CY 2011 Long code descriptor 

G0425 Initial inpatient telehealth consultation, typically 30 minutes communicating with the patient via telehealth. 

G0426 Initial inpatient telehealth consultation, typically 50 minutes communicating with the patient via telehealth. 

G0427 Initial inpatient telehealth consultation, typically 70 minutes or more communicating with the patient via telehealth. 

G0406 Follow-up inpatient telehealth consultation, limited, physicians typically spend 15 minutes communicating with the patient via 

telehealth. 

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TABLE 14—INPATIENT TELEHEALTH CONSULTATION G–CODES—Continued 

HCPCS Code CY 2011 Long code descriptor 

G0407 Follow-up inpatient telehealth consultation, intermediate, physicians typically spend 25 minutes communicating with the patient 

via telehealth. 

G0408 Follow-up inpatient telehealth consultation, complex, physicians typically spend 35 minutes or more communicating with the patient via telehealth. 

IV. Other Provisions of the Proposed 

Regulation 

A. Part B Drug Payment: Average Sales 

Price (ASP) Issues 

Section 1847A of the Act requires use 

of the average sales price (ASP) payment 

methodology for payment for drugs and 

biologicals described in section 

1842(o)(1)(C) of the Act furnished on or 

after January 1, 2005. The ASP 

methodology applies to most drugs 

furnished incident to a physician’s 

service, drugs furnished under the DME 

benefit, certain oral anti-cancer drugs, 

and oral immunosuppressive drugs. 

1. Widely Available Market Price 

(WAMP)/Average Manufacturer Price 

(AMP) 

Section 1847A(d)(1) of the Act states 

that ‘‘The Inspector General of HHS 

shall conduct studies, which may 

include surveys, to determine the 

widely available market prices (WAMP) 

of drugs and biologicals to which this 

section applies, as the Inspector 

General, in consultation with the 

Secretary, determines to be 

appropriate.’’ Section 1847A (d)(2) of 

the Act states, ‘‘Based upon such studies 

and other data for drugs and biologicals, 

the Inspector General shall compare the 

ASP under this section for drugs and 

biologicals with— 

• The widely available market price 

(WAMP) for these drugs and biologicals, 

(if any); and 

• The average manufacturer price 

(AMP) (as determined under section 

1927(k) (1) of the Act) for such drugs 

and biologicals.’’ 

Section 1847A(d)(3)(A) of the Act 

states that, ‘‘The Secretary may 

disregard the ASP for a drug or 

biological that exceeds the WAMP or 

the AMP for such drug or biological by 

the applicable threshold percentage (as 

defined in subparagraph (B)).’’ Section 

1847A(d)(3)(C) of the Act states that if 

the Inspector General (OIG) finds that 

the ASP for a drug or biological is found 

to have exceeded the WAMP or AMP by 

this threshold percentage, the OIG 

‘‘shall inform the Secretary (at such 

times as the Secretary may specify to 

carry out this subparagraph) and the 

Secretary shall, effective as of the next 

quarter, substitute for the amount of 

payment otherwise determined under 

this section for such drug or biological, 

the lesser of— 

• the widely available market price 

for the drug or biological (if any); or 

• 103 percent of the average 

manufacturer price as determined under 

section 1927(k)(1) of the Act for the drug 

or biological.’’ 

The applicable threshold percentage 

is specified in section 1847A(d)(3)(B)(i) 

of the Act as 5 percent for CY 2005. For 

CY 2006 and subsequent years, section 

1847A(d)(3)(B)(ii) of the Act establishes 

that the applicable threshold percentage 

is ‘‘the percentage applied under this 

subparagraph subject to such 

adjustment as the Secretary may specify 

for the WAMP or the AMP, or both.’’ In 

the CY 2006 (70 FR 70222), CY 2007 (71 

FR69680), CY 2008 (72 FR 66258), CY 

2009 (73 FR 69752), and CY 2010 (74 FR 

61904) PFS final rules with comment 

period, we specified an applicable 

threshold percentage of 5 percent for 

both the WAMP and AMP. We based 

this decision on the fact that data was 

too limited to support an adjustment to 

the current applicable threshold 

percentage. 

For CY 2011, we proposed to specify 

two separate adjustments to the 

applicable threshold percentages. When 

making comparisons to the WAMP, we 

proposed the applicable threshold 

percentage to remain at 5 percent. The 

applicable threshold percentage that we 

proposed for the AMP is addressed 

below in this section of the preamble. 

The latest WAMP comparison was 

published in 2008, and the OIG is 

continuing to perform studies 

comparing ASP to WAMP. Based on 

available OIG reports that have been 

published comparing WAMP to ASP, 

we did not have sufficient information 

at the time to determine that the 5 

percent threshold percentage is 

inappropriate and should be changed. 

As a result, we believed that continuing 

the 5 percent applicable threshold 

percentage for the WAMP was 

appropriate for CY 2011. Therefore, we 

proposed to revise § 414.904(d)(3) to 

specify the 5 percent WAMP threshold 

for CY 2011. After soliciting and 

reviewing comments, we finalized our 

proposal to continue the 5 percent 

WAMP threshold for CY 2011 (75 FR 

73469). 

For CY 2012, we again propose to 

specify a separate adjustment to the 

applicable threshold percentage for 

WAMP comparisons. When making 

comparisons to the WAMP, we propose 

the applicable threshold percentage to 

remain at 5 percent. We still do not have 

sufficient information to determine that 

the 5 percent threshold percentage is 

inappropriate and, as a result, we 

believe that continuing the 5 percent 

applicable threshold percentage for the 

WAMP is appropriate for CY 2012. As 

we noted in the CY 2011 PFS final rule 

with comment period (75 FR 73470), we 

understand that there are complicated 

operational issues associated with this 

policy. We continue to proceed 

cautiously in this area. We remain 

committed to providing stakeholders, 

including providers and manufacturers 

of drugs impacted by potential price 

substitutions with adequate notice of 

our intentions regarding such, including 

the opportunity to provide input with 

regard to the processes for substituting 

the WAMP for the ASP. 

2. AMP Threshold and Price 

Substitutions 

As mentioned previously in section 

V.A.1. of this proposed rule, when 

making comparisons of ASP to AMP, 

the applicable threshold percentage for 

CY 2005 was specified in statute as 5 

percent. Section 1847A(d)(3) of the Act 

allows the Secretary to specify 

adjustments to this threshold percentage 

for years subsequent to 2005. For CY 

2006 (70 FR 70222), CY 2007 (71 FR 

69680), CY 2008 (72 FR 66258), CY 2009 

(73 FR 69752), and CY 2010 (74 FR 

61904), the Secretary made no 

adjustments to the threshold percentage; 

it remained at 5 percent. 

For CY 2011, we proposed, with 

respect to AMP substitution, to apply 

the applicable percentage subject to 

certain adjustments such that 

substitution of AMP for ASP will only 

be made when the ASP exceeds the 

AMP by 5 percent in two consecutive 

quarters immediately prior to the 

current pricing quarter, or three of the 

previous four quarters immediately 

prior to the current quarter. We further 

proposed to apply the applicable AMP 

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threshold percentage only for those 

situations where AMP and ASP 

comparisons are based on the same set 

of National Drug Codes (NDCs) for a 

billing code (that is, ‘‘complete’’ AMP 

data). 

Furthermore, we proposed a price 

substitution policy to substitute 103 

percent of AMP for 106 percent of ASP 

for both multiple and single source 

drugs and biologicals as defined 

respectively at section 1847(A)(c)(6)(C) 

and (D) of the Act. Specifically, we 

proposed that this substitution: 

• Would occur when the applicable 

threshold percentage has been met for 

two consecutive quarters immediately 

prior to the current pricing quarter, or 

three of the previous four quarters 

immediately prior to the current quarter. 

• Would permit for a final 

comparison between the OIG’s volumeweighted 103 percent of AMP for a 

billing code (calculated from the prior 

quarter’s data) and the billing code’s 

volume weighted 106 percent ASP (as 

calculated by CMS for the current 

quarter) to avoid a situation in which 

the AMP-based price substitution would 

exceed that quarter’s ASP; and 

• That the duration of the price 

substitution would last for only one 

quarter. 

We also sought comment on other 

issues related to the comparison 

between ASP and AMP, such as the 

following: 

• Any effect of definitional 

differences between AMP and ASP, 

particularly in light of the definition of 

AMP as revised by section 2503 of the 

Affordable Care Act. 

• The impact of any differences in 

AMP and ASP reporting by 

manufacturers on price substitution 

comparisons. 

• Whether and/or how general 

differences and similarities between 

AMP and manufacturer’s ASP would 

affect comparisons between these two. 

In the CY 2011 PFS final rule with 

comment, we did not finalize our 

proposed adjustments to the 5 percent 

AMP threshold or our price substitution 

policy because of legislative changes, 

regulatory changes, and litigation that 

affected this issue. Specifically— 

• A preliminary injunction issued by 

the United States District Court for the 

District of Columbia in National 

Association of Chain Drug Stores et al. 

v. Health and Human Services, Civil 

Action No. 1:07–cv–02017 (RCL) was 

still in effect; 

• We were continuing to expect to 

develop regulations to implement 

section 2503 of the Affordable Care Act, 

which amended the definition of AMP, 

and section 202 of the Federal Aviation 

Administration Air Transportation 

Modernization and Safety Improvement 

Act (Pub. L. 111–226) as enacted on 

August 10, 2010, which further 

amended section 1927(k) of the Act; 

• We proposed to withdraw certain 

provisions of the AMP final rule 

published on July 17, 2007 (75 FR 

54073). 

As a result, we finalized the portion 

of our proposal that sets the AMP 

threshold at 5 percent for CY 2011 and 

revised the regulation text accordingly 

(75 FR 73470). 

The preliminary injunction was 

vacated by the United States District 

Court for the District of Columbia on 

December 15, 2010. Currently, we 

continue to expect to develop 

regulations to implement section 2503 

of the Affordable Care Act and section 

202 of the Federal Aviation 

Administration Air Transportation 

Modernization and Safety Improvement 

Act. However, these statutory 

amendments became effective on 

October 1, 2010 without regard to 

whether or not final regulations to carry 

out such amendments have been 

promulgated by such date. Moreover, 

our Medicaid final rule published on 

November 15, 2010 finalized regulations 

requiring manufacturers to calculate 

AMP in accordance with section 

1927(k)(1) of the Act (75 FR 69591). 

Since statutory and regulatory 

provisions exist and are currently 

utilized by manufacturers for the 

calculation and submission of AMP 

data, we are revisiting the AMP 

threshold and price substitution issues. 

a. AMP Threshold 

Section 1847A(d)(3) of the Act allows 

the Secretary to specify adjustments to 

this threshold percentage for years 

subsequent to 2005, and to specify the 

timing for any price substitution. 

Therefore, for CY 2012, with respect to 

AMP substitution, we propose to apply 

the applicable percentage subject to 

certain adjustments. Specifically, a price 

substitution of AMP for ASP will be 

made only when the ASP exceeds the 

AMP by 5 percent in two consecutive 

quarters immediately prior to the 

current pricing quarter, or three of the 

previous four quarters immediately 

prior to the current quarter. 

In general, the ASP methodology 

reflects average market prices for Part B 

drugs for a quarter. The ASP is based on 

the average sales price to all purchasers 

for a calendar quarter; the AMP, in turn, 

represents the average price paid by 

wholesalers for drugs distributed to 

retail community pharmacies and by 

retail community pharmacies that 

purchase drugs directly from the 

manufacturers. Accordingly, while the 

ASP payment amount for a billing code 

may exceed its AMP for that billing 

code for any given quarter, this may 

reflect only a temporary fluctuation in 

market prices that would be corrected in 

a subsequent quarter. We believe this 

fluctuation is demonstrated by how few 

billing codes exceed the applicable 

threshold percentage over multiple 

quarters. For example, in the Inspector 

General’s report ‘‘Comparison of 

Average Sales Prices and Average 

Manufacturer Prices: An Overview of 

2009,’’ only 11 of 493 examined billing 

codes exceeded the applicable threshold 

percentage over multiple quarters (OEI– 

03–10–00380). We are concerned that 

substitutions based on a single quarter’s 

ASP to AMP comparison will not 

appropriately or accurately account for 

temporary fluctuations. We believe that 

applying this threshold percentage 

adjusted to reflect data from multiple 

quarters will account for continuing 

differences between ASP and AMP, and 

allow us to more accurately identify 

those drugs that consistently trigger the 

substitution threshold and thus warrant 

price substitution. 

We further propose to apply the 

applicable AMP threshold percentage 

only for those situations where AMP 

and ASP comparisons are based on the 

same set of NDCs for a billing code (that 

is, ‘‘complete’’ AMP data). Prior to 2008, 

the OIG calculated a volume-weighted 

AMP and made ASP and AMP 

comparisons only for billing codes with 

such ‘‘complete’’ AMP data. In such 

comparisons, a volume-weighted AMP 

for a billing code was calculated when 

NDC-level AMP data was available for 

the same NDCs used by us to calculate 

the volume-weighted ASP. Beginning in 

the first quarter of 2008, the OIG also 

began to make ASP and AMP 

comparisons based on ‘‘partial’’ AMP 

data (that is, AMP data for some, but not 

all, NDCs in a billing code). For these 

comparisons, the volume-weighted 

AMP for a billing code is calculated 

even when only such limited AMP data 

is available. That is, the volumeweighted AMP calculated by the 

Inspector General is based on fewer 

NDCs than the volume-weighted ASP 

calculated by CMS. Moreover, volumeweighted ASPs are not adjusted by the 

Inspector General to reflect the fewer 

number of NDCs in the volumeweighted AMP. 

Because the OIG’s partial AMP data 

comparison did not reflect all the NDCs 

used in our volume-weighted ASP 

calculations, we discussed our concern 

about using the volume-weighted AMP 

in the CY 2011 PFS proposed rule. We 

believed that such AMP data may not 

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adequately account for market-related 

drug price changes and may lead to the 

substitution of incomplete and 

inaccurate volume-weighted prices. 

Payment amount reductions that result 

from potentially inaccurate 

substitutions may impact physician and 

beneficiary access to drugs. Therefore, 

consistent with our authority as set forth 

in section 1847A(d)(1) and (3) of the 

Act, we proposed in the CY 2011 PFS 

proposed rule that the substitution of 

103 percent of AMP for 106 percent of 

ASP should be limited to only those 

drugs with ASP and AMP comparisons 

based on the same set of NDCs. 

In response to our CY 2011 proposed 

rule, the OIG changed its methodology 

for ‘‘partial’’ AMP data comparisons 

beginning with its report titled 

‘‘Comparison of First-Quarter 2010 

Average Sales Prices and Average 

Manufacturer Prices: Impact on 

Medicare Reimbursement for Third 

Quarter 2010.’’ Specifically, in addition 

to calculating a volume-weighted AMP 

based on ‘‘partial’’ data and identifying 

billing codes that exceeded the price 

substitution threshold, the OIG began to 

replace each missing NDC-level AMP 

with corresponding NDC-level ASP 

data. The OIG then calculated a volumeweighted AMP for the billing code. If 

the volume-weighted AMP continued to 

exceed the price substitution threshold, 

the report attributed this to an actual 

difference between ASPs and AMPs in 

the marketplace (OEI–03–10–00440). 

We appreciate that the Inspector 

General has acknowledged the 

importance of protecting beneficiary 

and physician access in its methodology 

change. However, section 

1847(A)(d)(2)(B) of the Act specifically 

indicates that the comparison be made 

to AMP as determined under section 

1927(k)(1) of the Act. Moreover, we 

continue to be concerned that 

comparisons based on partial AMP data 

may not adequately account for marketrelated drug price changes and may lead 

to the substitution of incomplete and 

inaccurate volume-weighted prices. 

Therefore, for CY 2012, we propose to 

apply the applicable AMP threshold 

percentage only for those situations 

where AMP and ASP comparisons are 

based on the same set of NDCs for a 

billing code (that is, ‘‘complete’’ AMP 

data). Furthermore, we are proposing to 

revise § 414.904(d)(3) to reflect 

corresponding regulatory text changes, 

and we welcome comments on all 

aspects of this proposal. 

b. AMP Price Substitution 

(1) Inspector General Studies 

Section 1847A(d) of the Act requires 

the Inspector General to conduct studies 

of the widely available market price for 

drugs and biologicals to which section 

1847A of the Act applies. However, it 

does not specify the frequency of when 

such studies should be conducted. The 

Inspector General has conducted studies 

comparing AMP to ASP for essentially 

each quarter since the ASP system has 

been implemented. Since 2005, the OIG 

has published 23 reports pertaining to 

the price substitution issue (see Table 

15), of which 21 have identified billing 

codes with volume-weighted ASPs that 

have exceeded their volume-weighted 

AMPs by the applicable threshold 

percentage. 

TABLE 15—PUBLISHED OIG REPORTS ON PRICE SUBSTITUTIONS

Date Report title 

5/2011 .................................. Comparison of Third–Quarter 2010 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for First Quarter 2011 (OEI–03–11–00160). 

4/2011 .................................. Comparison of Average Sales Prices and Average Manufacturer Prices: An overview of 2009 (OEI–03–10– 

00380). 

2/2011 .................................. Comparison of Second–Quarter 2010 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2010 (OEI–03–11–00030). 

11/2010 ................................ Comparison of First–Quarter 2010 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for Third Quarter 2010 (OEI–03–10–00440). 

7/2010 .................................. Comparison of Fourth–Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for Second Quarter 2010 (OEI–03–10–00350). 

4/2010 .................................. Comparison of Third–Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for First Quarter 2010 (OEI–03–10–00150). 

2/2010 .................................. Comparison of Average Sales Prices and Average Manufacturer Prices: An overview of 2008 (OEI–03–09– 

00350). 

1/2010 .................................. Comparison of Second–Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2009 (OEI–03–09–00640). 

8/2009 .................................. Comparison of First–Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for Third Quarter 2009 (OEI–03–09–00490). 

8/2009 .................................. Comparison of Fourth–Quarter 2008 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for Second Quarter 2009 (OEI–03–09–00340). 

4/2009 .................................. Comparison of Third-Quarter 2008 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for first Quarter 2009 (OEI–03–09–00150). 

2/2009 .................................. Comparison of Second-Quarter 2008 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2008 (OEI–03–09–00050). 

12/2008 ................................ Comparison of First-Quarter 2008 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for Third Quarter 2008 (OEI–03–08–00530). 

12/2008 ................................ Comparison of Average Sales Prices and Average Manufacturer Prices: An Overview of 2007 (OEI–03–08– 

00450). 

8/2008 .................................. Comparison of Fourth–Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for Second Quarter 2008 (OEI–03–08–00340). 

7/2008 .................................. A comparison of average sales price to widely available market prices for inhalation drugs (OEI–03–07–00190). 

5/2008 .................................. Comparison of Third–Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for First Quarter 2008 (OEI–03–08–00130). 

12/2007 ................................ Comparison of Second–Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2007 (OEI–03–08–00010). 

9/2007 .................................. Comparison of First–Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for Third Quarter 2007 (OEI–03–07–00530). 

7/2007 .................................. Comparison of Third–Quarter 2006 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for First Quarter 2007 (OEI–03–07–00140). 

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TABLE 15—PUBLISHED OIG REPORTS ON PRICE SUBSTITUTIONS—Continued 

Date Report title 

7/2006 .................................. Comparison of Fourth–Quarter 2005 Average Sales Price and Average Manufacturer Prices: Impact on Medicare 

Reimbursement for Second Quarter 2006 (OEI–03–06–00370). 

6/2006 .................................. A Comparison of Average Sales Price to Widely Available Market Prices: Fourth Quarter 2005 (OEI–03–05– 

00430). 

4/2006 .................................. Monitoring Medicare Part B Drug Prices: A Comparison of Average Sales Price to Average Manufacturer Prices 

(OEI–03–04–00430). 

In the latest quarterly report 

comparing AMP to ASP, titled 

‘‘Comparison of Third-Quarter 2010 

Average Sales Price and Average 

Manufacturer Prices: Impact on 

Medicare Reimbursement for First 

Quarter 2011’’ (OEI–03–11–00160), the 

Inspector General found that of 365 

billing codes with complete AMP data 

in the third quarter of 2010, only 14 met 

the 5 percent threshold; that is, ASP 

exceeded AMP by at least 5 percent. 8 

of these 14 billing codes also exceeded 

the AMP by at least 5 percent in one or 

more of the previous four quarters; only 

two drugs had ASPs that exceeded the 

5 percent threshold in all four quarters 

under review. This Inspector General 

report further indicates that, ‘‘If 

reimbursement amounts for all 14 codes 

with complete AMP data had been 

based on 103 percent of the AMPs 

during the first quarter of 2011, we 

estimate that Medicare expenditures 

would have been reduced $10.3 million 

in that quarter alone.’’ The savings 

found by the Inspector General 

constitute potential savings for the 

Medicare program and beneficiaries. 

(2) Proposal 

As discussed previously, section 

1847A(d)(3) of the Act provides 

authority for us to determine the 

applicable percentage subject to ‘‘such 

adjustment as the Secretary may specify 

for the widely available market price or 

the average manufacturer price, or 

both.’’ We also have authority to specify 

the timing of any ASP substitution. 

Consistent with this authority, we are 

proposing a policy to substitute 103 

percent of AMP for 106 percent of ASP 

where the applicable percentage 

threshold has been satisfied for the two 

consecutive quarters immediately prior 

to the current pricing quarter, or for 

three of the previous four quarters 

immediately prior to the current pricing 

quarter. This policy would apply to 

single source drugs and biologicals, 

multiple source drugs, and biosimilar 

biological products as defined at section 

1847A(c)(6)(C), (D), and (H) of the Act. 

Because of the lack of data regarding 

WAMP to ASP comparisons, we are 

explicitly excluding WAMP from this 

price substitution proposal, though we 

are proposing to maintain the WAMP 

threshold at 5 percent for CY 2012 in 

section V.A.1. of this rule. We believe 

that the proposed policy reflects marketrelated pricing changes and focuses on 

those drugs that consistently exceed the 

applicable percentage threshold over 

multiple quarters. Unlike the OIG’s 

AMP studies, the published WAMP 

studies do not show whether the prices 

for the examined groups of drugs 

consistently exceed the applicable 

percentage threshold across multiple 

quarters like the AMP studies. We will 

consider proposing a policy for the 

substitution of WAMP at a later date. 

(3) Timeframe for and Duration of Price 

Substitutions 

As stated in § 414.804(a)(5), a 

manufacturer’s average sales price must 

be submitted to CMS within 30 days of 

the close of the quarter. We then 

calculate an ASP for each billing code 

in accordance with the process outlined 

at § 414.904. Then, as described in our 

CY 2005 PFS final rule (69 FR 66300), 

we implement these new prices through 

program instructions or otherwise at the 

first opportunity after we receive the 

data, which is the calendar quarter after 

receipt. 

Section 1847A(d)(3)(C) of the Act 

indicates that a price substitution would 

be implemented ‘‘effective as of the next 

quarter’’ after the OIG has informed us 

that the ASP for a drug or biological 

exceeds its AMP by the applicable 

percentage threshold. The OIG does not 

receive new ASPs for a given quarter 

until after we have finalized our 

calculations for the quarter. Also, the 

results of the OIG’s pricing comparisons 

are not available until after the ASPs for 

a given quarter have gone into effect. 

Therefore, we anticipate that there will 

be a three-quarter lag for substituted 

prices from the quarter in which 

manufacturer sales occurred, though 

this will depend in great part upon the 

timeframe in which we obtain 

comparison data from the OIG. Table 16 

provides an example of this timeframe. 

TABLE 16—EXAMPLE PRICE SUBSTITUTION TIMEFRAME

Q2–11 Q3–11 Q4–11 Q1–12 

ASP Process ....... Manufacturer 

sells drug.

Manufacturer submits Q2–11 

pricing data. CMS calculates 

ASP payment limits for Q4–11 

and publishes Q4–11 payment 

limits.

Q4–11 payment limits apply .......

CMS calculates ASP payment 

limits for Q1–12. Compares 

calculated payment limits to 

OIG substitute prices. Publishes Q1–12 prices that may 

include OIG substitute prices.

Q1–12 payment limits apply, including any adjusted payment 

limit resulting from the price 

substitution. 

OIG Process ....... ........................... OIG receives Q4–11 payment 

limits from CMS and compares 

them to Q2–11 volume-weighted AMP data.

OIG notifies CMS of HCPCS for 

which Q4–11 ASP exceeds 

Q2–11 AMP by the applicable 

percentage threshold.

Given this lag in time, the ASP for a 

billing code may have decreased since 

the OIG’s comparison. Therefore, 

consistent with our authorities in 

section 1847A(d)(3) of the Act and our 

desire to provide accurate payments 

consistent with these provisions, we 

believe that the timing of any 

substitution policy should permit a final 

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comparison between the OIG’s volumeweighted 103 percent AMP for a billing 

code (calculated from the data from 

sales three quarters prior) and the 

billing code’s volume-weighted 106 

percent ASP (as calculated by CMS for 

the upcoming quarter). In Table 16, for 

example, this comparison would be 

done between the HCPCS payment 

limits calculated for Q1–12, and the 

OIG’s volume-weighted AMPs from 

their examination of Q4–11 payment 

limits. This final comparison would 

assure the Secretary that the 106 percent 

ASP payment limit for the current 

pricing quarter continues to exceed 103 

percent of the OIG’s calculated AMP in 

order to avoid a situation in which the 

Secretary would inadvertently raise the 

Medicare payment limit through this 

price substitution policy. We 

specifically request comments on this 

proposal. 

ASP payment limits are calculated on 

a quarterly basis as per section 

1847A(c)(5)(A) of the Act, and we are 

particularly mindful that the ASP-based 

payment allowance for a billing code 

may change from quarter to quarter. As 

such, we propose that any price 

substitution based on the comparison 

that triggered its application would last 

for one quarter. We note that in a 

subsequent quarter, the OIG may 

identify that a volume-weighted ASP 

continues to exceed the volumeweighted AMP for a billing code that 

previously triggered a price substitution. 

In this scenario, if the criteria for the 

price substitution policy are met, we 

would substitute 103 percent of the 

OIG’s updated volume-weighted AMP 

for that billing code. 

Overall, we believe that our proposal 

as previously outlined to substitute 103 

percent of AMP for 106 percent of ASP 

provides us with a viable mechanism for 

generating savings for the Medicare 

program and its beneficiaries because it 

will allow Medicare to pay based on 

lower market prices for those drugs and 

biologicals that consistently exceed the 

applicable threshold percentage. 

Moreover, it will enable us to address a 

programmatic vulnerability identified 

by the OIG. We welcome comments on 

all aspects of our proposal. 

In the CY 2011 proposed rule, we 

sought comment on other issues related 

to the comparison between ASP and 

AMP, specifically: 

• Any effect of definitional 

differences between AMP and ASP, 

particularly in light of the definition of 

AMP as revised by section 2503 of the 

Affordable Care Act. 

• The impact of any differences in 

AMP and ASP reporting by 

manufacturers on price substitution 

comparisons. 

• Whether and/or how general 

differences and similarities between 

AMP and manufacturer’s ASP would 

affect comparisons between these two. 

For the CY 2012 proposed rule, we 

again seek comment on other matters 

pertaining to this issue. 

3. ASP Reporting Update 

a. ASP Reporting Template Update 

For purposes of this part, unless 

otherwise specified, the term ‘‘drugs’’ 

will hereafter refer to both drugs and 

biologicals. Sections 1847A and 1927(b) 

of the Act specify quarterly ASP data 

reporting requirements for 

manufacturers. Specific ASP reporting 

requirements are set forth in section 

1927(b)(3) of the Act. For the purposes 

of reporting under section 1847A of the 

Act, the term ‘‘manufacturer’’ is defined 

in section 1927(k)(5) of the Act and 

means any entity engaged in the 

following: Production; preparation, 

propagation, compounding, conversion 

or processing of prescription drug 

products; either directly or indirectly by 

extraction from substances of natural 

origin, or independently by means of 

chemical synthesis, or by a combination 

of extraction and chemical synthesis; or 

packaging, repackaging, labeling, 

relabeling, or distribution of 

prescription drug products. The term 

manufacturer does not include a 

wholesale distributor of drugs or a retail 

pharmacy licensed under State law. 

However, manufacturers that also 

engage in certain wholesaler activities 

are required to report ASP data for those 

drugs that they manufacture. Note that 

the definition of manufacturers for the 

purposes of ASP data reporting includes 

repackagers. 

Section 1927(b)(3)(A)(iii) of the Act 

specifies that manufacturers must report 

their average sales price and the number 

of units by NDC. As established by 42 

CFR part 414 subpart J, manufacturers 

are required to report data at the NDC 

level, which includes the following 

elements: (1) The manufacturer ASP; (2) 

the Wholesale Acquisition Cost (WAC) 

in effect on the last day of the reporting 

period; (3) the number of units sold; and 

(4) the NDC. The reported ASP data are 

used to establish the Medicare payment 

amounts. 

Section 1927(b)(3)(A)(iii)(II) of the Act 

specifies that the manufacturer must 

report the WAC, if it is required in order 

for payment to be made under section 

1847A of the Act. In the 2004 IFC that 

implemented the ASP reporting 

requirements for Medicare Part B drugs 

and biologicals (66 FR 17935), we 

specified that manufacturers must 

report the ASP data to CMS using our 

Addendum A template. In 2005, we 

expanded the template to include WAC 

and additional product description 

details (70 FR 70221). We also initiated 

additional changes to the template in 

2008 (73 FR 76032). 

In order to facilitate more accurate 

and consistent ASP data reporting from 

manufacturers, we are now proposing 

additional revisions to the Addendum A 

template. Specifically, we propose to 

revise existing reporting fields and add 

new fields to the Addendum A 

template, as follows: 

• To split the current NDC column 

into three separate reporting fields, 

corresponding to the three segments of 

an NDC. 

• To add a new field to collect an 

Alternate ID for products without an 

NDC. 

• To expand the current FDA 

approval number column to account for 

multiple entries and supplemental 

numbers. 

We have also added a macro to the 

Addendum A template that will allow 

manufacturers to validate the format of 

their data prior to submission. This will 

help verify that data are complete and 

submitted to CMS in the correct format, 

thereby minimizing time and resources 

spent on identifying mistakes or errors. 

We note that the use of this macro does 

not preclude or supersede 

manufacturers’ responsibility to provide 

accurate and timely ASP data in 

accordance with the reporting obligation 

under section 1927(b)(3) of the Act. We 

also note that manufacturers who 

misrepresent or fail to report 

manufacturer ASP data will remain 

subject to civil monetary penalties, as 

applicable and described in sections 

1847A and 1927(b) of the Act and 

codified in regulations at § 414.806. 

b. Reporting of ASP Units and Sales 

Volume for Certain Products 

As required by 42 CFR part 414 

subpart J, manufacturers report ASP 

price and volume data at the NDC level. 

This is appropriate for most drug and 

biological products because an NDC is 

usually associated with a consistent 

amount of product that is being sold. 

Our experience with manufacturer 

reporting of ASPs has revealed that a 

limited number of drug products, as 

defined by an NDC, might contain a 

variable amount of active ingredient. 

This situation is common for plasma 

derived clotting factors; for example, we 

are aware of one product where a vial 

described as nominally containing 250 

international units (IUs) of clotting 

factor activity might actually contain 

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between 220 and 400 IUs. Although the 

exact factor activity is specified on the 

label, the amount of IUs contained in an 

NDC might vary between manufacturing 

lots. For these types of products, it is 

possible that vials with the same NDC 

but different amounts of clotting factor 

activity (as measured in IUs) might be 

sold during the same ASP reporting 

period. For drugs paid under Medicare 

Part B, such variability in the amount of 

drug product within an NDC appears to 

apply mostly to clotting factors that are 

prepared from plasma sources; it also 

applies to a few other products, 

including a plasma protein product 

used to treat antitrypsin deficiency. 

As stated in the Section 1847A(b)(2) 

of the Act, for years after 2004, the 

Secretary has the authority to ‘‘establish 

the unit for a manufacturer to report and 

methods for counting units as the 

Secretary determines appropriate to 

implement.’’ There are limited 

situations when ASP price and volume 

reporting by product NDC may affect the 

accuracy of subsequent pricing 

calculations done by us, for example, 

when an NDC is associated with a 

variable amount of drug product as 

described in the paragraph previously. 

We believe that in such cases it is 

appropriate to amend the definition of 

the ASP unit associated with the NDC 

that is reported to us by manufacturers 

for the purposes of calculating ASP. 

Under the authority in the section 

1847A(b)(2) of the Act, we propose that 

we will maintain a list of HCPCS codes 

for which manufacturers report ASPs for 

NDCs on the basis of a specified unit. 

The specified unit will account for 

situations where labeling indicates that 

the amount of drug product represented 

by an NDC varies. Our initial list 

appears in Table 17 and is limited to 

items with variable amounts of drug 

product per NDC as described 

previously. However, we propose to 

update this list as appropriate through 

program instruction or otherwise 

because we believe that the ability to 

make changes in a subregulatory 

manner will provide us with the 

flexibility to quickly and appropriately 

react to sales and marketing practices 

for specific drug products, including the 

introduction of new drugs or drug 

products. We plan to amend the list as 

necessary and to keep updates on the 

CMS ASP Web site at: http:// 

www.cms.gov/ 

McrPartBDrugAvgSalesPrice/ 

01_overview.asp. Our proposals would 

be effective for ASP reports received on 

or after January 1, 2012 and would be 

reflected in our April 1, 2012 quarterly 

update. 

In conjunction with the proposals in 

the preceding paragraph and the 

expectation that nearly all ASP price 

and sales volume reporting will 

continue to be at the NDC level (that is, 

the reported ASP sales and volume will 

be associated with a non-variable 

amount that is represented by the NDC), 

we are also proposing a clarification to 

existing regulation text at § 414.802. 

Current regulation text states that ‘‘Unit 

means the product represented by the 

11-digit National Drug Code.’’ We 

propose to update the definition to 

account for situations when an 

alternative unit of reporting must be 

used; the definition of the term unit will 

continue to be based on reporting of 

ASP data per NDC unless otherwise 

specified by CMS to account for 

situations where the amount of drug 

product represented by an NDC varies. 

TABLE 17—HCPCS CODES FOR WHICH ASP REPORTING IS DONE IN UNITS OF MEASURE OTHER THAN AN NDC 

2011 Code 2011 Long descriptor 

Proposed 

reporting 

unit 

J0256 .............................. INJECTION, ALPHA 1—PROTEINASE INHIBITOR—HUMAN, 10 MG ................................................. 1MG 

J1680 .............................. INJECTION, HUMAN FIBRINOGEN CONCENTRATE, 100 MG ............................................................ 1MG 

J7184 .............................. INJECTION, VON WILLEBRAND FACTOR COMPLEX (HUMAN), WILATE, PER 100 IU VWF:RCO 1 IU 

VWF:RCO 

J7185 .............................. INJECTION, FACTOR VIII (ANTIHEMOPHILIC FACTOR, RECOMBINANT) (XYNTHA), PER I.U ...... 1 IU 

J7186 .............................. INJECTION, ANTIHEMOPHILIC FACTOR VIII/VON WILLEBRAND FACTOR COMPLEX (HUMAN), 

PER FACTOR VIII I.U.

1 IU 

J7187 .............................. INJECTION, VON WILLEBRAND FACTOR COMPLEX (HUMATE–P), PER IU VWF:RCO ................. 1 IU 

VWF:RCO 

J7190 .............................. FACTOR VIII (ANTIHEMOPHILIC FACTOR, HUMAN) PER I.U ............................................................ 1 IU 

J7192 .............................. FACTOR VIII (ANTIHEMOPHILIC FACTOR, RECOMBINANT) PER I.U., NOT OTHERWISE SPECIFIED.1 IU 

J7193 .............................. FACTOR IX (ANTIHEMOPHILIC FACTOR, PURIFIED, NON–RECOMBINANT) PER I.U .................... 1 IU

J7194 .............................. FACTOR IX, COMPLEX, PER I.U ........................................................................................................... 1 IU 

J7195 .............................. FACTOR IX (ANTIHEMOPHILIC FACTOR, RECOMBINANT) PER I.U ................................................. 1 IU 

J7197 .............................. ANTITHROMBIN III (HUMAN), PER I.U .................................................................................................. 1 IU 

J7198 .............................. ANTI–INHIBITOR, PER I.U. INJECTION, ANTITHROMBIN RECOMBINANT, 50 I.U ........................... 1 IU 

The instructions for reporting 

products with variable amounts of drug 

product, along with general instructions 

on completing the revised ASP Data 

Form (Addendum A), will be delineated 

in a User Guide that will be available on 

the ASP Web site. In the user guide, we 

will also be revising our instructions for 

the reporting of dermal grafting 

products as follows: 

• If an NDC is not associated with a 

dermal grafting product, manufacturers 

should enter the UPC or other unique 

identifier (such as an internal product 

number) in the alternate ID column. 

• Manufacturers should report ASP 

prices and sales volumes for dermal 

grafting products in units of area by 

square centimeter. The User Guide will 

be available on the CMS ASP Web site 

at: http://www.cms.hhs.gov/ 

McrPartBDrugAvgSalesPrice/ 

01_overview.asp. The Web site will also 

contain the revised ASP Data Form 

(Addendum A) and examples of how 

ASP data must be reported and 

formatted for submission. 

We would also like to remind 

manufacturers that additional 

information about reporting ASP data to 

us is available (for examples, see the 

following: (69 FR 17936), (69 FR 66299), 

(70 FR 70215), (71 FR 69665), (72 FR 

66256), (73 FR 69751), and (74 FR 

61904)). Also, a link to the ASP 

Frequently Asked Questions (FAQs) is 

posted in the ‘‘Related Links Inside 

CMS’’ section of the ASP Overview Web 

page. We welcome comments on the 

ASP reporting proposals that are 

described in this section. 

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42834 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

B. 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 

manual manipulation of the spine to 

correct a subluxation described in 

section 1861(r)(5) of the Act. 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’’ and 

was conducted in four geographically 

diverse sites, two rural and two urban 

regions, with each type including a 

Health Professional Shortage Area 

(HPSA). The two urban sites were 26 

counties in Illinois and Scott County, 

Iowa, and 17 counties in Virginia. The 

two rural sites were the States of Maine 

and New Mexico. The demonstration, 

which ended on March 31, 2007, was 

required to be budget neutral as section 

651(f)(1)(B) of MMA mandates the 

Secretary to ensure that ‘‘the aggregate 

payments made by the Secretary under 

the Medicare program do not exceed the 

amount which the Secretary would have 

paid under the Medicare program if the 

demonstration projects under this 

section were not implemented.’’ 

In the CY 2006, 2007, and 2008 PFS 

final rules with comment period (70 FR 

70266, 71 FR 69707, 72 FR 66325, 

respectively), we included a discussion 

of the strategy that would be used to 

assess budget neutrality (BN) and the 

method for adjusting chiropractor fees 

in the event the demonstration resulted 

in costs higher than those that would 

occur in the absence of the 

demonstration. We stated BN would be 

assessed by determining the change in 

costs based on a pre-post comparison of 

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 budget neutrality. 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 to 

Medicare was an $114 million increase 

in costs. 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 to 

Medicare was a $50 million increase in 

costs. 

As explained in the CY 2010 PFS final 

rule, we based the BN estimate on the 

‘‘Chiropractic User Analysis’’ because of 

its focus on users of chiropractic 

services rather than all Medicare 

beneficiaries with neuromusculoskeletal 

conditions, including 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. 

We are continuing the 

implementation of the required budget 

neutrality adjustment by recouping $10 

million in CY 2012. Our Office of the 

Actuary estimates chiropractic 

expenditures in CY 2012 to be 

approximately $470 million based on 

actual Medicare spending for 

chiropractic services for the most recent 

available year. To recoup $10 million in 

CY 2012, the payment amount under the 

PFS for the chiropractic CPT codes (that 

is, CPT codes 98940, 98941, and 98942) 

will be reduced by approximately 2 

percent. We are reflecting this reduction 

only in the payment files used by the 

Medicare contractors to process 

Medicare claims rather than through 

adjusting the relative value units 

(RVUs). Avoiding an adjustment to the 

RVUs would preserve the integrity of 

the PFS, particularly since many private 

payers also base payment on the RVUs. 

C. Proposed Productivity Adjustment for 

the Ambulatory Surgical Center 

Payment System, and the Ambulance, 

Clinical Laboratory and DMEPOS Fee 

Schedules 

Section 3401 of the Affordable Care 

Act requires that the update factor 

under certain payment systems be 

annually adjusted by changes in 

economy-wide productivity. The year 

that the productivity adjustment is 

effective varies by payment system. 

Specifically, section 3401 of the 

Affordable Care Act requires that in CY 

2011 (and in subsequent years) update 

factors under the ambulatory surgical 

center (ASC) payment system, the 

ambulance fee schedule (AFS), the 

clinical laboratory fee schedule (CLFS) 

and the DMEPOS fee schedule be 

adjusted by changes in economy-wide 

productivity. Section 3401(a) of the 

Affordable Care Act amends section 

1886(b)(3)(B) of the Act to add clause 

(xi)(II) which sets forth the definition of 

this productivity adjustment. The 

statute defines the productivity 

adjustment to be equal to the 10-year 

moving average of changes in annual 

economy-wide private nonfarm business 

multifactor productivity (MFP) (as 

projected by the Secretary for the 10- 

year period ending with the applicable 

fiscal year, year, cost reporting period, 

or other annual period). Historical 

published data on the measure of MFP 

is available on the Bureau of Labor 

Statistics’ (BLS) Web site at http:// 

www.bls.gov/mfp. 

As stated in the CY 2011 PFS final 

rule with comment period (75 FR 

73394), the projection of MFP is 

currently produced by IHS Global 

Insight, Inc. (IGI). The methodology for 

calculating MFP for the ASC payment 

system, and the Ambulance, CLFS, and 

DMEPOS fee schedules was finalized in 

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the CY 2011 PFS final rule with 

comment period (75 FR 73394 through 

73399). As described in the CY 2011 

PFS final rule with comment period, IGI 

replicates the MFP measure calculated 

by the BLS using a series of proxy 

variables derived from the IGI U.S. 

macro-economic models. For CY 2012, 

we are proposing to revise the IGI series 

used to proxy the labor index used in 

the MFP forecast calculation from manhours in private nonfarm establishments 

(billions of hours—annual rate) to hours 

of all persons in private nonfarm 

establishments, (2005 = 100.00), 

adjusted for labor composition effects. 

We are proposing this revision after 

further analysis showed that the 

proposed series is a more suitable proxy 

for the BLS Private nonfarm business 

sector labor input series since it 

accounts for the changes in skill-mix of 

the workforce over time (referred to 

above as labor composition effects). The 

BLS labor input series includes labor 

composition effects. We are proposing 

no additional changes to the IGI MFP 

forecast methodology or its application 

to the CPI–U update factors for the ASC 

payment system, and the Ambulance, 

CLFS, and DMEPOS fee schedules. 

D. Section 105: Extension of Payment 

for Technical Component of Certain 

Physician Pathology Services 

1. Background and Statutory Authority 

Section 542(c) of the Medicare, 

Medicaid, and SCHIP Benefits 

Improvement and Protection Act of 

2000 (BIPA) (Pub. L. 106–554), as 

amended by section 732 of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) (Pub. 

L. 108–173), section 104 of division B of 

the Tax Relief and Health Care Act of 

2006 (MIEA–TRHCA) (Pub. L. 109–432), 

section 104 of the Medicare, Medicaid, 

and SCHIP Extension Act of 2007 

(MMSEA) (Pub. L. 110–173), section 136 

of the Medicare Improvements for 

Patients and Providers Act of 2008 

(MIPPA) (Pub. L. 110–275) and section 

3104 of the Affordable Care Act (Pub. L. 

111–148), is amended by section 105 of 

the Medicare and Medicaid Extenders 

Act of 2010 (MMEA) (Pub. L. 111–309) 

to continue payment to independent 

laboratories for the TC of physician 

pathology services for fee-for-service 

Medicare beneficiaries who are 

inpatients or outpatients of a covered 

hospital through CY 2011. The technical 

component (TC) of physician pathology 

services refers to the preparation of the 

slide involving tissue or cells that a 

pathologist interprets. The professional 

component (PC) of physician pathology 

services refers to the pathologist’s 

interpretation of the slide. 

When the hospital pathologist 

furnishes the PC service for a hospital 

patient, the PC service is separately 

billable by the pathologist. When an 

independent laboratory’s pathologist 

furnishes the PC service, the PC service 

is usually billed with the TC service as 

a combined service. 

Historically, any independent 

laboratory could bill the Medicare 

contractor under the PFS for the TC of 

physician pathology services for 

hospital patients even though the 

payment for the costs of furnishing the 

pathology service (but not its 

interpretation) was already included in 

the bundled inpatient stay payment to 

the hospital. In the CY 2000 PFS final 

rule with comment period (64 FR 59408 

through 59409), we stated that this 

policy has contributed to the Medicare 

program paying twice for the TC service: 

(1) To the hospital, through the 

inpatient prospective payment rate, 

when the patient is an inpatient; and (2) 

to the independent laboratory that bills 

the Medicare contractor, instead of the 

hospital, for the TC service. While the 

policy also permits the independent 

laboratory to bill for the TC of physician 

pathology services for hospital 

outpatients, in this case, there generally 

would not be duplicate payment 

because we would expect the hospital to 

not also bill for the pathology service, 

which would be paid separately to the 

hospital only if the hospital were to 

specifically bill for it. We further 

indicated that we would implement a 

policy to pay only the hospital for the 

TC of physician pathology services 

furnished to its inpatients. 

Therefore, in the CY 2000 PFS final 

rule with comment period, we revised 

§ 415.130(c) to state that for physician 

pathology services furnished on or after 

January 1, 2001 by an independent 

laboratory, payment is made only to the 

hospital for the TC of physician 

pathology services furnished to a 

hospital inpatient. Ordinarily, the 

provisions in the PFS final rule with 

comment period are implemented in the 

following year. However, the change to 

§ 415.130 was delayed 1 year (until 

January 1, 2001), at the request of the 

industry, to allow independent 

laboratories and hospitals sufficient 

time to negotiate arrangements. 

Full implementation of § 415.130 was 

further delayed by section 542 of BIPA 

and section 732 of the MMA, which 

directed us to continue payment to 

independent laboratories for the TC of 

physician pathology services for 

hospital patients for a 2-year period 

beginning on January 1, 2001 and for 

CYs 2005 and 2006, respectively. In the 

CY 2007 PFS final rule with comment 

period (71 FR 69788), we amended 

§ 415.130 to provide that, for services 

furnished after December 31, 2006, an 

independent laboratory may not bill the 

carrier for the TC of physician pathology 

services furnished to a hospital 

inpatient or outpatient. However, 

section 104 of the MIEA–TRHCA 

continued payment to independent 

laboratories for the TC of physician 

pathology services for hospital patients 

through CY 2007, and section 104 of the 

MMSEA further extended such payment 

through the first 6 months of CY 2008. 

Section 136 of the MIPPA extended 

the payment through CY 2009. Section 

3104 of the Affordable Care Act 

amended the prior legislation to extend 

the payment through CY 2010. 

Subsequent to publication of the CY 

2011 PFS final rule with comment 

period, section 105 of the MMEA 

extended the payment through CY 2011. 

2. Proposed Revisions to Payment for 

TC of Certain Physician Pathology 

Services 

Consistent with this statutory change, 

we are proposing to revise § 415.130(d) 

to specify that for services furnished 

after December 31, 2011, an 

independent laboratory may not bill the 

Medicare contractor for the TC of 

physician pathology services furnished 

to a hospital inpatient or outpatient. We 

would implement this provision 

effective for TC services furnished on or 

after January 1, 2012. 

E. Section 4103 of the Affordable Care 

Act: Medicare Coverage and Payment of 

the Annual Wellness Visit Providing a 

Personalized Prevention Plan Covered 

Under Medicare Part B 

1. Incorporation of a Health Risk 

Assessment as Part of the Annual 

Wellness Visit 

a. Background and Statutory 

Authority—Medicare Part B Coverage of 

an Annual Wellness Visit Providing 

Personalized Prevention Plan Services 

Preventive care and beneficiary 

wellness are important to the Medicare 

program and have become an increasing 

focus. In section 4103 of the Affordable 

Care Act, the Congress expanded 

Medicare coverage under Part B to 

include an annual wellness visit 

providing personalized prevention plan 

services (hereinafter referred to as the 

annual wellness visit or AWV). The 

AWV is described more fully in section 

1861(hhh) of the Act, and coverage was 

effective for services furnished on or 

after January 1, 2011. Regulations for 

Medicare coverage of the AWV are 

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established at 42 CFR 410.15. The AWV 

may be performed by a physician, 

nonphysician practitioner (physician 

assistant, nurse practitioner, or clinical 

nurse specialist), or a medical 

professional (including a health 

educator, a registered dietitian, or a 

nutrition professional, or other licensed 

practitioner) or a team of such medical 

professionals, working under the direct 

supervision of a physician. In summary, 

for CY 2011, the first AWV includes— 

• Establishment of an individual’s 

medical and family history; 

• Establishment of a list of current 

medical providers and suppliers 

involved in providing medical care to 

the individual; 

• Measurement of an individual’s 

height, weight, body mass index (or 

waist circumference, if appropriate), 

blood pressure, and other routine 

measurements as deemed appropriate, 

based on the beneficiary’s medical and 

family history; 

• Detection of any cognitive 

impairment that the individual may 

have; 

• Review of the individual’s potential 

(risk factors) for depression; 

• Review of the individual’s 

functional ability and level of safety; 

• Establishment of a written 

screening schedule for the individual 

such as a checklist for the next 5 to 10 

years, as appropriate, based on 

recommendations of the United States 

Preventive Services Task Force, the 

Advisory Committee on Immunization 

Practices, and the individual’s health 

status, screening history, and ageappropriate preventive services covered 

by Medicare; 

• Establishment of a list of risk factors 

for which primary, secondary or tertiary 

interventions are recommended or 

underway for the individual, including 

any mental health conditions or any 

such risk factors or conditions that have 

been identified through an initial 

preventive physical examination, and a 

list of treatment options and their 

associated risks and benefits; 

• Furnishing of personalized health 

advice to the individual and a referral, 

as appropriate, to health education or 

preventive counseling services or 

programs aimed at reducing identified 

risk factors and improving self 

management; and 

• Any other element determined 

appropriate through the national 

coverage determination process (NCD). 

In summary, for CY 2011, subsequent 

AWVs include— 

• An update of the individual’s 

medical and family history; 

• An update of the list of current 

providers and suppliers that are 

regularly involved in providing medical 

care to the individual; 

• Measurement of an individual’s 

weight (or waist circumference), blood 

pressure and other routine 

measurements as deemed appropriate, 

based on the individual’s medical and 

family history; 

• Detection of any cognitive 

impairment that the individual may 

have; 

• An update to the written screening 

schedule for the individual; 

• An update to the list of risk factors 

and conditions for which primary, 

secondary, or tertiary interventions are 

recommended or are underway for the 

individual; 

• Furnishing of personalized health 

advice to the individual and a referral, 

as appropriate, to health education or 

preventive counseling services; 

• Any other element determined 

appropriate through the NCD process. 

The AWV is specifically designed as 

a wellness visit that focuses on 

identification of certain risk factors, 

personalized health advice, and referral 

for additional preventive services and 

lifestyle interventions (which may or 

may not be covered by Medicare). The 

elements included in the AWV differ 

from comprehensive physical 

examination protocols with which some 

providers may be familiar with since it 

is a visit that is specifically designed to 

provide personalized prevention plan 

services as defined in the Act. 

Section 1861(hhh)(1)(A) of the Act 

specifies that a personalized prevention 

plan for an individual includes a health 

risk assessment (HRA) that meets the 

guidelines established by the Secretary. 

In general, an HRA is an evaluation tool 

designed to provide a systematic 

approach to obtaining accurate 

information about the patient’s health 

status, injury risks, modifiable risk 

factors, and urgent health needs. This 

evaluation tool is completed prior to, or 

as part of, an AWV. The information 

from the HRA is reflected in the 

personalized prevention plan that is 

created for the individual. 

Although the AWV was effective on 

January 1, 2011, section 4103 of the 

Affordable Care Act provided the 

Secretary additional time to establish 

guidelines for HRAs after consulting 

with relevant groups and entities (see 

section 1861 (hhh)(4)(A) of the Act). A 

technology assessment from the Agency 

for Healthcare Research and Quality 

(AHRQ) was commissioned to describe 

key features of HRAs, to examine which 

features were associated with successful 

HRAs, and to discuss the applicability 

of HRAs to the Medicare population. A 

draft of the technology assessment dated 

January 19, 2011 is publically available 

on the CMS Web site at http://www.cms.

gov/determinationprocess/downloads/

id79ta.pdf. 

We collaborated with the Centers for 

Disease Control and Prevention (CDC), 

due to their in-depth knowledge of 

HRAs, and because the CDC was 

directed by section 4004(f) of the 

Affordable Care Act to develop 

guidelines for a personalized prevention 

plan tool. In the November 16, 2010 

Federal Register (75 FR 70009), CDC 

issued a notice to solicit feedback 

regarding HRA guidance development. 

Public comments were received from 

numerous relevant groups and entities 

including: The American Academy of 

Family Physicians; the American 

Dietetic Association; the American 

Geriatrics Society; the American College 

of Cardiology; Care Continuum 

Alliance, physician practices; public 

health agencies; healthcare research 

groups; and the general public. 

The CDC convened a public meeting 

in Atlanta, Georgia in February 2011 to 

facilitate the development of guidance 

for HRAs. (See the December 30, 2010 

Federal Register (75 FR 82400)— 

announcement for ‘‘Development of 

Health Risk Assessment Guidance, 

Public Forum’’). This meeting allowed 

broad public input from stakeholders 

and the general public into the 

development of guidelines for evidencebased HRAs. The Interim Guidance for 

Health Risk Assessments developed by 

the CDC is available on the CMS Web 

site at http://www.cms.gov/coverage

geninfo/downloads/healthrisk

assessmentsCDCfinal.pdf. The CDC 

guidance resulted from a review and 

compilation of the current scientific 

evidence, the technology assessment, 

expert advice from those working in the 

field of HRA and wellness, and takes 

into account public feedback from the 

request for information and the public 

meeting. The CDC guidance includes 

questions and topics to be addressed as 

deemed appropriate for the beneficiary’s 

age. Additional information regarding 

the CDC guidance development process 

is included as part of the guidance 

document. The CDC plans to publish ‘‘A 

Framework for Patient-Centered Health 

Assessments, a Morbidity and Mortality 

Weekly Report (MMWR).’’ The MMWR 

will include additional information 

applicable for the successful 

implementation of the HRA, such as the 

CDC interim guidance document, as 

well as information related to 

implementation, feedback, and followup that evidence suggests is critical for 

improving health outcomes using this 

process. We are interested in receiving 

feedback regarding the availability of 

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HRAs that are available for use by the 

general public. 

b. Implementation 

Consistent with section 1861(hhh) of 

the Act and the initial CDC guidance 

document, we propose to amend 42 CFR 

410.15 by: (1) Adding the term ‘‘health 

risk assessment’’ and its definition; (2) 

revising the definitions of ‘‘first annual 

wellness visit providing personalized 

prevention plan services’’ and 

‘‘subsequent annual wellness visit 

providing personalized prevention plan 

services;’’ and (3) incorporating the use 

and results of an HRA into the provision 

of personalized prevention plan services 

during the AWV. We believe that 

incorporation of the HRA supports a 

systematic approach to patient wellness 

and is integral to providing personalized 

prevention plan services. The results of 

the HRA will provide the foundation for 

and facilitate development of the 

personalized prevention plan. We 

believe that the results of the HRA will 

aid in developing the personalized 

prevention plan and, once fully 

implemented, will increase the 

efficiency of the physician’s effort 

during the AWV. 

(1) Definition of a ‘‘Health Risk 

Assessment’’ 

We propose to revise § 410.15 by 

adding the term ‘‘health risk 

assessment’’ and defining such term as 

an evaluation tool that meets the 

following requirements: 

• Collects self-reported information 

about the beneficiary. 

• Can be administered independently 

by the beneficiary or administered by a 

health professional prior to or as part of 

the AWV encounter. 

• Is appropriately tailored to and 

takes into account the communication 

needs of underserved populations, 

persons with limited English 

proficiency, and persons with health 

literacy needs, 

• Takes no more than 20 minutes to 

complete. 

• Addresses, at a minimum, the 

following topics: 

++ Demographic data, including but 

not limited to age, gender, race, and 

ethnicity. 

++ Self assessment of health status, 

frailty, and physical functioning. 

++ Psychosocial risks, including but 

not limited to depression/life 

satisfaction, stress, anger, loneliness/ 

social isolation, pain, or fatigue. 

++ Behavioral risks, including but 

not limited to tobacco use, physical 

activity, nutrition and oral health, 

alcohol consumption, sexual practices, 

motor vehicle safety (seat belt use), and 

home safety. 

++ Activities of daily living (ADLs), 

including but not limited to dressing, 

feeding, toileting, grooming, physical 

ambulation (including balance/risk of 

falls), and bathing. 

++ Instrumental activities of daily 

living (IADLs), including but not limited 

to shopping, food preparation, using the 

telephone, housekeeping, laundry, 

mode of transportation, responsibility 

for own medications, and ability to 

handle finances. 

The CDC guidance describes an HRA 

as ‘‘a collection of health-related data a 

medical provider can use to evaluate the 

health status and the health risk of an 

individual. An HRA will identify health 

behaviors and risk factors known only 

to the patient (such as, smoking, 

physical activity and nutritional habits) 

for which the medical provider can 

provide tailored feedback in an 

approach to reduce the risk factors’’ as 

well as the potential for diseases for 

which those risk factors are related. 

The CDC guidance further explains 

that the ‘‘questions/topics to be 

addressed in the HRA is a compilation 

of the current scientific evidence and 

are intended for Medicare beneficiaries 

as appropriate for their age.’’ These 

include collection of demographic data; 

self assessment of health status, frailty, 

and physical functioning; biometric 

assessments obtained by the provider; 

psychosocial risks; and behavioral risks. 

The guidance document suggests, based 

on current evidence that the following 

domains specific to the greater than or 

equal to a 65-year-old Medicare 

population be included in the HRA: 

Memory, activities of daily living, and 

instrumental activities of daily living. 

With regard to memory, the CDC 

guidance states ‘‘that cognition 

assessment is not part of the HRA itself, 

but rather an additional aspect of the 

AWV * * *’’. We note that the 

definitions of both the first and 

subsequent annual wellness visit 

include the detection of any cognitive 

impairment. The CDC guidance, 

consistent with section 1861(hhh)(4)(A) 

of the Act, specifies that an HRA should 

be made available to all Medicare 

beneficiaries who are eligible to receive 

an AWV, as defined in § 410.15; can be 

furnished in a number of ways, 

including during an encounter with a 

health professional or through an 

interactive telephonic or web-based 

program, while ensuring the privacy of 

the beneficiary; be provided in a 

patient’s preferred language; and take no 

longer than 20 minutes to complete. We 

believe that the health professional 

should consider the beneficiary’s needs 

when determining whether assistance 

would be needed for the beneficiary to 

complete the HRA. Factors a health 

professional may wish to consider 

include vision, hearing, or language 

limitations; the communication needs of 

underserved populations; persons with 

limited English proficiency; and persons 

with health literacy needs. 

The completed HRA and results 

would be provided to the health 

professional as that term is defined in 

§ 410.15(a), as a foundation for 

completing the elements included in the 

definitions of first and subsequent 

AWVs during the AWV encounter. The 

CDC guidance document explains that 

‘‘during the visit, the HRA information, 

and other biometrics available are 

utilized by the practitioner in a thought 

process intended to develop a 

prevention plan for the patient to 

improve health status and delay the 

onset of disease known to be caused by 

the reported behavioral risks or the 

patient’s current health status. The 

practitioner can, in a shared 

decisionmaking process with the patient 

provide feedback in the form of 

educational messages, counseling or 

referrals related to changing high risk 

behaviors and health habits. This 

feedback can potentially improve health 

behaviors and/or alter one’s risk of 

disease, improve chronic disease 

management or likelihood of premature 

death.’’ For instance, the HRA may 

collect aspects of the beneficiary’s 

medical and family history, such as 

history of tobacco use, that would 

provide a foundation for personalized 

health advice, and if deemed 

appropriate, referral for additional 

preventive services after completion of 

the AWV. We note that the standards 

outlined in the proposed definition of 

the term health risk assessment 

represent a minimum set of topics that 

need to be addressed as part of an HRA, 

while allowing the health professional 

the flexibility to evaluate additional 

topics, as appropriate, to provide a 

foundation for development of a 

personalized prevention plan. 

(2) Proposed Changes to the Definitions 

of ‘‘First Annual Wellness Visit’’ and 

‘‘Subsequent Annual Wellness Visit’’ 

In § 410.15, we adopted the 

components of the AWV, consistent 

with the statutory elements described in 

section 1861(hhh)(2) of the Act. The 

first and subsequent annual wellness 

visits, as defined in § 410.15(a), are 

meant to represent a beneficiary visit 

focused on prevention. Among other 

things, the annual wellness visit 

encourages beneficiaries to obtain the 

preventive services covered by Medicare 

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that are appropriate for them. First and 

subsequent AWVs also include elements 

that focus on the furnishing of 

personalized health advice and referral, 

as appropriate, to health education, 

preventive counseling services, 

programs aimed at improving selfmanagement, and community-based 

lifestyle interventions. 

We are proposing that the definitions 

of ‘‘first annual wellness visit providing 

personalized prevention plan services’’ 

and ‘‘subsequent annual wellness visit 

providing personalized prevention plan 

services’’ be revised to incorporate the 

use and results of an HRA. The HRA is 

an integral part of the provision of 

personalized prevention plan services, 

consistent with section 1861(hhh) of the 

Act. We propose to incorporate the HRA 

by revising the definitions of first and 

subsequent AWVs as follows: 

• Specify that the AWV take into 

account the results of an HRA. 

• Add the review (and 

administration, if needed) of an HRA as 

an element of both first and subsequent 

AWVs. 

• Specify that the establishment of a 

written screening schedule for the 

individual, such as a checklist, includes 

and takes into account the HRA. 

The HRA facilitates a systematic 

method for identifying health behaviors 

and risk factors known to the patient 

(such as: Smoking, physical activity, 

and nutritional habits) for which the 

medical provider can discuss and 

provide tailored feedback aimed at 

reducing risk factors as well as reducing 

the potential for developing the diseases 

to which they are related. 

During the AWV encounter, the HRA 

information is utilized by the health 

professional in a thought process 

intended to develop a personalized 

prevention plan for the patient to 

improve health status and delay the 

onset of disease. For instance, if the 

information provided by the HRA 

indicated that the beneficiary had a 

current or past history of tobacco use, 

the health professional may deem it 

appropriate to perform those commonly 

used aspects of a clinical evaluation (for 

instance, listening to (auscultation) the 

heart and lungs) in order to provide the 

appropriate personalized health advice 

and referrals for additional preventive 

services such as tobacco cessation 

counseling. 

The CDC guidance document 

provides a list of questions/topics to be 

addressed in an HRA, including 

biometric assessments of height, weight, 

body mass index (BMI), systolic/ 

diastolic blood pressure, blood lipids 

(HDL/LDL and total cholesterol, 

triglycerides), and blood glucose. 

Additionally, the CDC guidance 

document suggested that the 

information collected via the HRA 

would be reconciled with biometric 

assessments obtained by the provider. 

Consistent with section 1861(hhh)(2) of 

the Act, the definitions for first AWV 

and subsequent AWVs address most of 

the biometric assessments suggested in 

the CDC guidance document. We are 

requesting public comment on the 

applicability and impact of including 

additional elements and biometric 

assessments to first and subsequent 

AWVs, per the Secretary’s authority 

under section 1861(hhh)(2)(G) of the 

Act. 

We believe that the incorporation of 

the HRA would increase the efficiency 

of the health professional’s effort during 

the AWV. For instance, during the AWV 

encounter, the health professional 

furnishing the AWV would review the 

information reported in the HRA, which 

would serve as the basis for a 

personalized prevention plan provided 

during the AWV encounter. The 

beneficiary would leave the visit with 

personalized health advice, appropriate 

referrals, and a written individualized 

screening schedule, such as a check list. 

We would not expect that the health 

professional would provide only general 

recommendations during the AWV 

encounter and then mail a personalized 

prevention plan that incorporates an 

HRA to the beneficiary outside of the 

AWV encounter. While the AWV is a 

wellness visit that focuses on wellness 

and disease prevention, a follow-up 

visit to treat an identified illness may be 

needed to address an urgent health 

issue. For example, if a beneficiary is 

determined to have high blood pressure, 

a follow-up visit for further review of 

symptoms and evaluation and 

management, along with determining 

whether additional interventions are 

necessary, may be performed after the 

completion of the AWV as a separate 

service. 

We are requesting public comment on 

the overall impact and burden of the 

AWV on health professional practices, 

including the impact that incorporation 

of the use of an HRA will have on health 

professionals and their practices. 

Specifically, we are seeking public 

comment on the following: 

• The impact of use of an HRA on 

health professional practices; 

• The burden on health professional 

practices of incorporating an HRA into 

subsequent AWVs as well as the first 

AWV; 

• The impact of the elements 

included in the definitions of first and 

subsequent AWV. 

• Modification of those AWV 

elements for which the Secretary has 

authority to determine appropriateness. 

We are also proposing changes to the 

definition of the term ‘‘subsequent 

annual wellness visit providing 

personalized prevention plan services’’ 

to clarify that the health professional 

should furnish personalized prevention 

plan services and updated information 

if there have been changes since the 

beneficiary’s last AWV, whether that 

was a first AWV or a subsequent AWV. 

In the CY 2011 PFS final rule with 

comment period, we stated in the 

definition of ‘‘subsequent annual 

wellness visit providing personalized 

prevention plan services’’ that certain 

elements should be updated based on 

information developed during the first 

AWV (for example, lists of risk factors 

and screening schedules). Since all 

AWVs that follow the first AWV are 

considered subsequent AWVs, the 

health professional should update 

elements that were developed during 

the previous AWV if there have been 

changes. The proposed changes to the 

definition of the term ‘‘subsequent 

annual wellness visit providing 

personalized prevention plan services’’ 

are as follows: 

• We propose that newly 

redesignated paragraph (iii) state ‘‘an 

update of the list of current providers 

and suppliers that are regularly 

involved in providing medical care to 

the individual as that list was developed 

for the first annual wellness visit 

providing personalized prevention plan 

services or the previous subsequent 

annual wellness visit providing 

personalized prevention plan services.’’ 

• We propose that newly 

redesignated paragraph (vi)(B), state 

‘‘the list of risk factors and conditions 

for which primary, secondary or tertiary 

interventions are recommended or are 

underway for the individual as that list 

was developed at the first annual 

wellness visit providing personalized 

prevention plan services or the previous 

subsequent annual wellness visit 

providing personalized prevention plan 

services.’’ 

2. The Addition of a Health Risk 

Assessment as a Required Element for 

the Annual Wellness Visit Beginning in 

2012 

Section 4103 of the Affordable Care 

Act created a new benefit for an ‘‘annual 

wellness visit’’ (AWV) providing 

personalized prevention plan services 

(PPPS). The Affordable Care Act 

amended section 1861(s)(2) of the Act 

by adding new subparagraph (FF) to 

provide for coverage of the AWV 

beginning January 1, 2011. Section 4103 

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of the Affordable Care Act also added 

new subsection (hhh) to section 1861 of 

the Act to define ‘‘personalized 

prevention plan services’’ and to specify 

who may furnish these services. Finally, 

section 4103 of the Affordable Care Act 

amended section 1848(j)(3) of the Act 

and provided for payment of AWVs 

under the PFS, and specifically 

excluded the AWV from the hospital 

OPPS. As discussed in the CY 2011 PFS 

final rule with comment period (75 FR 

73401), a single Medicare payment is 

made when an AWV is furnished by a 

physician, physician assistant, nurse 

practitioner, or clinical nurse specialist, 

or by a medical professional or team of 

medical professionals, under the direct 

supervision of a physician. 

In the CY 2011 PFS final rule with 

comment period (75 FR 73409), we 

established two HCPCS G-codes for 

reporting the AWV beginning in CY 

2011: G0438 (Annual wellness visit; 

includes a personalized prevention plan 

of service (PPPS), first visit) and G0439 

(Annual wellness visit; includes a 

personalized prevention plan of service 

(PPPS), subsequent visit). 

A beneficiary is eligible for only one 

first AWV (HCPCS code G0438) covered 

by Medicare that must include all of the 

required elements that we adopted in 

our final policy for the CY 2011 PFS 

final rule with comment period (75 FR 

73399). All subsequent AWVs (HCPCS 

code G0439) include the required 

elements for those visits as finalized in 

the CY 2011 PFS final rule with 

comment period (75 FR 73399). All 

AWVs other than the beneficiary’s first 

AWV shall be reported as subsequent 

visits, even if a different practitioner 

furnished the subsequent AWV. We 

expect there to be continuity and 

communication among the practitioners 

caring for beneficiaries over time with 

respect to AWVs, and this would 

include the case where a different 

practitioner furnishing a subsequent 

AWV would update the information in 

the patient’s medical record based on 

the patient’s interval history since the 

previous AWV. 

As we stated in the CY 2011 PFS final 

rule with comment period (75 FR 

73409), we believe that the first AWV 

described by HCPCS code G0438 is 

similar to the IPPE that is currently 

reported with HCPCS code G0402 

(Initial preventive physical 

examination; face-to-face visit, services 

limited to new beneficiary during the 

first 12 months of Medicare enrollment). 

We note that in the CY 2010 PFS final 

rule with comment period discussion of 

payment for the IPPE (74 FR 61767), we 

stated that in the context of physician 

work and intensity, HCPCS code G0402 

was most equivalent to CPT code 99204 

(Level 4 new patient office or other 

outpatient visit). In addition, in the CY 

2011 PFS final rule with comment 

period (75 FR 73410), we indicated that 

subsequent AWV’s described by HCPCS 

code G0439 are most similar, from the 

perspectives of physician work and PE, 

to CPT code 99214 (Level 4 established 

patient office or other outpatient visit). 

Therefore, we valued HCPCS codes 

G0438 and G0439 for payment under 

the PFS using a crosswalk methodology 

for the work RVUs and direct PE inputs 

from the level 4 new and established 

patient office or other outpatient visit 

CPT codes, respectively. 

a. Payment for AWV services with the 

inclusion of an HRA element 

In the CY 2011 PFS final rule with 

comment period (75 FR 73411), we 

stated ‘‘that when the HRA is 

incorporated in the AWV, we will 

reevaluate the values for HCPCS codes 

G0438 and G0439’’. As discussed in the 

CY 2011 PFS final rule with comment 

period, the services described by CPT 

codes 99204 and 99214 already include 

‘preventive assessment’ forms. For CY 

2012, we believe that the current 

payment crosswalk for HCPCS codes 

G0438 and G0439 continue to be most 

accurately equivalent to a level 4 E/M 

new or established patient visit; and 

therefore, we are proposing to continue 

to crosswalk HCPCS codes G0438 and 

G0439 to CPT codes 99204 and 99214, 

respectively. 

F. Quality Reporting Initiatives 

1. Physician Payment, Efficiency, and 

Quality Improvements—Physician 

Quality Reporting System 

a. Program Background and Statutory 

Authority 

The Physician Quality Reporting 

System is a quality reporting program 

that provides incentive payments and 

payment adjustments to identified 

eligible professionals who satisfactorily 

report data on quality measures for 

covered professional services furnished 

during a specified reporting period. The 

Physician Quality Reporting System was 

initially implemented in 2007 as a result 

of section 101 of Division B of the Tax 

Relief and Health Care Act of 2006. The 

Physician Quality Reporting System was 

extended and further enhanced as a 

result of the Medicare Improvements for 

Patients and Providers Act of 2009 

(MIPPA), which was enacted on July 15, 

2008, and the Affordable Care Act, 

which was enacted on March 23, 2010. 

Changes to the Physician Quality 

Reporting System as a result of these 

laws, as well as information about the 

Physician Quality Reporting System in 

2007, 2008, 2009, 2010, and 2011 are 

discussed in detail in the CY 2008 PFS 

proposed and final rules (72 FR 38196 

through 38204 and 72 FR 66336 through 

66353, respectively), CY 2009 PFS 

proposed and final rules (73 FR 38558 

through 38575 and 73 FR 69817 through 

69847, respectively), CY 2010 PFS 

proposed and final rules (74 FR 33559 

through 33600 and 74 FR 61788 through 

61861, respectively), and CY 2011 PFS 

proposed and final rules (75 FR 73487 

through 73552). Further detailed 

information, about the Physician 

Quality Reporting System, related laws, 

and help desk resources, is available on 

the CMS Web site at http:// 

www.cms.gov/PQRS. 

In the CY 2011 PFS final rule (75 FR 

73618), we established 42 CFR 414.90 

governing the Physician Quality 

Reporting System. 

b. Methods of Participation 

There are two ways an eligible 

professional may participate in the 

Physician Quality Reporting System: (1) 

As an individual eligible professional or 

(2) as part of a group practice under the 

Physician Quality Reporting System 

group practice reporting option (GPRO). 

The details of each proposed method of 

participation are described in this 

section. 

(1) Individual Eligible Professionals 

As defined at 42 CFR 414.90(b) the 

term ‘‘eligible professional’’ means any 

of the following: (1) A physician; (2) a 

practitioner described in section 

1842(b)(18)(C) of the Act; (3) a physical 

or occupational therapist or a qualified 

speech-language pathologist; or (4) a 

qualified audiologist. For more 

information on which professionals are 

eligible to participate in the Physician 

Quality Reporting System, we refer 

readers to the ‘‘List of Eligible 

Professionals’’ download located in the 

‘‘How to Get Started section of the 

Physician Quality Reporting CMS Web 

site at: http://www.cms.gov/PQRS/

03_How_To_Get_Started.asp#Top

OfPage. 

(2) Group Practices 

(A) Background and Authority 

As required by section 

1848(m)(3)(C)(i) of the Act, we 

established and have had in place since 

January 1, 2010, a process under which 

eligible professionals in a group practice 

are treated as satisfactorily submitting 

data on quality measures under the 

Physician Quality Reporting System if, 

in lieu of reporting measures under the 

Physician Quality Reporting System, the 

group practice reports measures 

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determined appropriate by the 

Secretary, for example measures that 

target high-cost chronic conditions and 

preventive care, in a form and manner, 

and at a time specified by the Secretary. 

Section 1848(m)(3)(C)(ii) of the Act 

requires that this process provide for the 

use of a statistical sampling model to 

submit data on measures, for example 

the model used under the Medicare 

Physician Group Practice (PGP) 

demonstration project under section 

1866A of the Act. We established a 

group practice reporting option (GPRO) 

for the Physician Quality Reporting 

System under 42 CFR 414.90(g). 

(B) Proposed Definition of Group 

Practice 

Under 42 CFR 414.90(b), a ‘‘group 

practice’’ means ‘‘a single Tax 

Identification Number (TIN) with two or 

more eligible professionals, as identified 

by their individual National Provider 

Number (NPI), who have reassigned 

their Medicare billing rights to the TIN’’. 

We propose to change the definition of 

‘‘group practice’’ under 42 CFR 

414.90(b). Specifically, we propose that 

under the Physician Quality Reporting 

System, a ‘‘group practice’’ would 

consist of a physician group practice, as 

defined by a TIN, with 25 or more 

individual eligible professionals (or, as 

identified by NPIs) who have reassigned 

their billing rights to the TIN. This 

proposed definition of group practice is 

different from the definition of group 

practice that was applicable for the 2011 

Physician Quality Reporting System, 

which defined a group practice as two 

or more eligible professionals. 

For the 2010 Physician Quality 

Reporting System, our definition of 

‘‘group practice’’ was limited to 

practices with 200 or more eligible 

professionals because our intent was to 

model the Physician Quality Reporting 

System GPRO after a quality reporting 

program that group practices may 

already be familiar with—the Physician 

Group Practice (PGP) demonstration. 

Since participation in the PGP 

demonstration was limited to large 

group practices, we wanted to initially 

limit participation in the Physician 

Quality Reporting System GPRO to 

similar large group practices. In 2011, 

we expanded this definition to include 

practices with 2–199 eligible 

professionals because we developed a 

second reporting option (GPRO II) 

specifically for smaller group practices 

that was based largely on the Physician 

Quality Reporting System reporting 

options for individual eligible 

professionals. We have since observed 

that many of these smaller group 

practices that self-nominated to 

participate in GPRO II for 2011 

subsequently elected to opt out of 

participation in the GPRO II for 2011 so 

that members of the group practices can 

participate in the Physician Quality 

Reporting System individually instead. 

Out of 107 total groups that selfnominated for GPRO II, only 25 group 

practices comprised of 2–10 eligible 

professionals and 15 group practices 

comprised of 11–25 eligible 

professionals are still participating in 

GPRO II for 2011 at this time. 

Since the GPRO II seems to be a less 

attractive reporting option than GPRO I, 

we are proposing in section IV.F.1.b.2 of 

this proposed rule to consolidate GPRO 

I and II into a single GPRO. However, 

since our experience with using the 

GPRO submission web interface under 

the Physician Quality Reporting System 

has been limited to larger practices or 

practices participating in demonstration 

projects, we hesitate to expand what we 

referred to as GPRO I to all group 

practices until we gain some experience 

with smaller practices on a larger scale. 

For example, we believe that 

participation under the Physician 

Quality Reporting System GPRO is a 

more effective method of participation 

for larger as opposed to smaller group 

practices. As described in section 

IV.F.1.e.6 of this proposed rule, a group 

practice must take extra steps to 

participate in the Physician Quality 

Reporting System GPRO, for example 

reporting on more measures overall than 

is required for individual eligible 

professionals. In contrast, members of a 

group practice who choose to 

participate in the Physician Quality 

Reporting System as individual eligible 

professionals could satisfactorily report 

by reporting as few as 3 measures. We 

believe the additional reporting burden 

associated with participating under the 

Physician Quality Reporting System 

GPRO may make the GPRO less 

attractive for smaller practices. For these 

reasons, we propose to change the 

definition of ‘‘group practice’’ at 42 CFR 

414.90(b) to groups with 25 or more 

eligible professionals. 

Our proposal to change the definition 

of group practice would not preclude 

individual eligible professionals in 

group practices of less than 25 eligible 

professionals from participating in the 

Physician Quality Reporting System, 

since members of these group practices 

may still participate as individual 

eligible professionals. We believe that 

smaller group practices are more closely 

akin to individual eligible professionals 

with respect to participation under the 

Physician Quality Reporting System. We 

request comments on the proposed 

change to the definition of ‘‘group 

practice’’ under 42 CFR 414.90(b) under 

the Physician Quality Reporting System 

and also, whether we should retain the 

existing definition under the regulation 

despite our proposal to retain only the 

GPRO I for 2012. 

We recognize that a group’s size can 

fluctuate throughout the year as 

professionals move from practice to 

practice. We allow for fluctuation of the 

group practice’s size throughout the 

reporting period. However, the group 

practice’s size after the group practice’s 

participation is approved by CMS must 

continue to meet the definition of a 

group practice as proposed in 42 CFR 

414.90(b) for the entire reporting period. 

We also note that under 42 CFR 

414.90(g)(1), a group practice of any size 

(including solo practitioners) or 

comprised of multiple TINs 

participating in a Medicare approved 

demonstration project of other programs 

would also be deemed to be 

participating in the Physician Quality 

Reporting System GPRO. For example, 

the PGP demonstration, as well as the 

Medicare Shared Savings Program 

(governing accountable care 

organizations (ACOs)), Pioneer ACO, 

and EHR demonstrations have 

incorporated or proposed to incorporate 

aspects of the Physician Quality 

Reporting System reporting 

requirements and incentives under 

those respective programs. 

Our intention to recognize (deem) 

group practices participating in such 

other programs or demonstration 

projects as having participated in the 

Physician Quality Reporting System was 

to ensure that such groups would not be 

barred from participating in the group 

practice reporting option under the eRx 

Incentive program, since we previously 

required that group practices interested 

in participating in the eRx Incentive 

Program also participate in the 

Physician Quality Reporting System 

GPRO. We are not proposing to change 

the eligibility for group practices, 

including those participating in the 

programs mentioned above, to 

participate in the eRx Incentive 

program. As discussed in the proposed 

changes to the eRx Incentive Program in 

section IV.F.1.e.2 later in this proposed 

rule, however, we are proposing that a 

group practice must self-nominate to 

participate under the eRx Incentive 

Program’s group practice reporting 

option. In addition, we are proposing to 

make a technical change to 42 CFR 

414.90(g)(1) to eliminate the reference to 

group practices in demonstrations that 

are deemed to have participated in the 

Physician Quality Reporting System. We 

believe that this language is unnecessary 

given the regulation at 42 CFR 

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414.92(b). In addition, we believe that 

retaining the reference at 42 CFR 

414.90(g)(1) may cause confusion with 

regard to participation under the 

Physician Quality Reporting System or 

inappropriately suggest that duplicate 

Physician Quality Reporting System 

incentive payments are available to 

group practices under both the 

Physician Quality Reporting System and 

the other types of programs mentioned 

previously. We also propose to make a 

technical change to 42 CFR 414.92(b) to 

more broadly address group practices in 

other types of programs that incorporate 

Physician Quality Reporting System 

reporting requirements and incentives, 

so that the regulation does not solely 

reference demonstrations. We seek 

comments on these proposed technical 

changes to the regulations. 

Since the introduction of the 

Physician Quality Reporting System 

GPRO in 2010, eligible professionals 

within a group practice were required to 

assign their billing rights to a single 

TIN. For 2012, as stated previously, we 

are proposing to retain this requirement. 

However, in an effort to align the 

Physician Quality Reporting System 

with other CMS quality reporting group 

programs, we considered amending the 

definition of ‘‘group practice’’ to allow 

participation in the Physician Quality 

Reporting System GPRO by groups with 

25 or more individual eligible 

professionals (or, as identified by NPIs) 

who practice using multiple TINs. We 

believe that changing the definition of 

group practice in the Physician Quality 

Reporting System for future program 

years to align with other quality 

reporting group programs may be 

beneficial to providers who wish to 

participate in multiple CMS quality 

reporting programs that apply to group 

practices. Although we are not 

proposing to do so at this time, we 

invite public comment on possibly 

expanding the definition of group 

practice to be comprised of multiple 

TINs in future years of the program. 

We believe that to the extent we 

changed the definition of group practice 

in future years to allow for participation 

by group practices that use multiple 

TINs, it would require us to create 

additional parameters related to the 

relationship between the various TINs. 

As such, we also invite public comment 

on parameters that should be set to 

ensure that these multiple TINs 

represent a single integrated practice, 

such as but not limited to: 

• Must eligible professionals in a 

group practice share certain common 

characteristics in order to be eligible for 

participation under the Physician 

Quality Reporting System GPRO, such 

as geographic location or specialty? 

• Should there be a limit to how 

many TINs may be comprised in a 

single group practice? 

We invite public comment on 

parameters that may be set should we 

decide to amend the definition of group 

practice to include multiple TINs in 

future program years. 

(C) Proposed Process for Physician 

Group Practices to Participate as Group 

Practices 

In order to participate in the 

Physician Quality Reporting System 

GPRO for 2012 and subsequent years, 

we propose to require group practices to 

complete a self-nomination process and 

to meet certain technical and other 

requirements described later in this 

section in greater detail. As in prior 

years, we are proposing to require these 

self-nomination and additional process 

requirements so that we may identify 

which group practices are interested in 

participating in the Physician Quality 

Reporting System as a GPRO as well as 

to ensure that group practices 

participating in the GPRO understand 

the process for satisfactorily reporting 

Physician Quality Reporting System 

quality measures under the GPRO 

method of reporting. 

We propose to require that group 

practices interested in participating in 

the Physician Quality Reporting System 

GPRO for the first time submit a selfnomination statement for the respective 

year the group practice wishes to 

participate as a Physician Quality 

Reporting System GPRO via a Webbased tool that includes the group 

practice’s TIN(s) and name of the group 

practice, the name and e-mail address of 

a single point of contact for handling 

administrative issues, as well as the 

name and e-mail address of a single 

point of contact for technical support 

purposes. A group practice that submits 

an incomplete self-nomination 

statement, such as a valid e-mail 

address is not provided, would not be 

considered for inclusion in the 

Physician Quality Reporting System 

GPRO. We would notify any group 

practice that submits an incomplete selfnomination statement. 

If it is not operationally feasible for us 

to collect self-nomination statements via 

a Web-based tool for 2012, we propose 

to require that group practices interested 

in participation in the Physician Quality 

Reporting System GPRO submit a selfnomination statement via a letter 

accompanied by an electronic file 

submitted in a format specified by us 

(such as a Microsoft Excel file) that 

includes the group practice’s TIN(s) and 

name of the group practice, the name 

and e-mail address of a single point of 

contact for handling administrative 

issues, as well as the name and e-mail 

address of a single point of contact for 

technical support purposes. Under this 

proposed submission mechanism, a 

group practice that submits an 

incomplete self-nomination statement 

(such as, a valid e-mail address is not 

provided), would not be considered for 

inclusion in the 2012 Physician Quality 

Reporting System GPRO. 

For the Physician Quality Reporting 

System GPRO, we propose that the selfnomination statement must also 

indicate the group practice’s compliance 

with the following requirements: 

• Agree to attend and participate in 

all mandatory GPRO training sessions. 

• Is an established Medicare provider 

that has billed Medicare Part B on or 

after January 1 and prior to October 29 

of the year prior to the reporting period 

for the respective year. For example, for 

purposes of participating in the 2012 

Physician Quality Reporting System 

GPRO, the group practice must have 

billed Medicare Part B on or after 

January 1, 2011 and prior to October 29, 

2011. 

• Agree to have the results on the 

performance of their Physician Quality 

Reporting System measures publicly 

posted on the Physician Compare Web 

site. 

• Obtain and/or have access to the 

identity management system specified 

by CMS (such as, but not limited to, the 

Individuals Authorized Access to CMS 

Computer Systems, or IACS) to submit 

Medicare clinical quality data to a CMS 

clinical data warehouse. 

• Provide CMS access (upon request 

for validation purposes) to review the 

Medicare beneficiary data on which 

Physician Quality Reporting System 

GPRO submissions are founded or 

provide to CMS a copy of the actual data 

(upon request). 

Furthermore, to ensure that accurate 

data is being reported, we reserve the 

right to validate the data submitted by 

GPROs. 

We propose that, for 2012 and future 

years, a group practice that wishes to 

participate in both the Physician 

Quality Reporting System and eRx 

GPRO (see the eRx Incentive Program’s 

section IV.F.2.(b).(2).(B). of this 

proposed rule) must indicate its desire 

to participate in both programs in its 

self-nomination statement. 

In 2012, the GPRO is interested in 

testing the extraction of EHR data 

submitted by group practices through 

the GPRO Web interface. We propose 

that those group practices wishing to 

participate in this test must state their 

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interest to participate in the group 

practice’s self-nomination letter. 

We further propose that group 

practices that wish to self-nominate 

must do so by January 31 of the calendar 

year in which the group practice wishes 

to participate in the Physician Quality 

Reporting System GPRO. For example, 

in order to participate in the GPRO for 

the 2012 Physician Quality Reporting 

System, the group practice would need 

to self-nominate by January 31, 2012. 

Upon receipt of the self-nomination 

statements, we would assess whether 

the participation requirements for the 

respective reporting period were met by 

each group practice using Medicare 

claims data from the year prior to the 

respective reporting period. We would 

not preclude a group practice from 

participating in the GPRO if we 

discover, from analysis of the Medicare 

claims data, that there are some eligible 

professionals (identified by NPIs) that 

are not established Medicare providers 

(that is, have not billed Medicare Part B 

on or after January 1 and prior to or on 

October 29 of the year prior to the 

respective reporting period) as long as 

the group has at least the minimum 

proposed number (that is, 25) of 

established Medicare providers required 

to participate in the Physician Quality 

Reporting System as a group practice. 

Eligible professionals, as classified by 

their NPIs, who do not submit Medicare 

Part B claims for PFS covered 

professional services during the 

reporting period, however, would not be 

included in our incentive payment 

calculations. 

Furthermore, we propose to allow 

group practices who have previously 

participated in the Physician Quality 

Reporting System GPRO to 

automatically be qualified to participate 

in the GPRO in 2012 and future program 

years. For example, group practices that 

were selected to participate in the 2011 

Physician Quality Reporting System 

GPRO I or GPRO II (provided the group 

practice is still comprised of at least 25 

eligible professionals) would 

automatically be qualified to participate 

in the 2012 Physician Quality Reporting 

System GPRO and would not need to 

complete the 2012 Physician Quality 

Reporting System GPRO qualification 

process. These practices would, 

however, need to notify CMS in writing 

of their desire to continue participation 

in the Physician Quality Reporting 

System GPRO for the respective 

program year. 

We recognize that, for various 

reasons, there potentially could be a 

discrepancy between the number of 

eligible professionals (that is, NPIs) 

submitted by the practice during the 

self-nomination process and the number 

of eligible professionals billing 

Medicare under the practice’s TIN as 

people move in and out of practices. 

Therefore, if we find more NPIs in the 

Medicare claims than the number of 

NPIs submitted by the practice during 

the self-nomination process and this 

would result in the practice being 

subject to different criteria for 

satisfactory reporting, we propose to 

notify the practice of this finding as part 

of the self-nomination process. At this 

point, the practice would have the 

option of either agreeing to be subject to 

the different criteria for satisfactory 

reporting or opting out of participation 

in the Physician Quality Reporting 

System GPRO to enable the members of 

their practice to participate in the 

Physician Quality Reporting System as 

individual eligible professionals. 

We invite public comment on our 

proposals regarding the process for 

physician group practices to participate 

in the Physician Quality Reporting 

System GPRO. 

c. Proposed Reporting Period 

Since the implementation of the 

Physician Quality Reporting System in 

2007, depending on an eligible 

professional’s chosen reporting 

mechanism, we have offered up to two 

different reporting periods for 

satisfactorily reporting Physician 

Quality Reporting System quality 

measures: A 12-month reporting period 

(from January 1 through December 31 of 

the respective program year) and a 6- 

month reporting period (from July 1 

through December 31 of the respective 

program year). Section 1848(m)(5)(F) of 

the Act requires CMS to provide 

alternative reporting periods and criteria 

for measures groups and registry 

reporting. To comply with this 

provision, for 2012 and subsequent 

years, CMS is proposing to retain the 6- 

month reporting period option for the 

reporting of Physician Quality Reporting 

System measures groups via registry. 

In addition, for 2012 and subsequent 

years, we propose to modify 42 CFR 

414.90(f)(1) to specify a 12-month 

reporting period (that is, January 1 

through December 31 of the respective 

program year), consistent with section 

1848(m)(6)(C)(i)(II) of the Act, for the 

satisfactory reporting of Physician 

Quality Reporting System quality 

measures for claims, registry, and EHRBased reporting. Additionally, we 

propose to modify 42 CFR 414.90(g)(1) 

to specify a 12-month reporting period 

(that is, January 1 through December 31 

of the respective program year) for the 

Physician Quality Reporting System 

GPRO. We understand that in proposing 

these modifications to 42 CFR 414.90, 

we are proposing to eliminate the 6- 

month reporting period for claims and 

registry previously available under the 

Physician Quality Reporting System 

(with the exception of reporting 

measures groups via registry). Although 

we are not proposing a 6-month 

reporting period for claims and registry 

reporting (for reporting individual 

measures via registry), we note that the 

12-month reporting period aligns with 

other CMS quality reporting programs. 

In addition, the elimination of the 6- 

month reporting period for claims and 

registry reporting (for reporting 

individual measures via registry) will 

align the reporting periods of these 

mechanisms with the EHR reporting 

mechanism. We further believe that the 

elimination of the 6-month reporting 

period for claims and registry reporting 

(for reporting individual measures via 

registry) will help to streamline and 

simplify the reporting requirements for 

the Physician Quality Reporting System 

without substantial burden to eligible 

professionals who may still 

satisfactorily report using the 12-month 

reporting period. 

d. Proposed Reporting Mechanisms— 

Individual Eligible Professionals 

For the purpose of reporting quality 

measures under the Physician Quality 

Reporting System, we propose to retain 

the claims-based, registry-based, and 

EHR-Based reporting mechanism for 

2012 and beyond. Accordingly, we 

propose to modify 42 CFR 414.9(f) to 

reflect this proposal. We are proposing 

to retain these reporting mechanisms in 

order to provide eligible professionals 

with multiple mechanisms from which 

to satisfactorily report Physician Quality 

Reporting System quality measures. We 

hope that offering multiple reporting 

mechanisms will aid in encouraging 

participation in the Physician Quality 

Reporting System. 

As in previous years, the individual 

quality measures or measures groups an 

eligible professional selects will dictate 

the applicable reporting mechanism(s). 

In addition, while eligible professionals 

can attempt to qualify for a Physician 

Quality Reporting System incentive 

under multiple reporting mechanisms, 

the eligible professional must satisfy the 

criteria for satisfactory reporting 

proposed for the respective program 

year, with respect to a single reporting 

mechanism to qualify for an incentive. 

We further propose that we would not 

combine data submitted via multiple 

reporting mechanisms to determine 

incentive eligibility. We invite public 

comment concerning the general, 

proposed reporting mechanisms for the 

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Physician Quality Reporting System for 

2012 and beyond. 

(1) Claims-Based Reporting 

As we noted previously, we propose 

to retain the claims-based reporting 

mechanism for the Physician Quality 

Reporting System for 2012 and beyond. 

For eligible professionals who choose to 

participate in the Physician Quality 

Reporting System by submitting data on 

individual quality measures or measures 

groups through the claims-based 

reporting mechanism, we propose that 

the eligible professional be required to 

submit the appropriate Physician 

Quality Reporting System quality data 

codes (QDCs) on the professionals’ 

Medicare Part B claims. QDCs for the 

eligible professional’s selected 

individual Physician Quality Reporting 

System quality measures or measures 

group may be submitted to CMS at any 

time during the reporting period for the 

respective program year. However, as 

required by section 1848(m)(1)(A) of the 

Act, all claims for services furnished 

during the reporting period would need 

to be processed by no later than 2 

months after the end of the reporting 

period, to be included in the program 

year’s Physician Quality Reporting 

System analysis. For example, all claims 

for services furnished for the 2012 

Physician Quality Reporting System 

would need to be processed by no later 

than 2 months after the end of the 

reporting period for the 2012 Physician 

Quality Reporting System, that is, 

processed by February 28, 2013 for the 

reporting period that ends December 31, 

2012. We invite public comment on our 

proposed requirements for eligible 

professionals who choose the claimsbased reporting mechanism for 2012 

and beyond. 

(2) Registry-Based Reporting 

(A) Proposed Requirements for the 

Registry-Based Reporting Mechanism— 

Individual Eligible Professionals 

As stated previously, we propose to 

retain the registry-based reporting 

mechanism via a qualified registry (as 

defined in section (2)(B) of this section) 

for the Physician Quality Reporting 

System for 2012 and beyond. With 

regard to specific requirements for 

registry-based reporting for individual 

eligible professional reporters under the 

Physician Quality Reporting System, we 

propose that in order to report quality 

data on the Physician Quality Reporting 

System individual quality measures or 

measures groups for the respective 

program year through a qualified 

registry, an eligible professional or 

group practice must enter into and 

maintain an appropriate legal 

arrangement with a qualified Physician 

Quality Reporting System registry. Such 

arrangements would provide for the 

registry’s receipt of patient-specific data 

from the eligible professional and the 

registry’s disclosure of quality measures 

results and numerator and denominator 

data on Physician Quality Reporting 

System quality measures or measures 

groups on behalf of the eligible 

professional to CMS. Thus, the registry 

would act as a Health Insurance 

Portability and Accountability Act of 

1996 (Pub. L. 104–191) (HIPAA) 

Business Associate and agent of the 

eligible professional. Such agents are 

referred to as ‘‘data submission 

vendors.’’ The ‘‘data submission 

vendors’’ would have the requisite legal 

authority to provide clinical quality 

measures results and numerator and 

denominator data on individual quality 

measures or measures groups on behalf 

of the eligible professional for the 

Physician Quality Reporting System. 

We propose that the registry, acting as 

a data submission vendor, would submit 

CMS-defined registry-derived measures 

information to our designated database 

for the Physician Quality Reporting 

System, using a CMS-specified record 

layout, which would be provided to the 

registry by CMS. Similarly, we propose 

that eligible professionals choosing to 

participate in the Physician Quality 

Reporting System through the registrybased reporting mechanism for the 

respective program year must select a 

qualified Physician Quality Reporting 

System registry and submit information 

on Physician Quality Reporting System 

individual quality measures or measures 

groups to the selected registry in the 

form and manner and by the deadline 

specified by the registry. 

We propose to post a list of qualified 

registries for the Physician Quality 

Reporting System for the respective 

program year on the Physician Quality 

Reporting System section of the CMS 

Web site at http://www.cms.gov/pqrs, 

which would include the registry name, 

contact information, the measures and/ 

or measures group (if qualified) for 

which the registry is qualified and 

intends to report for the respective 

program year, and information regarding 

the cost of the registry to eligible 

professionals. However, we do not 

anticipate making this list available 

prior to the start of the respective 

program year. That is, we do not 

anticipate making the list of qualified 

registries for the 2012 Physician Quality 

Reporting System available prior to the 

start of the 2012 program year. We 

propose to post the names of the 

Physician Quality Reporting System 

qualified registries for the respective 

reporting period in the following 3 

phases based on: (1) The registry’s 

success in submitting Physician Quality 

Reporting System quality measures 

results and numerator and denominator 

data on the quality measures in a prior 

Physician Quality Reporting System 

program year (2008, 2009, 2010, 2011, 

etc.); (2) the registry’s submission of a 

letter indicating their continued interest 

in being a Physician Quality Reporting 

System registry by October 31 of the 

year prior to the program year (that is, 

by October 31, 2011 for the 2012 

program year); and (3) the registry’s 

compliance with the Physician Quality 

Reporting System registry requirements 

for the respective program year as 

indicated by CMS’ registry vetting 

process. The listing of a qualified 

registry will depend on which of the 3 

proposed phases is most applicable to 

the registry. The manner in which we 

post the list of qualified registries is 

based on prior experience with 

participation in the Physician Quality 

Reporting System as a registry vendor. 

(B) 2012 Proposed Qualification 

Requirements for Registries 

Although we are proposing to 

establish the registry-based reporting 

mechanism as a way to report Physician 

Quality Reporting System quality 

measures for 2012 and beyond, we 

propose that the following proposed 

qualification requirements only apply 

for the 2012 program year. For the 

Physician Quality Reporting System in 

2012, as in prior program years, we 

propose to require a self-nomination 

process for registries wishing to submit 

Physician Quality Reporting System 

quality measures or measures groups on 

behalf of eligible professionals for 

services furnished during the applicable 

reporting periods in 2012. This 

qualification process allows us to ensure 

that registries are fully informed of the 

Physician Quality Reporting System 

reporting process and to ensure the 

registry is qualified, thereby improving 

the likelihood of accurate reporting. 

We note that third party 

intermediaries may participate in 

various capacities under the Physician 

Quality Reporting System. In addition, 

in an effort to encourage the electronic 

submission of quality measures data 

from eligible professionals’ EHRs, we 

are proposing EHR-Based reporting, as 

discussed later in this section. As a 

result, we believe it is important to 

distinguish entities that collect their 

data from an EHR from those entities 

that collect their data from other 

sources. As such, as discussed here and 

below, we propose, the following two 

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categories of third party intermediaries 

that would be able to submit Physician 

Quality Reporting System measures data 

on behalf of eligible professional: (1) A 

registry, as defined at 42 CFR 414.90(b), 

which would be any data submission 

vendor submitting data from a source 

other than an EHR on behalf of eligible 

professionals that meets the proposed 

registry qualification requirements later 

in this section; and (2) EHR data 

submission vendors, which would be a 

data submission vendor that obtains its 

data from an eligible professional’s EHR 

and that meets the 2012 EHR 

qualification requirements. However, for 

operational reasons, we may reserve the 

right to limit such entities to a single 

role such that the entity would need to 

decide whether it wants to serve as a 

registry or EHR data submission vendor 

but not both. We note that a registry 

could serve as an ‘‘EHR data submission 

vendor’’ to the extent that it obtains data 

from an eligible professional’s EHR, but 

would need to meet the proposed 2012 

EHR qualification requirements. To be 

considered a qualified registry for 

purposes of serving as a registry under 

the program and submitting individual 

quality measures on behalf of eligible 

professionals who choose the registry 

reporting mechanism for 2012, we 

propose that both registries new to the 

Physician Quality Reporting System and 

those previously qualified must: 

• Be in existence as of January 1, 

2012. 

• Have at least 25 participants by 

January 1, 2012. 

• Provide at least 1 feedback report, 

based on the data submitted to them for 

the 2012 Physician Quality Reporting 

System incentive reporting period, and 

if technically feasible, provide at least 2 

feedback reports throughout the year to 

participating eligible professionals. 

Although it is not a requirement that 

registries provide interim feedback 

reports, we believe it is in the 

stakeholder’s interest to require early 

registry collection of data for purposes 

of providing a feedback report to eligible 

professionals before the end of the 2012 

Physician Quality Reporting System 

incentive reporting period to determine 

what steps, if any, an eligible 

professional should take to meet the 

criteria for satisfactory reporting. 

• For purposes of distributing 

feedback reports to eligible 

professionals, collect an eligible 

professional’s e-mail addresses and have 

documentation from the eligible 

professional authorizing the release of 

his or her e-mail address. 

• Not be owned and managed by an 

individual locally-owned singlespecialty group (in other words, singlespecialty practices with only 1 practice 

location or solo practitioner practices 

would be prohibited from selfnominating to become a qualified 

Physician Quality Reporting System 

registry). 

• Participate in ongoing 2012 

Physician Quality Reporting System 

mandatory support conference calls 

hosted by CMS (approximately 1 call 

per month), including an in-person 

registry kick-off meeting to be held at 

CMS headquarters in Baltimore, MD. 

Registries that miss more than one 

meeting would be precluded from 

submitting Physician Quality Reporting 

System data for the reporting year 

(2012). 

• Be able to collect all needed data 

elements and transmit to CMS the data 

at the TIN/NPI level for at least 3 

measures, which is the minimum 

amount of measures on which an 

eligible professional is required to 

report, in the 2012 Physician Quality 

Reporting System (according to the 

posted 2012 Physician Quality 

Reporting System Measure 

Specifications); 

• Be able to calculate and submit 

measure-level reporting rates or, upon 

request, the data elements needed to 

calculate the reporting rates by TIN/NPI. 

• Be able to calculate and submit, by 

TIN/NPI, a performance rate (that is, the 

percentage of a defined population who 

receive a particular process of care or 

achieve a particular outcome based on 

a calculation of the measure’s numerator 

and denominator specifications) for 

each measure on which the TIN/NPI 

reports or, upon request the Medicare 

beneficiary data elements needed to 

calculate the reporting rates. 

• Be able to separate out and report 

on Medicare Part B FFS patients. 

• Provide the name of the registry. 

• Provide the reporting period start 

date the registry will cover. 

• Provide the reporting period end 

date the registry will cover. 

• Provide the measure numbers for 

the Physician Quality Reporting System 

quality measures on which the registry 

is reporting. 

• Provide the measure title for the 

Physician Quality Reporting System 

quality measures on which the registry 

is reporting. 

• Report the number of eligible 

instances (reporting denominator). 

• Report the number of instances a 

quality service is performed (reporting 

numerator). 

• Report the number of performance 

exclusions, meaning the quality action 

was not performed for a valid reason as 

defined by the measure specification. 

• Report the number of reported 

instances, performance not met (eligible 

professional receives credit for 

reporting, not for performance), 

meaning the quality action was not 

performed for no valid reason as defined 

by the measure specification. 

• Be able to transmit this data in a 

CMS-approved XML format. 

• Comply with a CMS-specified 

secure method for data submission, 

such as submitting the registry’s data in 

an XML file through an identity 

management system specified by CMS 

or another approved method, such as 

use of appropriate NwHIN (Nationwide 

Health Information Network) 

specifications, if technically feasible. 

• Submit an acceptable ‘‘validation 

strategy’’ to CMS by March 31, 2012. A 

validation strategy ascertains whether 

eligible professionals have submitted 

accurately and on at least the minimum 

number (80 percent) of their eligible 

patients, visits, procedures, or episodes 

for a given measure, which, as described 

in section (e)(2) of this section, is the 

minimum percentage of patients on 

which an eligible professional must 

report on any given measure. 

Acceptable validation strategies often 

include such provisions as the registry 

being able to conduct random sampling 

of their participant’s data, but may also 

be based on other credible means of 

verifying the accuracy of data content 

and completeness of reporting or 

adherence to a required sampling 

method. 

• Perform the validation outlined in 

the strategy and send the results to CMS 

by June 30, 2013 for the 2012 reporting 

year’s data. 

• Enter into and maintain with its 

participating professionals an 

appropriate Business Associate 

agreement that provides for the 

registry’s receipt of patient-specific data 

from the eligible professionals, as well 

as the registry’s disclosure of quality 

measure results and numerator and 

denominator data and/or patientspecific data on Medicare beneficiaries 

on behalf of eligible professionals who 

wish to participate in the Physician 

Quality Reporting System. 

• Obtain and keep on file signed 

documentation that each holder of an 

NPI whose data are submitted to the 

registry has authorized the registry to 

submit quality measure results and 

numerator and denominator data and/or 

patient-specific data on Medicare 

beneficiaries to CMS for the purpose of 

Physician Quality Reporting System 

participation. This documentation must 

be obtained at the time the eligible 

professional signs up with the registry 

to submit Physician Quality Reporting 

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System quality measures data to the 

registry and must meet any applicable 

laws, regulations, and contractual 

business associate agreements. 

• Provide CMS access (upon request 

for health oversight purposes like 

validation) to review the Medicare 

beneficiary data on which 2012 

Physician Quality Reporting System 

registry-based submissions are founded 

or provide to CMS a copy of the actual 

data (upon request). 

• Provide CMS a signed, written 

attestation statement via mail or e-mail 

which states that the quality measure 

results and any and all data including 

numerator and denominator data 

provided to CMS are accurate and 

complete. 

• Use Physician Quality Reporting 

System measure specifications and the 

CMS provided measure calculation 

algorithm, or logic, to calculate 

reporting rates or performance rates 

unless otherwise stated. CMS would 

provide registries a standard set of logic 

to calculate each measure and/or 

measures group they intend to report in 

2012. 

• Provide a calculated result using 

the CMS supplied measure calculation 

logic and XML file for each measure that 

the data submission vendor intends to 

calculate. The registries would be 

required to show that they can calculate 

the proper measure results (that is, 

reporting and performance rates) using 

the CMS-supplied logic and send the 

calculated data back to CMS in the 

specified format. 

• Provide the individual data 

elements used to calculate the measures 

upon request by CMS under its health 

oversight authority, if aggregated data 

submission is still the selected method 

of data collection. Registries that are 

subject to validation will be asked to 

send discrete Medicare beneficiary data 

elements for a measure (determined by 

CMS) in the required data format for us 

to recalculate the registries’ reported 

results. Validation would be conducted 

for several measures at a randomly 

selected sample of registries in order to 

validate their data submissions. 

• Provide CMS with beneficiary-level 

data provided to the registry by the 

eligible professional in the CMSapproved format, upon request by CMS. 

CMS intends to use the data to calculate 

the eligible professional’s measure 

results (that is, reporting and 

performance rates). 

In addition to meeting all the 

requirements specified previously for 

the reporting of individual quality 

measures via registry, for registries that 

intend to report on 2012 Physician 

Quality Reporting System measures 

groups, we propose that both registries 

new to the Physician Quality Reporting 

System and those previously qualified 

must: 

• Indicate the reporting period 

chosen for each eligible professional 

who chooses to submit data on 

measures groups. 

• Base reported information on 

measures groups only on patients to 

whom services were furnished during 

the 2012 reporting period. 

• Agree that the registry’s data may be 

inspected or a copy requested by CMS 

and provided to CMS under our 

oversight authority. 

• Be able to report consistent with the 

proposed reporting criteria 

requirements, as specified in section 

(e)(2) of this section. 

We intend to post the final 2012 

Physician Quality Reporting System 

registry requirements on the Physician 

Quality Reporting System section of the 

CMS Web site at http://www.cms.gov/ 

pqrs by November 15, 2011 or shortly 

thereafter. We anticipate that new 

registries that wish to self-nominate for 

2012 would be required to do so by 

January 31, 2012. 

We propose that registries that were 

‘‘qualified’’ for 2011 and wish to 

continue to participate in 2012 will not 

need to be ‘‘re-qualified’’ for 2012, but 

instead would only be required to 

demonstrate that they can meet the new 

2012 data submission requirements. For 

technical reasons, however, we do not 

expect to be able to complete this 

vetting process for the new 2012 data 

submission requirements until mid2012. Therefore, for 2012, we may not 

be able to post the names of registries 

that are qualified for the 2012 Physician 

Quality Reporting System until we have 

determined the previously qualified 

registries that wish to be qualified for 

the 2012 Physician Quality Reporting 

System are in compliance with the new 

registry requirements. 

We propose that registries ‘‘qualified’’ 

for 2011, who are successful in 

submitting 2011 Physician Quality 

Reporting System data, and wish to 

continue to participate in 2012 would 

need to indicate their desire to continue 

participation for 2012 by submitting a 

self-nomination statement via a webbased tool to CMS indicating their 

continued interest in being a Physician 

Quality Reporting System registry for 

2012 and their compliance with the 

2012 Physician Quality Reporting 

System registry requirements by no later 

than October 31, 2011. Additionally, 

registries that were qualified but 

unsuccessful in submitting 2011 

Physician Quality Reporting System 

data (that is, fail to submit 2011 

Physician Quality Reporting System 

data per the 2011 Physician Quality 

Reporting System registry requirements) 

would need to go through a full selfnomination vetting process for 2012. 

We further propose that by March 31, 

2012, registries that are unsuccessful at 

submitting registry data in the correct 

data format for 2011 would need to be 

able to meet the 2012 Physician Quality 

Reporting System registry requirements 

and go through the full vetting process 

again. This would include CMS 

receiving the registry’s self-nomination 

by March 31, 2012. We propose that the 

aforementioned registry requirements 

will also apply for the purpose of a 

registry qualifying to submit the 

electronic prescribing measure for the 

2012 eRx Incentive Program. We 

anticipate finalizing the list of 2012 

Physician Quality Reporting System 

registries by Summer 2012. 

For eligible professionals considering 

this reporting mechanism, we point out 

that even though a registry is listed as 

‘‘qualified,’’ we cannot guarantee or 

assume responsibility for the registry’s 

successful submission of the required 

Physician Quality Reporting System 

quality measures results or measures 

group results or required data elements 

submitted on behalf of a given eligible 

professional. We invite public comment 

on our proposed 2012 requirements for 

the registry-based reporting mechanism 

for individual eligible professional 

reporters. 

Furthermore, in an effort to ensure 

that registries provide accurate reporting 

of Physician Quality Reporting System 

data, in program years after 2012, we 

seek to disallow previously-qualified 

registries from submitting data on 

Physician Quality Reporting System 

quality measures if it is found that the 

data registries provide are significantly 

inaccurate. We believe this is important 

because we have noticed many 

calculation and data submission errors 

in reporting from registries in past 

program years. Alternatively, for years 

after 2012, we may require registries to 

submit all the individual data elements 

for CMS to calculate an eligible 

professional’s reporting and 

performance rates as well as require 

registries to submit patient-level data on 

Medicare beneficiaries rather than 

aggregate data. We seek public comment 

on disallowing previously-qualified 

registries to submit data on Physician 

Quality Reporting System quality 

measures in future program years if it is 

found that the data the registries 

provide are significantly inaccurate. 

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(3) EHR-Based Reporting 

For 2012 and beyond, we propose that 

eligible professionals who choose to 

participate in the Physician Quality 

Reporting System via the EHR-Based 

reporting mechanism have the option of 

submitting quality measure data 

obtained from their Physician Quality 

Reporting System qualified EHR to CMS 

either: 

(1) Directly from his or her qualified 

EHR, in the CMS-specified manner, or 

(2) indirectly from a qualified EHR data 

submission vendor (on the eligible 

professional’s behalf), in the CMSspecified manner. 

(A) Direct EHRs 

(i) Proposed Requirements for the Direct 

EHR-Based Reporting Mechanism— 

Individual Eligible Professionals 

For 2012 and beyond, we propose to 

retain the EHR-Based reporting 

mechanism via a qualified EHR (as 

defined in section (3)(b) of this section) 

for the purpose of satisfactorily 

reporting Physician Quality Reporting 

System quality measures. We propose 

the following requirements for 

individual eligible professionals 

associated with EHR-Based reporting: 

(1) Selection of a Physician Quality 

Reporting System qualified EHR 

product and (2) submission of Medicare 

clinical quality data extracted from the 

EHR directly to CMS, in the CMSspecified manner. 

We propose that, in addition to 

meeting the appropriate criteria for 

satisfactory reporting of individual 

measures for the 2012 Physician Quality 

Reporting System EHR reporting option, 

eligible professionals who choose the 

EHR-Based reporting mechanism for the 

2012 Physician Quality Reporting 

System would be required to have a 

Physician Quality Reporting System 

qualified EHR product. We understand 

that eligible professionals may have 

purchased Certified EHR Technology for 

purposes of reporting under the 

Medicare and Medicaid EHR Incentive 

Programs. Such Certified EHR 

Technology may or may not be qualified 

for purposes of the 2012 Physician 

Quality Reporting System. Eligible 

professionals would need to ensure that 

their Certified EHR Technology is also 

qualified for purposes of the 2012 

Physician Quality Reporting System to 

participate in the Physician Quality 

Reporting System via the EHR-Based 

reporting mechanism for 2012. The 

certification process for EHR technology 

does not test the EHR product’s ability 

to output a file that meets the Physician 

Quality Reporting System measures file 

specifications. We are currently 

exploring ways to further align these 

two programs’ reporting requirements 

for future years so that Certified EHR 

Technology may be used to satisfy both 

the Medicare EHR Incentive Program 

and the Physician Quality Reporting 

System without any additional testing. 

For 2012, we propose to modify the 

current list of EHR vendors qualified 

under the Physician Quality Reporting 

System to indicate which of the 

qualified vendors’ products have also 

received a certification for the purposes 

of the EHR Incentive Programs. We 

invite public comment on the 2012 

proposed qualifications for direct EHRs. 

(ii) 2012 Proposed Qualification 

Requirements for Direct EHR Products 

For direct EHR products who wish to 

report 2012 Physician Quality Reporting 

System quality measures data on behalf 

of eligible professionals, we propose 

that a test of quality data submission 

from eligible professionals who wish to 

report 2012 quality measure data 

directly from their qualified EHR 

product would be required and we 

anticipate that this testing would occur 

in late 2012, immediately followed by 

the submission of the eligible 

professional’s actual 2012 Physician 

Quality Reporting System data in early 

2013. This entire final test/production 

data submission timeframe for 2012 is 

expected to be December 2012 through 

February 2013. We are currently vetting 

newly self-nominated EHR vendor 

products for possible qualification for 

the 2012 Physician Quality Reporting 

System program year. Similar to prior 

years, we expect to list the 2012 

Physician Quality Reporting System 

qualified EHR products by January 

2012. We will also be vetting those selfnominated EHR data submission 

vendors for possible qualification to 

submit 2012 Physician Quality 

Reporting System measures on eligible 

professionals’ behalf under the EHRBased reporting mechanism. We expect 

to list the entities that are EHR data 

submission vendors qualified to submit 

2012 Physician Quality Reporting 

System EHR measures on eligible 

professionals’ behalf by mid-2012. 

For direct EHR vendors wishing to 

qualify for participation in the 2012 

Physician Quality Reporting SystemMedicare Incentive Pilot for the 

Medicare EHR Incentive Program 

(discussed in section IV.H. of this 

proposed rule), we propose a separate, 

accelerated vetting process for EHR 

vendors and their products. This vetting 

process will be the same process as the 

vetting process for EHR vendor products 

for the 2012 Physician Quality 

Reporting System that is currently 

underway. We will begin the vetting 

process for these additional EHR data 

submission vendors in the beginning of 

2012 and anticipate that the vetting 

process be completed by Summer/Fall 

2012. 

We further propose that any EHR 

direct vendor interested in being 

‘‘qualified’’ to submit quality data 

extracted from an EHR to CMS on 

eligible professionals’ behalf for the 

2012 Physician Quality Reporting 

System would be required to selfnominate. We anticipate that the selfnomination deadline will occur no later 

than December 31, 2011. We expect to 

post instructions for self-nomination by 

the 4th quarter of CY 2011 on the 

Physician Quality Reporting System 

section of CMS Web site. 

(B) EHR Data Submission Vendors 

(i) Proposed Requirements for the EHR 

Data Submission Vendor-based 

Reporting Mechanism—Individual 

Eligible Professionals 

For 2012 and beyond, we propose to 

retain the EHR-Based reporting 

mechanism via a qualified EHR (as 

defined in 42 CFR 414.90(b)) for the 

purpose of satisfactorily reporting 

Physician Quality Reporting System 

quality measures. We propose the 

following requirements for individual 

eligible professionals associated with 

indirect EHR-Based reporting: (1) 

Selection of a Physician Quality 

Reporting System qualified EHR 

product and (2) submission of Medicare 

clinical quality data extracted from the 

EHR to a qualified ‘‘EHR data 

submission vendor’’ (which may 

include some current registries, EHR 

vendors, and other entities that are able 

to receive and transmit clinical quality 

data extracted from an EHR) to CMS, in 

the CMS-specified manner. For eligible 

professionals who choose to 

electronically submit Medicare clinical 

quality data extracted from their EHR to 

a qualified EHR data submission 

vendor, the EHR data submission 

vendor would then submit the 

Physician Quality Reporting System 

measures data to CMS in a CMSspecified manner on the eligible 

professional’s behalf for the respective 

program year. 

For 2012, we propose that in order for 

an eligible professional to submit 

Medicare clinical quality data extracted 

from his or her EHR to CMS via an EHR 

data submission vender, the eligible 

professional must enter into and 

maintain an appropriate legal 

arrangement with a qualified 2012 EHR 

data submission vendor that is capable 

of receiving and transmitting Medicare 

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clinical quality data extracted from an 

EHR. Such arrangements would provide 

for the EHR data submission vendor’s 

receipt of beneficiary-specific data from 

the eligible professional and the EHR 

data submission vendor’s disclosure of 

the beneficiary-specific data on behalf of 

the eligible professional to CMS. Thus, 

the EHR data submission vendor would 

act as a Health Insurance Portability and 

Accountability Act of 1996 (Pub. L. 

104–191) (HIPAA) Business Associate 

and agent of the eligible professional. 

Such agents are referred to as ‘‘EHR data 

submission vendors.’’ The ‘‘EHR data 

submission vendors’’ would have the 

requisite legal authority to provide 

beneficiary-specific data on the 2012 

Physician Quality Reporting System 

EHR measures on behalf of the eligible 

professional to CMS for the Physician 

Quality Reporting System. 

We also propose that eligible 

professionals choosing to participate in 

the 2012 Physician Quality Reporting 

System through the EHR-Based 

reporting mechanism via an EHR data 

submission vendor for 2012 must select 

a qualified Physician Quality Reporting 

System EHR data submission vendor 

and submit information on Physician 

Quality Reporting System EHR 

measures to the selected EHR data 

submission vendor in the form and 

manner, and by the deadline specified 

by the EHR data submission vendor. We 

invite public comment on the proposed 

qualification requirements on the 2012 

proposed qualification requirements for 

individual eligible professionals using 

EHR data submission vendors to submit 

Physician Quality Reporting System 

quality measures data. 

(i) 2012 Proposed Qualification 

Requirements for EHR Data Submission 

Vendors 

Similar to our 2012 qualification 

requirements for direct EHR vendors, 

we propose that qualified EHR data 

submission vendors that wish to submit 

2012 quality measures data obtained 

from an eligible professional’s qualified 

EHR product to CMS on the eligible 

professional’s behalf would be required 

to submit test data in late 2012 followed 

by the submission of the eligible 

professional’s actual 2012 Physician 

Quality Reporting System data in early 

2013. For data submission vendors 

wishing to qualify for participation in 

the 2012 Physician Quality Reporting 

System-Medicare Incentive Pilot for the 

Medicare EHR Incentive Program 

(discussed in section IV.H. of this 

proposed rule), we propose a separate, 

accelerated vetting process for EHR 

vendors and their products. This vetting 

process will be the same process as the 

vetting process for EHR vendor products 

for the 2012 Physician Quality 

Reporting System that is currently 

underway. We will begin the vetting 

process for these additional EHR data 

submission vendors in the beginning of 

2012 and anticipate that the vetting 

process be completed by Summer/Fall 

2012. 

We further propose that any EHR data 

submission vendor interested in being 

‘‘qualified’’ to submit quality data 

extracted from an EHR to CMS on 

eligible professionals’ behalf for the 

2012 Physician Quality Reporting 

System would be required to selfnominate. We anticipate that the selfnomination deadline will occur no later 

than December 31, 2011. We expect to 

post instructions for self-nomination by 

the 4th quarter of CY 2011 on the 

Physician Quality Reporting System 

section of CMS Web site. 

We propose the following 

qualification requirements for EHR data 

submission vendors who wish to submit 

2012 Physician Quality Reporting 

System quality measure data: 

• Not be in a beta test form. 

• Be in existence as of January 1, 

2012. 

• Have at least 25 active users. 

• Participate in ongoing Physician 

Quality Reporting mandatory support 

conference calls hosted by CMS 

(approximately one call per month). 

Failure to attend more than one call per 

year would result in the removal of the 

EHR data submission vendor from the 

2012 EHR qualification process. 

• Have access to the identity 

management system specified by CMS 

(such as, but not limited to, the 

Individuals Authorized Access to CMS 

Computer Systems, or IACS) to submit 

clinical quality data extracted to a CMS 

clinical data warehouse. 

• Submit a test file containing 

dummy Medicare clinical quality data 

to a CMS clinical data warehouse via an 

identity management system specified 

by CMS during a timeframe specified by 

CMS. In 2011, the requirement to 

submit a test file could have contained 

real or dummy data. However, for 

privacy reasons, we have decided to 

only provide for the submission of test 

files containing dummy data. We have 

proposed revisions to 42 CFR 414.90 to 

reflect this change. 

• Submit a file containing the eligible 

professional’s 2012 Physician Quality 

Reporting System Medicare clinical 

quality data extracted from the EHR for 

the entire 12-month reporting period via 

the CMS-specified identify management 

system during the timeframe specified 

by us in early 2013. 

• Provide at least 1 feedback report, 

based on the data submitted to them for 

the 2012 Physician Quality Reporting 

System incentive reporting period, and 

if technically feasible, provide at least 2 

feedback reports throughout the year to 

participating eligible professionals. 

• Be able to collect all needed data 

elements and transmit to CMS the data 

at the beneficiary level. 

• Be able to separate out and report 

on Medicare Part B FFS patients. 

• Provide the measure numbers for 

the quality measures on which the data 

submission vendor is reporting. 

• Be able to transmit this data in a 

CMS-approved XML format utilizing a 

Clinical Document Architecture (CDA) 

standard such as Quality Reporting Data 

Architecture (QRDA). 

• Comply with a CMS-specified 

secure method for data submission, 

such as submitting the EHR data 

submission vendor’s data in an XML file 

through an identity management system 

specified by CMS or another approved 

method, such as use of appropriate 

NwHIN (Nationwide Health Information 

Network) specifications, if technically 

feasible. 

• Enter into and maintain with its 

participating professionals an 

appropriate Business Associate 

agreement that provides for the data 

submission vendor’s receipt of patientspecific data from the eligible 

professionals, as well as the data 

submission vendor’s disclosure of 

patient-specific data on Medicare 

beneficiaries on behalf of eligible 

professionals who wish to participate in 

the Physician Quality Reporting System. 

• Obtain and keep on file signed 

documentation that each holder of an 

NPI whose data are submitted to the 

data submission vendor has authorized 

the data submission vendor to submit 

patient-specific data on Medicare 

beneficiaries to CMS for the purpose of 

Physician Quality Reporting System 

participation. This documentation must 

be obtained at the time the eligible 

professional signs up with the data 

submission vendor to submit Physician 

Quality Reporting System quality 

measures data to the data submission 

vendor and must meet any applicable 

laws, regulations, and contractual 

business associate agreements. 

• Provide CMS access (upon request 

for health oversight purposes like 

validation) to review the Medicare 

beneficiary data on which 2012 

Physician Quality Reporting System 

EHR-Based submissions are founded or 

provide to CMS a copy of the actual data 

(upon request). 

• Provide CMS a signed, written 

attestation statement via mail or e-mail 

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which states that the quality measure 

results and any and all data including 

numerator and denominator data 

provided to CMS are accurate and 

complete. 

• Use Physician Quality Reporting 

System measure specifications and the 

CMS provided measure calculation 

algorithm, or logic, to calculate 

reporting rates or performance rates 

unless otherwise stated. CMS would 

provide EHR data submission vendors a 

standard set of logic to calculate each 

measure and/or measures group they 

intend to report in 2012. 

• Provide a calculated result using 

the CMS supplied measure calculation 

logic and XML file for each measure that 

the EHR data submission vendor 

intends to calculate. The data 

submission vendors would be required 

to show that they can calculate the 

proper measure results (that is, 

reporting and performance rates) using 

the CMS-supplied logic and send the 

calculated data back to CMS in the 

specified format. 

For EHR data submission vendors 

participating in the Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot for 2012 (discussed in 

section IV.H. of this proposed rule) and 

wish to also submit Medicare clinical 

quality data extracted from an EHR for 

the purposes of the 2012 Physician 

Quality Reporting System incentive, we 

propose that these EHR data submission 

vendors meet the following below 

requirements in addition to the 

requirements stated above: 

• Be able to collect all needed data 

elements and transmit to CMS the data 

at the TIN/NPI level. 

• Be able to calculate and submit 

measure-level reporting rates or, upon 

request, the data elements needed to 

calculate the reporting rates by TIN/NPI. 

• Be able to calculate and submit, by 

TIN/NPI, a performance rate (that is, the 

percentage of a defined population who 

receive a particular process of care or 

achieve a particular outcome based on 

a calculation of the measure’s numerator 

and denominator specifications) for 

each measure on which the TIN/NPI 

reports or, upon request the Medicare 

beneficiary data elements needed to 

calculate the reporting rates. 

• Report the number of eligible 

instances (reporting denominator). 

• Report the number of instances a 

quality service is performed (reporting 

numerator). 

• Report the number of performance 

exclusions, meaning the quality action 

was not performed for a valid reason as 

defined by the measure specification. 

• Report the number of reported 

instances, performance not met (eligible 

professional receives credit for 

reporting, not for performance), 

meaning the quality action was not 

performed for no valid reason as defined 

by the measure specification. 

• Be able to transmit this data in a 

CMS-approved XML format. 

• Submit an acceptable ‘‘validation 

strategy’’ to CMS by March 31, 2012. A 

validation strategy ascertains whether 

eligible professionals have submitted 

accurately and on at least the minimum 

number (80 percent) of their eligible 

patients, visits, procedures, or episodes 

for a given measure, which, as described 

in section (e)(2) of this section, is the 

minimum percentage of patients on 

which an eligible professional must 

report on any given measure. 

Acceptable validation strategies often 

include such provisions as the EHR data 

submission vendor being able to 

conduct random sampling of their 

participant’s data, but may also be based 

on other credible means of verifying the 

accuracy of data content and 

completeness of reporting or adherence 

to a required sampling method. 

• Perform the validation outlined in 

the strategy and send the results to CMS 

by June 30, 2013 for the 2012 reporting 

year’s data. 

• Enter into and maintain with its 

participating professionals an 

appropriate Business Associate 

agreement that provides for the data 

submission vendor’s receipt of patientspecific data from the eligible 

professionals, as well as the data 

submission vendor’s disclosure of 

quality measure results and numerator 

and denominator data on Medicare 

beneficiaries on behalf of eligible 

professionals who wish to participate in 

the Physician Quality Reporting System. 

• Obtain and keep on file signed 

documentation that each holder of an 

NPI whose data are submitted to the 

data submission vendor has authorized 

the data submission vendor to submit 

quality measure results and numerator 

and denominator data on Medicare 

beneficiaries to CMS for the purpose of 

Physician Quality Reporting System 

participation. This documentation must 

be obtained at the time the eligible 

professional signs up with the data 

submission vendor to submit Physician 

Quality Reporting System quality 

measures data to the data submission 

vendor and must meet any applicable 

laws, regulations, and contractual 

business associate agreements. 

• Use Physician Quality Reporting 

System measure specifications and the 

CMS provided measure calculation 

algorithm, or logic, to calculate 

reporting rates or performance rates 

unless otherwise stated. 

• Provide a calculated result using 

the CMS supplied measure calculation 

logic and XML file for each measure that 

the EHR data submission vendor 

intends to calculate. The data 

submission vendors would be required 

to show that they can calculate the 

proper measure results (that is, 

reporting and performance rates) using 

the CMS-supplied logic and send the 

calculated data back to CMS in the 

specified format. 

We cannot, however, assume 

responsibility for the successful 

submission of data from eligible 

professionals’ EHRs. In addition, 

eligible professionals who decide to 

submit the Physician Quality Reporting 

System measures directly from his or 

her EHR should begin attempting 

submission soon after the opening of the 

clinical data warehouse in order to 

assure the eligible professional has a 

reasonable period of time to work with 

his or her EHR and/or its vendors to 

correct any problems that may 

complicate or preclude successful 

quality measures data submission 

through that EHR. 

We propose that for 2012, the EHR 

data submission vendor would submit 

clinical quality data on Medicare 

beneficiaries extracted from eligible 

professionals’ EHRs to our designated 

database for the Physician Quality 

Reporting System using a CMS-specified 

record layout, which would be provided 

to the EHR data submission vendor by 

CMS. In addition, for purposes of also 

reporting 2012 Physician Quality 

Reporting System quality measures, the 

EHR data submission vendor would be 

required to submit patient level 

Medicare clinical quality data extracted 

from the eligible professional’s EHR 

using the same CMS-specified record 

layout that qualified EHR products must 

be able to produce for purposes of an 

eligible professional directly submitting 

the 2012 Physician Quality Reporting 

System EHR measures to CMS. 

We invite public comment on the 

proposed qualification requirements for 

EHR data submission vendors. 

(C) Proposed Qualification 

Requirements for EHR Direct and Data 

Submission Vendors and Their Products 

for the 2013 Physician Quality 

Reporting System 

As in prior years, unlike the 

qualification process for registries, EHR 

vendors, which include direct EHR 

vendors and EHR data submission 

vendors, are tested for qualification a 

year ahead of the program year in which 

the EHR vendor intends to submit 

Physician Quality Reporting System 

quality measures on behalf of individual 

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eligible professionals or where its 

product(s) are available for use by 

eligible professionals to submit 

Physician Quality Reporting System 

measures directly to CMS. 

We propose EHR vendor testing for 

the 2013 Physician Quality Reporting 

System program year to qualify new 

EHR vendors and EHR data submission 

vendors and their EHR products for 

submission of Medicare beneficiary 

quality data extracted from EHR 

products to the CMS Medicare clinical 

quality data warehouse for the 2013 

Physician Quality Reporting System. 

Specifically, we propose that in order 

for EHR vendors to be qualified to report 

2013 Physician Quality Reporting 

System data to CMS, EHR vendors must 

meet the following requirements: 

• Not be in a beta test form. 

• Be in existence as of January 1, 

2012. 

• Have at least 25 active users. 

• Participate in ongoing Physician 

Quality Reporting mandatory support 

conference calls hosted by CMS 

(approximately one call per month). 

Failure to attend more than one call per 

year would result in the removal of the 

EHR data submission vendor from the 

2012 EHR qualification process. 

• Indicate the reporting option the 

vendor seeks to qualify for its users to 

submit in addition to individual 

measures. 

• Have access to the identity 

management system specified by CMS 

(such as, but not limited to, the 

Individuals Authorized Access to CMS 

Computer Systems, or IACS) to submit 

Medicare clinical quality data extracted 

to a CMS clinical data warehouse. 

• Submit a test file containing 

dummy Medicare clinical quality data 

to a CMS clinical data warehouse via an 

identity management system specified 

by CMS during a timeframe specified by 

CMS. In 2011, the requirement to 

submit a test file could have contained 

real or dummy data. However, for 

privacy reasons, we have decided to 

only provide for the submission of test 

files containing dummy data. We have 

proposed revisions to 42 CFR 414.90 to 

reflect this change. 

• Submit a file containing the eligible 

professional’s 2012 Physician Quality 

Reporting System Medicare clinical 

quality data extracted from the EHR for 

the entire 12-month reporting period via 

the CMS-specified identify management 

system during the timeframe specified 

by us in early 2013. 

• Provide at least 1 feedback report, 

based on the data submitted to them for 

the 2012 Physician Quality Reporting 

System incentive reporting period, and 

if technically feasible, provide at least 

two feedback reports throughout the 

year to participating eligible 

professionals. 

• Be able to collect all needed data 

elements and transmit to CMS the data 

at the beneficiary level. 

• Be able to separate out and report 

on Medicare Part B FFS patients. 

• Provide the measure numbers for 

the quality measures on which the data 

submission vendor is reporting. 

• Be able to transmit this data in a 

CMS-approved XML format utilizing a 

Clinical Document Architecture (CDA) 

standard such as Quality Reporting Data 

Architecture (QRDA). 

• Comply with a CMS-specified 

secure method for data submission, 

such as submitting the EHR vendor’s 

data in an XML file through an identity 

management system specified by CMS 

or another approved method, such as 

use of appropriate NwHIN (Nationwide 

Health Information Network) 

specifications, if technically feasible. 

• Enter into and maintain with its 

participating professionals an 

appropriate Business Associate 

agreement that provides for the data 

submission vendor’s receipt of patientspecific data from the eligible 

professionals, as well as the data 

submission vendor’s disclosure of 

patient-specific data on Medicare 

beneficiaries on behalf of eligible 

professionals who wish to participate in 

the Physician Quality Reporting System. 

• Obtain and keep on file signed 

documentation that each holder of an 

NPI whose data are submitted to the 

data submission vendor has authorized 

the data submission vendor to submit 

patient-specific data on Medicare 

beneficiaries to CMS for the purpose of 

Physician Quality Reporting System 

participation. This documentation must 

be obtained at the time the eligible 

professional signs up with the data 

submission vendor to submit Physician 

Quality Reporting System quality 

measures data to the data submission 

vendor and must meet any applicable 

laws, regulations, and contractual 

business associate agreements. 

• Provide CMS access (upon request 

for health oversight purposes like 

validation) to review the Medicare 

beneficiary data on which 2012 

Physician Quality Reporting System 

EHR-Based submissions are founded or 

provide to CMS a copy of the actual data 

(upon request). 

• Provide CMS a signed, written 

attestation statement via mail or e-mail 

which states that the quality measure 

results and any and all data including 

numerator and denominator data 

provided to CMS are accurate and 

complete. 

• Use Physician Quality Reporting 

System measure specifications and the 

CMS provided measure calculation 

algorithm, or logic, to calculate 

reporting rates or performance rates 

unless otherwise stated. CMS would 

provide EHR vendors a standard set of 

logic to calculate each measure and/or 

measures group they intend to report in 

2012. 

• Provide a calculated result using 

the CMS supplied measure calculation 

logic and XML file for each measure that 

the EHR vendor intends to calculate. 

The data submission vendors would be 

required to show that they can calculate 

the proper measure results (that is, 

reporting and performance rates) using 

the CMS-supplied logic and send the 

calculated data back to CMS in the 

specified format. 

This is the same self-nomination 

process described in the ‘‘Requirements 

for Electronic Health Record (EHR) 

Vendors to Participate in the 2012 

Physician Quality Reporting System 

EHR Program,’’ posted on the Physician 

Quality Reporting System section of the 

CMS Web site at http://www.cms.gov/

PQRS/20_AlternativeReporting

Mechanisms.asp#TopOfPage. For 2013, 

we propose that these requirements 

would apply not only for the purpose of 

a vendor’s EHR product being qualified 

so that the product’s users may submit 

2013 Medicare beneficiary data 

extracted from the EHR for the 2013 

Physician Quality Reporting System in 

2014, but also for the purpose of a 

vendor’s EHR product being qualified to 

electronically submit Medicare 

beneficiary data extracted from the EHR 

for reporting the electronic prescribing 

measure for the eRx Incentive Program 

2013 incentive and 2014 payment 

adjustment. Similarly, we propose that 

requirements would apply not only for 

the purposes of an EHR data submission 

vendor being qualified to submit 2013 

Medicare beneficiary data from eligible 

professionals’ EHRs for the 2013 

Physician Quality Reporting System in 

2014 but also for the purpose of an EHR 

data submission vendor being qualified 

to electronically submit Medicare 

beneficiary data extracted from the EHR 

for reporting the electronic prescribing 

measure for the eRx Incentive Program 

2013 incentive and 2014 payment 

adjustment. 

We propose that if an EHR vendor 

misses more than one mandatory 

support call or meeting, the vendor and 

their product and/or EHR data 

submission vendor would be 

disqualified for the Physician Quality 

Reporting System reporting year, which 

is covered by the call. 

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42850 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

For the 2013 Physician Quality 

Reporting System, we propose that 

previously qualified and new vendors 

and/or EHR data submission vendors 

would need to incorporate any new EHR 

measures (that is, electronicallyspecified measures), as well as update 

their electronic measure specifications 

and data transmission schema should 

either or both change, finalized for to 

the Physician Quality Reporting System 

for 2013 if they wish to maintain their 

Physician Quality Reporting System 

qualification. 

We further propose that any EHR 

vendor interested in having one or more 

of their EHR products ‘‘qualified’’ to 

submit quality data extracted from their 

EHR products to the CMS Medicare 

clinical quality data warehouse for the 

2013 Physician Quality Reporting 

System would be required to submit 

their self-nomination statement by 

January 31, 2012. Whereas, in prior 

program years, EHR vendors have 

submitted self-nomination statements 

via mail, we propose to have EHR 

vendors submit self-nomination 

statements via a Web-based tool, if 

technically feasible for us to develop 

such a tool. We believe use of a Webbased tool to self-nominate is a more 

efficient method of collecting selfnomination statements. However, if use 

of a Web-based tool is not technically 

feasible, as in prior years, EHR vendors 

will submit self-nomination statements 

via e-mail. We expect to post 

instructions for submitting the selfnomination statement and the 2013 EHR 

vendor requirements in the 4th quarter 

of CY 2011. Specifically, for the 2013 

Physician Quality Reporting System, in 

order to ensure EHR vendors’ interest in 

participating in the 2013 Physician 

Quality Reporting System, we propose 

that only EHR vendors that selfnominate to participate in the EHR 

Program testing during calendar year 

2012 would be considered qualified 

EHR vendors for the 2013 Physician 

Quality Reporting System. 

We invite public comment on the 

proposed qualification requirements for 

EHR vendors and their products for the 

2013 Physician Quality Reporting 

System. 

e. Incentive Payments for the 2012 

Physician Quality Reporting System 

In accordance with 42 CFR 

414.90(c)(3), eligible professionals that 

satisfactorily report 2012 Physician 

Quality Reporting System measures can 

qualify for an incentive equal to 0.5 

percent of the total estimated part B 

allowed charges for all covered 

professional services furnished by the 

eligible professional (or, in the case of 

a group practice participating in the 

GPRO, the group practice) during the 

applicable reporting period. We are 

proposing to modify the incentive 

payment language in 42 CFR 414.90 to 

provide language more consistent with 

section 1848(k) of the Act. 

(1) Proposed Criteria for Satisfactory 

Reporting of Individual Quality 

Measures for Individual Eligible 

Professionals via Claims 

Section 1848(m)(3)(A) of the Act 

established the criteria for satisfactorily 

submitting data on individual quality 

measures as at least three measures in 

at least 80 percent of the cases in which 

the measure is applicable. For claimsbased reporting, if fewer than three 

measures are applicable to the services 

of the professional, the professional may 

meet the criteria by submitting data on 

one or two measures for at least 80 

percent of applicable cases where the 

measures are reportable. For years after 

2009, section 1848(m)(3)(D) of the Act 

authorizes the Secretary, in consultation 

with stakeholders and experts, to revise 

the criteria for satisfactorily reporting 

data on quality measures. Accordingly, 

we propose the following criteria for 

satisfactory reporting via the claimsbased reporting mechanism for 

individual eligible professionals 

specializing in internal medicine, family 

practice, general practice, or cardiology: 

• Report on at least one Physician 

Quality Reporting System core measure 

as identified in Table 29. 

• Report on at least two additional 

measures that apply to the services 

furnished by the professional. 

• Report each measure for at least 50 

percent of the eligible professional’s 

Medicare Part B FFS patients for whom 

services were furnished during the 

reporting period to which the measure 

applies. 

For all other eligible professionals, we 

propose the following criteria for 

satisfactory reporting via the claimsbased reporting mechanism: 

• Report on at least three measures 

that apply to the services furnished by 

the professional. 

• Report each measure for at least 50 

percent of the eligible professional’s 

Medicare Part B FFS patients for whom 

services were furnished during the 

reporting period to which the measure 

applies. 

We believe it would be easier for 

eligible professionals to find applicable 

measures on which to report if measures 

were grouped according its applicability 

to medical specialties. We then seek to 

move towards having specialties report 

on certain measures that are relevant to 

the respective specialty. We have 

recognized the promotion of the 

prevention of cardiovascular conditions 

as a top priority and therefore propose 

to start to group individual measures 

with measures that promote 

cardiovascular care. As such, the 

Physician Quality Reporting System 

core measures that we propose in Table 

29 are aimed at promoting the 

prevention of cardiovascular conditions. 

In an effort to promote the prevention of 

cardiovascular conditions, we are 

proposing that eligible professionals 

specializing in internal medicine, family 

practice, general practice, or cardiology 

be required to report on at least one 

proposed Physician Quality Reporting 

System core measure. We chose the 

aforementioned specialties because we 

believe the Physician Quality Reporting 

System core measures are most relevant 

to those specialties. Since we believe 

that eligible professionals in those 

specialties would likely report on the 

proposed Physician Quality Reporting 

System core measures regardless of the 

proposed requirement to report on at 

least one Physician Quality Reporting 

System core measure, we believe that 

the this requirement would not result in 

an increased burden to these specialties. 

In future years, we hope to develop a 

similar reporting requirement and core 

set of measures for other specialties. 

We also considered including 

geriatricians in the proposed Physician 

Quality Reporting System core measure 

reporting requirement for 2012. 

However, we would like to ensure that 

the proposed 2012 Physician Quality 

Reporting System core measures would 

be sufficiently applicable to geriatric 

physicians before making such a 

proposal. We seek public comment as to 

whether geriatricians should be 

included as a specialty required to 

report at least one proposed 2012 

Physician Quality Reporting System 

core measure. In addition, we invite 

public comment on whether other 

specialties should be included in the 

2012 Physician Quality Reporting 

System proposed core measure 

reporting requirement. 

As stated previously, we have 

proposed the requirement of the 

reporting of Physician Quality Reporting 

System core measures for certain 

specialties to introduce measures 

reporting according to specialty for 

eligible professionals specializing in 

internal medicine, family practice, 

general practice, or cardiology. 

However, we are not proposing this core 

measure requirement for all other 

specialties. Therefore, for all other 

specialties, we are proposing to retain 

similar reporting criteria as finalized for 

the in the 2011 MPFS final rule. 

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Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42851 

Specifically, under our authority under 

section 1848(m)(3)(D) of the Act to 

revise the reporting criteria for 

satisfactory reporting, for all other 

eligible professionals, we propose the 

following criteria for satisfactory 

reporting via the claims-based reporting 

mechanism: 

• Report on at least three measures 

that apply to the services furnished by 

the professional. Report each measure 

for at least 50 percent of the eligible 

professional’s Medicare Part B FFS 

patients for whom services were 

furnished during the reporting period to 

which the measure applies. 

To the extent that an eligible 

professional has fewer than three 

Physician Quality Reporting System 

measures that apply to the eligible 

professional’s services and the eligible 

professional is reporting via the claimsbased reporting mechanism, we propose 

that the eligible professional would be 

able to meet the criteria for satisfactorily 

reporting data on individual quality 

measures by meeting the following two 

criteria— 

• Report on all measures that apply to 

the services furnished by the 

professional (that is one to two 

measures); and 

• Report each measure for at least 50 

percent of the eligible professional’s 

Medicare Part B FFS patients for whom 

services were furnished during the 

reporting period to which the measure 

applies. 

As in prior years, we also propose 

that, for 2012, an eligible professional 

may also report on fewer than three 

measures, if less than three apply. 

However, an eligible professional who 

reports on fewer than three measures 

through the claims-based reporting 

mechanism may be subject to the 

Measure Applicability Validation 

(MAV) process, which would allow us 

to determine whether an eligible 

professional should have reported 

quality data codes for additional 

measures. This process was applied in 

prior years, including the 2011 

Physician Quality Reporting System. 

Under the proposed MAV process, 

when an eligible professional reports on 

fewer than 3 measures, we propose to 

review whether there are other closely 

related measures (such as those that 

share a common diagnosis or those that 

are representative of services typically 

provided by a particular type of eligible 

professional). We further propose that if 

an eligible professional who reports on 

fewer than 3 measures in 2012 reports 

on a measure that is part of an identified 

cluster of closely related measures and 

did not report on any other measure that 

is part of that identified cluster of 

closely related measures, then the 

eligible professional would not qualify 

as a satisfactory reporter in the 2012 

Physician Quality Reporting System or 

earn an incentive payment. We propose 

that these criteria for satisfactorily 

reporting data on fewer than three 

individual quality measures would 

apply for the claims-based reporting 

mechanism only because, unlike 

registry and EHR-Based reporting, the 

reporting of Physician Quality Reporting 

System quality measures via claims is 

not handled by an intermediary but 

rather directly by the eligible 

professional. 

For 2012, in order to encourage 

reporting on measures that are 

applicable to the eligible professional’s 

practice as well as encourage eligible 

professionals to perform the clinical 

quality actions specified in the 

measures, we propose not to count 

measures that are reported through 

claims that have a 0 percent 

performance rate. That is, if the 

recommended clinical quality action, as 

indicated in the numerator of the 

quality measure, is not performed on at 

least one patient for a particular 

measure or measures group reported by 

the eligible professional via claims, we 

will not count the measure (or measures 

group) as a measure (or measures group) 

reported by an eligible professional. 

This requirement is also consistent with 

the proposed registry and EHR-Based 

reporting (see the following section 

(e)(3)) criteria for satisfactory reporting 

that are proposed in this section. 

The proposed 2012 criteria for 

satisfactory reporting of data on 

individual Physician Quality Reporting 

System quality measures for individual 

eligible professionals are summarized in 

the following Tables 18 and 2, and are 

arranged by reporting mechanism and 

reporting period. 

TABLE 18—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING OF DATA ON INDIVIDUAL PHYSICIAN QUALITY REPORTING SYSTEM QUALITY MEASURES VIA CLAIMS FOR THE FOLLOWING SPECIALTIES: INTERNAL MEDICINE FAMILY

PRACTICE, GENERAL PRACTICE, AND CARDIOLOGY

Reporting mechanism Reporting criteria Reporting period 

Claims-based reporting.• Report at least three Physician Quality Reporting System measures, which 

consist of one Physician Quality Reporting System core measure + 2 additional measures of the eligible professional’s choosing; OR.

January 1, 2012–December 31, 2012. 

• If less than three measures apply to the eligible professional, 1–2 measures, 

of which at least 1 measure must consist of a Physician Quality Reporting 

System core measure; 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% performance rate will not be counted.

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42852 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

TABLE 19—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING OF DATA ON INDIVIDUAL PHYSICIAN QUALITY REPORTING SYSTEM QUALITY MEASURES VIA CLAIMS FOR ALL OTHER ELIGIBLE PROFESSIONALS NOT IDENTIFIED IN

TABLE 18 

Reporting mechanism Reporting criteria Reporting period 

Claims-based reporting.• Report at least three Physician Quality Reporting System measures; OR 

• If less than three measures apply to the eligible professional, 1–2 measures; 

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% performance rate will not be counted. 

January 1, 2012–December 31, 2012. 

We invite public comment on the 

proposed criteria for satisfactory 

reporting of individual measures by 

individual eligible professionals via 

claims for the 2012 Physician Quality 

Reporting System. 

(2) Proposed 2012 Criteria for 

Satisfactory Reporting of Individual 

Quality Measures for Individual Eligible 

Professionals via Registry 

Under our authority of section 

1848(m)(3)(D) of the Act to revise the 

reporting criteria for the satisfactory 

reporting of measures, we propose the 

following criteria for satisfactory 

reporting via the registry-based 

reporting mechanism: (1) Criteria for 

individual eligible professionals 

practicing in internal medicine, family 

practice, general practice, or cardiology 

and (2) criteria for all other eligible 

professionals. For the reasons stated 

previously, we are distinguishing 

eligible professionals in internal 

medicine, family practice, general 

practice, or cardiology from all other 

eligible professionals for the purposes of 

establishing criteria for satisfactory 

reporting. Therefore, for eligible 

professionals specializing in internal 

medicine, family practice, general 

practice, or cardiology, we propose the 

following criteria for satisfactory 

reporting: 

• Report on at least one Physician 

Quality Reporting System core measure 

as identified in Table 29. 

• Report on at least two additional 

measures that apply to the services 

furnished by the professional. 

• Report each measure for at least 80 

percent of the eligible professional’s 

Medicare Part B FFS patients for whom 

services were furnished during the 

reporting period to which the measure 

applies. 

For the same reasons stated for 

establishing different reporting criteria 

for all other eligible professionals under 

the claims-based reporting mechanism, 

we propose the following criteria for 

satisfactory reporting via the registrybased reporting mechanism: 

• Report on at least three measures 

that apply to the services furnished by 

the professional. 

• Report each measure for at least 80 

percent of the eligible professional’s 

Medicare Part B FFS patients for whom 

services were furnished during the 

reporting period to which the measure 

applies. 

We also considered including 

geriatricians in the proposed Physician 

Quality Reporting System core measure 

reporting requirement via the registrybased reporting mechanism for 2012. 

However, as stated previously, we 

would like to ensure that the proposed 

2012 Physician Quality Reporting 

System core measures would be 

sufficiently applicable to geriatric 

physicians before making such a 

proposal. We seek public comment as to 

whether geriatricians should be 

included as a specialty required to 

report at least one proposed 2012 

Physician Quality Reporting System 

core measure. In addition, we seek 

public comment on whether other 

specialties should be included in the 

2012 Physician Quality Reporting 

System proposed core measure 

reporting requirement. 

In addition, as in prior years, for 2012, 

we propose not to count measures that 

are reported through registries that have 

a 0 percent performance rate, calculated 

by dividing the measure’s numerator by 

the measure’s denominator. That is, if 

the recommended clinical quality 

action, that is the action denoted in the 

quality measure’s numerator, is not 

performed on at least one patient for a 

particular measure or measures group 

reported by the eligible professional via 

registry, we will not count the measure 

(or measures group) as a measure (or 

measures group) reported by an eligible 

professional. We propose to disregard 

measures (or measures groups) that are 

reported through a registry that have a 

0 percent performance rate in the 2012 

Physician Quality Reporting System, 

because we are assuming that the 

measure was not applicable to the 

eligible professional and was likely 

reported from EHR-derived data (or 

from data mining) and was 

unintentionally submitted from the 

registry to us. We also seek to avoid the 

possibility of intentional submission of 

spurious data solely for the purpose of 

receiving an incentive payment for 

reporting. 

The proposed 2012 criteria for 

satisfactory reporting of data on 

individual Physician Quality Reporting 

System quality measures for individual 

eligible professionals are summarized in 

the following Tables 20 and 21, and are 

arranged by reporting mechanism and 

reporting period. 

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TABLE 20—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING OF DATA ON INDIVIDUAL PHYSICIAN QUALITY REPORTING SYSTEM QUALITY MEASURES VIA REGISTRY FOR THE FOLLOWING SPECIALTIES: INTERNAL MEDICINE FAMILY

PRACTICE, GENERAL PRACTICE, AND CARDIOLOGY

Reporting mechanism Reporting criteria Reporting period 

Registry-based reporting.• Report at least three Physician Quality Reporting System measures, which 

consist of 1 Physician Quality Reporting System core measure + 2 additional 

measures of the eligible professional’s choosing AND 

• Report each measure for at least 80% of the eligible professional’s Medicare 

Part B FFS patients seen during the reporting period to which the measure 

applies.

• Measures with a 0% performance rate will not be counted. 

January 1, 2012—December 31, 2012. 

TABLE 21—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING OF DATA ON INDIVIDUAL PHYSICIAN QUALITY REPORTING SYSTEM QUALITY MEASURES VIA REGISTRY FOR ALL OTHER ELIGIBLE PROFESSIONALS NOT IDENTIFIED IN

TABLE 20 

Reporting mechanism Reporting criteria Reporting period 

Registry-based reporting.• Report at least three Physician Quality Reporting System measures AND 

• Report each measure for at least 80% of the eligible professional’s Medicare 

Part B FFS patients seen during the reporting period to which the measure 

applies.

• Measures with a 0% performance rate will not be counted .............................

January 1, 2012—December 31, 2012. 

We invite public comment on the 

proposed criteria for satisfactory 

reporting of individual quality measures 

for individual eligible professionals via 

registry.(3) Proposed Criteria for 

Satisfactory Reporting of Individual 

Quality Measures for Individual Eligible 

Professionals via EHR 

Section 1848(m)(3)(A) of the Act 

established the criteria for satisfactorily 

submitting data on individual quality 

measures as at least three measures in 

at least 80 percent of the cases in which 

the measure is applicable. For years 

after 2009, section 1848(m)(3)(D) of the 

Act authorizes the Secretary, in 

consultation with stakeholders and 

experts, to revise the criteria for 

satisfactorily reporting data on quality 

measures. Accordingly, we propose the 

following options for satisfactory 

reporting of individual quality measures 

by individual eligible professionals 

participating in the 2012 Physician 

Quality Reporting System via the EHRBased reporting mechanism: 

First, we propose that an eligible 

professional would meet the criteria for 

satisfactory reporting under the 

Physician Quality Reporting System if 

the eligible professional, using a 

Physician Quality Reporting System 

‘‘qualified’’ EHR product (if the eligible 

professional is also participating in the 

EHR Incentive Program via the proposed 

Physician Quality Reporting SystemEHR Incentive Pilot discussed in section 

IV.H. of this proposed rule, the eligible 

professional’s EHR product must also be 

Certified EHR Technology), reports on 

three proposed core measures for 80 

percent of the eligible professional’s 

Medicare Part B FFS patients seen 

during the reporting period to which 

each measure applies as identified in 

Table 31 in this section of this proposed 

rule, which are identical to the 

Medicare EHR Incentive Program core 

measures included in Table 7 of the 

Medicare and Medicaid EHR Incentive 

Program final rule (75 FR 44410). 

Insofar as the denominator for one or 

more of the core measures is 0, implying 

that the eligible professional’s patient 

population is not addressed by these 

measures, we propose that eligible 

professionals would be required to 

report up to three proposed alternate 

core measures as identified in Table 31 

in this section of this proposed rule and 

which are identical to the Medicare EHR 

Incentive Program alternate core 

measures included in Table 7 of the 

Medicare and Medicaid EHR Incentive 

Program final rule (75 FR 44410). In 

addition, we propose that the eligible 

professional would be required to report 

on three additional measures of their 

choosing that are available for the 

Medicare EHR Incentive Program in 

Table 6 of the Medicare and Medicaid 

EHR Incentive Program final rule (75 FR 

44398 through 44408) (as identified in 

Table 31 in this section of this proposed 

rule). 

With respect to reporting on the 

proposed measure titled ‘‘Preventive 

Care and Screening: Body Mass Index 

(BMI) Screening and Follow-up’’, listed 

in Table 31 of this proposed rule, there 

are two parameters in the measure 

denominator description: Age 65 and 

older BMI and Age 18–64 BMI. For the 

purpose of reporting this measure under 

the Physician Quality Reporting System, 

we propose to count the reporting of 

this measure if at least one of the two 

parameters does not contain a 0 percent 

performance rate. In addition, with 

respect to reporting on the proposed 

measure titled ‘‘Preventive Care and 

Screening: Tobacco Use: Screening and 

Cessation Intervention’’, also listed in 

Table 31 of this proposed rule, the 

measure is divided into two pairs: a. 

Tobacco Use Assessment and b. 

Tobacco Cessation Intervention. For the 

purpose of reporting this measure under 

the Physician Quality Reporting System, 

we propose to count the reporting of 

this measure if at least one of the two 

pairs does not contain a 0 percent 

performance rate. 

Section 1848(m)(7) of the Act 

(‘‘Integration of Physician Quality 

Reporting and EHR Reporting’’), as 

added by section 3002(d) of the 

Affordable Care Act, requires us to move 

towards the integration of EHR 

measures with respect to the Physician 

Quality Reporting System. Section 

1848(m)(7) of the Act specifies that by 

no later than January 1, 2012, the 

Secretary shall develop a plan to 

integrate reporting on quality measures 

under the Physician Quality Reporting 

System with reporting requirements 

under subsection (o) of section 1848 of 

the Act relating to the meaningful use of 

EHRs. Such integration shall consist of 

the following: 

(A) The selection of measures, the 

reporting of which would both 

demonstrate— 

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(i) Meaningful use of an EHR for 

purposes of the Medicare EHR Incentive 

Program; and 

(ii) Quality of care furnished to an 

individual; and 

(B) Such other activities as specified 

by the Secretary. 

We propose the aforementioned 

criteria for satisfactory reporting via an 

EHR, which is identical to the criteria 

for achieving meaningful use for 

reporting clinical quality measures 

under the EHR Incentive Program as 

finalized in the Medicare and Medicaid 

Electronic Health Record Incentive 

Program final rule (75 FR 44409 through 

44411), in an effort to align the 

Physician Quality Reporting System 

with the Medicare EHR Incentive 

Program. 

In addition to the reporting criteria 

proposed previously, we propose 

alternative reporting criteria for 

satisfactory reporting using the EHRBased reporting mechanism that is 

similar to the criteria finalized in the CY 

2011 MPFS Final Rule with comment 

period (75 FR 73497 through 73500). 

For the reasons set forth for establishing 

different criteria for satisfactory 

reporting via claims and registry, we are 

adopting two different criteria for 

satisfactory reporting, depending on an 

eligible professional’s specialty. For 

eligible professionals specializing in 

internal medicine, family practice, 

general practice, and cardiology, we 

propose the following criteria: 

• Report on ALL proposed Physician 

Quality Reporting System core measure 

as identified in Table 29. 

• Report each measure for at least 80 

percent of the eligible professional’s 

Medicare Part B FFS patients for whom 

services were furnished during the 

reporting period to which the measure 

applies. 

We understand that by proposing to 

require eligible professionals 

specializing in internal medicine, family 

practice, general practice, and 

cardiology to report all Physician 

Quality Reporting System core 

measures, we would be requiring such 

professionals to report more measures 

than eligible professionals who do not 

practice within those specialties. We 

believe, however, that proposing to 

require these specialists to report of all 

Physician Quality Reporting System 

core measures would not add an 

additional burden to these eligible 

professionals because the reporting of 

measures is done entirely through the 

EHR. Furthermore, because we are 

proposing to require these specialties to 

report on all Physician Quality 

Reporting System core measures and 

recognize that some of the proposed 

Physician Quality Reporting System 

core measures may not be applicable to 

all of these eligible professionals’ 

specialties, we propose to allow the 

reporting of these proposed Physician 

Quality Reporting System core measures 

with a 0 percent performance rate. That 

is, the reporting of a Physician Quality 

Reporting System core measure that is 

not applicable to the eligible 

professional’s practice in this instance 

will not preclude an eligible 

professional from meeting the criteria 

for satisfactory reporting. 

We also considered including 

geriatricians in the proposed Physician 

Quality Reporting System core measure 

reporting requirement for 2012. 

However, we would like to ensure that 

the proposed 2012 Physician Quality 

Reporting System core measures would 

be sufficiently applicable to geriatric 

physicians before making such a 

proposal. We seek public comment as to 

whether geriatricians should be 

included as a specialty required to 

report at least one proposed 2012 

Physician Quality Reporting System 

core measure via EHR-Based reporting. 

In addition, we invite public comment 

on whether other specialties should be 

included in the 2012 Physician Quality 

Reporting System proposed core 

measure reporting requirement. 

For the reasons we stated previously 

for creating separate reporting criteria 

all other eligible professionals for claims 

and registry reporting, we propose the 

following criteria for satisfactory 

reporting using the EHR-Based reporting 

mechanism: 

• Report on at least three Physician 

Quality Reporting System EHR 

measures of the eligible professional’s 

choosing; and 

• Report each measure for at least 80 

percent of the eligible professional’s 

Medicare Part B FFS patients for whom 

services were furnished during the 

reporting period to which the measure 

applies. 

The proposed methods for satisfactory 

reporting via EHR for the 2012 

Physician Quality Reporting System are 

described in the following Tables 22 

and 23. 

TABLE 22—2012 CRITERIA FOR SATISFACTORY REPORTING OF DATA ON INDIVIDUAL PHYSICIAN QUALITY REPORTING SYSTEM QUALITY MEASURES VIA EHR FOR THE FOLLOWING SPECIALTIES: INTERNAL MEDICINE, FAMILY PRACTICE, GENERAL PRACTICE, AND CARDIOLOGY

Reporting mechanism Reporting criteria Reporting period 

EHR—Aligning with 

the Medicare EHR 

Incentive Program.

• Reports on ALL three Medicare EHR Incentive Program core measures (as 

identified in Table 31 of this proposed rule).

• If the denominator for one or more of the Medicare EHR Incentive Program 

core measures is 0, report on up to three Medicare EHR Incentive Program 

alternate core measures (as identified in Table 31 of this proposed rule); 

AND 

• Report on three (of the 38 additional measures available for the Medicare 

EHR Incentive Program.

January 1, 2012–December 31, 2012. 

EHR .......................... • Report on ALL Physician Quality Reporting System core measures AND 

• Report each measure for at least 80% of the eligible professional’s Medicare 

Part B FFS patients seen during the reporting period to which the measure 

applies.

• Measures with a 0% performance rate will not be counted, unless the measure is a Physician Quality Reporting System core measure.

January 1, 2012–December 31, 2012. 

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TABLE 23—2012 CRITERIA FOR SATISFACTORY REPORTING OF DATA ON INDIVIDUAL PHYSICIAN QUALITY REPORTING

SYSTEM QUALITY MEASURES VIA EHR FOR ALL OTHER ELIGIBLE PROFESSIONALS NOT IDENTIFIED IN TABLE 22 

Reporting mechanism Reporting criteria Reporting period 

EHR—Aligning with the Medicare 

EHR Incentive Program.

• Reports on ALL three Medicare EHR Incentive Program core 

measures (as identified in Table 31 of this proposed rule).

January 1, 2012–December 31, 2012. 

• If the denominator for one or more of the Medicare EHR Incentive Program core measures is 0, report on up to three Medicare 

EHR Incentive Program alternate core measures (as identified in 

Table 31 of this proposed rule); AND 

• Report on three (of the 38) additional measures available for the 

Medicare EHR Incentive Program.

EHR .............................................. • Report at least three Physician Quality Reporting System measures AND January 1, 2012–December 31, 2012. 

• Report each measure for at least 80% of the eligible professional’s Medicare Part B FFS patients seen during the reporting 

period to which the measure applies.

• Measures with a 0% performance rate will not be counted.

We invite public comment on the 

proposed criteria for satisfactory 

reporting of individual quality measures 

by individual eligible professionals via 

an EHR-Based reporting mechanism in 

the 2012 Physician Quality Reporting 

System. (4) Proposed Criteria for 

Satisfactory Reporting of Measures 

Groups via Claims—Individual Eligible 

Professionals 

At § 414.90(b) ‘‘measures group’’ is 

defined as ‘‘a subset of four or more 

Physician Quality Reporting System 

measures that have a particular clinical 

condition or focus in common.’’ For 

2012 and beyond, we propose that 

individual eligible professionals have 

the option to report measures groups in 

addition to individual quality measures 

to qualify for the Physician Quality 

Reporting System incentive, using 

claims or registries. 

For the reasons we are proposing 

different criteria for satisfactorily 

reporting individual quality measures 

depending on specialty, specifically our 

desire to introduce core measures 

applicable to certain specialties and 

promote cardiovascular care, we are 

proposing two different criteria for 

satisfactorily reporting measures groups. 

We propose the following criteria for 

satisfactory reporting of 2012 Physician 

Quality Reporting System measures 

groups: 

We propose that eligible professionals 

specializing in internal medicine, family 

practice, general practice, and 

cardiology may meet the criteria for 

satisfactory reporting of Physician 

Quality Reporting System measures 

groups via claims by reporting in the 

following manner: 

• Report at least one Physician 

Quality Reporting System measures 

group; and 

• If the measures group does not 

contain at least one Physician Quality 

core measure, then one Physician 

Quality core measure; and 

• For each measures group and, if 

applicable, Physician Quality Reporting 

System core measure reported, report on 

at least 30 Medicare Part B FFS patients 

for each measures group that is 

reported. 

• Measures groups containing a 

measure with a 0 percent performance 

rate will not be counted. 

We also propose that eligible 

professionals specializing in internal 

medicine, family practice, general 

practice, and cardiology may meet the 

criteria for satisfactorily reporting 

Physician Quality Reporting System 

measures groups via claims by reporting 

in the following manner: 

• Report at least one Physician 

Quality Reporting System measures 

group; but 

• If the measures group does not 

contain at least one Physician Quality 

Reporting System core measure, then 

one Physician Quality core measure. 

• For each measures group and, if 

applicable, Physician Quality Reporting 

System core measure reported, report on 

at least 50 percent of the eligible 

professional’s Medicare Part B FFS 

patients seen during the reporting 

period to whom the measures group 

applies; but report no less than 15 

Medicare Part B PFS patients for each 

measures group reported. 

• Measures groups containing a 

measure with a 0 percent performance 

rate will not be counted. 

For all other eligible professionals, in 

order to meet the criteria for satisfactory 

reporting of Physician Quality Reporting 

measures groups via claims, we propose 

that the eligible professional must: 

• Report at least one Physician 

Quality Reporting System measures 

group. 

• Report on at least 30 Medicare Part 

B FFS patients for each measures group 

that is reported. 

• Measures groups containing a 

measure with a 0 percent performance 

rate will not be counted. 

Alternatively, eligible professionals 

not specializing in internal medicine, 

family practice, general practice, and 

cardiology may meet the criteria for 

satisfactorily reporting Physician 

Quality Reporting System measures 

groups via claims by reporting in the 

following manner: 

• Report at least one Physician 

Quality Reporting System measures 

group. 

• For each measures group reported, 

report each on at least 50 percent of the 

eligible professional’s Medicare Part B 

FFS patients seen during the reporting 

period to whom the measures group 

applies; but 

• Report no less than 15 Medicare 

Part B PFS patients for each measures 

group reported. 

• Measures groups containing a 

measure with a 0 percent performance 

rate will not be counted. 

Aside from the Physician Quality 

Reporting System core measure 

reporting requirement for eligible 

professionals specializing in internal 

medicine, family practice, general 

practice, or cardiology, we are 

proposing to retain the same criteria for 

satisfactory reporting of measures 

groups via claims as the 2011 criteria for 

satisfactory reporting of measures 

groups via claims for the 12-month 

reporting period that was finalized in 

the 2011 MPFS Final Rule with 

comment period. Therefore, as in 2011, 

an eligible professional must 

satisfactorily report on all individual 

measures within the measures group in 

order to meet the criteria for satisfactory 

reporting via measures groups. We are 

retaining the same criteria because 

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eligible professionals are already 

familiar with these reporting criteria, 

which we believe will in turn lead to a 

greater chance that eligible professionals 

meet the criteria for satisfactory 

reporting. 

As with the reporting of Physician 

Quality Reporting System individual 

measures, we also considered including 

geriatricians as one of specialties we 

proposed previously with regard to the 

proposed Physician Quality Reporting 

System core measure reporting 

requirement for measures groups. 

However, we would like to ensure that 

the proposed 2012 Physician Quality 

Reporting System core measures are 

sufficiently applicable to geriatric 

physicians before proposing to include 

them under the proposed requirement. 

We seek public comment as to whether 

geriatricians should be included as a 

specialty required to report at least 1 

proposed 2012 Physician Quality 

Reporting System core measure for 

measures group reporting. In addition, 

we seek public comment on whether 

other specialties should be included in 

the 2012 Physician Quality Reporting 

System core measure reporting 

requirement for measures groups. 

For 2012, in order to ensure that the 

Physician Quality Reporting System 

measures on which eligible 

professionals report are applicable to 

their respective practices, we propose 

not to count measures within measures 

groups that are reported through claims 

or registry that have a 0 percent 

performance rate. That is, if the 

recommended clinical quality action is 

not performed on at least one patient for 

a particular measure reported by the 

eligible professional via claims or 

registry, we will not count the measures 

groups as a measures group reported by 

an eligible professional. Furthermore, 

this proposed requirement is consistent 

with the proposed reporting options for 

individual quality measures, which are 

discussed previously. Since we are 

proposing to retain the requirement that 

an eligible professional must 

satisfactorily report on all individual 

measures contained within a measures 

group in order to meet the criteria for 

satisfactory reporting via measures 

groups, if an eligible professional 

reports a measure contained within a 

measures group with a 0 percent 

performance rate, the eligible 

professional will fail to meet the criteria 

for the satisfactory reporting of 

measures groups. 

The 2012 proposed criteria for 

satisfactory reporting of measures 

groups via claims for individual eligible 

professionals are described in the 

following Tables 24 and 25. 

TABLE 24—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING ON MEASURES GROUPS VIA CLAIMS FOR THE

FOLLOWING SPECIALTIES: INTERNAL MEDICINE, FAMILY PRACTICE, GENERAL PRACTICE, AND CARDIOLOGY

Reporting 

mechanism Reporting criteria Reporting period 

Claims ........................................... • Report at least 1 Physician Quality Reporting System measures 

group; AND 

• If the measures group does not contain at least 1 Physician 

Quality core measure, then report 1 Physician Quality core 

measure; AND 

January 1, 2012–December 31, 2012. 

• Report each measures group and, if applicable, Physician Quality Reporting System core measure for at least 30 Medicare Part 

B FFS patients.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

Claims ........................................... • Report at least 1 Physician Quality Reporting System measures 

group; AND 

• If the measures group does not contain at least 1 Physician 

Quality core measure, then report 1 Physician Quality core 

measure; AND 

January 1, 2012–December 31, 2012. 

• Report each measures group and, if applicable, Physician Quality Reporting System core measure for at least 50% of the eligible professional’s Medicare Part B FFS patients seen during the 

reporting period to whom the measures group applies; BUT 

• Report each measures group on no less than 15 Medicare Part 

B FFS patients seen during the reporting period to which the 

measures group applies.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

TABLE 25—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING ON MEASURES GROUPS VIA CLAIMS FOR ALL

OTHER ELIGIBLE PROFESSIONALS NOT IDENTIFIED IN TABLE 24 

Reporting 

mechanism Reporting criteria Reporting period 

Claims ........................................... • Report at least 1 Physician Quality Reporting System measures 

group; AND 

• Report each measures group for at least 30 Medicare Part B 

FFS patients.

January 1, 2012–December 31, 2012. 

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

Claims ........................................... • Report at least 1 Physician Quality Reporting System measures 

group; 

• Report each measures group for at least 50% of the eligible professional’s Medicare Part B FFS patients seen during the reporting period to whom the measures group applies; BUT 

January 1, 2012–December 31, 2012. 

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TABLE 25—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING ON MEASURES GROUPS VIA CLAIMS FOR ALL

OTHER ELIGIBLE PROFESSIONALS NOT IDENTIFIED IN TABLE 24—Continued 

Reporting 

mechanism Reporting criteria Reporting period 

• Report each measures group on no less than 15 Medicare Part 

B FFS patients seen during the reporting period to which the 

measures group applies.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

An eligible professional could also 

potentially qualify for the Physician 

Quality Reporting System incentive 

payment by satisfactorily reporting both 

individual measures and measures 

groups. However, only one incentive 

payment will be made to the eligible 

professional. We invite public comment 

on the proposed 2012 criteria for 

satisfactory reporting of measures 

groups via claims for individual eligible 

professionals. 

(5) Proposed 2012 Criteria for 

Satisfactory Reporting of Measures 

Groups via Registry—Individual Eligible 

Professionals 

As with the reporting of measures 

groups via claims, we are proposing 

different criteria for the satisfactory 

reporting of Physician Quality Reporting 

System measures groups via registry 

depending on the eligible professional’s 

specialty. For eligible professionals 

specializing in internal medicine, family 

practice, general practice, or cardiology, 

in order to meet the criteria for the 

satisfactory reporting of Physician 

Quality Reporting measures groups via 

registry, during the proposed 12-month 

reporting period, we propose that the 

eligible professional must— 

• Report at least 1 Physician Quality 

Reporting System measures group; AND 

• If the measures group does not 

contain at least 1 Physician Quality core 

measure, then 1 Physician Quality core 

measure; AND 

• Report on at least 30 Medicare Part 

B FFS patients for each measures group 

and, if applicable, Physician Quality 

Reporting System core measure 

reported. 

• Measures groups containing a 

measure with a 0% performance rate 

will not be counted. 

Alternatively, we propose that the 

eligible professional specializing in 

internal medicine, family practice, 

general practice, or cardiology may meet 

the criteria for the satisfactory reporting 

of Physician Quality measures groups 

via registry by doing the following 

during the proposed 12-month reporting 

period: 

• Report at least one Physician 

Quality Reporting System measures 

group; AND 

• If the measures group does not 

contain at least 1 Physician Quality core 

measure, then 1 Physician Quality core 

measure; AND 

• Report each measures group and, if 

applicable, Physician Quality Reporting 

System core measure for at least 80 

percent of the eligible professional’s 

Medicare Part B FFS patients seen 

during the reporting period to whom the 

measures group applies; BUT 

• Report each measures group on no 

less than 15 Medicare Part B FFS 

patients seen during the reporting 

period to which the measures group 

applies. 

• Measures groups containing a 

measure with a 0% performance rate 

will not be counted. 

In order to meet the criteria for the 

satisfactory reporting of Physician 

Quality Reporting measures groups via 

registry, during the proposed 6-month 

reporting period, we propose that 

theeligible professional must— 

• Report at least one Physician 

Quality Reporting System measures 

group; AND 

• If the measures group does not 

contain at least 1 Physician Quality core 

measure, then 1 Physician Quality core 

measure; AND 

• Report each measures group and, if 

applicable, Physician Quality Reporting 

System core measure for at least 80 

percent of the eligible professional’s 

Medicare Part B FFS patients seen 

during the reporting period to whom the 

measures group applies; BUT 

• Report each measures group on no 

less than 8 Medicare Part B FFS patients 

seen during the reporting period to 

which the measures group applies. 

• Measures groups containing a 

measure with a 0% performance rate 

will not be counted. 

For all other eligible professionals, in 

order to meet the criteria for the 

satisfactory reporting of Physician 

Quality Reporting System measures 

groups via registry, we propose that, 

during the proposed 12-month reporting 

period, the eligible professional must— 

• Report at least 1 Physician Quality 

Reporting System measures group; AND 

• Report each measures group for at 

least 30 Medicare Part B FFS patients. 

• Measures groups containing a 

measure with a 0% performance rate 

will not be counted. 

Alternatively, we propose that an 

eligible professional not specializing in 

internal medicine, family practice, 

general practice, or cardiology may meet 

the criteria for the satisfactory reporting 

of Physician Quality Reporting System 

measures groups via registry by doing 

the following during the proposed 12- 

month reporting period: 

• Report at least one Physician 

Quality Reporting System measures 

group; AND 

• For each measures group reported, 

report on at least 80 percent of the 

eligible professional’s Medicare Part B 

FFS patients seen during the reporting 

period to whom the measures group 

applies; BUT 

• Report no less than 15 patients for 

each measures group reported. 

For all other eligible professionals, in 

order to meet the criteria for the 

satisfactory reporting of Physician 

Quality Reporting System measures 

groups via registry during the proposed 

6-month reporting period, we propose 

that, during the proposed 6-month 

reporting period, the eligible 

professional must— 

• Report at least 1 Physician Quality 

Reporting System measures group; AND 

• For each measures group reported, 

report on at least 80 percent of the 

eligible professional’s Medicare Part B 

FFS patients seen during the reporting 

period to whom the measures group 

applies; BUT 

• Report each measures group on no 

less than least 8 Medicare Part B FFS 

patients for each measures group 

reported. 

• Measures groups containing a 

measure with a 0% performance rate 

will not be counted. 

Aside from the Physician Quality 

Reporting System core measure 

reporting requirement for eligible 

professionals specializing in internal 

medicine, family practice, general 

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42858 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

practice, or cardiology, we are 

proposing to retain the same criteria for 

satisfactory reporting of measures 

groups via registry as the 2011 criteria 

for satisfactory reporting of measures 

groups via registry finalized in the 2011 

MPFS Final Rule with comment period. 

Therefore, as in 2011, an eligible 

professional must satisfactorily report 

on all individual measures within the 

measures group in order to meet the 

criteria for satisfactory reporting via 

measures groups. We are retaining the 

same criteria because we eligible 

professionals are already familiar with 

this reporting criteria, which we believe 

will in turn lead to a greater chance that 

eligible professionals meet the criteria 

for satisfactory reporting. 

As with the reporting of Physician 

Quality Reporting System individual 

measures, we also considered including 

geriatricians as one of specialties we 

proposed previously with regard to the 

proposed Physician Quality Reporting 

System core measure reporting 

requirement for measures groups. 

However, we would like to ensure that 

the proposed 2012 Physician Quality 

Reporting System core measures are 

sufficiently applicable to geriatric 

physicians before proposing to include 

them under the proposed requirement. 

We seek public comment as to whether 

geriatricians should be included as a 

specialty required to report at least 1 

proposed 2012 Physician Quality 

Reporting System core measure for 

measures group reporting. In addition, 

we seek public comment on whether 

other specialties should be included in 

the 2012 Physician Quality Reporting 

System core measure reporting 

requirement for measures groups. 

For 2012, in order to ensure that the 

Physician Quality Reporting System 

measures on which eligible 

professionals report are applicable to 

their respective practices, we propose 

not to count measures within measures 

groups that are reported through claims 

or registry that have a 0 percent 

performance rate. That is, if the 

recommended clinical quality action is 

not performed on at least one patient for 

a particular measure reported by the 

eligible professional via claims or 

registry, we will not count the measures 

groups as a measures group reported by 

an eligible professional. Furthermore, 

this proposed requirement is consistent 

with the proposed reporting options for 

individual quality measures, which are 

discussed previously. Since we are 

proposing to retain the requirement that 

an eligible professional must 

satisfactorily report on all individual 

measures contained within a measures 

group in order to meet the criteria for 

satisfactory reporting via measures 

groups, if an eligible professional 

reports a measure contained within a 

measures group with a 0 percent 

performance rate, the eligible 

professional will fail to meet the criteria 

for the satisfactory reporting of 

measures groups. 

The proposed 2012 criteria for 

satisfactory reporting of data on 

measures groups are summarized in the 

following Tables 26 through 27 and are 

arranged by reporting mechanism and 

reporting period. 

TABLE 26—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING ON MEASURES GROUPS VIA REGISTRY FOR THE

FOLLOWING SPECIALTIES: INTERNAL MEDICINE, FAMILY PRACTICE, GENERAL PRACTICE AND CARDIOLOGY

Reporting mechanism Reporting criteria Reporting period 

Registry ......................................... • Report at least 1 Physician Quality Reporting System measures 

group; AND 

January 1, 2012–December 31, 2012. 

• If the measures group does not contain at least 1 Physician 

Quality core measure, then 1 Physician Quality core measure; 

AND 

• Report each measures group and, if applicable, Physician Quality Reporting System core measure for at least 30 Medicare Part 

B FFS patients.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

Registry ......................................... • Report at least 1 Physician Quality Reporting System measures 

group; 

January 1, 2012–December 31, 2012. 

• If the measures group does not contain at least 1 Physician 

Quality core measure, then 1 Physician Quality core measure; 

AND 

• Report each measures group and, if applicable, Physician Quality Reporting System core measure for at least 80% of the eligible professional’s Medicare Part B FFS patients seen during the 

reporting period to whom the measures group applies; BUT 

• Report each measures group on no less than 15 Medicare Part 

B FFS patients seen during the reporting period to which the 

measures group applies.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

Registry ......................................... • Report at least 1 Physician Quality Reporting System measures 

group; 

July 1, 2012–December 31, 2012. 

• If the measures group does not contain at least 1 Physician 

Quality core measure, then 1 Physician Quality core measure; 

AND 

• Report each measures group and, if applicable, Physician Quality Reporting System core measure for at least 80% of the eligible professional’s Medicare Part B FFS patients seen during the 

reporting period to whom the measures group applies; BUT 

• Report each measures group on at least 8 Medicare Part B FFS 

patients seen during the reporting period to which the measures 

group applies.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

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TABLE 27—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING ON MEASURES GROUPS VIA REGISTRY FOR ALL

OTHER ELIGIBLE PROFESSIONALS NOT IDENTIFIED IN TABLE 26 

Reporting mechanism Reporting criteria Reporting period 

Registry ......................................... • Report at least 1 Physician Quality Reporting System measures 

group; AND 

January 1, 2012–December 31, 2012. 

• Report each measures group for at least 30 Medicare Part B 

FFS patients.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

Registry ......................................... • Report at least 1 Physician Quality Reporting System measures 

group; AND 

January 1, 2012–December 31, 2012. 

• Report each measures group for at least 80% of the eligible professional’s Medicare Part B FFS patients seen during the reporting period to whom the measures group applies; BUT 

• Report each measures group on at least 15 Medicare Part B 

FFS patients seen during the reporting period to which the 

measures group applies.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

Registry ......................................... • Report at least 1 Physician Quality Reporting System measures 

group; AND 

July 1, 2012–December 31, 2012. 

• Report each measures group for at least 80% of the eligible professional’s Medicare Part B FFS patients seen during the reporting period to whom the measures group applies; BUT 

• Report each measures group on no less than 8 Medicare Part B 

FFS patients seen during the reporting period to which the 

measures group applies.

• Measures groups containing a measure with a 0% performance 

rate will not be counted.

An eligible professional could also 

potentially qualify for the Physician 

Quality Reporting System incentive 

payment by satisfactorily reporting both 

individual measures and measures 

groups. However, only one incentive 

payment will be made to the eligible 

professional. We invite public comment 

on the proposed criteria for satisfactory 

reporting of measures groups for 

individual eligible professionals. 

(6) Proposed 2012 Criteria for 

Satisfactory Reporting on Physician 

Quality Reporting System Measures by 

Group Practices Under the GPRO 

As stated previously, instead of 

participating as an individual eligible 

professional, an eligible professional in 

a group practice may participate in the 

Physician Quality Reporting System 

under the Physician Quality Reporting 

System GPRO. However, an individual 

eligible professional who is affiliated 

with a group practice participating in 

the Physician Quality Reporting System 

GPRO that satisfactorily submits 

Physician Quality Reporting System 

quality measures will only be able to 

earn an incentive as part of the group 

practice and not as an individual 

eligible professional. 

As stated previously, we propose that 

group practices interested in 

participating in GPRO must selfnominate. As stated in the ‘‘Proposed 

Reporting Period’’ in section IV.F.2.c. of 

this proposed rule, for group practices 

selected to participate in the Physician 

Quality Reporting System GPRO for 

2012, we propose a 12-month reporting 

period beginning January 1, 2012. For 

2012, we propose to use the same GPRO 

reporting methods that we have used in 

prior years. Specifically, we propose 

that group practices participating in 

GPRO submit information on measures 

within a proposed common set of 40 

NQF-endorsed quality measures using a 

web interface based on the GPRO Tool 

used in the 2011 Physician Quality 

Reporting System GPRO. As part of the 

data submission process for 2012 GPRO, 

we propose that during 2012, each 

group practice would be required to 

report quality measures with respect to 

services furnished during the 2012 

reporting period (that is, January 1, 

2012, through December 31, 2012) on an 

assigned sample of Medicare 

beneficiaries. Once the beneficiary 

assignment has been made for each 

group practice, which we anticipate will 

be done during the fourth quarter of 

2012, we propose to provide each group 

practice selected to participate in the 

Physician Quality Reporting System 

GPRO with access to a web interface 

that would include the group’s assigned 

beneficiary samples and the final GPRO 

quality measures. We propose to prepopulate the web interface with the 

assigned beneficiaries’ demographic and 

utilization information based on all of 

their Medicare claims data. The group 

practice would be required to populate 

the remaining data fields necessary for 

capturing quality measure information 

on each of the assigned beneficiaries. 

As specified in section IV.F.(b).(2).(B). 

of this proposed rule, we propose to 

change the definition of the group 

practices to those practices consisting of 

25 or more eligible professionals. In 

2011, to distinguish the criteria in GPRO 

I and II for satisfactory reporting 

between small vs. large groups, we 

established different reporting criteria 

dependent on the group’s size. Although 

we are consolidating the GPRO for 2012, 

we still recognize the need to equalize 

the reporting burden by establishing 

different reporting criteria for small vs. 

large groups. Therefore, we propose to 

establish the following two criteria for 

the satisfactory reporting of Physician 

Quality Reporting System quality 

measures under the 2012 GPRO, based 

on the size of the group practice: 

• For group practices comprised of 

25–99 eligible professionals 

participating in the GPRO, we propose 

that the group practice must report on 

all GPRO measures included in the web 

interface (listed in Table 56 of this 

proposed rule). During the submission 

period, the group practice will need to 

access the web interface and populate 

the data fields necessary for capturing 

quality measure information on each of 

the assigned beneficiaries up to 218 

beneficiaries (with an over-sample of 

327 beneficiaries) for each disease 

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module and preventive care measure. 

We further propose that if the pool of 

eligible assigned beneficiaries for any 

disease module or preventive care 

measure is less than 218, then the group 

practice would need to populate the 

remaining data files for 100 percent of 

eligible assigned beneficiaries for that 

disease module or preventive care 

measure. For each disease module or 

preventive care measure, we propose 

that the group practice must report 

information on the assigned patients in 

the order in which they appear in the 

group’s sample (that is, consecutively). 

We propose these criteria because they 

mirror the criteria for CMS’ Medicare 

Care Management Performance (MCMP) 

demonstration. In determining the 

appropriate reporting criteria for group 

practices comprised of 25–99 eligible 

professionals, we sought to align the 

criteria for satisfactory reporting under 

the Physician Quality Reporting System 

with CMS’ MCMP demonstration, 

which uses small to medium-sized 

group practices to analyze data aimed at 

improving the quality of care for 

beneficiaries with chronic conditions. 

We have an interest in aligning the 

reporting criteria for these two programs 

particularly as the MCMP 

demonstration also required its 

participants to report on measures 

similar to the PGP demonstration and 

using the same data collection vehicle. 

However, the statistical sampling 

methodology used in the MCMP 

demonstration also took into account 

that the group practices that 

participated in this demonstration were 

significantly smaller than those that 

participate in the PGP demonstration. 

• For group practices comprised of 

100 or more eligible professionals, we 

propose that the group practices must 

report on all Physician Quality 

Reporting System GPRO quality 

measures. During the submission 

period, the group practice would need 

to populate the remaining data fields in 

the web interface necessary for 

capturing quality measure information 

on each of the assigned beneficiaries up 

to 411 beneficiaries (with an oversample of 616 beneficiaries) for each 

disease module and preventive care 

measure. We further propose that if the 

pool of eligible assigned beneficiaries 

for any disease module or preventive 

care measure is less than 411, then the 

group practice must populate the 

remaining data fields for 100 percent of 

eligible assigned beneficiaries for that 

disease module or preventive care 

measure. For each disease module or 

preventive care measure, we propose 

that the group practice must report 

information on the assigned patients in 

the order in which they appear in the 

group’s sample (that is, consecutively). 

Furthermore, although we are 

requiring that the group practices 

participating as GPROs report on a 

certain number of consecutive patients, 

such as either 218 or 411 beneficiaries 

depending on the group’s size, we 

propose to allow the ‘‘skipping’’ of 

patients for valid reasons, such as a 

beneficiary’s medical records not being 

found or not being able to confirm a 

diagnosis. However, excessive skipping 

of patients may cause us to question the 

accuracy or validity of the data being 

reported to us by the group practices. 

Due to the variance in group patterns, 

measures, and disease modules, 

however, it is difficult to establish a 

‘‘skip threshold’’ for the satisfactory 

reporting of GPRO measures. Therefore, 

it is our intent to examine each group 

practice’s skip patterns. We may request 

the group to provide additional 

information to help explain or support 

the skips to help better inform us on 

what levels of skipping could 

potentially be considered excessive 

skipping in a future year. 

In determining the appropriate 

reporting criteria for group practices 

comprised of 100 or more eligible 

professionals, we sought to use the same 

criteria as we finalized in the 2011 

MPFS Final Rule with comment period 

for GPRO I (75 FR 73506) because group 

practices are already familiar with this 

reporting process. We hope that 

establishing the same process for 

reporting under the GPRO as proposed 

in prior years will provide a likelier 

chance for meeting the criteria for 

satisfactory reporting under the GPRO. 

In addition, we sought to align the 

criteria for satisfactory reporting under 

the Physician Quality Reporting System 

with CMS’ Physician Group Practice 

(PGP) demonstration, which collects 

data from large group practices in an 

effort to coordinate the overall care 

delivered to Medicare patients. 

As we discussed previously with our 

proposed definition of group practice, 

we allow for fluctuation of the group 

practice’s size throughout the reporting 

period, provided that the group size 

contains at least 25 eligible 

professionals, which is the proposed 

minimum group practice size for 

participation in the Physician Quality 

Reporting System GPRO. However, as 

we established in 2011, for purposes of 

determining which reporting criteria the 

group must satisfy, a group practice’s 

size will be the size of the group at the 

time the group’s participation is 

approved by CMS (75 FR 73504). For 

example, if a group practice is 

comprised of 100 eligible professionals 

at the time it self-nominates for 

participation as a GPRO in 2012, and 

the group practice’s size then drops to 

99 eligible professionals at the time the 

group practice’s participation is 

approved by CMS, the group practice 

would need to meet the proposed 

reporting criteria for a group size of 99. 

Table 28 summarizes the proposed 

criteria for the satisfactory reporting of 

data on quality measures by group 

practice under the proposed 2012 

Physician Quality Reporting GPRO. We 

propose that group practices 

participating in the 2012 Physician 

Quality Reporting System GPRO, 

regardless of size, would be required to 

report on all of the proposed measures 

listed in Table 56 of this proposed rule. 

These quality measures are grouped into 

preventive care measures and five 

disease modules: heart failure, diabetes, 

coronary artery disease, hypertension, 

and chronic obstructive pulmonary 

disease (COPD). 

TABLE 28—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING FOR GROUP PRACTICES PARTICIPATING IN THE

PHYSICIAN QUALITY REPORTING SYSTEM GROUP PRACTICE REPORTING OPTION (GPRO) 

Group practice size Reporting mechanism Reporting criteria Reporting period 

25–99 Eligible Professionals A submission web interface 

provided by CMS.

• 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 (with an 

over-sample of 327) for each disease module or preventive care measure. If the pool of eligible assigned 

beneficiaries is less than 218, then report on 100% of 

assigned beneficiaries.

January 1, 2012–December 31, 2012. 

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TABLE 28—PROPOSED 2012 CRITERIA FOR SATISFACTORY REPORTING FOR GROUP PRACTICES PARTICIPATING IN THE

PHYSICIAN QUALITY REPORTING SYSTEM GROUP PRACTICE REPORTING OPTION (GPRO)—Continued 

Group practice size Reporting mechanism Reporting criteria Reporting period 

100+ Eligible Professionals .. A submission web interface 

provided by CMS.

• Report on all measures included in the web interface; 

and 

• Populate data fields for the first 411 consecutively 

ranked and assigned beneficiaries in the order in which 

they appear in the group’s sample (with an 

over-sample of 616) for each disease module or preventive care measure. If the pool of eligible assigned 

beneficiaries is less than 411, then report on 100% of 

assigned beneficiaries.

January 1, 2012–December 31, 2012. 

We intend to post the final 2012 

Physician Quality Reporting System 

GPRO participation requirements for 

group practices, including instructions 

for submitting the self-nomination 

statement and other requested 

information, on the Physician Quality 

Reporting System section of the CMS 

Web site at http://www.cms.gov/PQRS 

by November 15, 2011 or shortly 

thereafter. 

The Physician Quality Reporting 

System GPRO web interface will be 

updated as needed to include the 2012 

Physician Quality Reporting System 

GPRO measures (i.e. to eliminate 

measures that have been retired as well 

as add additional measures that will be 

finalized for 2012). We believe that use 

of the GPRO web interface allows group 

practices the opportunity to calculate 

their own performance rates on the 

quality measures. 

We intend to provide the selected 

physician groups with access to this 

pre-populated database by no later than 

the first quarter of 2013. For purposes of 

pre-populating this GPRO web interface, 

we propose to assign beneficiaries to 

each group practice using a patient 

assignment methodology modeled after 

the patient assignment methodology 

used in the PGP & MCMP 

demonstrations. Based on our desire to 

model the Physician Quality Reporting 

System GPRO after the PGP & MCMP 

demonstrations, we will also consider 

incorporating any methodologies used 

in the PGP demonstration prior to 

January 1, 2012 to the 2012 Physician 

Quality Reporting System. We propose 

using Medicare Part B claims data for 

dates of service on or after January 1, 

2011 and submitted and processed by 

approximately October 31, 2011 to 

assign Medicare beneficiaries to each 

group practice. Assigned beneficiaries 

would be limited to those Medicare Part 

B FFS beneficiaries with Medicare Parts 

A and B claims for whom Medicare is 

the primary payer. Assigned 

beneficiaries would not include 

Medicare Advantage enrollees. A 

beneficiary would be assigned to the 

group practice that provides the 

plurality of a beneficiary’s office or 

other outpatient office evaluation and 

management allowed charges. 

Beneficiaries with only one office visit 

to the group practice would be 

eliminated from the group practice’s 

assigned patient sample for purposes of 

the 2012 Physician Quality Reporting 

System GPRO. We would pre-populate 

the GPRO web interface with the 

assigned beneficiaries’ demographic and 

utilization information based on their 

Medicare claims data. 

We invite public comment on the 

proposed requirements for satisfactory 

reporting via the Physician Quality 

Reporting System GPRO reporting 

option. 

f. 2012 Physician Quality Reporting 

System Measures 

(1) Statutory Requirements for the 

Selection of Proposed 2012 Physician 

Quality Reporting System Measures 

Under section 1848(k)(2)(C)(i) of the 

Act, the Physician Quality Reporting 

System quality measures shall be such 

measures selected by the Secretary from 

measures that have been endorsed by 

the entity with a contract with the 

Secretary under subsection 1890(a) of 

the Act (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 proposed 

2012 Physician Quality Reporting 

System quality measure would need to 

be endorsed by the NQF. Additionally, 

section 1848(k)(2)(D) of the Act requires 

that for each 2012 Physician Quality 

Reporting System 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 with 

respect to how the measures that are 

submitted to the NQF for endorsement 

were developed. The basic steps for 

developing measures applicable to 

physicians and other eligible 

professionals prior to submission of the 

measures for endorsement may be 

carried out by a variety of different 

organizations. We do not believe there 

needs to be any special restrictions on 

the type or make-up of the organizations 

carrying out this basic process of 

development of physician measures, 

such as restricting the initial 

development to physician-controlled 

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 Physician Quality 

Reporting System. 

(2) Other Considerations for the 

Selection of Proposed 2012 Physician 

Quality Reporting System Measures 

In addition to reviewing the 2011 

Physician Quality Reporting System 

measures for purposes of developing the 

proposed 2012 Physician Quality 

Reporting System measures, we 

reviewed and considered measure 

suggestions for the 2012 Physician 

Quality Reporting System. 

With respect to the selection of new 

measures, we applied the following 

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considerations, which include many of 

the same considerations applied to the 

selection of 2009, 2010 and 2011 

Physician Quality Reporting System 

quality measures proposed for inclusion 

in the 2012 Physician Quality Reporting 

System quality measure set previously 

described: 

• High Impact on Healthcare. 

++ Measures that are high impact and 

support CMS and HHS priorities for 

improved quality and efficiency of care 

for Medicare beneficiaries. These 

current and long term priority topics 

include the following: Prevention; 

chronic conditions; high cost and high 

volume conditions; elimination of 

health disparities; healthcare-associated 

infections and other conditions; 

improved care coordination; improved 

outcomes; improved efficiency; 

improved patient and family experience 

of care; effective management of acute 

and chronic episodes of care; reduced 

unwarranted geographic variation in 

quality and efficiency; and adoption and 

use of interoperable HIT. 

++ Measures that are included in, or 

facilitate alignment with, other 

Medicare, Medicaid, and CHIP programs 

in furtherance of overarching healthcare 

goals. 

++ NQF Endorsement. 

++ Measures must be NQF-endorsed 

by August 15, 2011, in order to be 

considered for inclusion in the 2012 

Physician Quality Reporting System 

quality measure set except as provided 

under section 1848(k)(2)(C)(ii) of the 

Act. 

++ Section 1848(k)(2)(C)(ii) of the Act 

provides an exception to the 

requirement that the Secretary select 

measures that have been endorsed by 

the entity with a contract under section 

1890(a) of the Act (that is, the NQF). 

• Address Gaps in the Physician 

Quality Reporting System Measure Set. 

++ Measures that increase the scope 

of applicability of the Physician Quality 

Reporting System measures to services 

furnished to Medicare beneficiaries and 

expand opportunities for eligible 

professionals to participate in the 

Physician Quality Reporting System. 

• Measures of various aspects of 

clinical quality including outcome 

measures, where appropriate and 

feasible, process measures, structural 

measures, efficiency measures, and 

measures of patient experience of care. 

Other considerations that we applied 

to the selection of proposed measures 

for 2012, regardless of whether the 

measure was a 2011 Physician Quality 

Reporting System measure or not, 

were— 

• Measures that are functional, which 

is to say measures that can be 

technically implemented within the 

capacity of the CMS infrastructure for 

data collection, analysis, and 

calculation of reporting and 

performance rates. 

• Measures that address gaps in the 

quality of care delivered to Medicare 

beneficiaries; 

• Measures impacting chronic 

conditions (chronic kidney disease, 

diabetes mellitus, heart failure, 

hypertension and musculoskeletal); 

• Measures involving care 

coordination; 

• Measures applicable across care 

settings (such as, outpatient, nursing 

facilities, domiciliary, etc.) 

• Measures conducive to leveraging 

capabilities of an electronic health 

record (EHR) 

• Measures whose detailed 

specifications will be completed and 

ready for implementation in the 2012 

Physician Quality Reporting System 

• 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. 

In the 2012 Physician Quality 

Reporting System, as in the 2011 

Physician Quality Reporting System, for 

some measures that are useful, but 

where data submission is not feasible 

through all otherwise available 

Physician Quality Reporting System 

reporting mechanisms, we are proposing 

that a measure may be included for 

reporting solely through specific 

reporting mechanism(s) in which its 

submission is feasible. 

As discussed previously, section 

1848(k)(2)(D) of the Act requires that the 

public have the opportunity to provide 

input during the selection of measures. 

We also are required by other applicable 

statutes to provide opportunity for 

public comment on provisions of policy 

or regulation that are established via 

notice and comment rulemaking. 

Measures that are not included in the 

proposed rule for inclusion in the 2012 

Physician Quality Reporting System that 

are recommended to us via comments 

on the proposed rule have not been 

placed before the public to comment on 

the selection of those measures within 

the rulemaking process. Even when 

measures have been published in the 

Federal Register, but in other contexts 

and not specifically proposed as 

Physician Quality Reporting System 

measures, such publication does not 

provide true opportunity for public 

comment on those measures’ potential 

inclusion in the Physician Quality 

Reporting System. Thus, such 

additional measures recommended for 

selection for the 2012 Physician Quality 

Reporting System via comments on the 

CY 2012 PFS proposed rule cannot be 

included in the 2012 measure set. As 

such, while we welcome all 

constructive comments and suggestions, 

and may consider such recommended 

measures for inclusion in future 

measure sets for the Physician Quality 

Reporting System and other programs to 

which such measures may be relevant, 

we are not able to consider such 

additional measures for inclusion in the 

final 2012 Physician Quality Reporting 

System measure set. 

In addition, as in prior years, we again 

note that we do not use notice and 

comment rulemaking as a means to 

update or modify measure 

specifications. Quality measures that 

have completed the consensus process 

have a designated party (usually, the 

measure developer/owner) who has 

accepted responsibility for maintaining 

the measure. In general, it is the role of 

the measure owner, developer, or 

maintainer to make changes to a 

measure. Therefore, comments 

requesting changes to a specific 

proposed Physician Quality Reporting 

System measure’s title, definition, and 

detailed specifications or coding should 

be directed to the measure developer 

identified in Tables 29 through 55. 

Contact information for the 2011 

Physician Quality Reporting System 

measure developers is listed in the 

‘‘2011 Physician Quality Reporting 

System Quality Measures List,’’ which 

is available on the CMS Web site at 

http://www.cms.gov/PQRS/ 

15_MeasuresCodes.asp#TopOfPage. 

However, we stress that inclusion of 

measures that are not NQF endorsed or 

AQA adopted is an exception to the 

requirement under section 

1848(k)(2)(C)(i) of the Act that measures 

be endorsed by the NQF. We may 

exercise this exception authority in a 

specified area or medical topic for 

which a feasible and practical measure 

has not been endorsed by NQF, so long 

as due consideration is given to 

measures that have been endorsed by 

the NQF. 

Based on the criteria previously 

discussed, we propose to include the 

individual measures listed in Tables 29 

through 31 in the 2012 Physician 

Quality Reporting System individual 

quality measure set. We believe that 

each measure we are proposing for 

reporting under the 2012 Physician 

Quality Reporting System meets at least 

one criterion for the selection of 

Physician Quality Reporting System 

measures described previously. We are 

also proposing to include 24 measures 

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groups in the 2012 Physician Quality 

Reporting System quality measure set, 

which are listed in Tables 29 through 

31. The individual measures selected for 

the 2012 Physician Quality Reporting 

System can be categorized as follows— 

• Proposed 2012 Physician Quality 

Reporting System Core Measures 

Available for Either Claims, Registry, 

and/or EHR-Based Reporting; 

• Proposed 2012 Physician Quality 

Reporting System Individual Quality 

Measures Available for Either Claimsbased Reporting and/or Registry-based 

Reporting; AND 

• Proposed 2012 Physician Quality 

Reporting System Measures Available 

for EHR-Based Reporting. 

Please note that some individual 

measures we are proposing in Tables 29 

through 31 for reporting for the 2012 

Physician Quality Reporting System 

may be available for reporting in other 

CMS programs, such as the Medicare 

and Medicaid EHR Incentive Program as 

well as the Medicare Shared Savings 

Program. We note that measure titles, in 

some instances, may vary from program 

to program. If an eligible professional 

intends to report the same measures for 

multiple CMS programs, it is important 

to check the full measure specifications, 

NQF measure number (if applicable), as 

well as any other identifying measure 

features to determine whether the 

measures are the same. We invite 

comments on our proposed approach in 

selecting measures. 

(3) Proposed 2012 Physician Quality 

Reporting System Individual Measures 

This section focuses on the proposed 

2012 Physician Quality Reporting 

System Individual Measures available 

for reporting via claims and/or registry. 

For the proposed 2012 Physician 

Quality Reporting System measures that 

were selected for reporting in 2011, 

please note that detailed measure 

specifications, including the measure’s 

title, for the proposed 2012 individual 

Physician Quality Reporting System 

quality measures may have been 

updated or modified during the NQF 

endorsement process or for other 

reasons prior to 2012. The 2012 

Physician Quality Reporting System 

quality measure specifications for any 

given individual quality measure may, 

therefore, be different from 

specifications for the same quality 

measure used in prior years. 

Specifications for all 2012 individual 

Physician Quality Reporting System 

quality measures, whether or not 

included in the 2011 Physician Quality 

Reporting System program, must be 

obtained from the specifications 

document for 2012 individual Physician 

Quality Reporting System quality 

measures, which will be available on 

the Physician Quality Reporting System 

section of the CMS Web site on or before 

December 31, 2011. 

(A) Proposed 2012 Physician Quality 

Reporting System Core Measures 

Available for Claims, Registry, and/or 

EHR-Based Reporting 

The prevention of cardiovascular 

conditions is a top priority for CMS. 

Therefore, in an effort to encourage 

eligible professionals to monitor their 

performance with respect to the 

prevention of cardiovascular conditions, 

we propose to adopt a Physician Quality 

Reporting System set of core measures 

for CY 2012, which are specified later in 

this section in Table 29, which focuses 

on the prevention of cardiovascular 

conditions. 

While we encourage reporting of these 

measures by all eligible professionals, as 

previously discussed in section IV.F.1.f. 

of this proposed rule, we are proposing 

that only certain specialties be required 

to report on the proposed 2012 

Physician Quality Reporting System 

core measures. 

TABLE 29—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM CORE MEASURES AVAILABLE FOR EITHER CLAIMS, 

REGISTRY, AND/OR EHR-BASED REPORTING

Physician 

quality 

reporting 

system 

measure No. 

Measure title NQF measure 

No. 

Measure 

developer 

Reporting 

mechanism 

204 .............. Ischemic Vascular Disease (IVD): Use of Aspirin or another Antithrombotic.0068 NCQA .................................. Claims, Registry, 

EHR. 

236 .............. Controlling High Blood Pressure ...................................... 0018 NCQA .................................. Claims, Registry, 

EHR. 

2 .................. Diabetes Mellitus: Low Density Lipoprotein (LDL-C) 

Control in Diabetes Mellitus.

0064 NCQA .................................. Claims, Registry, 

EHR. 

226 .............. Measure pair: a. Tobacco Use Assessment, b. Tobacco 

Cessation Intervention.

0028 AMA-PCPI ........................... Claims, Registry, 

EHR. 

TBD ............. Ischemic Vascular Disease (IVD): Complete Lipid Profile 

and LDL Control < 100.

0075 NCQA .................................. Claims, Registry, 

EHR. 

TBD ............. Proportion of adults 18 years and older who have had 

their BP measured within the preceding 2 years.

N/A CMS .................................... Claims, Registry, 

EHR. 

TBD ............. Preventative Care: Cholesterol-LDL test performed ........ N/A CMS .................................... EHR. 

We invite public comment on the 

proposed 2012 Physician Quality 

Reporting System core measures. 

(B) Proposed 2012 Physician Quality 

Reporting System Individual Measures 

for Claims and Registry Reporting 

For 2012, we propose to retain all 

measures currently used in the 2011 

Physician Quality Reporting System. We 

believe these 2011 Physician Quality 

Reporting System measures meet the 

statutory considerations as well as other 

factors we used in determining which 

measures to include for reporting under 

the 2012 Physician Quality Reporting 

System. The retention of these measures 

also promotes program consistency. 

These proposed measures include 55 

registry-only measures currently used in 

the 2011 Physician Quality Reporting 

System, and 144 individual quality 

measures for either claims-based 

reporting or registry-based reporting (75 

FR 40186 through 40190 and 52489 

through 52490). These proposed 

measures do not include any measures 

that are proposed to be included as part 

of the Back Pain measures group. For 

2012, we propose that any 2012 

Physician Quality Reporting System 

measures that are included in the Back 

Pain measures group would not be 

reportable as individual measures 

through claims-based reporting or 

registry-based reporting. 

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42864 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

In 2011, Physician Quality Reporting 

System measure # 197 was titled 

‘‘Coronary Artery Disease (CAD): Drug 

Therapy for Lowering LDL– 

Cholesterol’’. For 2012, we are changing 

the title of measure # 197 to ‘‘Coronary 

Artery Disease: Lipid Control’’, because 

the measure owner, AMA–PCPI, has 

changed the title of the measure. Aside 

from the title change, measure # 197’s 

NQF number as well as its NQFendorsement status has not changed. 

However, as noted previously, please 

check the measure specifications for 

measure # 197, as the specifications on 

how to report on measure # 197 for the 

2012 Physician Quality Reporting 

System may change from 2011. 

In addition, we propose the 26 new 

individual measures below for inclusion 

in the 2012 Physician Quality Reporting 

System in order to provide eligible 

professionals with more Physician 

Quality Reporting System quality 

measures on which they can select from 

to report. The following 2 proposed 

measures are NQF-endorsed: 

• Anticoagulation for Acute 

Pulmonary Embolus Patients. 

• Pregnancy Test for Female 

Abdominal Pain Patients. 

The remaining 24 measures are either 

pending NQF endorsement or would 

have to be adopted under the exception 

to NQF endorsement provided under 

section 1848(k)(2)(C)(ii) of the Act. In 

selecting these measures, we took into 

account other considerations listed in 

section IV.F.1.(f).(2). of this proposed 

rule. Specifically, we are proposing the 

following measures because the 

measures impact chronic conditions: 

• Chronic Wound Care: Use of 

Wound Surface Culture Technique in 

Patients with Chronic Skin Ulcers. 

• Chronic Wound Care: Use of Wet to 

Dry Dressings in Patients with Chronic 

Skin Ulcers. 

• Hypertension: Blood Pressure 

Control. 

We are proposing the following 

measures because these measures 

involve care coordination: 

• Coronary Artery Disease (CAD): 

Symptom Management. 

We are proposing the following 

measures because these measures are 

applicable across care settings: 

• Substance Use Disorders: 

Counseling Regarding Psychosocial and 

Pharmacologic Treatment Options for 

Alcohol Dependence. 

• Substance Use Disorders: Screening 

for Depression Among Patients with 

Substance Abuse or Dependence. 

• Cardiac Rehabilitation Patient 

Referral From an Outpatient Setting. 

We are proposing the following 

measures because we believe the 

measures address gaps in the Physician 

Quality Reporting System measure set: 

• Barrett’s Esophagus. 

• Ultrasound Determination of 

Pregnancy Location for Pregnant 

Patients with Abdominal Pain. 

• Rh Immunoglobulin (Rhogam) for 

Rh Negative Pregnant Women at Risk of 

Fetal Blood Exposure. 

• Surveillance after Endovascular 

Abdominal Aortic Aneurysm Repair 

(EVAR). 

• Referral for Otology Evaluation for 

Patients with Acute or Chronic 

Dizziness. 

• Image Confirmation of Successful 

Excision of Image—Localized Breast 

Lesion. 

• Improvement in Patient’s Visual 

Function within 90-Days Following 

Cataract Surgery. 

• Patient Satisfaction within 90-Days 

Following Cataract Surgery. 

We are proposing the following 

measures because we believe the 

measures increase the scope of 

applicability of the Physician Quality 

Reporting System measures to services 

furnished to Medicare beneficiaries and 

expand opportunities for eligible 

professionals to participate in the 

Physician Quality Reporting System: 

• Radical Prostatectomy Pathology 

Reporting. 

• Immunohistochemical (IHC) 

Evaluation of HER2 for Breast Cancer 

Patients. 

We are proposing the following 

measures because the measures are high 

impact and support CMS and HHS 

priorities for improved quality and 

efficiency of care for Medicare 

beneficiaries. 

• Statin Therapy at Discharge after 

Lower Extremity Bypass (LEB). 

• Rate of Open AAA Repair without 

Major Complications (discharged to 

home no later than post-operative day 

#7). 

• Rate of EVAR without Major 

Complications (discharged to home no 

later than POD #2). 

• Rate of Carotid Endarterectomy for 

Asymptomatic Patients, without Major 

Complications (discharged to home no 

later than post-operative day #2). 

We are proposing the following 

measures because the measures have a 

high impact on health care: 

• Preoperative Diagnosis of Breast 

Cancer. 

• Sentinel Lymph Node Biopsy for 

Invasive Breast Cancer. 

• Biopsy Follow-up. 

We believe that the addition of 

Physician Quality Reporting System 

quality measures will encourage eligible 

professionals to participate in the 

Physician Quality Reporting System, as 

there are more measures that may be 

applicable to eligible professionals. 

Of these measures, 13 would be 

reportable via registry-only. The 

remaining 13 measures would be 

available for claims and registry 

reporting. Although we are proposing to 

designate certain measures as registryonly measures, we cannot guarantee that 

there will be a registry qualified to 

submit each registry-only measure for 

2012. We rely on registries to selfnominate and identify the measures for 

which they would like to be qualified to 

submit quality measures results and 

numerator and denominator data on 

quality measures. If no registry selfnominates to submit measure results 

and numerator and denominator data on 

a particular measure for 2012, then an 

eligible professional would not be able 

to report that particular measure. 

Table 30 identifies the list of 

measures we propose to include for 

claims and/or registry-based reporting 

in the 2012 Physician Quality Reporting 

System. The proposed 2012 Physician 

Quality Reporting System individual 

measures for either claims-based 

reporting or registry-based reporting are 

listed by their Physician Quality 

Reporting System Measure Number (to 

the extent the measure is part of the 

2011 Physician Quality Reporting 

System measure set) and Title in Table 

30, along with the name of the 

measure’s developer/owner and NQF 

measure number, if applicable. The 

Physician Quality Reporting System 

Measure Number is a unique identifier 

assigned by CMS to all measures in the 

Physician Quality Reporting System 

measure set. Once a Physician Quality 

Reporting System Measure Number is 

assigned to a measure, it will not be 

used again to identify a different 

measure, even if the original measure to 

which the number was assigned is 

subsequently retired from the Physician 

Quality Reporting System measure set. 

A description of the measures listed in 

Table 30 can be found in the ‘‘2011 

Physician Quality Reporting System 

Quality Measures List,’’ which is 

available on the Measures and Codes 

page of the Physician Quality Reporting 

System section of the CMS Web site at 

http://www.cms.hhs.gov/PQRS to the 

extent the measure is part of the 2011 

Physician Quality Reporting System 

measure set. New measures that we are 

proposing to add to the Physician 

Quality Reporting System measure set 

for 2012 are designated with a Physician 

Quality Reporting System Measure 

Number of ‘‘TBD.’’ 

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TABLE 30—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM INDIVIDUAL QUALITY MEASURES AVAILABLE FOR

EITHER CLAIMS-BASED REPORTING AND/OR REGISTRY-BASED REPORTING

Physician 

quality 

reporting system measure 

No. 

Measure title NQF measure 

No. Measure developer Reporting mechanism 

1 .................. Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus.0059 NCQA .................................. Claims, Registry. 

2 .................. Diabetes Mellitus: Low Density Lipoprotein (LDL–C) 

Control in Diabetes Mellitus.

0064 NCQA .................................. Claims, Registry. 

3 .................. Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus.0061 NCQA .................................. Claims, Registry. 

5 .................. Heart Failure: Angiotensin-Converting Enzyme (ACE) 

Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD).

0081 AMA–PCPI .......................... Registry. 

6 .................. Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD.0067 AMA–PCPI .......................... Claims, Registry. 

7 .................. Coronary Artery Disease (CAD): Beta-Blocker Therapy 

for CAD Patients with Prior Myocardial Infarction (MI).

0070 AMA–PCPI .......................... Registry. 

8 .................. Heart Failure: Beta-Blocker Therapy for Left Ventricular 

Systolic Dysfunction (LVSD).

0083 AMA–PCPI .......................... Registry. 

9 .................. Major Depressive Disorder (MDD): Antidepressant 

Medication During Acute Phase for Patients with 

MDD.

0105 NCQA .................................. Claims, Registry. 

10 ................ Stroke and Stroke Rehabilitation: Computed Tomography (CT) or Magnetic Resonance Imaging (MRI) 

Reports.

00246 AMA–PCPI/NCQA .............. Claims, Registry. 

12 ................ Primary Open Angle Glaucoma (POAG): Optic Nerve 

Evaluation.

0086 AMA–PCPI .......................... Claims, Registry. 

14 ................ Age-Related Macular Degeneration (AMD): Dilated 

Macular Examination.

0087 AMA–PCPI/NCQA .............. Claims, Registry. 

18 ................ Diabetic Retinopathy ........................................................ 0088 AMA–PCPI .......................... Claims, Registry. 

19 ................ Diabetic Retinopathy: Communication with the Physician 

Managing On-going Diabetes Care.

0089 AMA–PCPI .......................... Claims, Registry. 

20 ................ Perioperative Care: Timing of Antibiotic Prophylaxis— 

Ordering Physician.

0270 AMA–PCPI/NCQA .............. Claims, Registry. 

21 ................ Perioperative Care: Selection of Prophylactic Antibiotic 0268 AMA–PCPI/NCQA .............. Claims, Registry. 

22 ................ Perioperative Care: Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures).0271 AMA–PCPI/NCQA .............. Claims, Registry. 

23 ................ Perioperative Care: Venous Thromboembolism (VTE) 

Prophylaxis (When Indicated in ALL Patients).

0239 AMA–PCPI/NCQA .............. Claims, Registry. 

24 ................ Osteoporosis: Communication with the Physician Managing On-going Care Post-Fracture of Hip, Spine or 

Distal Radius for Men and Women Aged 50 Years 

and Older.

0045 AMA–PCPI/NCQA .............. Claims, Registry. 

28 ................ Aspirin at Arrival for Acute Myocardial Infarction (AMI) .. 0092 AMA–PCPI/NCQA .............. Claims, Registry. 

30 ................ Perioperative Care: Timely Administration of Prophylactic Parenteral Antibiotics.0270 AMA–PCPI/NCQA .............. Claims, Registry. 

31 ................ Stroke and Stroke Rehabilitation: Deep Vein Thrombosis Prophylaxis (DVT) for Ischemic Stroke or 

Intracranial Hemorrhage.

0240 AMA–PCPI/NCQA .............. Claims, Registry. 

32 ................ Stroke and Stroke Rehabilitation: Discharged on 

Antiplatelet Therapy.

0325 AMA–PCPI/NCQA .............. Claims, Registry. 

33 ................ Stroke and Stroke Rehabilitation: Anticoagulant Therapy 

Prescribed for Atrial Fibrillation at Discharge.

0241 AMA–PCPI/NCQA .............. Registry. 

35 ................ Stroke and Stroke Rehabilitation: Screening for Dysphagia.0243 AMA–PCPI/NCQA .............. Claims, Registry. 

36 ................ Stroke and Stroke Rehabilitation: Consideration of Rehabilitation Services.0244 AMA–PCPI/NCQA .............. Claims, Registry. 

39 ................ Screening or Therapy for Osteoporosis for Women 

Aged 65 Years and Older.

0046 AMA–PCPI/NCQA .............. Claims, Registry. 

40 ................ Osteoporosis: Management Following Fracture of Hip, 

Spine or Distal Radius for Men and Women Aged 50 

Years and Older.

0045 AMA–PCPI/NCQA .............. Claims, Registry. 

41 ................ Osteoporosis: Pharmacologic Therapy for Men and 

Women Aged 50 Years and Older.

0049 AMA–PCPI/NCQA .............. Claims, Registry. 

43 ................ Coronary Artery Bypass Graft (CABG): Use of Internal 

Mammary Artery (IMA) in Patients with Isolated 

CABG Surgery.

0516 STS ..................................... Claims, Registry. 

44 ................ Coronary Artery Bypass Graft (CABG): Preoperative 

Beta-Blocker in Patients with Isolated CABG Surgery.

0235 STS ..................................... Claims, Registry. 

45 ................ Perioperative Care: Discontinuation of Prophylactic Antibiotics (Cardiac Procedures).0637 AMA–PCPI/NCQA .............. Claims, Registry. 

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42866 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

TABLE 30—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM INDIVIDUAL QUALITY MEASURES AVAILABLE FOR

EITHER CLAIMS-BASED REPORTING AND/OR REGISTRY-BASED REPORTING—Continued 

Physician 

quality 

reporting system measure 

No. 

Measure title NQF measure 

No. Measure developer Reporting mechanism 

46 ................ Medication Reconciliation: Reconciliation After Discharge from an Inpatient Facility.0097 AMA–PCPI/NCQA .............. Claims, Registry. 

47 ................ Advance Care Plan .......................................................... 0326 AMA–PCPI/NCQA .............. Claims, Registry. 

48 ................ Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women Aged 65 

Years and Older.

0098 AMA–PCPI/NCQA .............. Claims, Registry. 

49 ................ Urinary Incontinence: Characterization of Urinary Incontinence in Women Aged 65 Years and Older.0099 AMA–PCPI/NCQA .............. Claims, Registry. 

50 ................ Urinary Incontinence: Plan of Care for Urinary Incontinence in Women Aged 65 Years and Older.0100 AMA–PCPI/NCQA .............. Claims, Registry. 

51 ................ Chronic Obstructive Pulmonary Disease (COPD): 

Spirometry Evaluation.

0091 AMA–PCPI .......................... Claims, Registry. 

52 ................ Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy.0102 AMA–PCPI .......................... Claims, Registry. 

53 ................ Asthma: Pharmacologic Therapy ..................................... 0047 AMA–PCPI .......................... Claims, Registry. 

54 ................ 12-Lead Electrocardiogram (ECG) Performed for NonTraumatic Chest Pain.0090 AMA–PCPI/NCQA .............. Claims, Registry. 

55 ................ 12-Lead Electrocardiogram (ECG) Performed for Syncope.0093 AMA–PCPI/NCQA .............. Claims, Registry. 

56 ................ Community-Acquired Pneumonia (CAP): Vital Signs ...... 0232 AMA–PCPI/NCQA .............. Claims, Registry. 

57 ................ Community-Acquired Pneumonia (CAP): Assessment of 

Oxygen Saturation.

0094 AMA–PCPI/NCQA .............. Claims, Registry. 

58 ................ Community-Acquired Pneumonia (CAP): Assessment of 

Mental Status.

0234 AMA–PCPI/NCQA .............. Claims, Registry. 

59 ................ Community-Acquired Pneumonia (CAP): Empiric Antibiotic.0096 AMA–PCPI/NCQA .............. Claims, Registry. 

64 ................ Asthma: Asthma Assessment .......................................... 0001 AMA–PCPI .......................... Claims, Registry. 

65 ................ Treatment for Children with Upper Respiratory Infection 

(URI): Avoidance of Inappropriate Use.

0069 NCQA .................................. Claims, Registry. 

66 ................ Appropriate Testing for Children with Pharyngitis ........... 0002 NCQA .................................. Claims, Registry. 

67 ................ Myelodysplastic Syndrome (MDS) and Acute Leukemias: Baseline Cytogenetic Testing Performed on 

Bone Marrow.

0377 AMA–PCPI/ASH ................. Claims, Registry. 

68 ................ Myelodysplastic Syndrome (MDS): Documentation of 

Iron Stores in Patients Receiving Erythropoietin Therapy.

0378 AMA–PCPI/ASH ................. Claims, Registry. 

69 ................ Multiple Myeloma: Treatment with Bisphosphonates ...... 0380 AMA–PCPI/ASH ................. Claims, Registry. 

70 ................ Chronic Lymphocytic Leukemia (CLL): Baseline Flow 

Cytometry.

0379 AMA–PCPI/ASH ................. Claims, Registry. 

71 ................ Breast Cancer: Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/Progesterone Receptor (ER/PR) 

Positive Breast Cancer.

0387 AMA–PCPI/ASCO/NCCN ... Claims, Registry. 

72 ................ Colon Cancer: Chemotherapy for Stage III Colon Cancer Patients.0385 AMA–PCPI/ASCO/NCCN ... Claims, Registry. 

76 ................ Prevention of Catheter-Related Bloodstream Infections 

(CRBSI): Central Venous Catheter (CVC) Insertion 

Protocol.

0464 AMA–PCPI .......................... Claims, Registry. 

79 ................ End Stage Renal Disease (ESRD): Influenza Immunization in Patients with ESRD.0227 AMA–PCPI .......................... Claims, Registry. 

81 ................ End Stage Renal Disease (ESRD): Plan of Care for Inadequate Hemodialysis in ESRD Patients.0323 AMA–PCPI .......................... Registry. 

82 ................ End Stage Renal Disease (ESRD): Plan of Care for Inadequate Peritoneal Dialysis.0321 AMA–PCPI .......................... Registry. 

83 ................ Hepatitis C: Testing for Chronic Hepatitis C—Confirmation of Hepatitis C Viremia.0393 AMA–PCPI .......................... Registry. 

84 ................ Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating Treatment.0395 AMA–PCPI .......................... Claims, Registry. 

85 ................ Hepatitis C: HCV Genotype Testing Prior to Treatment 0396 AMA–PCPI .......................... Claims, Registry. 

86 ................ Hepatitis C: Antiviral Treatment Prescribed ..................... 0397 AMA–PCPI .......................... Claims, Registry. 

87 ................ Hepatitis C: HCV Ribonucleic Acid (RNA) Testing at 

Week 12 of Treatment.

0398 AMA–PCPI .......................... Claims, Registry. 

89 ................ Hepatitis C: Counseling Regarding Risk of Alcohol Consumption.0401 AMA–PCPI .......................... Claims, Registry. 

90 ................ Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy.0394 AMA–PCPI .......................... Claims, Registry. 

91 ................ Acute Otitis Externa (AOE): Topical Therapy .................. 0653 AMA–PCPI .......................... Claims, Registry. 

92 ................ Acute Otitis Externa (AOE): Pain Assessment ................ N/A AMA–PCPI .......................... Claims, Registry. 

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Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42867 

TABLE 30—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM INDIVIDUAL QUALITY MEASURES AVAILABLE FOR

EITHER CLAIMS-BASED REPORTING AND/OR REGISTRY-BASED REPORTING—Continued 

Physician 

quality 

reporting system measure 

No. 

Measure title NQF measure 

No. Measure developer Reporting mechanism 

93 ................ Acute Otitis Externa (AOE): Systemic Antimicrobial 

Therapy—Avoidance of Inappropriate Use.

0654 AMA–PCPI .......................... Claims, Registry. 

94 ................ Otitis Media with Effusion (OME): Diagnostic Evaluation—Assessment of Tympanic Membrane Mobility.N/A AMA–PCPI .......................... Claims, Registry. 

99 ................ Breast Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN Category (Regional 

Lymph Nodes) with Histologic Grade.

0391 AMA–PCPI/CAP ................. Claims, Registry. 

100 .............. Colorectal Cancer Resection Pathology Reporting: pT 

Category (Primary Tumor) and pN Category (Regional Lymph Nodes) with Histologic Grade.

0392 AMA–PCPI/CAP ................. Claims, Registry. 

102 .............. Prostate Cancer: Avoidance of Overuse of Bone Scan 

for Staging Low-Risk Prostate Cancer Patients.

0389 AMA–PCPI .......................... Claims, Registry. 

104 .............. Prostate Cancer: Adjuvant Hormonal Therapy for HighRisk Prostate Cancer Patients.0390 AMA–PCPI .......................... Claims, Registry. 

105 .............. Prostate Cancer: Three-Dimensional (3D) Radiotherapy 0388 AMA–PCPI .......................... Claims, Registry. 

106 .............. Major Depressive Disorder (MDD): Diagnostic Evaluation.0103 AMA–PCPI .......................... Claims, Registry. 

107 .............. Major Depressive Disorder (MDD): Suicide Risk Assessment.0104 AMA–PCPI .......................... Claims, Registry. 

108 .............. Rheumatoid Arthritis (RA): Disease Modifying AntiRheumatic Drug (DMARD) Therapy.0054 NCQA .................................. Claims, Registry. 

109 .............. Osteoarthritis (OA): Function and Pain Assessment ....... 0050 AMA–PCPI .......................... Claims, Registry. 

110 .............. Preventive Care and Screening: Influenza Immunization 

for Patients ≥ 50 Years Old.

0041 AMA–PCPI .......................... Claims, Registry. 

111 .............. Preventive Care and Screening: Pneumonia Vaccination 

for Patients 65 Years and Older.

0043 NCQA .................................. Claims, Registry. 

112 .............. Preventive Care and Screening: Screening Mammography.0031 NCQA .................................. Claims, Registry. 

113 .............. Preventive Care and Screening: Colorectal Cancer 

Screening.

0034 NCQA .................................. Claims, Registry. 

116 .............. Antibiotic Treatment for Adults with Acute Bronchitis: 

Avoidance of Inappropriate Use.

0058 NCQA .................................. Claims, Registry. 

117 .............. Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient 0055 NCQA .................................. Claims, Registry. 

118 .............. Coronary Artery Disease (CAD): Angiotensin-Converting 

Enzyme (ACE) Inhibitor or Angiotensin Receptor 

Blocker (ARB) Therapy for Patients with CAD and Diabetes and/or Left Ventricular Systolic Dysfunction 

(LVSD).

0066 AMA–PCPI .......................... Registry. 

119 .............. Diabetes Mellitus: Urine Screening for Microalbumin or 

Medical Attention for Nephropathy in Diabetic Patients.

0062 NCQA .................................. Claims, Registry. 

121 .............. Chronic Kidney Disease (CKD): Laboratory Testing 

(Calcium, Phosphorus, Intact Parathyroid Hormone 

(iPTH) and Lipid Profile).

N/A AMA–PCPI .......................... Claims, Registry. 

122 .............. Chronic Kidney Disease (CKD): Blood Pressure Management.AQA adopted AMA–PCPI .......................... Claims, Registry. 

123 .............. Chronic Kidney Disease (CKD): Plan of Care—Elevated 

Hemoglobin for Patients Receiving ErythropoiesisStimulating Agents (ESA).

AQA adopted AMA–PCPI .......................... Claims, Registry. 

124 .............. Health Information Technology (HIT): Adoption/Use of 

Electronic Health Records (EHR).

0488 CMS/QIP ............................. Claims, Registry. 

126 .............. Diabetes Mellitus: Diabetic Foot and Ankle Care, Peripheral Neuropathy—Neurological Evaluation.0417 APMA .................................. Claims, Registry. 

127 .............. Diabetes Mellitus: Diabetic Foot and Ankle Care, Ulcer 

Prevention—Evaluation of Footwear.

0416 APMA .................................. Claims, Registry. 

128 .............. Preventive Care and Screening: Body Mass Index (BMI) 

Screening and Follow-Up.

0421 CMS/QIP ............................. Claims, Registry. 

130 .............. Documentation of Current Medications in the Medical 

Record.

0419 CMS/QIP ............................. Claims, Registry. 

131 .............. Pain Assessment Prior to Initiation of Patient Therapy 

and Follow-Up.

0420 CMS/QIP ............................. Claims, Registry. 

134 .............. Screening for Clinical Depression and Follow-Up Plan ... 0418 CMS/QIP ............................. Claims, Registry. 

135 .............. Chronic Kidney Disease (CKD): Influenza Immunization AQA adopted AMA–PCPI .......................... Claims, Registry. 

137 .............. Melanoma: Continuity of Care—Recall System .............. 0650 AMA–PCPI/NCQA .............. Registry. 

138 .............. Melanoma: Coordination of Care ..................................... 0561 AMA–PCPI/NCQA .............. Registry. 

140 .............. Age-Related Macular Degeneration (AMD): Counseling 

on Antioxidant Supplement.

0566 AMA–PCPI/NCQA .............. Claims, Registry. 

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42868 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

TABLE 30—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM INDIVIDUAL QUALITY MEASURES AVAILABLE FOR

EITHER CLAIMS-BASED REPORTING AND/OR REGISTRY-BASED REPORTING—Continued 

Physician 

quality 

reporting system measure 

No. 

Measure title NQF measure 

No. Measure developer Reporting mechanism 

141 .............. Primary Open-Angle Glaucoma (POAG): Reduction of 

Intraocular Pressure (IOP) by 15% OR Documentation of a Plan of Care.

0563 AMA–PCPI/NCQA .............. Claims, Registry. 

142 .............. Osteoarthritis (OA): Assessment for Use of Anti-Inflammatory or Analgesic Over-the-Counter (OTC) Medications.0051 AMA–PCPI .......................... Claims, Registry. 

143 .............. Oncology: Medical and Radiation—Pain Intensity Quantified.0384 AMA–PCPI .......................... Registry. 

144 .............. Oncology: Medical and Radiation—Plan of Care for 

Pain.

0383 AMA–PCPI .......................... Registry. 

145 .............. Radiology: Exposure Time Reported for Procedures 

Using Fluoroscopy.

0510 AMA–PCPI/NCQA .............. Claims, Registry. 

146 .............. Radiology: Inappropriate Use of ‘‘Probably Benign’’ Assessment Category in Mammography Screening.0508 AMA–PCPI/NCQA .............. Claims, Registry. 

147 .............. Nuclear Medicine: Correlation with Existing Imaging 

Studies for All Patients Undergoing Bone Scintigraphy.

0511 AMA–PCPI .......................... Claims, Registry. 

153 .............. Chronic Kidney Disease (CKD): Referral for 

Arteriovenous (AV) Fistula.

AQA adopted AMA–PCPI .......................... Claims, Registry. 

154 .............. Falls: Risk Assessment .................................................... AQA adopted AMA–PCPI/NCQA .............. Claims, Registry. 

155 .............. Falls: Plan of Care ........................................................... AQA adopted AMA–PCPI/NCQA .............. Claims, Registry. 

156 .............. Oncology: Radiation Dose Limits to Normal Tissues ...... 0382 AMA–PCPI .......................... Claims, Registry. 

157 .............. Thoracic Surgery: Recording of Clinical Stage for Lung 

Cancer and Esophageal Cancer Resection.

0455 STS ..................................... Claims, Registry. 

158 .............. Carotid Endarterectomy: Use of Patch During Conventional Carotid Endarterectomy.0466 SVS ..................................... Claims, Registry. 

159 .............. HIV/AIDS: CD4+ Cell Count or CD4+ Percentage .......... 0404 AMA–PCPI/NCQA .............. Registry. 

160 .............. HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) 

Prophylaxis.

0405 AMA–PCPI/NCQA .............. Registry. 

161 .............. HIV/AIDS: Adolescent and Adult Patients with HIV/AIDS 

Who Are Prescribed Potent Antiretroviral Therapy.

0406 AMA–PCPI/NCQA .............. Registry. 

162 .............. HIV/AIDS: HIV RNA Control After Six Months of Potent 

Antiretroviral Therapy.

0407 AMA–PCPI/NCQA .............. Registry. 

163 .............. Diabetes Mellitus: Foot Exam .......................................... 0056 NCQA .................................. Claims, Registry. 

164 .............. Coronary Artery Bypass Graft (CABG): Prolonged 

Intubation (Ventilation).

0129 STS ..................................... Registry. 

165 .............. Coronary Artery Bypass Graft (CABG): Deep Sternal 

Wound Infection Rate.

0130 STS ..................................... Registry. 

166 .............. Coronary Artery Bypass Graft (CABG): Stroke/Cerebrovascular Accident (CVA).0131 STS ..................................... Registry. 

167 .............. Coronary Artery Bypass Graft (CABG): Postoperative 

Renal Insufficiency.

0114 STS ..................................... Registry. 

168 .............. Coronary Artery Bypass Graft (CABG): Surgical Re-exploration.0115 STS ..................................... Registry. 

169 .............. Coronary Artery Bypass Graft (CABG): Antiplatelet 

Medications at Discharge.

0237 STS ..................................... Registry. 

170 .............. Coronary Artery Bypass Graft (CABG): Beta-Blockers 

Administered at Discharge.

0238 STS ..................................... Registry. 

171 .............. Coronary Artery Bypass Graft (CABG): Lipid Management and Counseling.0118 STS ..................................... Registry. 

172 .............. Hemodialysis Vascular Access Decision-Making by Surgeon to Maximize Placement of Autogenous Arterial 

Venous (AV) Fistula.

0259 SVS ..................................... Claims, Registry. 

173 .............. Preventive Care and Screening: Unhealthy Alcohol 

Use—Screening.

AQA adopted AMA–PCPI .......................... Claims, Registry. 

175 .............. Pediatric End Stage Renal Disease (ESRD): Influenza 

Immunization.

AQA adopted AMA–PCPI .......................... Claims, Registry. 

176 .............. Rheumatoid Arthritis (RA): Tuberculosis Screening ........ AQA adopted AMA–PCPI/NCQA .............. Claims, Registry. 

177 .............. Rheumatoid Arthritis (RA): Periodic Assessment of Disease Activity.AQA adopted AMA–PCPI/NCQA .............. Claims, Registry. 

178 .............. Rheumatoid Arthritis (RA): Functional Status Assessment.AQA adopted AMA–PCPI/NCQA .............. Claims, Registry. 

179 .............. Rheumatoid Arthritis (RA): Assessment and Classification of Disease Prognosis.AQA adopted AMA–PCPI/NCQA .............. Claims, Registry. 

180 .............. Rheumatoid Arthritis (RA): Glucocorticoid Management AQA adopted AMA–PCPI/NCQA .............. Claims, Registry. 

181 .............. Elder Maltreatment Screen and Follow-Up Plan ............. AQA adopted CMS/QIP ............................. Claims, Registry. 

182 .............. Functional Outcome Assessment in Chiropractic Care ... AQA adopted CMS/QIP ............................. Claims, Registry. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42869 

TABLE 30—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM INDIVIDUAL QUALITY MEASURES AVAILABLE FOR

EITHER CLAIMS-BASED REPORTING AND/OR REGISTRY-BASED REPORTING—Continued 

Physician 

quality 

reporting system measure 

No. 

Measure title NQF measure 

No. Measure developer Reporting mechanism 

183 .............. Hepatitis C: Hepatitis A Vaccination in Patients with 

HCV.

0399 AMA–PCPI .......................... Claims, Registry. 

184 .............. Hepatitis C: Hepatitis B Vaccination in Patients with 

HCV.

0400 AMA–PCPI .......................... Claims, Registry. 

185 .............. Endoscopy & Polyp Surveillance: Colonoscopy Interval 

for Patients with a History of Adenomatous Polyps— 

Avoidance of Inappropriate Use.

0659 AMA–PCPI/NCQA .............. Claims, Registry. 

186 .............. Wound Care: Use of Compression System in Patients 

with Venous Ulcers.

AQA adopted AMA–PCPI/NCQA .............. Claims, Registry. 

187 .............. Stroke and Stroke Rehabilitation: Thrombolytic Therapy 0437 AHA/ASA/TJC ..................... Registry. 

188 .............. Referral for Otologic Evaluation for Patients with Congenital or Traumatic Deformity of the Ear.N/A AQC .................................... Claims, Registry. 

189 .............. Referral for Otologic Evaluation for Patients with History 

of Active Drainage From the Ear Within the Previous 

90 Days.

N/A AQC .................................... Claims, Registry. 

190 .............. Referral for Otologic Evaluation for Patients with a History of Sudden or Rapidly Progressive Hearing Loss.N/A AQC .................................... Claims, Registry. 

191 .............. Cataracts: 20/40 or Better Visual Acuity Within 90 Days 

Following Cataract Surgery.

0565 AMA–PCPI/NCQA .............. Registry. 

192 .............. Cataracts: Complications within 30 Days Following Cataract Surgery Requiring Additional Surgical Procedures.0564 AMA–PCPI/NCQA .............. Registry. 

193 .............. Perioperative Temperature Management ........................ 0454 AMA–PCPI .......................... Claims, Registry. 

194 .............. Oncology: Cancer Stage Documented ............................ 0386 AMA–PCPI/ASCO ............... Claims, Registry. 

195 .............. Radiology: Stenosis Measurement in Carotid Imaging 

Studies.

0507 AMA–PCPI/NCQA .............. Claims, Registry. 

196 .............. Coronary Artery Disease (CAD): Symptom and Activity 

Assessment.

0065 AMA–PCPI .......................... Registry. 

197 .............. Coronary Artery Disease (CAD): Lipid Control ................ 0074 AMA–PCPI .......................... Registry. 

198 .............. Heart Failure: Left Ventricular Function (LVF) Assessment.0079 AMA–PCPI .......................... Registry. 

199 .............. Heart Failure: Patient Education ...................................... 0082 AMA–PCPI .......................... Registry. 

200 .............. Heart Failure: Warfarin Therapy for Patients with Atrial 

Fibrillation.

0084 AMA–PCPI .......................... Registry. 

201 .............. Ischemic Vascular Disease (IVD): Blood Pressure Management Control.0073 NCQA .................................. Claims, Registry. 

202 .............. Ischemic Vascular Disease (IVD): Complete Lipid Profile 0075 NCQA .................................. Claims, Registry. 

203 .............. Ischemic Vascular Disease (IVD): Low Density 

Lipoprotein (LDL–C) Control.

0075 NCQA .................................. Claims, Registry. 

204 .............. Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic.0068 NCQA .................................. Claims, Registry. 

205 .............. HIV/AIDS: Sexually Transmitted Disease Screening for 

Chlamydia and Gonorrhea.

0409 AMA–PCPI/NCQA .............. Registry. 

206 .............. HIV/AIDS: Screening for High Risk Sexual Behaviors .... 0413 AMA–PCPI/NCQA .............. Registry. 

207 .............. HIV/AIDS: Screening for Injection Drug Use ................... 0415 AMA–PCPI/NCQA .............. Registry. 

208 .............. HIV/AIDS: Sexually Transmitted Disease Screening for 

Syphilis.

0410 AMA–PCPI/NCQA .............. Registry. 

209 .............. Functional Communication Measure-Spoken Language 

Comprehension.

0445 ASHA .................................. Registry. 

210 .............. Functional Communication Measure-Attention ................ 0449 ASHA .................................. Registry.

211 .............. Functional Communication Measure-Memory ................. 0448 ASHA .................................. Registry. 

212 .............. Functional Communication Measure-Motor Speech ........ 0447 ASHA .................................. Registry. 

213 .............. Functional Communication Measure-Reading ................. 0446 ASHA .................................. Registry. 

214 .............. Functional Communication Measure-Spoken Language 

Expression.

0444 ASHA .................................. Registry. 

215 .............. Functional Communication Measure-Writing ................... 0442 ASHA .................................. Registry. 

216 .............. Functional Communication Measure-Swallowing ............ 0443 ASHA .................................. Registry. 

217 .............. Functional Deficit: Change in Risk-Adjusted Functional 

Status for Patients with Knee Impairments.

0422 FOTO .................................. Registry. 

218 .............. Functional Deficit: Change in Risk-Adjusted Functional 

Status for Patients with Hip Impairments.

0423 FOTO .................................. Registry. 

219 .............. Functional Deficit: Change in Risk-Adjusted Functional 

Status for Patients with Lower Leg, Foot or Ankle Impairments.

0424 FOTO .................................. Registry. 

220 .............. Functional Deficit: Change in Risk-Adjusted Functional 

Status for Patients with Lumbar Spine Impairments.

0425 FOTO .................................. Registry. 

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42870 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

TABLE 30—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM INDIVIDUAL QUALITY MEASURES AVAILABLE FOR

EITHER CLAIMS-BASED REPORTING AND/OR REGISTRY-BASED REPORTING—Continued 

Physician 

quality 

reporting system measure 

No. 

Measure title NQF measure 

No. Measure developer Reporting mechanism 

221 .............. Functional Deficit: Change in Risk-Adjusted Functional 

Status for Patients with Shoulder Impairments.

0426 FOTO .................................. Registry. 

222 .............. Functional Deficit: Change in Risk-Adjusted Functional 

Status for Patients with Elbow, Wrist or Hand Impairments.

0427 FOTO .................................. Registry. 

223 .............. Functional Deficit: Change in Risk-Adjusted Functional 

Status for Patients with Neck, Cranium, Mandible, 

Thoracic Spine, Ribs, or Other General Orthopedic 

Impairments.

0428 FOTO .................................. Registry. 

224 .............. Melanoma: Overutilization of Imaging Studies in Stage 

0–IA Melanoma.

0562 AMA–PCPI .......................... Registry. 

225 .............. Radiology: Reminder System for Mammograms ............. 0509 AMA–PCPI .......................... Claims, Registry.

226 .............. Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention.0028 AMA–PCPI .......................... Claims, Registry. 

228 .............. Heart Failure (HF): Left Ventricular Function (LVF) Testing.0079 CMS .................................... Registry. 

231 .............. Asthma: Tobacco Use: Screening-Ambulatory Care Setting.N/A AMA–PCPI .......................... Claims, Registry. 

232 .............. Asthma: Tobacco Use: Intervention-Ambulatory Care 

Setting.

N/A AMA–PCPI .......................... Claims, Registry. 

233 .............. Thoracic Surgery: Recording of Performance Status 

Prior to Lung or Esophageal Cancer Resection.

0457 STS ..................................... Registry. 

234 .............. Thoracic Surgery: Pulmonary Function Tests Before 

Major Anatomic Lung Resection (Pneumonectomy, 

Lobectomy, or Formal Segmentectomy).

0458 STS ..................................... Registry. 

235 .............. Hypertension (HTN): Plan of Care ................................... 0017 AMA–PCPI .......................... Claims, Registry. 

TBD ............. Chronic Wound Care: Use of Wound Surface Culture 

Technique in Patients with Chronic Skin Ulcers.

N/A ASPS–PCPI–NCQA ............ Claims, Registry. 

TBD ............. Chronic Wound Care: Use of Wet to Dry Dressings in 

Patients with Chronic Skin Ulcers.

N/A ASPS–PCPI–NCQA ............ Claims, Registry. 

TBD ............. Substance Use Disorders: Counseling Regarding Psychosocial and Pharmacologic Treatment Options for 

Alcohol Dependence.

AQA adopted ASPS–PCPI–NCQA ............ Claims, Registry. 

TBD ............. Substance Use Disorders: Screening for Depression 

Among Patients with Substance Abuse or Dependence.

AQA adopted ASPS–PCPI–NCQA ............ Claims, Registry. 

TBD ............. Coronary Artery Disease (CAD): Symptom Management N/A ASPS–PCPI–NCQA ............ Registry. 

TBD ............. Cardiac Rehabilitation Patient Referral From an Outpatient Setting.N/A ACCF–AHA ......................... Registry. 

TBD ............. Hypertension: Blood Pressure Control ............................ N/A ACC–AHA–PCPI ................. Registry. 

TBD ............. Barrett’s Esophagus ......................................................... N/A CAP ..................................... Claims, Registry. 

TBD ............. Radical Prostatectomy Pathology Reporting ................... N/A CAP ..................................... Claims, Registry. 

TBD ............. Immunohistochemical (IHC) Evaluation of HER2 for 

Breast Cancer Patients.

N/A College of American Pathologists.Claims, Registry. 

TBD ............. Anticoagulation for Acute Pulmonary Embolus Patients 0503 ACEP .................................. Claims, Registry. 

TBD ............. Pregnancy Test for Female Abdominal Pain Patients ..... 0502 ACEP .................................. Claims, Registry. 

TBD ............. Ultrasound Determination of Pregnancy Location for 

Pregnant Patients with Abdominal Pain.

N/A ACEP .................................. Claims, Registry. 

TBD ............. Rh Immunoglobulin (Rhogam) for Rh Negative Pregnant 

Women at Risk of Fetal Blood Exposure.

N/A ACEP .................................. Registry. 

TBD ............. Surveillance after Endovascular Abdominal Aortic Aneurysm Repair (EVAR).N/A SVS ..................................... Registry. 

TBD ............. Statin Therapy at Discharge after Lower Extremity Bypass (LEB).N/A SVS ..................................... Registry. 

TBD ............. Rate of Open AAA Repair without Major Complications 

(discharged to home no later than post-operative day 

#7).

N/A SVS ..................................... Registry. 

TBD ............. Rate of EVAR without Major Complications (discharged 

to home no later than POD #2).

N/A SVS ..................................... Registry. 

TBD ............. Rate of Carotid Endarterectomy for Asymptomatic Patients, without Major Complications (discharged to 

home no later than post-operative day #2).

N/A SVS ..................................... Registry. 

TBD ............. Referral for Otology Evaluation for Patients with Acute 

or Chronic Dizziness.

N/A AQC .................................... Claims, Registry. 

TBD ............. Image Confirmation of Successful Excision of Image-Localized Breast Lesion.N/A ASBS .................................. Claims, Registry. 

TBD ............. Preoperative Diagnosis of Breast Cancer ....................... N/A ASBS .................................. Claims, Registry. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42871 

TABLE 30—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM INDIVIDUAL QUALITY MEASURES AVAILABLE FOR

EITHER CLAIMS-BASED REPORTING AND/OR REGISTRY-BASED REPORTING—Continued 

Physician 

quality 

reporting system measure 

No. 

Measure title NQF measure 

No. Measure developer Reporting mechanism 

TBD ............. Sentinel Lymph Node Biopsy for Invasive Breast Cancer N/A ASBS .................................. Registry. 

TBD ............. Biopsy Follow-up .............................................................. N/A AAD ..................................... Registry. 

TBD ............. Improvement in Patient’s Visual Function within 90 Days 

Following Cataract Surgery.

N/A AAO .................................... Registry. 

TBD ............. Patient Satisfaction within 90 Days Following Cataract 

Surgery.

N/A AAO .................................... Registry. 

(C) Proposed 2012 Measures Available 

for EHR-Based Reporting 

For 2012, we propose to again accept 

Physician Quality Reporting System 

data from EHRs for a limited subset of 

2012 Physician Quality Reporting 

System quality measures. 

Section 1848(m)(7) of the Act 

(‘‘Integration of Physician Quality 

Reporting and EHR Reporting’’), as 

added by section 3002(d) of the 

Affordable Care Act, requires that by no 

later than January 1, 2012, the Secretary 

shall develop a plan to integrate 

reporting on quality measures under the 

Physician Quality Reporting System 

with reporting requirements under the 

EHR Incentive Program under section 

1848(o) of the Act relating to the 

meaningful use of EHRs. Such 

integration shall consist of the 

following: 

(A) The selection of measures, the 

reporting of which would both 

demonstrate— 

(i) Meaningful use of an EHR for 

purposes of the Medicare EHR Incentive 

Program; and 

(ii) Quality of care furnished to an 

individual; and 

(B) Such other activities as specified 

by the Secretary. 

To align the Physician Quality 

Reporting System with the Medicare 

EHR Incentive Program, we propose to 

include all clinical quality measures 

available for reporting under the 

Medicare EHR Incentive Program (75 FR 

44398 through 44408) in the EHR-Based 

reporting option in the 2012 Physician 

Quality Reporting System for purposes 

of reporting data on quality measures 

under the EHR-reporting option. In 

2011, we included 14 of the 44 EHR 

Incentive Program measures under the 

2011 Physician Quality Reporting 

System EHR reporting mechanism. In 

order to better align Physician Quality 

Reporting System measures with those 

under the EHR Incentive Program, for 

2012, we propose to have the rest of the 

44 clinical quality measures in the 

Medicare EHR Incentive Program 

available for EHR-Based reporting under 

the 2012 Physician Quality Reporting 

System. 

Furthermore, for 2012, we propose to 

retain the following 6 additional 

measures that were available for 

reporting under the EHR-Based 

reporting mechanism under the 2011 

Physician Quality Reporting System: 

• Measure # 39: Screening or Therapy 

for Osteoporosis for Women Aged 65 

Years and Older. 

• Measure # 47: Advance Care Plan. 

• Measure # 48: Urinary 

Incontinence: Assessment of Presence or 

Absence of Urinary Incontinence in 

Women Aged 65 Years and Older. 

• Measure # 124: Health Information 

Technology (HIT): Adoption/Use of 

Electronic Health Records (EHR). 

• Measure # 173: Preventive Care and 

Screening: Unhealthy Alcohol Use— 

Screening. 

• Measure # 238: Drugs to be Avoided 

in the Elderly. 

We believe these measures meet the 

criteria listed previously for inclusion 

for reporting under the Physician 

Quality Reporting System. 

Table 31 identifies the list of 

measures we propose to include for 

EHR-Based reporting under the 2012 

Physician Quality Reporting System. 

TABLE 31—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM MEASURES AVAILABLE FOR EHR-BASED

REPORTING

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM CORE MEASURES 

128 .............. Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-up * ..... 0421 CMS/QIP 

237 .............. Hypertension (HTN): Blood Pressure Measurement ........................................................ 0013 AMA–PCPI 

226 .............. Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention ** 0028 AMA–PCPI 

MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM ALTERNATE CORE MEASURES 

110 .............. Preventative Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old 0041 AMA–PCPI 

239 .............. Weight Assessment and Counseling for Children and Adolescents ................................ 0024 NCQA 

TBD ............. Childhood Immunization Status ......................................................................................... 0038 NCQA 

MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM MEASURES 

1 .................. Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus ............................ 0059 NCQA 

2 .................. Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control in Diabetes Mellitus .......... 0064 NCQA 

3 .................. Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus .............................. 0061 NCQA 

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42872 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

TABLE 31—PROPOSED 2012 PHYSICIAN QUALITY REPORTING SYSTEM MEASURES AVAILABLE FOR EHR-BASED

REPORTING—Continued 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

5 .................. Heart Failure: Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD).0081 AMA–PCPI 

6 .................. Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with 

CAD.

0067 AMA–PCPI 

7 .................. Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior 

Myocardial Infarction (MI).

0070 AMA–PCPI 

8 .................. Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction 

(LVSD).

0083 AMA–PCPI 

9 .................. Anti-depressant medication management: (a) Effective Acute Phase Treatment, (b) Effective Continuation Phase Treatment.0105 NCQA 

12 ................ Primary Open Angle Glaucoma (POAG): Optic Nerve Evaluation ................................... 0086 AMA–PCPI 

18 ................ Diabetic Retinopathy: Documentation of Presence or Absence of Macular Edema and 

Level of Severity of Retinopathy.

0088 AMA–PCPI 

19 ................ Diabetic Retinopathy: Communication with the Physician Managing Ongoing Diabetes 

Care.

0089 AMA–PCPI 

53 ................ Asthma Pharmacologic ...................................................................................................... 0047 AMA–PCPI 

64 ................ Asthma Assessment .......................................................................................................... 0001 AMA–PCPI 

66 ................ Appropriate Testing for Children with Pharyngitis ............................................................. 0002 NCQA 

71 ................ Oncology Breast Cancer: Hormonal Therapy for Stage IC–IIIC Estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer.0387 AMA–PCPI 

72 ................ Oncology Colon Cancer: Chemotherapy for Stage III Colon Cancer Patients ................. 0385 AMA–PCPI 

102 .............. Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low Risk Prostate 

Cancer Patients.

0389 AMA–PCPI 

111 .............. Preventive Care and Screening: Screening Mammography ............................................. 0043 NCQA 

112 .............. Preventive Care and Screening: Colorectal Cancer Screening ........................................ 0031 NCQA 

113 .............. Colorectal Cancer Screening ............................................................................................ 0034 NCQA 

114 & 115 .... Smoking and Tobacco Use Cessation, Medical Assistance: a. Advising Smokers to 

Quit, b. Discussing Smoking and Tobacco Use Cessation Medications, c. Discussing 

Smoking and Tobacco Use Cessation Strategies.

0027 NCQA 

117 .............. Diabetes: Eye Exam .......................................................................................................... 0055 AMA–PCPI 

119 .............. Diabetes: Urine Screening ................................................................................................ 0062 NCQA 

163 .............. Diabetes: Foot Exam ......................................................................................................... 0056 NCQA 

197 .............. Coronary Artery Disease (CAD): Lipid Control ................................................................. 0074 AMA–PCPI 

200 .............. Heart Failure: Warfarin Therapy Patients with Atrial Fibrillation ....................................... 0084 AMA–PCPI 

201 .............. Ischemic Vascular Disease (IVD): Blood Pressure Management .................................... 0073 NCQA 

204 .............. Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic .................. 0068 NCQA 

TBD ............. Initiation and Engagement of Alcohol and Other Drug Dependence Treatment: (a) Initiation, (b) Engagement.0004 NCQA 

TBD ............. Prenatal Care: Screening for Human Immunodeficiency Virus (HIV) ............................... 0012 AMA–PCPI 

TBD ............. Prenatal Care: Anti-D Immune Globulin ............................................................................ 0014 AMA–PCPI 

236 .............. Controlling High Blood Pressure ....................................................................................... 0018 NCQA 

TBD ............. Cervical Cancer Screening ................................................................................................ 0032 NCQA 

TBD ............. Chlamydia Screening for Women ..................................................................................... 0033 NCQA 

240 .............. Use of Appropriate Medications for Asthma ..................................................................... 0036 NCQA 

TBD ............. Low Back Pain: Use of Imaging Studies ........................................................................... 0052 NCQA 

202 & 203 .... Ischemic Vascular Disease (IVD): Complete Lipid Panel and LDL Control ..................... 0075 NCQA 

TBD ............. Diabetes: Hemoglobin A1c Control (< 8.0%) .................................................................... 0575 NCQA 

OTHER PHYSICIAN QUALITY REPORTING SYSTEM EHR MEASURES 

39 ................ Screening or Therapy for Osteoporosis for Women Aged 65 Years and Older .............. 0046 AMA–PCPI/NCQA 

47 ................ Advance Care Plan ........................................................................................................... 0326 AMA–PCPI/NCQA 

48 ................ Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in 

Women Aged 65 Years and Older.

0098 AMA–PCPI/NCQA 

124 .............. Health Information Technology (HIT): Adoption/Use of Electronic Health Records 

(EHR).

0488 CMS/QIP 

173 .............. Preventive Care and Screening: Unhealthy Alcohol Use—Screening ............................. AQA Adopted AMA–PCPI 

238 .............. Drugs to be Avoided in the Elderly ................................................................................... 0022 NCQA 

* For the purpose of reporting this measure under the Physician Quality Reporting System, the reporting of this measure will count if at least 

one of the two parameters does not contain a 0 percent performance rate. 

** For the purpose of reporting this measure under the Physician Quality Reporting System, the reporting of this measure will count if at least 

one of the two pairs does not contain a 0 percent performance rate. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS2

Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42873 

(4) 2012 Physician Quality Reporting 

System Measures Groups 

We propose to retain the following 14 

2011 Physician Quality Reporting 

System measures groups for the 2012 

Physician Quality Reporting System: (1) 

Diabetes Mellitus; (2) CKD; (3) 

Preventive Care; (4) CABG; (5) 

Rheumatoid Arthritis; (6) Perioperative 

Care; (7) Back Pain; (8) CAD; (9) Heart 

Failure; (10) IVD; (11) Hepatitis C; (12) 

HIV/AIDS; (13) CAP, and (14) Asthma. 

For 2012, we propose that the CABG, 

CAD, Heart Failure, and HIV/AIDS 

measures groups would continue to be 

reportable through the registry-based 

reporting mechanism only, while the 

remaining Diabetes Mellitus, CKD, 

Preventive Care, Rheumatoid Arthritis, 

Perioperative Care, Back Pain, IVD, 

Hepatitis C, CAP, and Asthma measures 

groups would continue to be reportable 

through either claims-based reporting or 

registry-based reporting for the 2012 

Physician Quality Reporting System. We 

are retaining these measures groups for 

the 2012 Physician Quality Reporting 

System particularly because we believe 

the measures groups reflect the services 

furnished to beneficiaries by a particular 

specialty. We also believe that retaining 

these measures groups will provide 

consistency from program year to 

program year. 

In addition to the 14 measures groups 

previously, we propose the following 10 

new measures groups for 2012 to 

provide eligible professionals with more 

measures groups on which to report: 

• Chronic Obstructive Pulmonary 

Disease (COPD). 

• Inflammatory Bowel Disease. 

• Sleep Apnea. 

• Epilepsy. 

• Dementia. 

• Parkinson’s. 

• Elevated Blood Pressure. 

• Radiology. 

• Cardiovascular Prevention, which 

contains individual measures from the 

proposed Physician Quality Reporting 

System core measure set previously 

discussed. 

• Cataracts. 

These are the measures groups that 

were presented to us for inclusion for 

reporting under the 2012 Physician 

Quality Reporting System. Section 

1848(k)(2)(C)(ii) of the Act provides an 

exception to the requirement that 

measures be endorsed by the NQF. We 

may exercise this exception authority in 

a specified area or medical topic for 

which a feasible and practical measure 

has not been endorsed by NQF, so long 

as due consideration is given to 

measures that have been endorsed by 

the NQF. For the measures contained 

within these measures groups that are 

not currently NQF-endorsed, we are 

proposing to exercise this authority due 

to our interest in all of the proposed 10 

measures group’s topics. We believe that 

each of the proposed additional 

measures groups address gaps in the 

Physician Quality Reporting System 

measures groups and will also allow for 

greater reporting options for individual 

eligible professionals, thereby 

increasing participation in the Physician 

Quality Reporting System. 

Finally, as in previous program years, 

for 2012, we propose that the measures 

included in any proposed 2012 

measures group be reportable either as 

individual measures or as part of a 

measures group, except for the Back 

Pain measures group, which would 

continue to be reportable only as part of 

a measures group and not as individual 

measures in 2012. 

As with measures group reporting in 

prior program years, we propose that 

each eligible professional electing to 

report a group of measures for 2012 

must report all measures in the group 

that are applicable to each patient or 

encounter to which the measures group 

applies at least up to the minimum 

number of patients required by the 

applicable reporting criteria. 

The measures proposed for inclusion 

in each of the 2012 measures groups are 

identified in Tables 32 through 55 of 

this proposed rule. Some measures 

proposed for inclusion in the 2012 

measures groups are also 2011 

individual Physician Quality Reporting 

System measures. The title of each such 

measure is preceded with its Physician 

Quality Reporting System Measure 

Number in Tables 32 through 55. As 

stated previously, the Physician Quality 

Reporting System Measure Number is a 

unique identifier assigned by us to all 

measures in the Physician Quality 

Reporting System measure set. Once a 

Physician Quality Reporting System 

Measure Number is assigned to a 

measure, it will not be used again, even 

if the measure is subsequently retired 

from the Physician Quality Reporting 

System measure set. Measures that are 

not preceded by a number (in other 

words, those preceded by ‘‘TBD’’) in 

Tables 32 through 55 were never part of 

a Physician Quality Reporting System 

measure set prior to 2012. A number 

will be assigned to such measures for 

2012. 

TABLE 32—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 DIABETES MELLITUS MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

1 .................. Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus ............................ 0059 NCQA 

2 .................. Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control in Diabetes Mellitus .......... 0064 NCQA 

3 .................. Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus .............................. 0061 NCQA 

117 .............. Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient ................................................. 0055 NCQA 

119 .............. Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for 

Nephropathy in Diabetic Patients.

0062 NCQA 

163 .............. Diabetes Mellitus: Foot Exam ........................................................................................... 0056 NCQA 

TABLE 33—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 CKD MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

121 .............. Chronic Kidney Disease (CKD): Laboratory Testing (Calcium, Phosphorus, Intact Parathyroid Hormone (iPTH) and Lipid Profile).Not applicable AMA–PCPI 

122 .............. Chronic Kidney Disease (CKD): Blood Pressure Management ........................................ AQA adopted AMA–PCPI 

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TABLE 33—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 CKD MEASURES GROUP—Continued 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

123 .............. Chronic Kidney Disease (CKD): Plan of Care—Elevated Hemoglobin for Patients Receiving Erythropoiesis–Stimulating Agents (ESA).AQA adopted AMA–PCPI 

153 .............. Chronic Kidney Disease (CKD): Referral for Arteriovenous (AV) Fistula ......................... AQA adopted AMA–PCPI 

TABLE 34—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 PREVENTATIVE CARE MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

39 ................ Screening or Therapy for Osteoporosis for Women Aged 65 Years and Older .............. 0046 AMA–PCPI/NCQA 

48 ................ Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in 

Women Aged 65 Years and Older.

0098 AMA–PCPI/NCQA 

110 .............. Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old ... 0041 AMA–PCPI 

111 .............. Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and 

Older.

0043 NCQA 

112 .............. Preventive Care and Screening: Screening Mammography ............................................. 0031 NCQA 

113 .............. Preventive Care and Screening: Colorectal Cancer Screening ........................................ 0034 NCQA 

128 .............. Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up ...... 0421 CMS/QIP 

173 .............. Preventive Care and Screening: Unhealthy Alcohol Use—Screening ............................. AQA adopted AMA–PCPI 

226 .............. Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention .. 0028 AMA–PCPI 

TABLE 35—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 CABG MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

43 ................ Coronary Artery Bypass Graft (CABG): Use of Internal Mammary Artery (IMA) in Patients with Isolated CABG Surgery.0516 STS 

44 ................ Coronary Artery Bypass Graft (CABG): Preoperative Beta-Blocker in Patients with Isolated CABG Surgery.0235 STS 

164 .............. Coronary Artery Bypass Graft (CABG): Prolonged Intubation (Ventilation) ..................... 0129 STS 

165 .............. Coronary Artery Bypass Graft (CABG): Deep Sternal Wound Infection Rate .................. 0130 STS 

166 .............. Coronary Artery Bypass Graft (CABG): Stroke/Cerebrovascular Accident (CVA) ........... 0131 STS 

167 .............. Coronary Artery Bypass Graft (CABG): Postoperative Renal Insufficiency ..................... 0114 STS 

168 .............. Coronary Artery Bypass Graft (CABG): Surgical Re-exploration ..................................... 0115 STS 

169 .............. Coronary Artery Bypass Graft (CABG): Antiplatelet Medications at Discharge ............... 0237 STS 

170 .............. Coronary Artery Bypass Graft (CABG): Beta-Blockers Administered at Discharge ......... 0238 STS 

171 .............. Coronary Artery Bypass Graft (CABG): Lipid Management and Counseling ................... 0118 STS 

* This measures group is reportable through registry-based reporting only. 

TABLE 36—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 RHEUMATOID ARTHRITIS MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

108 .............. Rheumatoid Arthritis (RA): Disease Modifying Anti-Rheumatic Drug (DMARD) Therapy 0054 NCQA 

176 .............. Rheumatoid Arthritis (RA): Tuberculosis Screening ......................................................... AQA adopted AMA–PCPI/NCQA 

177 .............. Rheumatoid Arthritis (RA): Periodic Assessment of Disease Activity .............................. AQA adopted AMA–PCPI/NCQA 

178 .............. Rheumatoid Arthritis (RA): Functional Status Assessment .............................................. AQA adopted AMA–PCPI/NCQA 

179 .............. Rheumatoid Arthritis (RA): Assessment and Classification of Disease Prognosis .......... AQA adopted AMA–PCPI/NCQA 

180 .............. Rheumatoid Arthritis (RA): Glucocorticoid Management .................................................. AQA adopted AMA–PCPI/NCQA 

TABLE 37—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 PERIOPERATIVE CARE MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF Measure 

No. Measure developer 

20 ................ Perioperative Care: Timing of Antibiotic Prophylaxis—Ordering Physician ...................... 0270 AMA–PCPI/NCQA 

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TABLE 37—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 PERIOPERATIVE CARE MEASURES GROUP— 

Continued 

Physician 

quality reporting system 

No. 

Measure title NQF Measure 

No. Measure developer 

21 ................ Perioperative Care: Selection of Prophylactic Antibiotic—First OR Second Generation 

Cephalosporin.

0268 AMA–PCPI/NCQA 

22 ................ Perioperative Care: Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures).0271 AMA–PCPI/NCQA 

23 ................ Perioperative Care: Venous Thromboembolism (VTE) Prophylaxis (When Indicated in 

ALL Patients).

0239 AMA–PCPI/NCQA 

TABLE 38—PROPOSED MEASURES INCLUDED IN THE 2012 PROPOSED BACK PAIN MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

148 .............. Back Pain: Initial Visit ........................................................................................................ 0322 NCQA 

149 .............. Back Pain: Physical Exam ................................................................................................ 0319 NCQA 

150 .............. Back Pain: Advice for Normal Activities ............................................................................ 0315 NCQA 

151 .............. Back Pain: Advice Against Bed Rest ................................................................................ 0313 NCQA 

TABLE 39—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 CAD MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

6 .................. Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with 

CAD.

0067 AMA–PCPI 

196 .............. Coronary Artery Disease (CAD): Symptom and Activity Assessment .............................. 0065 AMA–PCPI 

197 .............. Coronary Artery Disease (CAD): Lipid Control ................................................................. 0074 AMA–PCPI 

226 .............. Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention .. 0028 AMA–PCPI 

* This measures group is reportable through registry-based reporting only. 

TABLE 40—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 HEART FAILURE MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

5 .................. Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor 

Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD).

0081 AMA–PCPI 

8 .................. Heart Failure: Beta–Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD) .. 0083 AMA–PCPI 

198 .............. Heart Failure: Left Ventricular Function (LVF) Assessment ............................................. 0079 AMA–PCPI 

199 .............. Heart Failure: Patient Education ....................................................................................... 0082 AMA–PCPI 

226 .............. Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention .. 0028 AMA–PCPI 

* This measures group is reportable through registry-based reporting only. 

TABLE 41—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 IVD MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

201 .............. Ischemic Vascular Disease (IVD): Blood Pressure Management Control ........................ 0073 NCQA 

202 .............. Ischemic Vascular Disease (IVD): Complete Lipid Profile ................................................ 0075 NCQA 

203 .............. Ischemic Vascular Disease (IVD): Low Density Lipoprotein (LDL–C) Control ................. 0075 NCQA 

204 .............. Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic .................. 0068 NCQA 

226 .............. Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention .. 0028 AMA–PCPI 

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TABLE 42—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 HEPATITIS C MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

84 ................ Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating Treatment ........................ 0395 AMA–PCPI 

85 ................ Hepatitis C: HCV Genotype Testing Prior to Treatment ................................................... 0396 AMA–PCPI 

86 ................ Hepatitis C: Antiviral Treatment Prescribed ...................................................................... 0397 AMA–PCPI 

87 ................ Hepatitis C: HCV Ribonucleic Acid (RNA) Testing at Week 12 of Treatment ................. 0398 AMA–PCPI 

89 ................ Hepatitis C: Counseling Regarding Risk of Alcohol Consumption ................................... 0401 AMA–PCPI

90 ................ Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy ...... 0394 AMA–PCPI 

183 .............. Hepatitis C: Hepatitis A Vaccination in Patients with HCV ............................................... 0399 AMA–PCPI 

184 .............. Hepatitis C: Hepatitis B Vaccination in Patients with HCV ............................................... 0400 AMA–PCPI 

TABLE 43—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 HIV/AIDS MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

159 .............. HIV/AIDS: CD4+ Cell Count or CD4+ Percentage ........................................................... 0404 AMA–PCPI/NCQA 

160 .............. HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) Prophylaxis ................................... 0405 AMA–PCPI/NCQA 

161 .............. HIV/AIDS: Adolescent and Adult Patients with HIV/AIDS Who Are Prescribed Potent 

Antiretroviral Therapy.

0406 AMA–PCPI/NCQA 

162 .............. HIV/AIDS: HIV RNA Control After Six Months of Potent Antiretroviral Therapy .............. 0407 AMA–PCPI/NCQA 

205 .............. HIV/AIDS: Sexually Transmitted Disease Screening for Chlamydia and Gonorrhea ....... 0409 AMA–PCPI/NCQA 

206 .............. HIV/AIDS: Screening for High Risk Sexual Behaviors ..................................................... 0413 AMA–PCPI/NCQA 

207 .............. HIV/AIDS: Screening for Injection Drug Use .................................................................... 0415 AMA–PCPI/NCQA 

208 .............. HIV/AIDS: Sexually Transmitted Disease Screening for Syphilis ..................................... 0410 AMA–PCPI/NCQA 

* This measures group is selected to be reportable through registry-based reporting only. 

TABLE 44—PROPOSED MEASURES INCLUDED IN THEPROPOSED 2012 CAP MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

56 ................ Community–Acquired Pneumonia (CAP): Vital Signs ....................................................... 0232 AMA–PCPI/NCQA 

57 ................ Community–Acquired Pneumonia (CAP): Assessment of Oxygen Saturation ................. 0094 AMA–PCPI/NCQA 

58 ................ Community–Acquired Pneumonia (CAP): Assessment of Mental Status ......................... 0234 AMA–PCPI/NCQA 

59 ................ Community–Acquired Pneumonia (CAP): Empiric Antibiotic ............................................ 0096 AMA–PCPI/NCQA 

TABLE 45—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 ASTHMA MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

53 ................ Asthma: Pharmacologic Therapy ...................................................................................... 0047 AMA–PCPI 

64 ................ Asthma: Asthma Assessment ........................................................................................... 0001 AMA–PCPI 

231 .............. Asthma: Tobacco Use: Screening—Ambulatory Setting .................................................. N/A AMA–PCPI 

232 .............. Asthma: Tobacco Use: Intervention—Ambulatory Screening ........................................... N/A AMA–PCPI 

TABLE 46—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 COPD MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

110 .............. Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old ... 0041 AMA–PCPI 

111 .............. Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and 

Older.

0043 AMA–PCPI 

51 ................ Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation ....................... 0091 AMA–PCPI 

52 ................ Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy ..................... 0102 AMA–PCPI 

226 .............. Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention .. 0028 AMA–PCPI 

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TABLE 47—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 IBD MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

TBD ............. Inflammatory Bowel Disease (IBD): Assessment of Inflammatory Bowel Disease Activity and Severity.N/A AGA/AMA–PCPI 

TBD ............. Inflammatory Bowel Disease (IBD): Preventive Care: Steroid Sparing Therapy ............. N/A AGA/AMA–PCPI 

TBD ............. Inflammatory Bowel Disease (IBD): Preventive Care: Steroid Related Iatrogenic Injury—Bone Loss Assessment.N/A AGA/AMA–PCPI 

TBD ............. Inflammatory Bowel Disease (IBD): Preventive Care: Influenza Immunization ................ N/A AGA/AMA–PCPI 

TBD ............. Inflammatory Bowel Disease (IBD): Preventive Care: Pneumococcal Immunization ....... N/A AGA/AMA–PCPI 

TBD ............. Inflammatory Bowel Disease (IBD): Screening for Latent TB Before Initiating Anti–TNF 

Therapy.

N/A AGA/AMA–PCPI 

TBD ............. Inflammatory Bowel Disease (IBD): Hepatitis B Assessment Before Initiating Anti–TNF 

Therapy.

N/A AGA/AMA–PCPI 

226 .............. Preventative Care and Screening: Tobacco Use: Screening and Cessation Intervention 0028 AMA–PCPI 

* This measures group is reportable thought registry-based reporting only. 

TABLE 48—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 SLEEP APNEA MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

TBD ............. Assessment of Sleep Symptoms ...................................................................................... N/A AMA/PCPI/AASM 

TBD ............. Severity Assessment at Initial Diagnosis .......................................................................... N/A AMA/PCPI/AASM 

TBD ............. Positive Airway Pressure Therapy Prescribed .................................................................. N/A AMA/PCPI/AASM 

TBD ............. Assessment of Adherence to Positive Airway Pressure Therapy .................................... N/A AMA/PCPI/AASM 

* This measures group is reportable thought registry-based reporting only. 

TABLE 49—PROPOSED MEASURES IN THE PROPOSED 2012 EPILEPSY MEASURES GROUP

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

TBD ............. Seizure Type(s) and Current Seizure Frequency(ies) ...................................................... N/A AAN/AMA–PCPI 

TBD ............. Documentation of Etiology of Epilepsy or Epilepsy Syndrome ......................................... N/A AAN/AMA–PCPI 

TBD ............. Querying and Counseling about Anti-Epileptic Drug (AED) Side-Effects ......................... N/A AAN/AMA–PCPI 

TBD ............. Counseling about Epilepsy Specific Safety Issues ........................................................... N/A AAN/AMA–PCPI 

TBD ............. Counseling for Women of Childbearing Potential with Epilepsy ....................................... N/A AAN/AMA–PCPI 

TABLE 50—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 DEMENTIA MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

TBD ............. Dementia: Staging of Dementia ........................................................................................ N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

TBD ............. Dementia: Cognitive Assessment ..................................................................................... N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

TBD ............. Dementia: Functional Status Assessment ........................................................................ N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

TBD ............. Dementia: Neuropsychiatric Symptom Assessment ......................................................... N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

TBD ............. Dementia: Management of Neuropsychiatric Symptoms .................................................. N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

TBD ............. Dementia: Screening for Depressive Symptoms .............................................................. N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

TBD ............. Dementia: Counseling Regarding Safety Concerns ......................................................... N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

TBD ............. Dementia: Counseling Regarding Risks of Driving ........................................................... N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

TBD ............. Dementia: Caregiver Education and Support ................................................................... N/A AAN/AGS/AMDA/ 

APA/AMA–PCPI 

* This measures group is reportable thought registry-based reporting only. 

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TABLE 51—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 PARKINSON’S MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

TBD ............. Annual Parkinson’s Disease Diagnosis Review ................................................................ N/A AAN 

TBD ............. Psychiatric Disorders or Disturbances Assessment ......................................................... N/A AAN 

TBD ............. Cognitive Impairment or Dysfunction Assessment ........................................................... N/A AAN 

TBD ............. Querying about Sleep Disturbances ................................................................................. N/A AAN 

TBD ............. Parkinson’s Disease Rehabilitative Therapy Options ....................................................... N/A AAN 

TBD ............. Parkinson’s Disease Related Safety Issues Counseling .................................................. N/A AAN 

TBD ............. Parkinson’s Disease Medical and Surgical Treatment Options Reviewed ....................... N/A AAN 

* This measures group is reportable thought registry-based reporting only. 

TABLE 52—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 ELEVATED BLOOD PRESSURE MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title 

NQF 

measure 

No. 

Measure 

developer 

TBD ............. Aspirin or Other Anti-Platelet or Anti-Coagulant Therapy N/A ........... ABIM 

TBD ............. Complete Lipid Profile ................................................................................................................................ N/A ........... ABIM 

TBD ............. Urine Protein Test ...................................................................................................................................... N/A ........... ABIM 

TBD ............. Annual Serum Creatinine Test .................................................................................................................. N/A ........... ABIM 

TBD ............. Diabetes Documentation or Screen Test .................................................................................................. N/A ........... ABIM 

TBD ............. Counseling for Diet and Physical Activity .................................................................................................. N/A ........... ABIM 

TBD ............. Blood Pressure Control .............................................................................................................................. N/A ........... ABIM 

TBD ............. LDL Control ................................................................................................................................................ N/A ........... ABIM 

TBD ............. Overall Hypertension Care Satisfaction ..................................................................................................... N/A ........... ABIM 

TBD ............. Patient Self-care Support ........................................................................................................................... N/A ........... ABIM 

* This measures group is reportable thought registry-based reporting only. 

TABLE 53—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 RADIOLOGY MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title NQF measure 

No. Measure developer 

TBD ............. Reporting to a Radiation Dose Index Registry ................................................................. N/A 

TBD ............. Cumulative Count of Potential High Dose Radiation Imaging Studies: CT Scans and 

Cardiac Nuclear Medicine Scans 

N/A ABMS/ABR/ACR/ 

PCPI 

TBD ............. Utilization of a Standardized Nomenclature for CT Imaging Description ......................... N/A ABR 

TBD ............. Appropriateness: Follow-up CT Imaging for Incidental Pulmonary Nodules According to 

Recommended Guidelines.

N/A ABR 

TBD ............. Overuse: Abdomen, Pelvis or Combined Abdomen/Pelvis CT Studies ........................... N/A ABR 

TBD ............. Equipment Evaluation for Pediatric CT Imaging Protocols ............................................... N/A ABR 

TBD ............. Utilization of Pediatric CT Imaging Protocols .................................................................... N/A ABR 

TBD ............. Search for Prior Imaging Studies through a Secure, Authorized Media-Free Shared Archive.N/A ABR 

TBD ............. Images Available for Patient Follow-up and Comparison Purposes ................................ N/A ABR 

TBD ............. Exposure Time Reported for Procedures Using Fluoroscopy .......................................... N/A PCPI/ACR/NCQA 

* This measures group is reportable thought registry-based reporting only. 

TABLE 54—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 CARDIOVASCULAR PREVENTION MEASURES GROUP

Physician 

quality reporting system Measure title NQF measure 

No. Measure developer 

204 .............. Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic .................. 0068 NCQA 

236 .............. Controlling High Blood Pressure ....................................................................................... 0018 NCQA 

2 .................. Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control in Diabetes Mellitus .......... 0064 NCQA 

226 .............. Measure pair: a. Tobacco Use Assessment, b. Tobacco Cessation Intervention ............ 0028 AMA–PCPI 

TBD ............. Ischemic Vascular Disease (IVD): Complete Lipid Profile and LDL Control < 100 .......... 0075 NCQA 

TBD ............. Proportion of adults 18 years and older who have had their BP measured within the 

preceding 2 years.

N/A CMS 

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TABLE 55—PROPOSED MEASURES INCLUDED IN THE PROPOSED 2012 CATARACTS MEASURES GROUP * 

Physician 

quality reporting system 

No. 

Measure title 

NQF 

measure 

No. 

Measure developer 

TBD ............. Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery ... N/A ... AAO 

TBD ............. Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery ... N/A ... AAO 

191 .............. Cataracts: 20/40 or Better Visual Acuity within 90 Days Following Cataract Surgery ....................... 0565 AMA–PCPI/NCQA 

192 .............. Cataracts: Complications within 30 Days Following Cataract Surgery Requiring Additional Surgical 

Procedures.

0564 AMA–PCPI/NCQA 

* This measures group is reportable thought registry-based reporting only. 

As with measures group reporting in 

the 2008, 2009, 2010, and 2011 

Physician Quality Reporting System, we 

propose that each eligible professional 

electing to report a group of measures 

for 2012 must report all measures in the 

group that are applicable to each patient 

or encounter to which the measures 

group applies at least up to the 

minimum number of patients required 

by the applicable reporting criteria. We 

proposed that the measures proposed 

for the 2012 Back Pain Measures Group 

would continue to be reportable only as 

part of a measures group and not as 

individual measures for the 2012 

Physician Quality Reporting System. 

Measures selected for inclusion in all 

other 2012 Physician Quality Reporting 

System measures groups would be 

reportable either as individual measures 

or as part of a measures group. 

We note that the specifications for 

measures groups do not necessarily 

contain all the specification elements of 

each individual measure making up the 

measures group. This is based on the 

need for a common set of denominator 

specifications for all the measures 

making up a measures group in order to 

define the applicability of the measures 

group. Therefore, the specifications and 

instructions for measures groups would 

be provided separately from the 

specifications and instructions for the 

individual 2012 Physician Quality 

Reporting System measures. We will 

post the detailed specifications and 

specific instructions for reporting 

measures groups on the Physician 

Quality Reporting System section of the 

CMS Web site at http:// 

www.cms.hhs.gov/PQRS by no later 

than December 31, 2011. 

Additionally, the detailed measure 

specifications and instructions for 

submitting data on those 2012 measures 

groups that were also included as 2011 

Physician Quality Reporting System 

measures groups may be updated or 

modified by the measure developer 

prior to 2012. Therefore, the 2012 

Physician Quality Reporting System 

measure specifications for any given 

measures group could be different from 

specifications and submission 

instructions for the same measures 

group used for 2011. For example, the 

measure developer may change the 

codes contained in the measure’s 

denominator. These measure 

specification changes do not materially 

impact the intended meaning of the 

measures or the strength of the 

measures. We invite public comment on 

our proposed retention of all 2011 

Physician Quality Reporting System 

measures groups, as well as our newly 

proposed measures groups for the 2012 

Physician Quality Reporting System. 

(5) Proposed 2012 Physician Quality 

Reporting System Quality Measures for 

Group Practices Selected To Participate 

in the GPRO (GPRO) 

For 2012, we propose that group 

practices selected to participate in the 

2012 Physician Quality Reporting 

System GPRO would be required to 

report on 40 proposed measures listed 

in Table 55. Specifically, for the 2012 

Physician Quality Reporting System, we 

propose to retain most of the measures 

available for reporting under the 2011 

Physician Quality Reporting System 

GPRO because of our continued interest 

in the reporting of those measures as 

well as to maintain program consistency 

from year to year. However, for 2012, we 

propose to retire the following measures 

that were required under the 2010 and 

2011 GPRO (that is, GPRO I for 2011): 

• Diabetes Mellitus: Hemoglobin A1c 

Testing. 

• Diabetes Mellitus: Lipid Profile. 

• Hypertension (HTN): Blood 

Pressure Measurement. 

Furthermore, we propose to add the 

following Physician Quality core 

measures that were not available for 

reporting via the GPRO for the 2011 

Physician Quality Reporting System: 

• Ischemic Vascular Disease (IVD): 

Use of Aspirin or another 

Antithrombotic. 

• Measure pair: a. Tobacco Use 

Assessment, b. Tobacco Cessation 

Intervention. 

• Ischemic Vascular Disease (IVD): 

Complete Lipid Profile and LDL Control 

< 100. 

• Proportion of adults 18 years and 

older who have had their blood pressure 

measured within the preceding 2 years. 

In addition to adding the Physician 

Quality Reporting System core measures 

that were not available for reporting 

under the GPRO for the 2011 Physician 

Quality Reporting System, we propose 

to add the following measures for 

reporting under the 2012 Physician 

Quality Reporting System GPRO: 

• Chronic Obstructive Pulmonary 

Disease (COPD): Bronchodilator 

Therapy. 

• Adult Weight Screening and 

Follow-up. 

• Ischemic Vascular Disease (IVD): 

Blood Pressure Management Control. 

• Chronic Obstructive Pulmonary 

Disease (COPD): Spirometry Evaluation. 

• 30 Day Post Discharge Physician 

Visit. 

• Medication Reconciliation: 

Reconciliation After Discharge from an 

Inpatient Facility. 

• Diabetes: Aspirin Use. 

• Falls: Screening for Fall Risk. 

• Osteoporosis: Management 

Following Fracture of Hip, Spine or 

Distal Radius for Men and Women Aged 

50 Years and Older. 

• Diabetes Mellitus: Tobacco Non 

Use. 

• Coronary Artery Disease (CAD): 

LDL-level < 100 mg/dl. 

• Diabetes Mellitus: Hemoglobin A1c 

Poor Control in Diabetes Mellitus (less 

than 8 percent). 

• Chronic Obstructive Pulmonary 

Disease (COPD): Smoking Cessation 

Counseling Received. 

• Monthly International Normalized 

Ratio (INR) for Beneficiaries on 

Warfarin. 

We propose these new measures 

because they are NQF-endorsed 

measures that are consistent with other 

CMS quality reporting initiatives. We 

believe it is in the stakeholders’ interest 

to align measures in different initiatives. 

As stated previously in section (e)(6) of 

this proposed rule, we propose that 

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group practices selected to participate in 

the Physician Quality Reporting System 

GPRO would be required to report on all 

measures listed in Table 56. 

TABLE 56—PROPOSED MEASURES FOR PHYSICIAN GROUPS PARTICIPATING IN THE 2012 PHYSICIAN QUALITY REPORTING

SYSTEM GROUP PRACTICE REPORTING OPTION (GPRO) 

Physician 

quality 

reporting 

system No. 

Measure title NQF measure 

No. Measure developer 

1 .................. Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus (> 9%) ................. 0059 NCQA 

2 .................. Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control in Diabetes Mellitus .......... 0064 NCQA 

3 .................. Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus .............................. 0061 NCQA 

5 .................. Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor 

Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD).

0081 AMA–PCPI 

6 .................. Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with 

CAD.

0067 AMA–PCPI 

7 .................. Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior 

Myocardial Infarction (MI).

0070 AMA–PCPI 

8 .................. Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD) ... 0083 AMA–PCPI 

110 .............. Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old ... 0041 AMA–PCPI 

111 .............. Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and 

Older.

0043 NCQA 

112 .............. Preventive Care and Screening: Screening Mammography ............................................. 0031 NCQA 

113 .............. Preventive Care and Screening: Colorectal Cancer Screening ........................................ 0034 NCQA 

117 .............. Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient ................................................. 0055 NCQA 

118 .............. Coronary Artery Disease (CAD): Angiotensin-Converting Enzyme (ACE) Inhibitor or 

Angiotensin Receptor Blocker (ARB) Therapy for Patients with CAD and Diabetes 

and/or Left Ventricular Systolic Dysfunction (LVSD).

0066 AMA–PCPI 

119 .............. Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for 

Nephropathy in Diabetic Patients.

0062 NCQA 

163 .............. Diabetes Mellitus: Foot Exam ........................................................................................... 0056 NCQA 

228 .............. Heart Failure: Left Ventricular Function (LVF) Testing ..................................................... ............................ CMS 

198 .............. Heart Failure: Left Ventricular Function (LVF) Assessment ............................................. 0079 AMA–PCPI 

227 .............. Heart Failure: Weight Measurement ................................................................................. 0085 AMA–PCPI 

199 .............. Heart Failure: Patient Education ....................................................................................... 0082 AMA–PCPI 

236 .............. Hypertension (HTN): Blood Pressure Control ................................................................... 0018 NCQA 

235 .............. Hypertension (HTN): Plan of Care .................................................................................... 0017 AMA–PCPI 

201 .............. Ischemic Vascular Disease (IVD): Blood Pressure Management Control ........................ 0073 NCQA 

51 ................ Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation ....................... 0091 AMA–PCPI 

226 .............. Measure pair: a. Tobacco Use Assessment, b. Tobacco Cessation Intervention ............ 0028 AMA–PCPI 

52 ................ Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy ..................... 0102 AMA–PCPI 

204 .............. Ischemic Vascular Disease (IVD): Use of Aspirin or another Antithrombotic ................... 0068 NCQA 

TBD ............. Ischemic Vascular Disease (IVD): Complete Lipid Profile and LDL Control < 100 .......... 0075 NCQA 

TBD ............. Proportion of adults 18 years and older who have had their BP measured within the 

preceding 2 years.

N/A CMS 

TBD ............. 30-Day Post Discharge Physician Visit ............................................................................. N/A CFMC 

46 ................ Medication Reconciliation: Reconciliation After Discharge from an Inpatient Facility ...... 0097 AMA–PCPI/NCQA 

197 .............. Coronary Artery Disease (CAD): Lipid Control ................................................................. 0074 AMA–PCPI 

200 .............. Heart Failure: Warfarin Therapy for Patients with Atrial Fibrillation ................................. 0084 AMA–PCPI 

TBD ............. Diabetes: Aspirin Use ........................................................................................................ 0076 MN Community 

Measurement 

TBD ............. Falls: Screening for Fall Risk ............................................................................................ 0101 NCQA 

40 ................ Osteoporosis: Management Following Fracture of Hip, Spine or Distal Radius for Men 

and Women Aged 50 Years and Older.

0045 AMA–PCPI/NCQA 

128 .............. Adult Weigh Screening and Follow-up .............................................................................. 421 CMS/QIP 

TBD ............. Diabetes Mellitus: Tobacco Non-Use ................................................................................ 0729 MN Community 

Management 

TBD ............. Coronary Artery Disease (CAD): LDL-level < 100 mg/dl ................................................... N/A CMS 

TBD ............. Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes Mellitus (< 8%) ................ 575 NCQA 

TBD ............. Chronic Obstructive Pulmonary Disease (COPD): Smoking Cessation Counseling Received.N/A CMS 

TBD ............. Monthly INR for Beneficiaries on Warfarin ........................................................................ 555 CMS 

We intend to provide a separate 

measures specifications document and 

other supporting documents for group 

practices participating in the 2012 

Physician Quality Reporting System 

GPRO. We anticipate that the group 

practice measures specifications 

document will be available by 

November 15, 2011 or shortly thereafter 

on the Physician Quality Reporting 

System section of the CMS Web site at 

http://www.cms.hhs.gov/PQRS. We 

invite public comment on the proposed 

2012 Physician Quality Reporting 

System measures for group practices 

selected to participate in the 2012 

Physician Quality Reporting System 

GPRO. 

g. Maintenance of Certification Program 

Incentive 

Section 3002(c) of the Affordable Care 

Act amends section 1848(k)(4) of the 

Act, as amended by section 3002(c) of 

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the Affordable Care Act, requires the 

Secretary to address a mechanism 

whereby an eligible professional may 

provide data on quality measures 

through a maintenance of certification 

program (Maintenance of Certification 

Program) operated by a specialty body 

of the American Board of Medical 

Specialties (ABMS). In addition, section 

1848(m)(7) of the Act (‘‘Additional 

Incentive Payment’’), as added by 

section 10327(a) of the Affordable Care 

Act, provides for an additional 0.5 

percent incentive payment for years 

2011 through 2014 if certain 

requirements are met. In accordance 

with section 1848(m)(7)(B) of the Act 

governing the ‘‘Additional Incentive 

Payment,’’ in order to qualify for the 

additional incentive payment, an 

eligible professional must— 

• Satisfactorily submit data on quality 

measures under the Physician Quality 

Reporting System for a year and have 

such data submitted— 

++ On their behalf through a 

Maintenance of Certification Program 

that meets the criteria for a registry 

under the Physician Quality Reporting 

System; or 

++ In an alternative form and manner 

determined appropriate by the 

Secretary; and 

++ More frequently than is required 

to qualify for or maintain board 

certification status: 

++ Participate in such a Maintenance 

of Certification Program for a year; and 

++ Successfully complete a qualified 

Maintenance of Certification Program 

practice assessment for such year. 

Section 1848(m)(7)(C)(i) of the Act 

defines ‘‘Maintenance of Certification 

Program’’ as a continuous assessment 

program, such as a qualified ABMS 

Maintenance of Certification Program, 

or an equivalent program (as determined 

by the Secretary), that advances quality 

and the lifelong learning and selfassessment of board certified specialty 

physicians by focusing on the 

competencies of patient care, medical 

knowledge, practice-based learning, 

interpersonal and communications 

skills and professionalism. Such a 

program shall require a physician to do 

the following: 

• Maintain a valid, unrestricted 

medical license in the United States. 

• Participate in educational and selfassessment programs that require an 

assessment of what was learned. 

• Demonstrate, through a formalized, 

secure examination, that the physician 

has the fundamental diagnostic skills, 

medical knowledge, and clinical 

judgment to provide quality care in their 

respective specialty. 

• Successful completion of a 

qualified Maintenance of Certification 

Program practice assessment. 

As defined in section 

1848(m)(7)(C)(ii) of the Act, a ‘‘qualified 

Maintenance of Certification Program 

practice assessment’’ means an 

assessment of a physician’s practice 

that— 

• Includes an initial assessment of an 

eligible professional’s practice that is 

designed to demonstrate the physician’s 

use of evidence-based medicine; 

• Includes a survey of patient 

experience with care; and 

• Requires a physician to implement 

a quality improvement intervention to 

address a practice weakness identified 

in the initial assessment and then to 

remeasure to assess performance after 

such intervention. 

To qualify for the additional incentive 

payment, section 1848(m)(7)(B)(iii) of 

the Act also requires the Maintenance of 

Certification Program to submit to CMS, 

on behalf of the eligible professional, 

information: 

• In a form and manner specified by 

the Secretary, that the eligible 

professional more frequently than is 

required to qualify for or maintain board 

certification status, participates in the 

Maintenance of Certification Program 

for a year and successfully completes a 

qualified Maintenance of Certification 

Program practice assessment for such 

year; 

• Upon request by the Secretary, 

information on the survey of patient 

experience with care; and 

• As the Secretary may require, on 

the methods, measures, and data used 

under the Maintenance of Certification 

Program and the qualified Maintenance 

of Certification Program practice 

assessment. 

In order to qualify for the additional 

0.5 percent incentive payment in 2011, 

eligible professionals were required to 

participate more frequently in each of 

the following four parts of the 

Maintenance of Certification Program: 

• Maintain a valid unrestricted 

license in the United States. For 2011, 

physicians simply needed to maintain a 

valid unrestricted license in the United 

States to meet the requirement for 

‘‘more frequent’’ participation with 

respect to this part (75 FR 73541 

through 73546). 

• Participate in educational and selfassessment programs that require an 

assessment of what was learned. 

• Demonstrate, through a formalized 

secure examination, that the physician 

has the fundamental diagnostic skills, 

medical knowledge, and clinical 

judgment to provide quality care in their 

respective specialty. 

• Successfully complete a qualified 

maintenance of certification program 

practice assessment. 

We have received requests from the 

American Board of Medical Specialties, 

as well as various specialty 

organizations, to revise the criteria for 

satisfying the Maintenance of 

Certification Program additional 

incentive, because these entities believe 

that more frequent participation in all 

four parts of the Maintenance of 

Certification Program is too narrow. We 

have further considered the language 

under section 1848(m)(7)(B)(ii)(I) of the 

Act and we believe it can be interpreted 

more broadly. In particular, we note that 

the requirement that a professional 

‘‘more frequently than is required to 

qualify for or maintain board 

certification status participates in such 

a Maintenance of Certification Program’’ 

could refer to the program as a whole, 

such that any element performed more 

frequently than is required satisfies the 

general requirement. The nature of the 

various components of a maintenance of 

certification program also suggest that it 

is not necessary that each of the four 

elements of the program be performed 

more frequently. We previously stated 

we believe that the ‘‘more frequently’’ 

requirement does not apply to the first 

part, which states that a physician 

maintain a valid unrestricted license, as 

there is no way a physician may 

maintain a valid unrestricted license 

‘‘more frequently.’’ As such, we believe 

that the more frequently requirement 

could be satisfied based on any of the 

other elements of the program (that is, 

educational and self-assessment 

program; secure examination; or 

practice assessment). Specifically, we 

believe that if a professional more 

frequently than is required satisfies one 

or more of those parts of a program, the 

more frequently requirement would be 

met. Accordingly, we propose that in 

order to earn an additional 0.5 percent 

incentive for 2012 through 2014, an 

eligible professional must participate 

more frequently than is required in at 

least one of the following four parts of 

the Maintenance of Certification 

Program, as well as ‘‘more frequent’’ 

participation in the practice assessment 

component. With respect to how to 

assess whether a professional completes 

one of the elements of a program ‘‘more 

frequently,’’ we believe that this would 

be tied to the specific requirements of 

Board certification for the professional. 

Given that different specialties have 

different certification requirements 

(physician examination requirements to 

maintain Board certification varies 

widely depending on specialty), we do 

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not believe it is appropriate to impose 

a uniform requirement for all 

professionals and therefore, we believe 

that the board could determine for a 

particular program element the more 

frequent requirement for the 

professional. However, we believe that a 

minimum threshold would need to be 

met such that the professional would 

have to do something more frequently or 

more than what is ordinarily required 

for a particular part of the program, as 

well as ‘‘more frequent’’ participation in 

the practice assessment component. 

Accordingly, we propose for 2012, 

2013, and 2014 the following for each 

year: 

• An eligible professional wishing to 

be eligible for the additional Physician 

Quality Reporting System incentive 

payment of 0.5 percent would be 

required to meet the proposed 

requirements for satisfactory Physician 

Quality Reporting System reporting, for 

the applicable program year (that is, to 

qualify for the additional 0.5 percent 

incentive payment for 2012, meet the 

2012 requirements for satisfactory 

reporting), based on the 12-month 

reporting period (January 1 through 

December 31 of the respective program 

year). 

• For purposes of satisfactory 

reporting under the Physician Quality 

Reporting System, we propose that the 

eligible professional may participate as 

an individual eligible professional using 

either individual Physician Quality 

Reporting System measures or measures 

groups and submitting the Physician 

Quality Reporting System data via 

claims, a registry, or an EHR or 

participate under the GPRO option. As 

an alternative to this reporting option, 

we propose that eligible professionals 

may satisfactorily report under the 

Physician Quality Reporting System 

based on submission of Physician 

Quality Reporting System data by a 

Maintenance of Certification Program, 

provided that the Maintenance of 

Certification Program has qualified as a 

Physician Quality Reporting System 

registry for 2012. As indicated 

previously, an eligible professional 

would not necessarily have to qualify 

for the Physician Quality Reporting 

System through a Maintenance of 

Certification Program serving as a 

registry. Rather, we propose that an 

eligible professional may qualify for the 

additional incentive, without regard to 

the method by which the eligible 

professional has met the basic 

requirement of satisfactory reporting 

under the Physician Quality Reporting 

System. 

• In addition to meeting the proposed 

requirements for satisfactory reporting 

for the Physician Quality Reporting 

System for a program year, the eligible 

professional must have data with 

respect to the eligible professional’s 

participation in a Maintenance of 

Certification Program submitted on his 

or her behalf by a qualified medical 

specialty board or other entity 

sponsoring a Maintenance of 

Certification Program. For each eligible 

professional that wishes to qualify for 

the Maintenance of Certification 

Program Incentive, the qualified 

medical specialty board or other entity 

sponsoring a Maintenance of 

Certification Program must submit data 

to CMS with respect to the following: 

• An eligible professional must, more 

frequently than is required to qualify for 

or maintain board certification, 

participate in a Maintenance of 

Certification Program for a year and 

successfully complete a qualified 

Maintenance of Certification Program 

practice assessment for such year. With 

regard to the ‘‘more frequently’’ 

requirement as it applies to the elements 

of a Maintenance of Certification 

Program itself (other than completing a 

qualified Maintenance of Certification 

Program practice assessment), we 

propose to require that the Maintenance 

of Certification Program certify that the 

eligible professional has ‘‘more 

frequently’’ than is required to qualify 

for or maintain board certification 

‘‘participated in a Maintenance of 

Certification Program for a year.’’ We do 

not propose to specify with respect to 

participation how a physician must 

meet the more frequently requirement, 

but rather that the Maintenance of 

Certification Program determine what a 

physician must do to more frequently 

participate in a Maintenance of 

Certification Program and so certify that 

the eligible professional has met this 

requirement. While we do not believe 

that the ‘‘more frequently’’ requirement 

is applicable to the licensure 

requirement, given that one cannot be 

licensed ‘‘more frequently’’ than is 

required, we propose to leave it up to 

the Maintenance of Certification 

Program to determine which element(s) 

of a Maintenance of Certification 

Program must be completed more 

frequently. We believe that making this 

change will reduce burden on 

physicians and will increase 

participation while being consistent 

with the requirement to ‘‘more 

frequently’’ participate in a 

Maintenance of Certification Program. 

• With respect to the Maintenance of 

Certification Program practice 

assessment, which is specifically 

delineated in section 1848(m)(7)(B)(ii) 

of the Act as being required more often 

than is necessary to qualify for or 

maintain board certification, we believe 

we need to be more specific regarding 

our interpretation of the phrase ‘‘more 

frequently.’’ Additionally, we are aware 

that some specialty boards have varying 

Maintenance of Certification Program 

requirements for physicians to maintain 

board certification, based on the date of 

original certification. Some, we believe, 

may not be required to participate in a 

Maintenance of Certification Program at 

all in order to maintain board 

certification. Accordingly, we recognize 

that ‘‘more often’’ may vary among 

physicians certified by the same 

specialty board. We interpret the 

statutory provisions as requiring 

participation in and successful 

completion of at least one Maintenance 

of Certification Program practice 

assessment per year. Therefore, we 

propose, as a basic requirement, 

participation in and successful 

completion in at least one Maintenance 

of Certification Program practice 

assessment for each year the physician 

participates in the Maintenance of 

Certification Program Incentive, 

regardless of whether or how often the 

physician is required to participate in a 

Maintenance of Certification Program to 

maintain board certification. 

We are also aware that ABMS boards 

are at various stages in implementing 

the practice assessment modules, and 

some may not have such assessment 

modules in place. However, inasmuch 

as we interpret the statute to require a 

Maintenance of Certification Program 

practice assessment at least once per 

program year as part of the Maintenance 

of Certification Program, eligible 

professionals who do not have available, 

through their boards or otherwise, a 

Maintenance of Certification Program 

practice assessment are not eligible for 

the 0.5 percent incentive. 

We believe that the experience of care 

survey provides particularly valuable 

information and proposed that a 

qualified Maintenance of Certification 

Program practice assessment must 

include a survey of patient experience 

with care. The Secretary may request 

information on the survey of patient 

experience with care, under section 

1848(m)(7)(B)(iii) of the Act. In view of 

the importance of this information, and 

the lack of readily available alternative 

sources, we propose to require that 

Maintenance of Certification Programs 

submit information about the patient 

experience with care survey(s) used by 

physicians to fulfill the Maintenance of 

Certification Program practice 

assessment. We are not, at this time, 

requesting the results of the survey for 

the eligible professionals for whom 

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information is being submitted by the 

Maintenance of Certification Program. 

We may, however, request such 

information for appropriate validation 

purposes and may propose to request 

such data for future years of the 

Maintenance of Certification Program 

Incentive. 

Some Maintenance of Certification 

Programs underwent a self-nomination 

process in 2011 to enable their members 

to be eligible for this Physician Quality 

Reporting System Maintenance of 

Certification Program Incentive for 2011 

Physician Quality Reporting System. We 

propose that a Maintenance of 

Certification Program that was approved 

after undergoing the self-nomination 

process in 2011 must submit a self 

nomination statement for each year the 

Maintenance of Certification Program 

intends to participate in the Physician 

Quality Reporting System Maintenance 

of Certification Program. In the selfnomination statement, we propose that 

the previously approved program must 

provide us with updates to its program 

in its self-nomination statement. We 

propose that this self-nomination 

statement be submitted to CMS via a 

web-based tool. 

For Maintenance of Certification 

Programs new for 2012, we propose that 

Maintenance of Certification Programs 

wishing to enable their diplomates to be 

eligible for an additional Physician 

Quality Reporting System incentive 

payment for the 2012 Physician Quality 

Reporting System will need to go 

through a self-nomination process by 

January 31, 2012. We proposed the 

board would need to include all of the 

following information in their selfnomination statement to us: 

• Provide detailed information 

regarding the Maintenance of 

Certification Program with reference to 

the statutory requirements for such 

program. 

• Indicate the organization 

sponsoring the Maintenance of 

Certification Program, and whether the 

Maintenance of Certification Program is 

sponsored by an ABMS board. If not an 

ABMS board, indicate whether and how 

the program is substantially equivalent 

to the ABMS Maintenance of 

Certification Program process. 

• Indicate that the program is in 

existence as of January 1, 2012. 

• Indicate that the program has at 

least 1 active participant. 

• The frequency of a cycle of 

Maintenance of Certification Program 

for the specific Maintenance of 

Certification Program of the sponsoring 

organization; including what constitutes 

‘‘more frequently’’ for the Maintenance 

of Certification Program itself and for 

the practice assessment for the specific 

Maintenance of Certification Program of 

the sponsoring organization. 

• Confirmation from the board that 

the practice assessment will occur and 

be completed in the year the physician 

is participating in the Maintenance of 

Certification Program Incentive. 

• What was, is, or will be the first 

year of availability of the Maintenance 

of Certification Program practice 

assessment for completion by an eligible 

professional. 

• What data is collected under the 

patient experience of care survey and 

how this information would be 

provided to CMS. 

• How the Maintenance of 

Certification Program monitors that an 

eligible professional has implemented a 

quality improvement process for their 

practice. 

• Describe the methods, and data 

used under the Maintenance of 

Certification Program, and provide a list 

of all measures used in the Maintenance 

of Certification Program for 2011 and to 

be used for 2012, including the title and 

descriptions of each measure, the owner 

of the measure, whether the measure is 

NQF endorsed, and a link to a Web site 

containing the detailed specifications of 

the measures, or an electronic file 

containing the detailed specifications of 

the measures. 

We propose that sponsoring 

organizations who desire to participate 

as a Maintenance of Certification 

Program would need to be able to 

provide CMS the following information 

in a CMS-specified file format by no 

later than the end of the first quarter of 

2012: 

• The name, NPI and applicable 

TIN(s) of the eligible professional who 

would like to participate in this process. 

• Attestation from the board that the 

information provided to CMS is 

accurate and complete. 

• The board has signed 

documentation from the eligible 

professional that the eligible 

professional wishes to have the 

information released to us. 

• Information from the patient 

experience of care survey. 

• Information certifying that the 

eligible professional has participated in 

a Maintenance of Certification Program 

for a year, more frequently than is 

required to qualify for or maintain board 

certification status, including the year 

that the physician met the board 

certification requirements for the 

Maintenance of Certification Program, 

and the year the eligible professional 

participated in a Maintenance of 

Certification Program ‘‘more frequently’’ 

than is required to maintain or qualify 

for board certification. 

• Information certifying that the 

eligible professional has completed the 

Maintenance of Certification Program 

practice assessment at least one time 

each year the eligible professional 

participates in the Maintenance of 

Certification Program Incentive. 

We propose that specialty boards that 

also desire to send Physician Quality 

Reporting System information to us on 

behalf of eligible professionals should 

be able to meet the proposed 

requirements for registry data 

submission and should follow the 

directions for self-nomination to become 

a qualified registry. Boards may also 

participate as registries for Physician 

Quality Reporting System data provided 

that they meet the registry requirements. 

As an alternative to requiring boards to 

either operate a qualified Physician 

Quality Reporting System registry or to 

self-nominate to submit Maintenance of 

Certification Program data to us on 

behalf of their members, we propose to 

continue to allow the various boards to 

submit the Maintenance of Certification 

Program data to the ABMS and having 

ABMS submit the information on behalf 

of the various boards and their member 

eligible professionals to CMS. 

To the extent an eligible professional 

participates in multiple Maintenance of 

Certification Programs and meets the 

requirements under section 1848(m)(7) 

of the Act (Additional Incentive 

Payment) under multiple programs, we 

note that the eligible professional can 

qualify for only one additional 0.5 

percent incentive per year. We invite 

public comment on our proposals for 

the Physician Quality Maintenance of 

Certification Program Incentive for 2012 

through 2014. 

h. Feedback Reports 

Section 1848(m)(5)(H) of the Act 

requires the Secretary to provide timely 

feedback to eligible professionals on the 

performance of the eligible professional 

with respect to satisfactorily submitting 

data on quality measures. Since the 

inception of the program in 2007, the 

Physician Quality Reporting System has 

provided eligible professionals who 

have reported Physician Quality 

Reporting System data on quality 

measures feedback reports at the TIN/ 

NPI level detailing participation in the 

Physician Quality Reporting System, 

including reporting rate and 

performance rate information. For 2008, 

we improved the format and content of 

feedback reports based on stakeholder 

input. We also developed an alternate 

report distribution method whereby 

each eligible professional can directly 

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42884 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

request and receive a feedback report. In 

accordance with Section 1848(m)(5)(H) 

of the Act, we will continue to provide 

feedback reports to individuals and 

group practices that attempt to report on 

at least one Physician Quality Reporting 

System quality measure. We propose to 

provide feedback reports for 2012 and 

beyond on or about the time of issuance 

of the incentive payments, consistent 

with our current practice. 

We believe it will be beneficial for 

eligible professionals to also receive 

interim feedback reports. In the 2011 

MPFS Final Rule with comment period, 

we stated that we intended to provide 

interim feedback reports to eligible 

professionals in 2012 (75 FR 73549). 

Therefore, we propose to provide 

interim feedback reports for eligible 

professionals reporting individual 

measures and measures groups through 

the claims-based reporting mechanism 

for 2012 and beyond. These reports 

would be a simplified version of annual 

feedback reports that we currently 

provide for such eligible professionals 

and would be based on claims for dates 

of service occurring on or after January 

1 and processed by March 31 of the 

respective program year (that is, January 

1, 2012 and processed by March 31, 

2012 for the 2012 program year). We 

expect that we would be able to make 

these interim feedback reports available 

to eligible professionals in the summer 

of the respective program year (that is 

summer 2012 for the 2012 program 

year). We believe interim feedback 

reports would be particularly valuable 

to eligible professionals reporting 

measures groups, because it would let 

an eligible professional know how many 

more cases he or she needs to report to 

satisfy the criteria for satisfactory 

reporting for claims-based reporting of 

measures groups. We invite public 

comment on our proposal to continue to 

provide annual feedback reports as well 

as our intention to provide interim 

feedback reports. 

i. Informal Review 

Under 42 CFR 414.90(i), eligible 

professionals or group practices may 

seek an informal review of the 

determination that the eligible 

professional or group practice did not 

satisfactorily submit data on quality 

measures under the Physician Quality 

Reporting System. 

To maintain program consistency 

until we have further experience with 

the informal review process that we 

implemented for the 2011 Physician 

Quality Reporting System, we propose 

to largely retain the same informal 

review process that was finalized in the 

2011 MPFS final rule with comment 

period (75 FR 73549 through 73551) for 

2012 and beyond. Specifically, we 

propose to base the informal process on 

our current inquiry process whereby an 

eligible professional can contact the 

Quality Net Help Desk (via phone or email) for general Physician Quality 

Reporting System and eRx Incentive 

Program information, information on 

Physician Quality Reporting System 

feedback report availability and access, 

and/or information on Physician 

Quality Reporting System Portal 

password issues. For purposes of the 

informal process required under section 

1848(m)(5)(E) of the Act, we propose the 

following inquiry process: 

• An eligible professional electing to 

utilize the informal process must 

request an informal review within 90 

days of the release of his or her feedback 

report, irrespective of when an eligible 

professional actually accesses his/her 

feedback report. 

• An eligible professional may 

request an informal review through use 

of a web-based tool, if technically 

feasible. We believe use of the webbased tool will provide a more efficient 

way to record informal review requests, 

as web-based tool will guide the eligible 

professional through the creation of an 

informal review requests. For example, 

the web-based tool will prompt an 

eligible professional of any necessary 

information s/he must provide. If not 

technically feasible, we propose that an 

eligible professional may request the 

informal review by notifying the Quality 

Net Help Desk via e-mail at 

qnetsupport@sdps.org. The e-mail 

requesting the initiation of the informal 

review process should summarize the 

concern(s) of the eligible professional 

and the reason(s) for requesting an 

informal review. 

• We further propose that CMS will 

provide the eligible professional with a 

response to his or her request for an 

informal review within 90 days of 

receiving the original request. In 2011, 

we proposed to provide the eligible 

professional with a response to his or 

her request for an informal review 

within 60 days of receiving the original 

request. However, we anticipate that the 

volume of informal review requests will 

grow as participation in the Physician 

Quality Reporting System grows, 

particularly as we move towards the 

implementation of the 2015 payment 

adjustment. Furthermore, we believe 

that the time it takes for CMS to 

calculate data on Physician Quality 

Reporting System quality measures will 

be greater than in 2011, since we are 

proposing additional individual 

measures and measures groups. For 

these reasons, we are proposing to 

amend 42 CFR 414.90(i)(2) to indicate 

that CMS will provide a written 

response within 90 days of the receipt 

of the original request for an informal 

review. 

• As this process is informal and the 

statute does not require a formal appeals 

process, we will not include a hearing 

or evidence submission process, 

although the eligible professional may 

submit information to assist in the 

review. 

• Based on our informal review, we 

will provide a written response. Where 

we find that the eligible professional did 

satisfactorily report, we propose to 

provide the applicable incentive 

payment. 

• Given that this is an informal 

review process and given the limitations 

on review under section 1848(m)(5)(E) 

of the Act, decisions based on the 

informal review will be final, and there 

will be no further review or appeal. 

We invite public comment on our 

proposal for the Physician Quality 

Reporting System informal review 

process. 

j. Future Payment Adjustments for the 

Physician Quality Reporting System 

Beginning in 2015, a payment 

adjustment will apply under the 

Physician Quality Reporting System. 

Specifically, under section 1848(a)(8) of 

the Act, as added by section 3002(b) of 

the Affordable Care Act, with respect to 

covered professional services furnished 

by an eligible professional during 2015 

or any subsequent year, if the eligible 

professional does not satisfactorily 

submit data on quality measures for 

covered professional services for the 

quality reporting period for the year, the 

fee schedule amount for services 

furnished by such professionals during 

the year shall be equal to the applicable 

percent of the fee schedule amount that 

would otherwise apply to such services. 

The applicable percent is— 

• 98.5 percent for 2015; and 

• 98.0 percent for 2016 and each 

subsequent year. 

Section 1848(8)(A)(i) of the Act 

provides that, for purposes of the 

payment adjustment, the ‘‘quality 

reporting period’’ with the respect to a 

year, is a period specified by the 

Secretary. In order to maintain 

consistency and program continuity, 

similar to the 12-month reporting period 

we are proposing for 2012, we are also 

proposing a 12-month reporting period 

for the 2015 payment adjustment. 

Specifically, we propose that the 

reporting period for purposes of the 

2015 payment adjustment to be the 2013 

calendar year, that is, January 1, 2013 

through December 31, 2013. We believe 

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that this proposed reporting period will 

allow a full calendar year for eligible 

professionals to meet the criteria for 

satisfactory reporting for purposes of the 

2015 payment adjustment (that will be 

proposed in future rulemaking) while 

still providing us with enough time to 

collect and analyze the data submitted 

by eligible professionals for the 2015 

payment adjustment without having to 

make retroactive payment adjustments 

in 2015. If we determine that an eligible 

professional or group practice has not 

satisfactorily reported data on quality 

measures for the January 1, 2013 

through December 31, 2013 reporting 

period for purposes of the 2015 payment 

adjustment, then the eligible 

professional or group practice would be 

subject to the 1.5 percent adjustment in 

their fee schedule amount in 2015. We 

invite public comment on the proposed 

reporting period for purposes of the 

2015 Physician Quality Reporting 

System payment adjustment. 

We intend to address the remaining 

requirements for satisfactory reporting 

for purposes of the 2015 payment 

adjustment in future rulemaking. We 

welcome suggestions for what the 

criteria for satisfactory reporting for 

purposes of the 2015 payment 

adjustment we might consider in the 

future with regard to the proposed 

reporting period described previously. 

2. Incentives and Payment Adjustments 

for Electronic Prescribing (eRx)—The 

Electronic Prescribing Incentive 

Program 

a. Program Background and Statutory 

Authority 

Electronic prescribing is the 

transmission using electronic media, of 

prescription or prescription-related 

information between the prescriber, 

dispenser, pharmacy benefit manager 

(PBM), or health plan, either directly or 

through an intermediary, including an 

electronic prescribing network. To 

encourage the use of electronic 

prescribing among eligible 

professionals, section 132 of the 

Medicare Improvements for Patients and 

Providers Act of 2008 (MIPPA) amended 

section 1848(m) of the Act to establish 

the eRx Incentive Program. The eRx 

Incentive Program provides a 

combination of incentive payments and 

payment adjustments through 2014 to 

eligible professionals who are successful 

electronic prescribers. No eRx incentive 

payments or payment adjustments are 

authorized beyond 2014. 

From 2009 through 2013, the 

Secretary is authorized to provide 

eligible professionals who are successful 

electronic prescribers an incentive 

payment equal to a percentage of the 

eligible professional’s total estimated 

Medicare Part B PFS allowed charges 

(based on claims submitted not later 

than 2 months after the end of the 

reporting period) for all covered 

professional services furnished by the 

eligible professional during the 

respective reporting period. However, 

section 1848(m)(2)(D) of the Act, as 

added by section 4101(f)(2)(B) of Title 

IV of Division B of the American 

Recovery and Reinvestment Act of 2009 

(Pub. L. 111–5) (ARRA), which also 

authorized the Medicare EHR Incentive 

Program, specifies that the eRx 

incentive does not apply to an eligible 

professional, if, for the EHR reporting 

period, the eligible professional earns an 

incentive payment under the Medicare 

EHR Incentive Program beginning in 

2011. 

The applicable electronic prescribing 

percent for incentive payments under 

the eRx Incentive Program are as 

follows: 

• 2.0 percent for 2009. 

• 2.0 percent for 2010. 

• 1.0 percent for 2011. 

• 1.0 percent for 2012. 

• 0.5 percent for 2013. 

In addition, for years 2012 through 

2014, under section 1848(a)(5)(A) of the 

Act, a PFS payment adjustment applies 

to eligible professionals who are not 

successful electronic prescribers at an 

increasing rate through 2014. 

Specifically, if the eligible professional 

is not a successful electronic prescriber 

for the respective reporting period for 

the year, the PFS amount for covered 

professional services during the year 

shall be a percentage less than the PFS 

amount that would otherwise apply. 

The applicable electronic prescribing 

percent for payment adjustments under 

the eRx Incentive Program are as 

follows: 

• 1.0 percent in 2012. 

• 1.5 percent in 2013. 

• 2.0 percent in 2014. 

We believe the purpose of the eRx 

Incentive Program for 2012 and beyond 

is to continue to encourage significant 

expansion of the use of electronic 

prescribing by authorizing a 

combination of financial incentives and 

payment adjustments. We are proposing 

to modify the incentive and payment 

adjustment language in 42 CFR 414.92 

to provide language more consistent 

with section 1848(k) of the Act. 

We believe that the criteria used to 

determine who is a successful electronic 

prescriber for purposes of the eRx 

incentive are not required to be 

identical to the criteria used to 

determine the applicability of the eRx 

payment adjustment. In general, we 

believe that an incentive should be 

broadly available to encourage the 

widest possible adoption of electronic 

prescribing, even for low volume 

prescribers. On the other hand, we 

believe that a payment adjustment 

should be applied primarily to assure 

that those who have a large volume of 

prescribing do so electronically, without 

penalizing those for whom the adoption 

and use of an electronic prescribing 

system may be impractical given the 

low volume of prescribing. We also 

believe that eligible professionals who 

have met the requirements for receiving 

an incentive payment under the eRx 

Incentive Program for a particular year 

have sufficiently demonstrated their 

adoption and use of electronic 

prescribing technology and thus should 

not be subject to the payment 

adjustment in a future year. 

Individual eligible professionals do 

not have to participate in the Physician 

Quality Reporting System in order to 

participate in the eRx Incentive Program 

(and vice versa). The provisions of the 

eRx Incentive Program are codified at 42 

CFR 414.92. 

In prior years, we have proposed and 

finalized the details of the eRx Incentive 

Program for each program year through 

an annual rulemaking process. Through 

this annual rulemaking process, we 

have previously established the criteria 

for avoiding the 2012 eRx payment 

adjustment in the 2011 PFS Final Rule 

with comment period (75 FR 73562 

through 73565) as well as issued a 

proposed rule entitled ‘‘Proposed 

Changes to the Electronic Prescribing 

(eRx) Incentive Program’’ (76 FR 31547), 

in which we proposed additional 

changes to the 2012 payment 

adjustment, as well as the electronic 

prescribing quality measure for certain 

reporting periods in 2011. We also 

established requirements for the 2013 

eRx payment adjustment in the 2011 

PFS Final Rule with comment period 

(75 FR 7356). 

In this rule, we are setting forth our 

comprehensive proposals for the 2012 

and 2013 incentive payments, 

additional requirements for the 2013 

payment adjustment, and 2014 payment 

adjustment. We believe that proposing 

criteria for the eRx Incentive Program 

for 2012 and beyond will provide 

eligible professionals with more time to 

familiarize themselves with the details 

of the eRx Incentive Program. We hope 

this will lead to increased, successful 

participation in the eRx Incentive 

Program. Details regarding our 

proposals for the eRx Incentive Program 

for 2012 and 2013 incentive payments, 

additional requirements for the 2013 

payment adjustment, and the 2014 

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payment adjustment, including our 

rationale for such proposals, are 

described in the following section. 

b. Eligibility 

For the 2012 and 2013 incentive 

payments and 2013 and 2014 payment 

adjustments, we propose the following 

two ways eligible professionals may 

participate in the eRx Incentive 

Program: (1) As an individual eligible 

professional; or (2) as part of a group 

practice reporting option (GPRO) for the 

eRx Incentive Program (eRx GPRO). 

Eligible professionals eligible to 

participate in the eRx Incentive Program 

are defined at 42 CFR 414.92(b). For 

more information on which 

professionals are eligible to participate 

in the eRx Incentive Program, we refer 

readers to the Eligible Professionals 

page of the eRx Incentive Program 

section of the CMS Web site at: http:// 

www.cms.gov/ERxIncentive/ 

05_Eligible%20Professionals.asp#Top

OfPage. 

(1) Individual Eligible Professionals 

(A) Definition of Eligible Professional 

As in the 2011 eRx Incentive Program, 

we propose that, for individual eligible 

professionals participating in the eRx 

Incentive Program for purposes of the 

2012 and 2013 incentive payments and 

2013 and 2014 payment adjustments, 

the determination of whether an eligible 

professional is a successful electronic 

prescriber will be made at the 

individual professional level, based on 

the National Provider Identifier (NPI) 

number. Inasmuch as some individuals 

(identified by NPIs) may be associated 

with more than one practice or Tax 

Identification Number (TIN), for the 

2012 and 2013 incentive payments and 

2013 and 2014 payment adjustments, 

we propose that the determination of 

whether an eligible professional is a 

successful electronic prescriber will 

continue to be made for each unique 

TIN/NPI combination. Then, as in 

previous years, incentive payments 

would be made to the applicable holder 

of the TIN. We propose continuing to 

use the TIN/NPI combination as the unit 

of analysis to maintain program 

continuity, as individual eligible 

professionals are already familiar with 

this level of analysis and payment. We 

invite public comment on our proposal 

to continue analyzing data using the 

TIN/NPI combination while providing 

payment to the applicable holder of the 

TIN. 

As in prior program years, we propose 

that individual eligible professionals 

who wish to participate in the eRx 

Incentive Program for purposes of the 

2012 and 2013 incentive payments and 

2013 and 2014 payment adjustments 

may simply start participating. 

Individual eligible professionals are not 

required to register or notify CMS they 

intend to participate; rather, they may 

simply begin to report the eRx measure. 

We invite public comment on the 

proposed process for individual eligible 

professionals to participate in the eRx 

Incentive Program. 

(2) Group Practices 

As required under section 

1848(m)(3)(C) of the Act, we established 

a process under which eligible 

professionals in a group practice (as 

defined by the Secretary) would be 

treated as meeting the requirements for 

submitting data on electronic 

prescribing quality measures for covered 

professional services for a reporting 

period (or, for purposes of the payment 

adjustment under section 1848(a)(5) of 

the Act, for a reporting period for a year) 

if, in lieu of reporting the electronic 

prescribing measure, the group practice 

reports measures determined 

appropriate by the Secretary, such as 

measures that target high-cost chronic 

conditions and preventive care, in a 

form and manner, and at a time 

specified by the Secretary. Specifically, 

we first established the eRx GPRO in 

2010, which was further modified in the 

2011 PFS Final Rule (75 FR 73502). The 

eRx GPRO was further modified in 

2011. In addition to determining 

whether an eligible professional is a 

successful electronic prescriber for 

incentive payment and payment 

adjustment purposes based on 

separately analyzing whether the 

individual eligible professionals are 

successful electronic prescribers, we 

propose to also make the determination 

that the group practice, as a whole, is a 

successful electronic prescriber in 

accordance with section 1848(m)(3)(C) 

of the Act for those group practices that 

wish to participate in the eRx GPRO. 

(A) Proposed Definition of ‘‘Group 

Practice’’ 

Section 1848(m)(3)(C)(i) of the Act 

authorizes the Secretary to define 

‘‘group practice,’’ which CMS defined 

by referencing our regulation at 

§ 414.92(b). For the 2011 eRx Incentive 

Program, a group practice is— 

(1) Defined at § 414.90(b), that is 

participating in the Physician Quality 

Reporting System; or 

(2)(a) In a Medicare approved 

demonstration project that is deemed to 

be participating in the Physician Quality 

Reporting System group practice 

reporting option; and 

(b) Has indicated its desire to 

participate in the electronic prescribing 

group practice option. 

However, for purposes of determining 

whether an eRx GPRO is a successful 

electronic prescriber for CYs 2012 

through 2014, we propose to modify the 

definition of the ‘‘group practice’’ at 42 

CFR 414.92(b) to be consistent with 

modifications being proposed to the 

definition of ‘‘group practice’’ at 42 CFR 

414.90(b) for the 2012 Physician Quality 

Reporting System. 

Specifically, we propose to modify 

the language that references Medicare 

demonstrations to more broadly 

recognize other similar Medicare 

programs that group practices may be 

participating in so that such practices 

may be eligible to participate in the eRx 

Incentive Program. In addition, we are 

making clear that all group practices 

must indicate their desire to participate 

in the eRx group practice option. Also, 

as we noted above, we are proposing to 

modify the definition of group practice 

under the Physician Quality Reporting 

System definition at 42 CFR 414.90(b) 

by defining a group practice as a single 

TIN with at least 25 or more eligible 

professionals, as identified by their 

individual NPI, who have reassigned 

their Medicare billing rights to the TIN. 

Given that the definition of ‘‘group 

practice’’ at 42 CFR 414.92(b) follows 

the Physician Quality Reporting System 

definition, if the proposed changes to 

414.90(b) are finalized, it would apply 

to the definition for group practice 

under the eRx Incentive Program. 

Although this proposal would 

eliminate group practices comprised of 

2 to 24 eligible professionals for the 

purpose of the eRx Incentive Program, 

we believe this proposal to change the 

definition of ‘‘group practice’’ would 

not be a significant burden to these 

small group practices as they may still 

participate as individual eligible 

professionals. For 2010, out of 107 

group practices that self-nominated to 

participate in GPRO II for the Physician 

Quality Reporting System, 68 of these 

group practices qualified to participate 

in the eRx Incentive Program under 

GPRO II. However, during the opt-out 

period which ended on May 12, 2011, 

6 of these 68 group practices dropped 

out of GPRO II participation, leaving 

only 62 group practices to participate in 

GPRO II for 2010. Due to the low 

participation of only 62 groups, we 

believe participation in the eRx 

Incentive GPRO should be limited to 

only those group practices with 25 or 

more eligible professionals. Indeed, we 

believe participating under GPRO II may 

be more burdensome for very small 

group practices than participating as 

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eligible professionals. For example, with 

respect to the payment adjustment, 

additional limitations may apply to 

eligible professionals as individuals that 

are not applied to group practices, 

which presents an additional burden to 

the group practice. 

(B) Proposed Process to Participate in 

the eRx Incentive Program—eRx GPRO 

We propose that if a group practice 

wishes to participate in the eRx 

Incentive Program under the eRx GPRO, 

the group practice must self-nominate to 

do so. To self-nominate, we propose that 

the group practice follow the 

requirements for self-nomination under 

the Physician Quality Reporting System 

as well as specifically indicate its intent 

to participate in the eRx Incentive 

Program as a group practice. A group 

practice must self-nominate for each 

calendar year the group wishes to 

participate in the eRx GPRO. If a group 

practice self-nominates to participate in 

the eRx GPRO for a calendar year, then 

we propose to consider that the group 

practice is participating in the eRx 

GPRO for purposes of both the incentive 

payment (with respect to any incentive 

payment reporting period that occurs 

during the calendar year) and the 

payment adjustment (with respect to 

any payment adjustment reporting 

period that occurs during any calendar 

year). For example, the 2013 payment 

adjustment reporting period occurs 

during calendar year 2012 (January 1, 

2012 through June 30, 2012). Therefore, 

any group practice participating in the 

eRx GPRO during calendar year 2012 

would be considered to be participating 

in the eRx GPRO for both the 2012 

incentive and 2013 payment 

adjustment. Please note that a group 

practice that is deemed to be 

participating in the Physician Quality 

Reporting System, such as an ACO 

participating under the Medicare Shared 

Savings Program, will not be deemed 

participating as a group practice in the 

eRx Incentive Program. Therefore, the 

group practice must self-nominate to 

participate in the eRx Incentive Program 

under the eRx GPRO. Instructions for 

submitting the self-nomination 

statement are the same as the 

instructions for submitting a selfnomination statement for the Physician 

Quality Reporting System. Each year, 

we expect to notify a group practice of 

the selection decision with respect to 

participation in the eRx GPRO during 

the first quarter of the year. We invite 

public comment on the requirements for 

eligible professionals to participate as 

an eRx GPRO for purposes of the eRx 

Incentive Program. 

c. Proposed Reporting Periods 

Section 1848(m)(6)(C)(ii) of the Act 

also authorizes the Secretary to revise 

the reporting period if the Secretary 

determines such revision is appropriate, 

produces valid results on measures 

reported, and are consistent with the 

goals of maximizing scientific validity 

and reducing administrative burden. 

(1) Proposed Reporting Periods for the 

2012 and 2013 eRx Incentives 

Section 1848(m)(6)(C)(i)(II) of the Act 

defines ‘‘reporting period’’ under the 

eRx Incentive Program for years after 

2008 to be the entire year. We also have 

authority under section 

1848(m)(6)(C)(ii) of the Act to revise the 

reporting period. We propose, however, 

entire calendar year reporting periods 

for the reporting period for purposes of 

the 2012 and 2013 incentive payment 

(January 1, 2012 through December 31, 

2012 for the 2012 incentive and January 

1, 2013 through December 31, 2013 for 

the 2013 incentive, respectively). 

Accordingly, we propose to modify 42 

CFR 414.92(d)(1). 

(2) Proposed Reporting Periods for the 

2013 and 2014 eRx Payment 

Adjustments 

As we indicated, using our authority 

under Section 1848(m)(6)(C)(ii) of the 

Act, in the 2011 PFS Final Rule with 

comment period, we finalized two 

different reporting periods: A 6-month 

reporting period (between January 1, 

2011 and June 30, 2011) for purposes of 

the 2012 payment adjustment for both 

individual eligible professionals and 

group practices participating in the eRx 

GPRO (75 FR 73562 through 73563) and 

a 12-month reporting period (between 

January 1, 2011 and December 31, 2011) 

for purposes of the 2013 payment 

adjustment for individual eligible 

professionals and group practices 

participating in the eRx GPRO (75 FR 

73565). 

In addition to the 12-month reporting 

period finalized in the 2011 PFS Final 

Rule with comment period, we propose 

an additional 6-month reporting period 

for purposes of the 2013 payment 

adjustment. As stated in the CY 2011 

PFS final rule with comment period (75 

FR 73565), we indicated that we might 

consider in future rulemaking 

additional reporting periods for 

purposes of the 2013 payment 

adjustment to maximize the 

opportunities for eligible professionals 

to become successful electronic 

prescribers. 

As such, we propose for both 

individual eligible professionals and 

group practices participating in the eRx 

GPRO a 6-month reporting period 

(between January 1, 2012 and June 30, 

2012) for purposes of the 2013 payment 

adjustment. 

For similar reasons, we propose a 

12-month reporting period (between 

January 1, 2012 and December 31, 2012) 

that would apply to individual eligible 

professionals and a 6-month reporting 

period (between January 1, 2013 and 

June 30, 2013) that would apply to both 

individual eligible professionals and 

group practices with regard to the 2014 

payment adjustment.. (Please note that 

we are not proposing the 

12-month reporting period for group 

practices for purposes of the 2014 

payment adjustment because it is the 

same proposed reporting period for the 

2013 incentive.) Providing two different 

reporting periods will provide eligible 

professionals with two opportunities to 

become successful electronic 

prescribers. We invite public comment 

on the proposed reporting periods for 

the 2013 and 2014 payment 

adjustments. 

d. Proposed Criterion for Determining 

Successful Electronic Prescribers 

Section 1848(m)(3)(B) of the Act 

governs the requirements for 

‘‘successful electronic prescriber,’’ for 

purposes of the incentive payment 

under section 1848(m)(2) of the Act and 

the payment adjustment under section 

1848(a)(5) of the Act. The Secretary is 

authorized to use one of two possible 

criteria for determining whether an 

eligible professional is a successful 

electronic prescriber. One criterion, 

under section 1848(m)(3)(B)(ii) of the 

Act, is based on the eligible 

professional’s reporting, in at least 50 

percent of the reportable cases, on any 

electronic prescribing measures that 

have been established under the 

Physician Quality Reporting System, 

and are applicable to services furnished 

by the eligible professional for the 

reporting period. However, for years 

after 2009, section 1848(m)(3)(D) of the 

Act permits the Secretary in 

consultation with stakeholders and 

experts to revise the criteria for 

submitting data on electronic 

prescribing measures under section 

1848(m)(3)(B)(ii) of the Act. 

The second criterion, under section 

1848(m)(3)(B)(iii) of the Act, is based on 

the electronic submission by the eligible 

professional of a sufficient number (as 

determined by the Secretary) of 

prescriptions under Part D during the 

reporting period. If the Secretary 

decides to use this standard, then, in 

accordance with section 

1848(m)(3)(B)(iv) of the Act, the 

Secretary is authorized to use Part D 

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drug claims data to assess whether a 

sufficient number of prescriptions have 

been submitted by eligible 

professionals. However, under section 

1848(m)(3)(B)(i) of the Act, if the 

standard based on a sufficient number 

(as determined by the Secretary) of 

electronic Part D prescriptions is 

applied for a particular reporting period, 

then the standard specified in law, 

based on the reporting on electronic 

prescribing measures would no longer 

apply. 

We considered use of the second 

criterion for determining successful 

prescribing under the eRx Incentive 

Program. While we recognize the 

benefits of using Part D data as the 

standard for determining successful 

electronic prescribers, we believe use of 

Part D prescriptions for analysis may be 

premature. For example, as the use of 

Part D data is fairly new, there is 

uncertainty as to the accuracies of 

reporting electronic prescribing 

activities. For example, if an electronic 

prescription is converted to a facsimile 

when reaching the pharmacy, under 

reporting of Part D data, the 

transmission is still reported as a pure, 

electronic prescribing event. 

Furthermore, use of Part D data would 

require a complete overhaul of the 

current requirements for the eRx 

Incentive Program. For instance, if we 

choose to shift to the use of Part D data, 

the program would have to adopt a new 

form of measurement, a new form of 

analysis other than use of an eligible 

professionals’ TIN/NPI (as no TIN is 

populated under Part D data), and new 

criteria for eligible professionals and 

eRx GPROs to become successful 

electronic prescribers. Therefore, we are 

not proposing to use the second 

criterion. 

For the reasons stated previously, we 

propose to continue to require eligible 

professionals to report on the electronic 

prescribing measure used in 2011 to 

determine whether an eligible 

professional is a successful electronic 

prescriber for the remainder of the eRx 

Incentive Program. Please note, 

however, we also are proposing in 

section IV.F.2.(d).(1). of this proposed 

rule to modify the electronic quality 

measure’s specifications and to use 

modified reporting criteria based on the 

authority provided under section 

1848(m)(3)(D) of the Act. We invite 

public comment on the continued use of 

reporting the electronic prescribing 

quality measure for purposes of the 

‘‘successful electronic prescriber’’ 

determination under the program. 

(1) Reporting the Electronic Prescribing 

Quality Measure 

The proposed electronic prescribing 

quality measure, similar to the 

Physician Quality Reporting System 

measures, has two basic elements, 

which include: (1) A reporting 

denominator that defines the patient 

population on which the eligible 

professional’s performance is being 

measured; and (2) a reporting 

numerator, which identifies whether or 

not a clinical quality action was 

performed. Our proposals specified later 

in this section apply to the following 

eRx Incentive Program years: The 2012 

eRx incentive payment; the 2013 eRx 

incentive payment; the 2013 eRx 

payment adjustment; and the 2014 eRx 

payment adjustment. 

Under section 1848(k)(2)(C)(i) of the 

Act, the electronic prescribing measure, 

which was initially introduced under 

the Physician Quality Reporting System, 

shall be a measure selected by the 

Secretary that has been endorsed by the 

entity with a contract with the Secretary 

under section 1890(a) of the Act. 

Currently, that entity is the National 

Quality Forum (NQF). The electronic 

prescribing measure we propose to 

retain, NQF Measure #0486: Adoption 

of Medication e-Prescribing, is currently 

endorsed by the NQF. 

(2) The Denominator for the Electronic 

Prescribing Measure 

The denominator for the electronic 

prescribing quality measure consists of 

specific billing codes for covered 

professional services. 

As initially required under section 

1848(k)(2)(A)(ii) of the Act, and further 

established through rulemaking and 

under section 1848(m)(2)(B) of the Act, 

we may modify the codes making up the 

denominator of the electronic 

prescribing measure. As such, we 

expanded the scope of the denominator 

codes for 2010 to covered professional 

services outside the professional office 

and outpatient setting, such as 

professional services furnished in 

skilled nursing facilities or the home 

care setting. For 2011, we finalized the 

following CPT and HCPCS codes in the 

denominator of the electronic 

prescribing measure: 90801, 90802, 

90804, 90805, 90806, 90807, 90808, 

90809, 90862, 92002, 92004, 92012, 

92014, 96150, 96151, 96152, 99201, 

99202, 99203, 99204, 99205, 99211, 

99212, 99213, 99214, 99215, 99304, 

99305, 99306, 99307, 99308, 99309, 

99310, 99315, 99316, 99324, 99325, 

99326, 99327, 99328, 99334, 99335, 

99336, 99337, 99341, 99342, 99343, 

99344, 99345, 99347, 99348, 99349, 

99350, G0101, G0108, and G0109 (75 FR 

73555). For purposes of reporting 

periods during CYs 2012 and 2013, we 

propose to retain these CPT and HCPCS 

codes in the denominator of the 

electronic prescribing measure because 

we believe that these codes represent 

the types of services for which 

prescriptions are likely to be generated. 

Therefore, if we were to measure an 

eligible professional’s performance on 

the electronic prescribing measure, we 

would want to do so only for patients 

who saw the professional for such 

services. For purposes of the 2012 and 

2013 incentives and 2013 and 2014 

payment adjustment, we propose to 

retain the denominator codes contained 

in the 2011 electronic prescribing 

measure. Whereas in prior years we 

only permitted eligible professionals to 

report the electronic prescribing 

measure’s numerator in connection with 

a service in the measure’s denominator, 

as discussed in section IV.F.2.i. of this 

proposed rule, we are proposing to 

depart from this requirement for 

purposes of the 2013 and 2014 payment 

adjustments. 

(3) The Reporting Numerator for the 

Electronic Prescribing Measure 

Currently, the electronic prescribing 

measure’s numerator consists of a single 

code, G8553, which indicates that at 

least 1 prescription created during the 

encounter was generated and 

transmitted electronically using a 

qualified electronic prescribing system. 

For purposes of reporting the measure 

for the 2012 and 2013 incentives or the 

2013 and 2014 payment adjustment, as 

in prior years, we propose that an 

eligible professional or group practice 

participating in the eRx GPRO can 

report the code associated with the 

measure’s numerator whenever a 

prescription is generated and 

transmitted electronically. 

We propose to post the final 

electronic prescribing measure 

specifications on the ‘‘eRx Measure’’ 

page of the eRx Incentive Program 

section of the CMS Web site at http:// 

www.cms.gov/ERXIncentive by no later 

than— 

• December 31, 2011 for the reporting 

periods that occur during calendar year 

2012. 

• December 31, 2012 for the reporting 

periods that occur during calendar year 

2013. 

In the event that additional changes 

are needed to the measure specifications 

for years after 2012, we would do so via 

notice and comment rulemaking prior to 

posting the final measure specifications 

for that year. We invite public comment 

on the proposed numerator for the 

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electronic prescribing measure for CYs 

2012 through 2013. 

e. Required Functionalities and Part D 

Electronic Prescribing Standards 

As previously stated, to report the 

electronic prescribing measure, we 

propose that the eligible professional or 

group practice must report the 

measure’s numerator G-code. When 

reporting this G-code for incentive 

payment or payment adjustment 

purposes, we propose, for purposes of 

the 2012 and 2013 incentive and 2013 

and 2014 payment adjustment that the 

eligible professional or eRx GPRO must 

have and regularly use a ‘‘qualified’’ 

electronic prescribing system, which we 

further propose to define as either a 

system with functionalities identified in 

the electronic prescribing measure 

specifications, or Certified EHR 

Technology as defined at 42 CFR 495.4 

and 45 CFR 170.102. This proposal is 

consistent with our June 1, 2011 

proposed rule for the 2011 eRx 

Incentive Program (76 FR 31549). 

We are aware that there are significant 

numbers of eligible professionals who 

are interested in participating in the eRx 

Incentive Program but currently do not 

have an electronic prescribing system or 

Certified EHR Technology. The 

electronic prescribing measure does not 

require the use of any particular system 

or transmission network; only that the 

system be a ‘‘qualified’’ system. 

If the professional does not have 

general access to an electronic 

prescribing system or Certified EHR 

Technology in the practice setting, the 

eligible professional would not be able 

to report the electronic prescribing 

measure. In addition to not being 

eligible for an incentive payment, an 

eligible professional who does not 

report the electronic prescribing 

measure for 2012 or 2013 would be 

subject to the 2013 or 2014 eRx payment 

adjustment, unless an exception 

applied. We invite public comment on 

the proposed technological 

requirements of the electronic 

prescribing quality measure. 

(1) ‘‘Qualified’’ Electronic Prescribing 

System 

We propose to retain what constitutes 

a ‘‘qualified’’ electronic prescribing 

system as a system based upon certain 

required functionalities that the system 

can perform. We propose to retain the 

same functionalities that were required 

in 2010 and 2011. Therefore, for 2012 

through 2014, we propose that a 

‘‘qualified’’ electronic prescribing 

system is one that can do the following: 

• Generate a complete active 

medication list incorporating electronic 

data received from applicable 

pharmacies and PBMs, if available. 

• Enable eligible professionals to 

select medications, print prescriptions, 

electronically transmit prescriptions, as 

well as provide notifications (that is, 

signals to warn the prescriber of 

possible undesirable or unsafe 

situations including potentially 

inappropriate dose or route of 

administration of a drug, drug-drug 

interactions, allergy concerns, or 

warnings and cautions). This 

functionality must be enabled. 

• Provide information related to 

lower cost, therapeutically appropriate 

alternatives (if any). The ability of an 

electronic prescribing system to receive 

tiered formulary information, if 

available, would again suffice for this 

requirement for reporting the electronic 

prescribing measure during the 

reporting periods occurring in CYs 2012 

and 2013 until this function is more 

widely available in the marketplace. 

• Provide information on formulary 

or tiered formulary medications, patient 

eligibility, and authorization 

requirements received electronically 

from the patient’s drug plan (if 

available). 

We invite public comment on the 

proposed definition of a ‘‘qualified 

electronic prescribing system,’’ for 

systems that have these four 

functionalities. 

Furthermore, we are proposing to 

expand the definition of a ‘‘qualified 

electronic prescribing system’’ in the 

electronic prescribing measure that 

would be used for reporting periods that 

occur during CY 2012 and 2013 to 

include Certified EHR Technology as 

defined at 42 CFR 495.4 and 45 CFR 

170.102 because we believe the 

technological requirements for eRx in 

the EHR Incentive Program are similar 

to the technological requirements for the 

eRx Incentive Program. We also desire 

to align the requirements of the eRx and 

the Medicare EHR Incentive Program in 

order to potentially reduce unnecessary 

investment in multiple technologies for 

purposes of meeting the requirements 

for each program. This proposal is 

consistent with our June 1, 2011 

proposed rule for the 2011 eRx 

incentive and the 2013 eRx payment 

adjustment (76 FR 31549). 

(2) Part D Electronic Prescribing 

Standards 

Section 1848(m)(3)(B)(v) of the Act 

specifies that to the extent practicable, 

in determining whether an eligible 

professional is a successful electronic 

prescriber, ‘‘the Secretary shall ensure 

that eligible professionals utilize 

electronic prescribing systems in 

compliance with standards established 

for such systems pursuant to the Part D 

Electronic Prescribing Program under 

section 1860D–4(e) of the Act’’. The Part 

D standards for electronic prescribing 

systems establish which electronic 

standards Part D sponsors, providers, 

and dispensers must use when they 

electronically transmit prescriptions 

and certain prescription related 

information for Part D covered drugs 

that are prescribed for Part D eligible 

individuals. 

To be a qualified electronic 

prescribing system under the eRx 

Incentive Program, electronic systems 

must convey the information listed 

previously using the standards currently 

in effect for the Part D electronic 

prescribing program. Additional Part D 

electronic prescribing standards were 

implemented April 1, 2009. On July 1, 

2010, we published an Interim Final 

Rule providing additional updates to 

Part D electronic prescribing standards. 

These latest Part D electronic 

prescribing standards, and those that 

had previously been adopted, can be 

found on the CMS Web site at http:// 

www.cms.gov/eprescribing. 

To ensure that eligible professionals 

utilize electronic prescribing systems 

that meet these requirements, the 

electronic prescribing measure requires 

that those functionalities required for a 

‘‘qualified’’ electronic prescribing 

system utilize the adopted Part D 

electronic prescribing standards. We 

propose to modify the Part D electronic 

prescribing standards required for a 

‘‘qualified’’ electronic prescribing 

system under the eRx Incentive Program 

to have these standards consistent with 

current, CMS Part D electronic 

prescribing standards. The Part D 

electronic prescribing standards 

relevant to the four functionalities 

described previously are as follows: 

• Generate medication list—Use the 

National Council for Prescription Drug 

Programs (NCPDP) Prescriber/ 

Pharmacist Interface SCRIPT Standard, 

Implementation Guide, Version 8 or 

10.6, Release 1, October 2005 

(hereinafter ‘‘NCPDP SCRIPT 8.1 or 

10.6’’) Medication History Standard. 

Use of NCPDP SCRIPT 10.6 is a new 

option for use in the eRx Incentive 

Program. 

• Transmit prescriptions 

electronically—Use the NCPDP SCRIPT 

8.1or 10.6 for the transactions listed at 

§ 423.160(b)(2). 

• Provide information on lower cost 

alternatives—Use the NCPDP Formulary 

and Benefits Standard, Implementation 

Guide, Version 1, Release 0 (Version 

1.0), October 2005 (hereinafter ‘‘NCPDP 

Formulary and Benefits 1.0’’). 

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• Provide information on formulary 

or tiered formulary medications, patient 

eligibility, and authorization 

requirements received electronically 

from the patient’s drug plan use: 

++ NCPDP Formulary and Benefits 

1.0 for communicating formulary and 

benefits information between 

prescribers and plans. 

++ Accredited Standards Committee 

(ASC) X12N 270/271–Health Care 

Eligibility Benefit Inquiry and Response, 

Version 4010, May 2000, Washington 

Publishing Company, 004010X092 and 

Addenda to Health Care Eligibility 

Benefit Inquiry and Response, Version 

4010A1, October 2002, Washington 

Publishing Company, 004010X092A1 

for communicating eligibility 

information between the plan and 

prescribers. 

++ NCPDP Telecommunication 

Standard Specification, Version 5, 

Release 1 (Version 5.1), September 1999, 

and equivalent NCPDP Batch Standard 

Batch Implementation Guide, Version 1, 

Release 1 (Version 1.1), January 2000 for 

communicating eligibility information 

between the plan and dispensers. 

However, there are Part D electronic 

prescribing standards that are in effect 

for functionalities that are not 

commonly utilized at this time. One 

example is Rx Fill Notification, which is 

discussed in the Part D electronic 

prescribing final rule (73 FR 18926). For 

purposes of the eRx Incentive Program 

for CYs 2012 through 2014, we again are 

not requiring that an electronic 

prescribing system contain all 

functionalities for which there are 

available Part D electronic prescribing 

standards since many of these 

functionalities are not commonly 

available. For those required 

functionalities previously described, we 

propose that a ‘‘qualified’’ system must 

use the adopted Part D electronic 

prescribing standards listed previously 

for electronic messaging only. 

There are other aspects of the 

functionalities for a ‘‘qualified’’ system 

that are not dependent on electronic 

messaging and are part of the software 

of the electronic prescribing system, for 

which Part D standards for electronic 

prescribing do not pertain and are not 

required for purposes of the eRx 

Incentive Program. For example, the 

requirements in the second 

functionality that require the system to 

allow professionals to select 

medications, print prescriptions, and 

conduct alerts are functions included in 

the particular software, for which Part D 

standards for electronic messaging do 

not apply. 

As stated previously, we are 

proposing to expand the definition of 

what constitutes a ‘‘qualified’’ electronic 

prescribing system under the electronic 

prescribing system to also recognize as 

‘‘qualified’’ Certified EHR Technology. 

Among other requirements, Certified 

EHR Technology must be able to 

electronically generate and transmit 

prescriptions and prescription-related 

information in accordance with certain 

standards, some of which have been 

adopted for purposes of electronic 

prescribing under Part D. Similar to the 

four functionalities previously noted 

with regard to a qualified eRx system, 

Certified EHR Technology also must be 

able to check for drug-drug interactions 

and check whether drugs are in a 

formulary or a preferred drug list, 

although the certification criteria do not 

specify any standards for the 

performance of those functions. We 

believe that it is acceptable that not all 

of the Part D eRx standards are required 

for Certified EHR Technology in light of 

our desire to better align the 

requirements of the eRx and the 

Medicare EHR Incentive Program and 

potentially reduce unnecessary 

investment in multiple technologies for 

purposes of meeting the requirements 

for each program. Furthermore, to the 

extent that an eligible professional uses 

Certified EHR Technology to 

electronically prescribe under Part D, he 

or she would still be required to comply 

with the Part D standards to do so. 

f. Proposed Reporting Mechanisms for 

the 2012 and 2013 Reporting Periods 

For purposes of the 2011 incentive 

payment and 2013 payment adjustment, 

an eligible professional (and eRx GPRO, 

for purposes of the 2011 incentive) may 

report on the electronic prescribing 

measure to meet the criteria for being a 

successful electronic prescriber via 

three reporting mechanisms—claims, 

qualified registry, and qualified EHR 

product. However, for purposes of the 

2012 payment adjustment, due to 

operational limitations, only the claimsbased reporting mechanism is available 

for purposes of reporting on the 

electronic prescribing measure for the 

2012 payment adjustment (75 FR 

73563). 

For reporting periods that occur 

during CY 2012 and 2013, to provide 

eligible professionals and groups 

practices with multiple mechanisms to 

report on the electronic prescribing 

measure for purposes of reporting the 

electronic prescribing measure for the 

2012 and 2013 incentive payments and 

2013 and 2014 payment adjustments, 

we propose the following three 

reporting mechanisms—claims, 

qualified registry, and qualified EHR. 

However, as in the past, we would not 

combine data on the electronic 

prescribing measure submitted via 

multiple reporting mechanisms. 

Combining data received via multiple 

reporting mechanisms would add 

significant complexity to our analytics 

and potentially delay incentive 

payments. Therefore, we are proposing 

that an eligible professional or eRx 

GPRO would need to meet the relevant 

reporting criteria for the incentive or 

payment adjustment using a single 

reporting mechanism. 

For reporting periods that occur 

during CYs 2012 and 2013, we also 

propose that a group practice that 

wishes to participate in the eRx 

Incentive Program as an eRx GPRO for 

a particular calendar year will have to 

indicate which reporting mechanism the 

group practice intends to use to report 

the electronic prescribing measure. That 

is, the group practice will need to 

indicate at the time it self-nominates 

which reporting mechanism (claims, 

qualified registry, or qualified EHR) the 

group practice intends to use for 

purposes of participating in the eRx 

GPRO. 

The proposed requirements for each 

reporting mechanism with respect to the 

2012 and 2013 incentives and 2013 and 

2014 payment adjustments are 

described below. 

(1) Claims-Based Reporting 

First, for purposes of reporting the 

electronic measure for the 2012 and 

2013 incentives as well as the 2013 and 

2014 payment adjustments, we propose 

to again retain the claims-based 

reporting mechanism that has been used 

since the implementation of the eRx 

Incentive Program in 2009 for all 

remaining incentive and payment 

adjustment years. We are not proposing 

any prerequisites, such as registration, 

to begin reporting on the electronic 

prescribing measure via claims. 

Retaining the claims-based mechanism 

allows eligible professionals and group 

practices to begin to report on the 

electronic prescribing measure without 

the added cost of submitting data to a 

registry or purchasing an EHR system (if 

the eligible professional is using a 

standalone eRx system) as eligible 

professionals already report PFS charges 

via claims. 

If an eligible professional or group 

practice chooses the claims-based 

reporting mechanism, we propose that 

the eligible professional or group 

practice must directly submit data on 

the electronic prescribing measure. For 

eligible professionals and group 

practices participating in the eRx GPRO 

using the proposed claims-based 

reporting mechanism for purposes of 

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reporting the electronic prescribing 

measure during a 12-month incentive or 

payment adjustment reporting period, 

we propose that all claims for services 

must be processed by us no later than 

two months after the respective 

reporting period, for the claim to be 

included in our data analysis. (For 

example, for an eligible professional 

using the 12-month, 2014 payment 

adjustment reporting period, all claims 

for services between January 1, 2012 

and December 31, 2012 must be 

processed no later than February 28, 

2013 to be included in our data 

analysis.) For eligible professionals and 

group practices using the proposed 

claims-based reporting mechanism for 

purposes of reporting the electronic 

prescribing measure during a 6-month 

payment adjustment reporting period, 

we propose that all claims for services 

must be processed by us by no later than 

one month after the respective reporting 

period, for the claim to be included in 

our data analysis (for example, for an 

eligible professional using the 6-month, 

2013 payment adjustment reporting 

period, all claims for services between 

January 1, 2012 and June 30, 2012 must 

be processed no later than July 31, 2012, 

for the claims to be included in our data 

analysis.) We believe that these 

proposed reporting periods will allow 

sufficient time for eligible professionals 

to report the electronic prescribing 

measure, allow us to collect and analyze 

the data submitted by eligible 

professionals, and avoid retroactive 

adjustments of payments. We invite 

public comment on our proposal to 

retain claims-based reporting as a 

reporting mechanism for the eRx 

Incentive Program. 

(2) Registry-Based Reporting 

In addition, for purposes of reporting 

for the 2012 and 2013 incentives as well 

as the 2013 and 2014 payment 

adjustments, to provide an opportunity 

for individual eligible professionals and 

group practices who choose to 

participate in the Physician Quality 

Reporting System via registry to use the 

same reporting mechanism for reporting 

the electronic prescribing measure, we 

propose to continue the registry-based 

reporting mechanism introduced under 

the 2010 eRx Incentive Program. 

Retaining the registry-based reporting 

option provides eligible professionals 

and group practices with another 

alternative to reporting. In addition, 

unlike claims-based reporting, although 

there may be a cost associated with 

submitting data to a registry, reporting 

of the electronic prescribing measure to 

CMS is done entirely by the registry. 

We note that there may be a cost 

associated with submitting data to a 

registry. As in prior program years, we 

propose that only registries qualified to 

submit quality measure results and 

numerator and denominator data on 

quality measures on behalf of eligible 

professionals for the Physician Quality 

Reporting System for the applicable 

calendar year would be qualified to 

submit measure results and numerator 

and denominator data on the electronic 

prescribing measure on behalf of eligible 

professionals for the eRx Incentive 

Program. 

Some registries that self-nominate to 

become a qualified registry for the 

Physician Quality Reporting System 

may not choose to self-nominate to 

become a qualified registry for purposes 

for the eRx Incentive Program. Registries 

need to indicate their desire to qualify 

to submit measure results and 

numerator and denominator data on the 

electronic prescribing measure for 

reporting periods that occur during CYs 

2012 and 2013 at the time that they 

submit their self-nomination letter for 

the 2012 and 2013 Physician Quality 

Reporting System respectively. The selfnomination process and requirements 

for registries for the Physician Quality 

Reporting System, which also will apply 

to the registries for the eRx Incentive 

Program, are discussed in the Physician 

Quality Reporting System section 

IV.F.1.(d).(2). of this proposed rule. We 

would post a final list of qualified 

registries for the eRx Incentive Program 

for CYs 2012 and 2013 on the eRx 

Incentive Program section of the CMS 

Web site at http://www.cms.gov/ 

ERXIncentive when we post the final 

list of qualified registries for the 

Physician Quality Reporting System for 

2012 and 2013 respectively on the 

Physician Quality Reporting System 

section of the CMS Web site. 

Since we are proposing a 12-month 

reporting period for purposes of the 

2012 and 2013 incentive and 6 and 12- 

month reporting periods for purposes of 

the 2013 and 2014 payment adjustments 

(as described in the section previously), 

we further propose that qualified 

registries would need to submit the 

electronic prescribing measure for the 

eRx Incentive Program to us in two 

separate transmissions, based on the 

proposed reporting periods for the 2012 

and 2013 incentive payments and 2013 

and 2014 payment adjustments. 

Specifically, we propose that qualified 

registries would need to submit 2012 

and 2013 data on the electronic 

prescribing measure in two separate 

submissions: 

• Following the end of the respective 

6-month payment adjustment reporting 

period (between July 1, 2012 and 

August 19, 2012, for purposes of the 

2013 eRx payment adjustment, and 

between July 1, 2013 and August 19, 

2013, for purposes of the 2014 eRx 

payment adjustment); and 

• Following the end of the 12-month 

reporting period for the 2012 and 2013 

incentives and 2014 payment 

adjustment. 

We invite public comment on our 

proposals regarding registry-based 

reporting for the 2012, 2013, and 2014 

eRx Incentive Program. 

(3) EHR-Based Reporting 

For purposes of reporting for the 2013 

incentive as well as the 2013 and 2014 

payment adjustments, in order to 

provide an opportunity for eligible 

professionals and group practices who 

choose to participate in the Physician 

Quality Reporting System via EHR as 

well as eligible professionals who 

participate in the Medicaid or Medicare 

EHR Incentive Program to use the same 

reporting mechanism for reporting the 

electronic prescribing measure, we 

propose to retain the EHR-Based 

reporting mechanism to encourage the 

use of EHR technology as well as 

provide eligible professionals and group 

practices with a third reporting option. 

Similar to registry-based reporting, we 

propose that direct EHR technology as 

well as EHR data submission vendors 

(as described in our proposals to the 

Physician Quality Reporting System) 

‘‘qualified’’ to submit extracted 

Medicare clinical quality data to us for 

the Physician Quality Reporting System 

would be able to be used by an eligible 

professional or group practice to submit 

data on the electronic prescribing 

measure for the 2012 and 2013 

incentives and 2013 and 2014 payment 

adjustments. The self-nomination 

process and requirements for direct EHR 

products and EHR data submission 

vendors for the Physician Quality 

Reporting System as discussed 

previously in section IV.F.1.d.(3). of this 

proposed rule in our 2012 proposals for 

the Physician Quality Reporting System, 

would continue to apply to the EHR 

products and EHR data submission 

vendors for the eRx Incentive Program. 

We hope this third reporting option for 

eligible professionals and group 

practices will encourage the use of EHR 

technology. 

We propose that direct EHR products 

and EHR data submission vendors be 

required to indicate their desire to have 

one or more of their EHR products 

approved for the purpose of an eligible 

professional potentially being able to 

submit data on the electronic 

prescribing measure for the eRx 

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Incentive Program for reporting periods 

that occur in CYs 2012 and 2013 at the 

time they self-nominate for the 

respective 2012 and 2013 Physician 

Quality Reporting System. A list of 

approved EHR technology, their vendors 

(including the technology’s version that 

is approved) for the eRx Incentive 

Program would be posted on the eRx 

Incentive Program section of the CMS 

Web site at http://www.cms.gov/ 

ERXIncentive when we post the list of 

approved EHR technology for the 

Physician Quality Reporting System on 

the Physician Quality Reporting System 

section of the CMS Web site. 

Since we are proposing two reporting 

periods with respect to the 2013 and 

2014 payment adjustments (described in 

section (c)(2) previously), we further 

propose that eligible professionals using 

their approved EHR systems would 

need to submit the electronic 

prescribing measure for the eRx 

Incentive Program to us in two separate 

transmissions, based on the proposed 

reporting periods for the 2012 and 2013 

incentive payments and 2013 and 2014 

payment adjustments. Specifically, we 

propose that eligible professionals 

would need to submit 2012 and 2013 

data on the electronic prescribing 

measure in two separate submissions: 

• Following the end of the respective 

6-month payment adjustment reporting 

period (between July 1, 2012 and 

August 19, 2012, for purposes of the 

2013 eRx payment adjustment, and 

between July 1, 2013 and August 19, 

2013, for purposes of the 2014 eRx 

payment adjustment); and 

• Following the end of the 12-month 

reporting period for the 2012 and 2013 

incentives and 2014 payment 

adjustment. 

We invite public comment on our 

proposals with regard to EHR-Based 

reporting. 

g. The 2012 and 2013 eRx Incentives 

42 CFR 414.92(d) states the 

requirements for individual eligible 

professionals to qualify to receive an 

incentive payment. We are proposing to 

modify 42 CFR 414.92(d) to add ‘‘being 

a,’’ so that the provision reads: 

In order to be considered a successful 

electronic prescriber and qualify to earn an 

electronic prescribing incentive payment 

(subject to paragraph (c)(3) of this section), an 

individual eligible professional, as identified 

by a unique TIN/NPI combination, must meet 

the criteria for being a successful electronic 

prescriber under section 1848(m)(3)(B) of the 

Act and as specified by CMS during the 

reporting period specified in paragraph (d)(1) 

of this section and using one of the reporting 

mechanisms specified in paragraph (d)(2) of 

this section. Although an eligible 

professional may attempt to qualify for the 

electronic prescribing incentive payment 

using more than one reporting mechanism (as 

specified in paragraph (d)(2) of this section), 

the eligible professional will receive only one 

electronic prescribing incentive payment per 

TIN/NPI combination for a program year. 

We believe this change provides more 

clarity to the provision. 

(1) Applicability of 2012 and 2013 eRx 

Incentives for Eligible Professionals and 

eRx GPROs 

Section 1848(m)(2)(B) of the Act 

imposes a limitation on the eRx 

incentive payment. The Secretary is 

authorized to choose 1 of 2 possible 

criteria for determining whether or not 

the limitation applies to a successful 

electronic prescriber: 

• Whether Medicare Part B allowed 

charges for covered professional 

services to which the electronic 

prescribing quality measure applies are 

less than 10 percent of the total 

Medicare Part B PFS allowed charges for 

all covered professional services 

furnished by the eligible professional 

during the reporting period; OR 

• The second criterion, under section 

1848(m)(3)(B)(iii) of the Act, is based on 

whether the eligible professional 

submits (both electronically and nonelectronically) a sufficient number (as 

determined by the Secretary) of 

prescriptions under Part D (which can, 

again, be assessed using Part D drug 

claims data). If the Secretary decides to 

use this criterion, the criterion based on 

the reporting on electronic prescribing 

measures would no longer apply. 

Based on our proposal to make the 

determination of whether an eligible 

professional or group practice is a 

‘‘successful electronic prescriber’’ based 

on submission of the electronic 

prescribing measure (the first criterion), 

we propose to apply the criterion under 

section 1848(m)(2)(B)(i) of the Act for 

the limitation for both the 2012 and 

2013 incentives. Specifically, a 

successful electronic prescriber is 

eligible for the 2012 and/or 2013 

incentive only if the Medicare Part B 

allowed charges for covered 

professional services to which the 

electronic prescribing quality measure 

applies comprise at least 10 percent of 

the total Medicare Part B PFS allowed 

charges for all covered professional 

services furnished by the eligible 

professional or group practice during 

the reporting period. 

For purposes of the 2012 and 2013 

incentives, this analysis would be 

performed during the first quarters of 

2013 and 2014 respectively by dividing 

the eligible professional’s or group 

practice’s (for those group practices 

participation in the eRx GPRO for that 

year) total 2012 and 2013 respective 

Medicare Part B PFS allowed charges for 

all such covered professional services 

submitted for the measure’s 

denominator codes by the eligible 

professional’s or group practices’ total 

Medicare Part B PFS allowed charges for 

all covered professional services. If the 

result is 10 percent or more, then the 

statutory limitation would not apply 

and a successful electronic prescriber 

would qualify to earn the electronic 

prescribing incentive payment. If the 

result is less than 10 percent, then the 

statutory limitation would apply and 

the eligible professional or group 

practice would not earn an electronic 

prescribing incentive payment even if 

he or she meets the reporting criteria for 

being a successful electronic prescriber. 

Although an individual eligible 

professional or group practice may 

decide to conduct his or her own 

assessment of how likely this statutory 

limitation is expected to apply to him or 

her before deciding whether or not to 

report the electronic prescribing 

measure, an individual eligible 

professional or group practice may 

report the electronic prescribing 

measure without regard to the statutory 

limitation for the incentive payment. 

We invite public comment on our 

proposed use of the 10 percent 

limitation with respect to the 2012 and 

2013 incentive payments. 

(2) Proposed Reporting Criteria for 

Being a Successful Electronic for the 

2012 and 2013 eRx Incentives— 

Individual Eligible Professionals 

As discussed previously, section 

1848(m)(3)(D) of the Act authorizes the 

Secretary to revise the criteria for 

submitting data on the electronic 

prescribing measure under section 

1848(m)(3)(B)(ii) of the Act, which 

requires the measure to be reported in 

at least 50 percent of the cases in which 

the measure is reportable. For 2010 and 

2011, we revised that criterion, such 

that an eligible professional is a 

successful electronic prescriber by 

reporting the electronic prescribing 

quality measure for a minimum of 25 

unique visits per year of applicable 

cases in the denominator. 

For the 2012 and 2013 incentives, to 

maintain program consistency form year 

to year, we propose to make the 

determination of whether an eligible 

professional is a successful electronic 

prescriber for purposes of the incentive 

based on a count of the number of times 

(minimum threshold of 25) an eligible 

professional reports that at least one 

prescription created during the 

denominator-eligible encounter is 

generated using a qualified electronic 

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prescribing system, which would 

include Certified EHR Technology (that 

is, reports the G8553 code when the 

eligible professional bills for one of the 

services included in the measure’s 

denominator). We believe this criterion 

adequately addresses the goal of the eRx 

Incentive Program, specifically to 

promote the use of electronic 

prescribing systems. We invite public 

comment on the proposed criteria for 

successful electronic prescriber with 

regard to reporting the electronic 

prescribing quality measure by 

individual eligible professionals for 

purposes of qualifying for the 2012 and 

2013 eRx incentive payments. 

(3) Proposed Criteria for Being a 

Successful Electronic Prescriber 2012 

and 2013 eRx Incentives—Group 

Practices 

Under section 1848(m)(3)(B) of the 

Act, in order to qualify for the incentive 

payment, an eligible professional or 

group practice must be a ‘‘successful 

electronic prescriber.’’ 

For a group practice to be a successful 

electronic prescriber for purposes of the 

2011 incentive payment, depending on 

the group’s size, a group practice was 

required to report the electronic 

prescribing measure for a minimum of 

75 to 2,500 unique visits per year of 

applicable cases in the electronic 

prescribing measure’s denominator. 

Specifically, 2011 eRx GPRO comprised 

of 26 to 50 eligible professionals are 

required to report the electronic 

prescribing measure for at least 475 

unique visits. 2011 group practices 

comprised of 51 to 100 eligible 

professionals are required to report the 

electronic prescribing measure for at 

least 925 unique visits, and 2011 group 

practices comprised of 101 to 199 

eligible professionals are required to 

report the electronic prescribing 

measure for at least 1,875 unique visits. 

Because we seek to simplify the 

reporting criteria for group practices 

using the eRx GPRO, we propose that, 

for the 2012 and 2013 incentive 

payments and 2013 and 2014 payment 

adjustments, for a group practice using 

the eRx GPRO to be a successful 

prescriber, a group practice using the 

eRx GPRO must report the electronic 

prescribing measure’s numerator for at 

least 625 unique visits (for group 

practices comprised of 25–99 eligible 

professionals) or 2,500 unique visits (for 

group practices comprised of 100 or 

more eligible professionals). To obtain 

these reporting criteria, we multiplied 

the smallest group practice size for each 

respective threshold (that is, 25 for the 

first threshold and 100 for the second 

threshold) by the number of unique 

visits (25) an individual eligible 

professional must report on the 

electronic prescribing measure in order 

to qualify for an incentive payment. 

Although this may be a higher reporting 

threshold for group practices using the 

eRx GPRO comprised of 25–50 eligible 

professionals and group practices using 

the eRx GPRO comprised of 101–199 

eligible professionals than in 2011, we 

believe it is still quite feasible for these 

group practices to meet the respective 

reporting threshold as this would be the 

reporting threshold should the members 

of the group practice choose to 

participate in the eRx Incentive Program 

as individual eligible professionals. 

We invite public comment on the 

proposed criteria for determining 

successful electronic prescribers for eRx 

GPROs reporting for purposes of earning 

the 2012 and 2013 incentives. 

(4) No Double Payments 

We are prohibited from making 

double payments under section 

1848(m)(3)(C)(iii) of the Act, which 

requires that payments to a group 

practice shall be in lieu of the payments 

that would otherwise be made under the 

eRx Incentive Program to eligible 

professionals in the group practice for 

being a successful electronic prescriber. 

Accordingly, consistent with 2010 and 

2011, we propose to make incentive 

payments to group practices based on 

the determination that the eRx GPRO, as 

a whole, is a successful electronic 

prescriber for the respective program 

year. An individual eligible professional 

who is affiliated with a group practice 

participating in the eRx GPRO reporting 

option that meets the requirements of 

being a successful electronic prescriber 

under a group practice would not be 

eligible to earn a separate eRx incentive 

payment on the basis of the individual 

eligible professional meeting the criteria 

for successful electronic reporter at the 

individual level. We invite public 

comment on the proposed 

determination of the 2012 and 2013 

incentive payment amount for group 

practices that are successful electronic 

prescribers. 

Furthermore, we propose to make a 

technical change 42 CFR 414.92(g)(5)(ii) 

to modify ‘‘another’’ to ‘‘a’’ to clarify the 

provision. 

h. The 2013 and 2014 Electronic 

Prescribing Payment Adjustments 

As previously stated, for 2012, 2013, 

and 2014, if the eligible professional is 

not a successful electronic prescriber for 

the reporting period for the year, the 

PFS amount for covered professional 

services furnished by such professionals 

during the year shall be less than the 

PFS amount that would otherwise apply 

by— 

• 1.0 percent for 2012; 

• 1.5 percent for 2013; and 

• 2.0 percent for 2014. 

We propose to modify 42 CFR 414.92 

to provide further explanation of the 

requirements for individual eligible 

professionals and group practices for the 

2013 and 2014 payment adjustment, 

which we will propose below. 

(1) Proposed Limitations to the 2013 

and 2014 eRx Payment Adjustments— 

Individual Eligible Professionals 

Whereas we believe that an incentive 

should be broadly available to 

encourage the widest possible adoption 

of electronic prescribing, even for low 

volume prescribers, we believe that a 

payment adjustment should be applied 

primarily to assure that those who have 

a large volume of prescribing do so 

electronically, without penalizing those 

for whom the adoption and use of an 

electronic prescribing system may be 

impractical given the low volume of 

prescribing. We propose that the 2013 

and 2014 payment adjustments would 

not apply if: 

• An eligible professional is not an 

MD, DO, podiatrist, nurse practitioner, 

or physician assistant as of June 30, 

2012, for purposes of the 2013 payment 

adjustment and June 30, 2013, for 

purposes of the 2014 payment 

adjustment. Since these eligible 

professionals do not generally prescribe, 

we have excluded these eligible 

professionals from the eRx Incentive 

Program. 

For purposes of determining whether 

an eligible professional is an MD, DO, 

podiatrist, nurse practitioner, or 

physician assistant we would use 

National Plan and Provider 

Enumeration System (NPPES) data. It is 

an eligible professional’s responsibility 

to ensure that his or her primary 

taxonomy code in NPPES is accurate. 

However, in 2011, we also established a 

G-code, (G8644) that eligible 

professionals can use to report to us that 

they do not have prescribing privileges. 

We propose to retain the reporting of 

this G-code for purposes of the 2013 and 

2014 payment adjustments. For 

purposes of the 2013 payment 

adjustment, we propose that eligible 

professionals who report this G-code 

must do so on a claim with dates of 

services during the 6-month reporting 

period (January 1, 2012 and June 30, 

2012). For purposes of the 2014 

payment adjustment, we propose that 

eligible professionals who report this Gcode must do so on a claim with dates 

of services during the 6-month reporting 

period (January 1, 2013 and June 30, 

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2013) so that we are able to distinguish 

whether a professional is reporting this 

G-code for the 2013 payment adjustment 

or the 2014 payment adjustment. 

• The eligible professional’s Medicare 

Part B allowed charges for covered 

professional services to which the 

electronic prescribing quality measure 

applies are less than 10 percent of the 

total Medicare Part B PFS allowed 

charges for all covered professional 

services furnished by the eligible 

professional during the respective 

payment adjustment reporting period. 

This is a required limitation under 

section 1848(m)(2)(B) of the Act. This 

calculation will be performed by 

dividing the eligible professional’s total 

2011 Medicare Part B PFS allowed 

charges for all such covered professional 

services submitted for the measure’s 

denominator codes by the eligible 

professional’s total Medicare Part B PFS 

allowed charges for all covered 

professional services (as assessed at the 

TIN/NPI level). If the result is 10 

percent or more, then the statutory 

limitation will not apply. If the result is 

less than 10 percent, then the statutory 

limitation will apply. For the 12-month 

incentive and payment adjustment 

reporting periods, this calculation is 

expected to take place in the first 

quarter of the year following the 

reporting period (for example, in the 

first quarter of 2013 for the 12-month 

reporting period for the 2012 incentive). 

For the 6-month payment adjustment 

reporting period, this calculation is 

expected to take place within the 

calendar year for that 6-month reporting 

period (for example. within 2012 for the 

6-month reporting period for the 2013 

payment adjustment). 

• An eligible professional who does 

not have at least 100 cases (that is, 

claims for patient services) containing 

an encounter code that falls within the 

denominator of the electronic 

prescribing measure for dates of service 

during: The 6-month, 2013 payment 

adjustment reporting period (January 1, 

2012 through June 30, 2012) for 

purposes of the 2013 payment 

adjustment or the 6-month, 2014 

payment adjustment reporting period 

(January 1, 2013 through June 30, 2013) 

for purposes of the 2014 payment 

adjustment. If an eligible professional 

has less than 100 denominator-eligible 

instances in a 6-month period, this 

would be an indicator to us that the 

professional likely has a small Medicare 

patient population. 

We invite public comment on the 

proposed limitations of the 2013 and 

2014 payment adjustments. 

(2) Proposed Requirements for the 2013 

and 2014 eRx Payment Adjustments— 

Individual Eligible Professionals 

As we explained previously, section 

1848(a)(5) of the Act requires a payment 

adjustment be applied with respect to 

covered professional services furnished 

by an eligible professional in 2013 and 

2014, if the eligible professional is not 

a successful electronic prescriber for the 

reporting period for the year. Section 

1848(m)(3)(B) of the Act sets forth the 

requirements for being a successful 

electronic prescriber. However, section 

1848(m)(3)(D) of the Act authorizes the 

Secretary to revise the criteria for 

submitting data on the electronic 

prescribing quality measure. In the 2011 

PFS Final Rule with comment period, 

we established the same reporting 

criteria for being a successful electronic 

prescriber for purposes of the 2011 

incentive and the 2013 payment 

adjustment, based on a 12-month 

reporting period in 2011 (75 FR 73565). 

In order to create another opportunity 

for an eligible professional to become a 

successful electronic prescriber for 

purposes of the 2013 payment 

adjustment, we propose the following 

criteria, based on the proposed 6-month 

reporting period, for being a successful 

electronic prescriber: An eligible 

professional will be deemed a 

successful electronic prescriber if he/ 

she reports the electronic prescribing 

measure’s numerator, that is, at least 1 

prescription for Medicare Part B PFS 

patients created during an encounter 

was generated and transmitted 

electronically using a qualified 

electronic prescribing system at least 10 

times during the 6-month payment 

adjustment reporting period (that is, 

January 1, 2012 through June 30, 2012). 

Unlike the reporting criteria for the 

incentive payments where the 

numerator must be reported in 

connection with a denominator-eligible 

visit, for purposes of the 2013 and 2014 

payment adjustments, we propose an 

eligible professional would be able to 

report the measure’s numerator for any 

Medicare Part B PFS service provided 

during the reporting period, regardless 

of whether the code for such service 

appears in the denominator, because we 

recognize that eligible professionals may 

generate prescriptions during 

encounters that are not necessarily 

included in the measure’s denominator. 

For purposes of avoiding the 2014 

payment adjustment, we also seek to 

provide more than one opportunity for 

eligible professionals to avoid the 2014 

payment adjustment by becoming a 

successful electronic prescriber. 

Therefore, consistent with the finalized 

and proposed criteria for successful 

electronic prescribing for purposes of 

the 2013 payment adjustment, we 

propose that an eligible professional the 

following criteria for an eligible 

professional to be a successful 

electronic prescriber for purposes of the 

2014 payment adjustment: (1) An 

eligible professional meets the criteria 

for the 2013 incentive, that is, reports 

that at least one prescription for 

Medicare Part B PFS patients created 

during an encounter was generated and 

transmitted electronically using a 

qualified electronic prescribing system 

at least 25 times during the 12-month 

payment adjustment reporting period 

(that is, January 1, 2012 through 

December 31, 2012) or (2) An eligible 

professional reports the electronic 

prescribing measure’s numerator (that 

is, that at least 1 prescription for 

Medicare Part B PFS patients created 

during an encounter was generated and 

transmitted electronically using a 

qualified electronic prescribing system) 

at least 10 times during the 6-month 

payment adjustment reporting period 

(that is, January 1, 2013 through June 

30, 2013). 

As with the 2012 and 2013 incentive 

payments, we propose that the 

determination of whether an eligible 

professional is subject to the payment 

adjustment will be made at the 

individual professional level, based on 

the NPI and for each unique TIN/NPI 

combination. Tables 57 and 58 reflect 

the proposed criteria for being a 

successful electronic prescriber for an 

individual eligible professional for 

purposes of the 2013 and 2014 payment 

adjustment respectively. 

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TABLE 57—PROPOSED CRITERIA FOR BEING A SUCCESSFUL ELECTRONIC PRESCRIBER FOR THE 2013 ERX PAYMENT

ADJUSTMENT FOR THE PROPOSED 6-MONTH REPORTING PERIOD—INDIVIDUAL ELIGIBLE PROFESSIONALS * 

Reporting period Criteria 

6–month .......................................................................

(Jan 1, 2012–Jun 30, 2012) 

Report the electronic prescribing measure’s numerator code at least 10 times. 

* In the CY 2011 PFS final rule with comment period, we finalized a reporting criterion based on a 12-month reporting period (January 1, 2011 

through December 31, 2011) for being a successful electronic prescriber for the 2013 payment adjustment. That is, the eligible professional becomes a successful electronic prescriber for the 2013 payment adjustment if, between January 1, 2011 and December 31, 2011 s/he reports on 

the 2011 electronic prescribing measure at least 25 times. 

TABLE 58—PROPOSED CRITERIA FOR BEING A SUCCESSFUL ELECTRONIC PRESCRIBER FOR THE 2014 ERX PAYMENT

ADJUSTMENT—INDIVIDUAL ELIGIBLE PROFESSIONALS

Reporting period Criteria 

12-month ......................................................................

(Jan 1, 2012–Dec 31, 2012) 

Report the electronic prescribing measure’s numerator code at least 25 times for encounters associated with at least 1 of the denominator codes (the same criteria as the 

2013 eRx incentive). 

6-month ........................................................................

(Jan 1, 2013–Jun 30, 2013) 

Report the electronic prescribing measure’s numerator code at least 10 times. 

We proposed the previous criteria for 

being a successful electronic prescriber 

for purposes of the 2013 and 2014 

payment adjustments because they are 

consistent with the criteria for being a 

successful electronic prescriber for 

purposes of the 2012 and 2013 payment 

adjustment that were finalized in the CY 

2011 PFS final rule with comment 

period (75 FR 73562 through 73565). We 

invite public comment on the proposed 

criteria for becoming a successful 

electronic prescriber for the 2013 and 

2014 payment adjustments for 

individual eligible professionals. 

(3) Proposed Requirements for the 2013 

and 2014 eRx Payment Adjustments— 

Group Practices 

As required by section 1848(m)(3)(C) 

of the Act, we are also required to 

establish and have in place a process 

under which eligible professionals in a 

group practice shall be treated as a 

successful electronic prescriber for 

purposes of the payment adjustment. 

For purposes of the 2013 and 2014 

payment adjustments, we propose that if 

a group practice chooses to participate 

in the eRx GPRO during CYs 2012 and 

2013, respectively, then the group 

practice would be evaluated for 

applicability of the 2013 and 2014 

payment adjustment as a group practice. 

We propose an eRx GPRO will be 

deemed a successful electronic 

prescriber for purposes of the 2013 

payment adjustment if, during the 6- 

month, 2013 payment adjustment 

reporting period (January 1, 2012 

through June 30, 2012), a group practice 

reports the electronic prescribing 

measure’s numerator (that is, that at 

least 1 prescription for Medicare Part B 

PFS patients created during an 

encounter was generated and 

transmitted electronically using a 

qualified electronic prescribing system) 

at least 625 times (for group practices 

comprised of 25 to 99 eligible 

professionals) or 2,500 times (for group 

practices comprised of 100+ eligible 

professionals). 

Similarly, for the 2014 payment 

adjustment, we propose the following: A 

group practice would be a successful 

electronic prescriber for purposes of the 

2014 payment adjustment if the group 

practice meets the 2012 criteria for 

being a successful electronic prescriber 

for purposes of the 2012 incentive 

payment. In other words, the group 

practice would need to report the 

electronic prescribing measure’s 

numerator for at least 625 (for group 

practices comprised of 25 to 99 eligible 

professionals) or 2,500 (for group 

practices comprised of 100 or more 

eligible professionals) times for 

encounters associated with at least 1 of 

the denominator codes that occur 

between January 1, 2012 and December 

31, 2012. In addition, we propose that 

a group practice would also be a 

successful electronic prescriber for 

purposes of the 2014 payment 

adjustment if, during the 6-month, 2014 

payment adjustment reporting period 

(January 1, 2013 through June 30, 2013), 

a group practice reports the electronic 

prescribing measure’s numerator (that 

is, that at least 1 prescription for 

Medicare Part B PFS patients created 

during an encounter was generated and 

transmitted electronically using a 

qualified electronic prescribing system 

at least 625 times (for group practices 

with 25 to 99 eligible professionals) or 

2,500 times (for group practices with 

100+ eligible professionals)). 

In addition, in accordance with the 

limitation under section 

1848(m)(2)(B)(i) of the Act, the 2013 or 

2014 payment adjustment would not 

apply to a group practice in which less 

than 10 percent of the group practice’s 

estimated total allowed charges for the 

respective 6-month or 12-month 

payment adjustment reporting period 

are comprised of services which appear 

in the denominator of the 2012 or 2013 

electronic prescribing measure. To be 

consistent with how this limitation is 

applied to group practices for purposes 

of the incentive, we propose to 

determine whether this limitation 

applies to a group practice for the 

payment adjustment at the TIN level. 

Tables 59 and 60 reflect the proposed 

criteria for being a successful electronic 

prescriber for a group practice for 

purposes of the 2013 and 2014 payment 

adjustments, respectively. 

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TABLE 59—PROPOSED CRITERIA FOR BEING A SUCCESSFUL ELECTRONIC PRESCRIBER FOR THE 2013 ERX PAYMENT

ADJUSTMENT FOR THE PROPOSED 6-MONTH REPORTING PERIOD—GROUP PRACTICES

eRx GPRO Size Reporting period Criteria 

25–99 Eligible Professionals ............... 6-month ...............................................

(Jan 1, 2012–Jun 30, 2012) 

Report the electronic prescribing measure’s numerator code at 

least 625 times. 

100+ Eligible Professionals ................. 6-month ...............................................

(Jan 1, 2012–Jun 30, 2012) 

Report the electronic prescribing measure’s numerator code at 

least 2,500 times. 

TABLE 60—PROPOSED CRITERIA FOR BEING A SUCCESSFUL ELECTRONIC PRESCRIBER FOR THE 2014 ERX PAYMENT

ADJUSTMENT—GROUP PRACTICES USING THE ERX GPROS 

eRx GPRO Size Reporting period Criteria 

25–99 Eligible Professionals ............... 12-month .............................................

(Jan 1, 2012–Dec 31, 2012) 

Report the electronic prescribing measure’s numerator for at 

least 625 times for encounters associated with at least 1 of 

the denominator codes (the same criteria as the 2012 eRx 

incentive). 

100+ Eligible Professionals ................. 12-month .............................................

(Jan 1, 2012–Dec 31, 2012) 

Report the electronic prescribing measure’s numerator for at 

least 2,500 times for encounters associated with at least 1 of 

the denominator codes (the same criteria as the 2012 incentive). 

25–99 Eligible Professionals ............... 6-month ...............................................

(Jan 1, 2013–Jun 30, 2013) 

Report the electronic prescribing measure’s numerator code at 

least 625 times. 

100+ Eligible Professionals ................. 6-month ...............................................

(Jan 1, 2013–Jun 30, 2013) 

Report the electronic prescribing measure’s numerator code at 

least 2,500 times. 

We invite public comment on the 

proposed requirements for 2013 and 

2014 electronic prescribing payment 

adjustment for eRx GPROs. 

(4) Significant Hardship Exemptions 

Section 1848(a)(5)(B) of the Act 

provides that the Secretary may, on a 

case-by-case basis, exempt an eligible 

professional from the application of the 

payment adjustment, if the Secretary 

determines, subject to annual renewal, 

that compliance with the requirement 

for being a successful electronic 

prescriber would result in a significant 

hardship. 

(A) Proposed Significant Hardship 

Exemptions 

In the CY 2011 PFS Final Rule with 

comment period (75 FR 73564 through 

75 FR 73565), we finalized two 

circumstances under which an eligible 

professional or eRx GPRO can request 

consideration for a significant hardship 

exemption for the 2012 eRx payment 

adjustment: 

• The eligible professional or eRx 

GPRO practices in a rural area with 

limited high speed internet access. 

• The eligible professional or eRx 

GPRO practices in an area with limited 

available pharmacies for electronic 

prescribing. 

For the 2013 and 2014 payment 

adjustments, we propose to retain these 

two significant hardship exemption 

categories. We propose that eligible 

professionals and eRx GPROs wishing to 

request applicability of these significant 

hardship exemption categories may do 

so via a web-based tool. Alternatively, 

since we created a G-code for each of 

the previous categories, we propose that 

eligible professionals and eRx GPROs 

may use the G-codes to request 

consideration for a significant hardship 

exemption for the 2013 and 2014 

payment adjustment by reporting the 

appropriate G-code at least once on 

claims for services rendered during the 

respective 2013 and 2014 6-month 

reporting periods. 

Since publication of the CY 2011 PFS 

Final Rule with comment period, we 

have received numerous requests to 

expand the categories under the 

significant hardship exemption for the 

payment adjustment. Some stakeholders 

have recommended specific 

circumstances of significant hardship 

for our consideration (for example, 

eligible professionals who have 

prescribing privileges but do not 

prescribe under their NPI, eligible 

professionals who prescribe a high 

volume of narcotics, and eligible 

professionals who electronically 

prescribe but typically do not do so for 

any of the services included in the 

electronic prescribing measure’s 

denominator), while others strongly 

suggested we consider increasing the 

number of specific hardship exemption 

categories. We believe that many of the 

circumstances raised by stakeholders 

may pose a significant hardship and 

limit eligible professionals and group 

practices in their ability to meet the 

requirements for being successful 

electronic prescribers either because of 

the nature of their practice or because of 

the limitations of the electronic 

prescribing measure itself, and as a 

result, such professionals might be 

unfairly penalized. Therefore, in 2011, 

in the proposed rule entitled ‘‘Proposed 

Changes to the Electronic Prescribing 

(eRx) Incentive’’ (76 FR 31547), we 

proposed to expand the categories under 

the significant hardship exemption for 

the 2012 payment adjustment. Because 

we believe the reasons for proposing the 

expanded categories under the 

significant hardship exemption for the 

2012 payment adjustment also apply to 

the 2013 and 2014 payment 

adjustments, we propose to retain the 

following significant hardship 

exemptions for the 2013 and 2014 

payment adjustments: 

• Inability to electronically prescribe 

due to local, state, or federal law or 

regulation 

• Eligible professionals who prescribe 

fewer than 100 prescriptions during a 

6-month, payment adjustment reporting 

period 

(i) Inability to Electronically Prescribe 

Due to Local, State, or Federal Law or 

Regulation 

We are proposing that, to the extent 

that local, State, or Federal law or 

regulation limits or prevents an eligible 

professional or group practice that 

otherwise has general prescribing 

authority from electronically prescribing 

(for example, eligible professionals who 

prescribe a large volume of narcotics, 

which may not be electronically 

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prescribed in some states, or eligible 

professionals who practice in a State 

that prohibits or limits the transmission 

of electronic prescriptions via a third 

party network such as Surescripts), the 

eligible professional or group practice 

would be able to request consideration 

for an exemption from application of the 

2013 and/or 2014 payment adjustments, 

which would be reviewed on a case-bycase basis. We believe eligible 

professionals in this situation face a 

significant hardship with regard to the 

requirements for being successful 

electronic prescribers because while 

they may meet the 10 percent threshold 

for applicability of the payment 

adjustment, or the 100 denominatoreligible cases limit in a 6-month 

payment adjustment reporting period, 

they may not have sufficient 

opportunities to meet the requirements 

for being a successful electronic 

prescriber because Federal, State, or 

local law or regulation may limit the 

number of opportunities that an eligible 

professional or group practice has to 

electronically prescribe. 

(ii) Eligible Professionals Who Prescribe 

Fewer Than 100 Prescriptions During a 

6-Month, Payment Adjustment 

Reporting Period 

We are proposing that an eligible 

professional who has prescribing 

privileges but prescribes fewer than 100 

prescriptions during a 6-month, 

payment adjustment reporting period 

(for example, a nurse practitioner who 

may not write prescriptions under his or 

her own NPI, a physician who decides 

to let his Drug Enforcement 

Administration registration expire 

during the reporting period without 

renewing it, or an eligible professional 

who prescribed fewer than 

100 prescriptions between January 1, 

2012 and June 30, 2012 regardless of 

whether the prescriptions were 

electronically prescribed or not), yet 

still meets the 

10 percent threshold for applicability of 

the payment adjustment, would be able 

to request consideration for a significant 

hardship exemption from application of 

the 2013 and/or 2014 payment 

adjustment, which would be reviewed 

on a case-by-case basis. We believe that 

it is a significant hardship for eligible 

professionals who have prescribing 

privileges, but infrequently prescribe, to 

become successful electronic prescribers 

because the nature of their practice may 

limit the number of opportunities an 

eligible professional or group practice to 

prescribe, much less electronically 

prescribe. 

We invite public comments on our 

proposal to modify 42 CFR 414.92 to 

include our proposed significant 

hardship exemption categories for the 

2013 and 2014 payment adjustments. 

As we realize that the 4 significant 

hardship exemptions we have proposed 

above may not capture every 

circumstance that could constitute a 

significant hardship, we invite public 

comment on other suggestions for 

significant hardship exemption 

categories that we may want to consider. 

(B) Process for Submitting Significant 

Hardship Exemptions—Individual 

Eligible Professionals and Group 

Practices 

To request a significant hardship 

exemption for any of the categories 

proposed and previously described, we 

are proposing that an eligible 

professional provide to us by the end of 

the 2013 and/or 2014 payment 

adjustment reporting periods (that is 

June 30, 2012 for the 2013 payment 

adjustment and June 30, 2013 for the 

2014 payment adjustment), the 

following: 

• The name of the practice and other 

Identifying information (for example: 

TIN, NPI, mailing address, and e-mail 

address of all affected eligible 

professionals. 

• The proposed significant hardship 

exemption category(ies) that apply. 

• A justification statement describing 

how compliance with the requirement 

for being a successful electronic 

prescriber for the respective 2013 

and/or 2014 payment adjustment during 

the reporting period would result in a 

significant hardship to the eligible 

professional. 

• An attestation of the accuracy of the 

information provided. 

The justification statement should be 

specific to the category under which the 

eligible professional or group practice is 

submitting its request and must explain 

how the exemption applies to the 

professional. For example, if the eligible 

professional is requesting a significant 

hardship exemption due to Federal, 

State, or local law or regulation, he or 

she must cite the applicable law and 

how the law restricts the eligible 

professional’s ability to electronically 

prescribe. CMS will review the 

information submitted by each eligible 

professional on a case-by-case basis. In 

addition, we are proposing that an 

eligible professional or group practice 

must, upon request, provide additional 

supporting documentation if there is 

insufficient information (such as, but 

not limited to, a TIN or NPI that we 

cannot match to the Medicare claims, a 

certification number for the Certified 

EHR Technology that does not appear 

on the list of Certified EHR Technology, 

or an incomplete justification for the 

significant hardship exemption request) 

to justify the request or make the 

determination of whether a significant 

hardship exists. 

We also are proposing that eligible 

professionals or group practices would 

be able to submit significant hardship 

exemption requests using the web-based 

tool or interface (that we also proposed 

to use in the 2011 ‘‘Proposed Changes 

to the Electronic Prescribing (eRx) 

Incentive Program’’ proposed rule). 

Under the web-based tool, we propose 

that eligible professionals and group 

practices be able to log-in, request a 

specific significant hardship exemption, 

and provide the reasons why a 

significant hardship exemption should 

apply. We propose that eligible 

professionals would be required to 

submit their requests for a significant 

hardship exemption via the web-based 

tool during the relevant 6-month 

payment adjustment reporting period. 

For example, if an eligible professional 

is requesting a significant hardship 

exemption from the 2013 payment 

adjustment, then the request must be 

submitted between January 1, 2012 and 

June 30, 2012. 

We also are proposing that once we 

have completed our review of the 

eligible professional’s or group 

practice’s request and made a decision, 

we would notify the eligible 

professional or group practice of our 

decision and all such decisions would 

be final. Eligible professionals or group 

practices would not have the 

opportunity to request reconsiderations 

of their requests for significant hardship 

exemption. We invite public comment 

on the proposed process for individual 

eligible professionals and group 

practices for submitting these requests 

for significant hardship exemptions to 

us (including comments on the type of 

information we are proposing eligible 

professionals must submit, the proposed 

options for how the information could 

be submitted, and the proposed 

timeframes for submission). 

G Physician Compare Web Site 

1. Background and Statutory Authority 

Section 10331 (a)(1) of the Affordable 

Care Act (42 U.S.C. 1395w–5 note) 

requires that we, by no later than 

January 1, 2011, develop a Physician 

Compare Internet Web site with 

information on physicians enrolled in 

the Medicare program under section 

1866(j) of the Act as well information on 

other eligible professionals who 

participate in the Physician Quality 

Reporting System under section 1848 of 

the Act (42 U.S.C. 1395w–4). Public 

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reporting of performance results on 

standardized quality measures currently 

exists on http://www.medicare.gov for 

the following: 

• Hospitals (Hospital Compare). 

• Dialysis facilities (Dialysis Facility 

Compare). 

• Nursing homes (Nursing Home 

Compare). 

• Home health facilities (Home 

Health Compare). 

As an initial step towards providing 

information on the quality of care for 

services furnished by physicians and 

other professionals to Medicare 

beneficiaries, we have enhanced the 

existing Physician and Other Health 

Care Professionals directory at http:// 

www.medicare.gov to develop a similar 

Compare Web site specific to physicians 

and other professionals. In accordance 

with section 10331 of the Affordable 

Care Act, we launched the first phase of 

the Physician Compare Internet Web 

site on December 30, 2010. This initial 

phase included the posting of the names 

of eligible professionals that 

satisfactorily submitted quality data for 

the 2009 Physician Quality Reporting 

System. 

2. Proposed Plans 

Section 10331 (a)(2) of the Affordable 

Care Act also requires that, no later than 

January 1, 2013, and with respect to 

reporting periods that begin no earlier 

than January 1, 2012, we implement a 

plan for making information on 

physician performance publicly 

available through the Physician 

Compare Web site. 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 

Physician Quality Reporting System. 

• An assessment of patient health 

outcomes and functional status of 

patients. 

• An assessment of the continuity 

and coordination of care and care 

transitions, including episodes of care 

and risk-adjusted resource use. 

• An assessment of efficiency. 

• An assessment of patient 

experience and patient, caregiver, and 

family engagement. 

• An assessment of the safety, 

effectiveness, and timeliness of care. 

• Other information as determined 

appropriate by the Secretary. 

As required under section 10331(b) of 

the Affordable Care Act, in developing 

and implementing the plan, we must 

include, to the extent practicable, the 

following: 

• Processes to ensure that data made 

public are statistically valid, reliable, 

and accurate, including risk adjustment 

mechanisms used by the Secretary. 

• Processes for physicians and 

eligible professionals whose information 

is being publically reported to have a 

reasonable opportunity, as determined 

by the Secretary, to review their results 

before posting to Physician Compare. 

• 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 and 

other providers are involved in the care 

of the patient. 

• Processes to ensure timely 

statistical performance feedback is 

provided to physicians concerning the 

data published on Physician Compare. 

• Implementation of computer and 

data infrastructure and systems used to 

support valid, reliable, and accurate 

reporting activities. 

Section 10331(d) of the Affordable 

Care Act requires us to consider input 

from multi-stakeholder groups in 

selecting quality measures for Physician 

Compare. In developing the plan for 

making information on physician 

performance publicly available through 

the Physician Compare Web site, 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. 

We are required, under section 

10331(f) of the Affordable Care Act, to 

submit a report to the Congress by 

January 1, 2015 on the Physician 

Compare Web site developed, 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. 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 to foster transparency 

and public reporting by providing 

consumers with quality of care 

information to make informed decisions 

about their health care, while 

encouraging clinicians to improve on 

the quality of care they provide to their 

patients. In accordance with Section 

10331 of the Affordable Care Act, we 

intend to utilize the Physician Compare 

Web site to publicly report physician 

performance results. 

For purposes of implementing a plan 

to publicly report physician 

performance, we plan to use data 

reported under the existing Physician 

Quality Reporting System as an initial 

step for making public physician 

‘‘measure performance’’ information on 

Physician Compare. By ‘‘measure 

performance,’’ we mean the percent of 

times that a particular clinical quality 

action was reported as being performed, 

or a particular outcome was attained, for 

the applicable persons to whom a 

measure applies as described in the 

denominator for the measure. 

The Physician Quality Reporting 

System is a readily available source of 

measures performance data. First 

implemented in 2007, the program grew 

to include 194 different measures in 

2011. The measures used in the 

Physician Quality Reporting System 

cover a wide range of health conditions 

and topics and include measures 

applicable to most physician specialties 

and other clinicians. Work is underway 

to ensure consistency of quality 

measures reported under the Physician 

Quality Reporting System and the EHR 

Incentive Program. 

The first phase of the plan to make 

information on physicians and other 

eligible professionals who participate in 

the Physician Quality Reporting System 

publically available was completed 

through the launch of the Physician 

Compare Web site and the posting of the 

names of those eligible professionals 

who satisfactorily participated in the 

Physician Quality Reporting System. 

During the second phase of the plan, 

occurring in 2011 through 2012, we will 

continue to work towards the 

development and improvement of the 

Web site. Our plans for Physician 

Compare Web site development during 

this second phase include monthly data 

refreshes and a semiannual Web site 

release to incorporate updates and 

improvements to the Web site. Updates 

will include the addition of the names 

of eligible professionals who are 

successful electronic prescribers, as 

required by section 1848(m)(5)(G) of the 

Social Security Act (the Act), as well as 

the names of those eligible professionals 

who participate in the EHR Incentive 

Program, as required by section 

1848(o)(3)(D) of the Act. Additional 

enhancements planned include the 

addition of links to specialty board Web 

sites that can provide more information 

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on an eligible professional’s board 

certification status and improved Web 

site functionality and layout. 

Moving towards the reporting of 

physician performance information, we 

propose to take an initial step by making 

public the performance rates of the 

quality measures that group practices 

submit under the 2012 Physician 

Quality Reporting System group 

practice reporting option (GPRO) 

described in section IV.F.b.2. of this 

proposed rule. We also propose to 

publicly report the performance rates of 

the quality measures that the group 

practices participating in the Physician 

Group Practice demonstration report on 

the Physician Compare Web site as early 

as 2013 for performance information 

collected in CY 2012. Subject to the 

discussion later in this section, we 

would make public the measure 

performance for each of the measures 

included in the 2012 Physician Quality 

Reporting System GPRO. Since the 

quality measures in GPRO are reported 

for the group as a whole, the 

information on measure performance 

would also apply to the group as a 

whole, rather than to individual 

physicians within a group. 

Public reporting of the group 

practices’ measure performance results 

at the group practice level would begin 

public reporting at the earliest time 

specified by the statute. We believe the 

design of the GPRO (see section 

IV.F.b.2. of this proposed rule) 

facilitates making public groups’ 

performance results. All groups 

participating in the GPRO would be 

reporting on the same set of clinical 

quality measures, which allows for 

comparison of the results across groups. 

To eliminate the risk of calculating 

performance rates based on a small 

denominator, we propose to set a 

minimum patient sample size threshold. 

A minimum threshold of 25 patients 

will have to be met in order for the 

group practice’s measure performance 

rate to be reported on the Physician 

Compare Web site. If the threshold of 25 

patients is not met for a particular 

measure, the group’s performance rate 

for that measure would be suppressed 

and not publically reported. In 

determining the minimum patient 

sample size, we took into consideration 

the minimum patient sample size used 

by other Compare Web sites that 

publically report measure performance 

data. We wanted to ensure that we used 

a number large enough to accurately 

reflect measure performance, but not so 

large that it will limit the number of 

groups for which measure performance 

could be reported. In taking into 

consideration the minimum patient 

sample size used by other Compare Web 

sites that publically report measure 

performance data, we also considered a 

minimum patient sample size of 10 

patients, 20 patients and 30 patients. As 

we are proposing to report measure 

performance at a group level and a 

majority of the other Compare Web sites 

use minimum sample sizes of between 

20 and 30 patients, we concluded that 

a minimum patient sample size of 25 

would meet our criteria. 

As discussed in section IV.F.b.2 of 

this proposed rule, we propose that 

group practices participating in the 2012 

Physician Quality Reporting System 

GPRO would agree in advance to have 

their reporting performance results 

publicly reported as part of their selfnomination to participate in the 2012 

Physician Quality Reporting System 

GPRO. Finally, we propose to modify 

the GPRO data collection tool for 2012 

to calculate the numerator, 

denominator, and measure performance 

rate for each measure from the data that 

the group practices use to populate the 

tool and provide each group practice 

this information at the time of tool 

submission. This feature would allow 

the group practice the opportunity to 

review their measure performance 

results before they are made public in 

accordance with section 10331(b) of the 

Affordable Care Act. For groups 

reporting using GPRO information that 

is made public in 2013, we do not 

propose to post information with 

respect to the measure performance of 

individual physicians or eligible 

professionals associated with the group. 

However, we propose to identify the 

individual eligible professionals who 

were associated with the group during 

the reporting period. We will identify 

the eligible professionals associated 

with the group by posting a list of the 

eligible professionals on the Physician 

Compare Web site. 

We believe a staged approach to 

public reporting of physician 

information allows for the use of 

information currently available while 

we develop the infrastructure necessary 

to support the collection of additional 

types of measures and public reporting 

of individual physicians’ quality 

measure performance results. 

Implementation of subsequent phases of 

the plan will need to be developed and 

addressed in future notice and comment 

rulemaking, as needed. We invite 

comments regarding our proposal to: (1) 

To publicly report group practices’ 

measure performance results in 2013 

based on group practices’ 2012 

Physician Quality Reporting System 

performance results under GPRO; and 

(2) utilize a minimum patient sample 

size of 25 for reporting and displaying 

measure performance on the Physician 

Compare Web site. 

H. Medicare EHR Incentive Program for 

Eligible Professionals for the 2012 

Payment Year 

1. Background 

On July 28, 2010, we published in the 

Federal Register (75 FR 44314) a final 

rule entitled ‘‘Medicare and Medicaid 

Programs; Electronic Health Record 

Incentive Program’’ to implement the 

provisions of the American Recovery 

and Reinvestment Act of 2009 (ARRA) 

(Pub. L. 111–5) that amended sections 

1848, 1853, and 1886 of the Social 

Security Act (the Act) to provide 

incentive payments to eligible 

professionals (EPs), eligible hospitals, 

and critical access hospitals (CAHs) 

participating in the Medicare and 

Medicaid programs that successfully 

adopt, implement, upgrade, or 

demonstrate meaningful use of certified 

electronic health record (EHR) 

technology. In that final rule, we 

specified the initial criteria EPs, eligible 

hospitals, and CAHs must meet in order 

to qualify for an incentive payment, 

including the initial clinical quality 

measures (CQMs) for which these 

providers would be required to submit 

information to the Secretary in the form 

and manner specified by CMS. 

In the July 28, 2010 final rule (75 FR 

44430), we stated that for the Medicare 

EHR Incentive Program, for the 2011 

payment year, EPs, eligible hospitals, 

and CAHs will be required to submit 

CQM results as calculated by certified 

EHR technology through attestation, and 

for the 2012 payment year and 

subsequent payment years, they will be 

required to electronically submit CQM 

results as calculated by certified EHR 

technology. Additionally, we stated that 

the primary method for these providers 

to report required CQM information 

electronically will be to submit data by 

an upload process through a CMSdesignated portal. In the final rule, we 

also stated that we anticipated that we 

would have completed the necessary 

steps to have the capacity to receive 

information on CQMs electronically for 

the 2012 payment year. However, we 

also stated that if the Secretary does not 

have the capacity to accept the 

information on CQMs electronically in 

2012, consistent with sections 

1848(o)(2)(B)(ii) and 1886(n)(3)(B)(ii) of 

the Act, then we will continue to rely 

on attestation for reporting CQMs as a 

requirement for demonstrating 

meaningful use of certified EHR 

technology for the 2012 payment year 

(75 FR 44380). 

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We also stated in the final rule that 

certified EHR technology will be 

required to calculate the clinical quality 

measure results and transmit under the 

Physician Quality Reporting Initiative 

(PQRI) Registry XML specification (75 

FR 44435). Since the publication of the 

final rule, we have determined that it is 

not feasible to receive electronically the 

information necessary for clinical 

quality measure reporting based solely 

on the use of PQRI 2009 Registry XML 

Specification content exchange 

standards as is required for certified 

EHR technology. This is because the 

specification is tailored to the elements 

required for 2009 PQRI Registry 

submission, rather than constituting a 

more generic standard. As a result, we 

propose to modify the requirement that 

clinical quality measure reporting must 

be done electronically. Specifically, we 

propose that for the 2012 payment year, 

EPs may continue to report clinical 

quality measure results as calculated by 

certified EHR technology by attestation, 

as for the 2011 payment year. 

In addition to attestation, we propose 

to establish a pilot mechanism through 

which EPs participating in the Medicare 

EHR Incentive Program may report CQM 

information electronically using 

certified EHR technology for the 2012 

payment year. Participation in the pilot 

would be voluntary and would enable 

EPs to satisfy the Medicare EHR 

Incentive Program requirements for 

reporting CQMs for the 2012 payment 

year. EPs who choose not to participate 

in the pilot would be able to continue 

to use an attestation methodology for 

reporting CQMs for payment year 2012. 

We propose to modify 42 CFR 

495.8(a)(2) by adding a new paragraph 

to allow for the reporting of CQMs for 

the Medicare EHR Incentive Program via 

the Physician Quality Reporting SystemMedicare EHR Incentive Pilot. 

Furthermore we are proposing to revise 

42 CFR 495.8(a)(2)(ii) by deleting the 

word ‘‘electronically’’ and adding the 

words ‘‘form and’’ such that it reads as 

follows: 

Reporting of clinical quality information. 

For 42 CFR 495.6(d)(10), ‘Report ambulatory 

clinical quality measures to CMS or, in the 

case of Medicaid EPs, the States,’ report the 

ambulatory clinical quality measures selected 

by CMS to CMS (or in the case of Medicaid 

EPs, the States) in the form and manner 

specified by CMS (or in the case of Medicaid 

EPs, the States). 

2. The Proposed Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot 

We propose to modify 42 CFR 

495.8(a)(2) to indicate that EPs 

participating in the Medicare EHR 

Incentive Program can meet the CQM 

reporting requirements of the EHR 

Incentive Program for payment year 

2012 by participating in a pilot, which 

we refer to as the Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot. Sections 

1848(o)(2)(B)(ii) of the Act provides 

authority for the Secretary to accept 

information on CQMs electronically on 

a pilot basis. We propose that EPs may 

participate in the pilot on a voluntary 

basis, and that those EPs who choose 

not to participate may instead continue 

to attest to the results of the CQMs as 

calculated by certified EHR technology, 

consistent with the CQM reporting 

method for the 2011 payment year. 

However, we encourage participation in 

the pilot based on our desire to 

adequately pilot electronic submission 

of CQMs and to move to a system of 

reporting where EPs can satisfy the 

CQM reporting requirements for both 

the Physician Quality Reporting System 

and the EHR Incentive Program. To 

participate in the Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot, we propose that EPs 

would be required to electronically 

report the CQMs using certified EHR 

technology via one of two options that 

are based on the existing reporting 

platforms of the Physician Quality 

Reporting System. As described later in 

this section, one option would be based 

on the infrastructure used for the 

Physician Quality Reporting System 

EHR data submission vendor reporting 

mechanism. The second option would 

be based on the infrastructure used for 

the Physician Quality Reporting System 

EHR reporting mechanism. EPs who 

seek to participate in the Physician 

Quality Reporting System-Medicare 

EHR Incentive Pilot must also 

participate in the Physician Quality 

Reporting System itself, because the 

pilot will rely on the infrastructure used 

for Physician Quality Reporting System. 

To move towards the integration of 

reporting on quality measures under the 

Physician Quality Reporting System 

with the reporting requirements of the 

Medicare EHR Incentive Program, as 

required by section 1848(m)(7) of the 

Act (‘‘Integration of Physician Quality 

Reporting and EHR Reporting’’), we 

propose that participation in the 

Physician Quality Reporting SystemMedicare EHR Incentive Pilot would 

require EPs to submit information on 

the same CQMs that were adopted for 

EPs for the Medicare EHR Incentive 

Program and included in Tables 6 and 

7 of the July 28, 2010 final rule (75 FR 

44398 through 44410). We propose that 

EPs participating in this pilot must 

submit information on the three core 

measures included in Table 7, up to 

three of the alternate core measures 

included in Table 7 insofar as the 

denominator for one or more of the core 

measures is zero, and three additional 

measures from the measures included in 

Table 6, as is otherwise required by the 

final rule to successfully demonstrate 

meaningful use (75 FR 44409 through 

44411). EPs that elect to participate in 

this Physician Quality Reporting 

System-Medicare EHR Incentive Pilot 

will still be required to report 

information on the CQMs as required 

under the Stage 1 criteria established for 

the Medicare EHR Incentive Program 

regardless of which option they select as 

described later in this section. As the 

reporting of CQMs is only one of the 15 

core meaningful use objectives for EPs 

for the Medicare EHR Incentive 

Program, an EP who elects to participate 

in the proposed Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot would still be required to 

meet and attest to the remaining 14 core 

objectives and required menu set 

objectives using the attestation module 

on the CMS Web site for the program. 

Consequently, participation in this pilot 

only applies to the method of reporting 

for meeting the meaningful use CQM 

objective in the EHR Incentive Program 

(42 CFR 495.6(d)(10)). 

To participate in the Physician 

Quality Reporting System-Medicare 

EHR Incentive Pilot, we propose EPs 

would be required to electronically 

report the CQMs by choosing one of the 

options described later in this section. 

By submitting the required information 

through the pilot, an EP could meet the 

core objective for reporting CQMs for 

the Medicare EHR Incentive Program for 

the 2012 payment year. After attesting to 

all other meaningful use objectives, the 

EP’s attestation file would be placed in 

a holding status, with respect to the 

CQM objective only, until the EP reports 

the CQMs via one of the proposed 

Physician Quality Reporting SystemMedicare EHR Incentive Pilot options. 

Thus, the EP would not know if he/she 

successfully met the requirements for 

the Medicare EHR Incentive Program 

with respect to the CQM objective until 

the CQMs are received at the end of the 

submission period for measures for the 

Physician Quality Reporting System (we 

expect this would be 2 months after the 

close of the reporting period, which is 

the CY 2012, and no later than February 

29, 2013). As explained later in this 

section, any EP participating in this 

pilot would be required to report CQMs 

based on a full calendar year, regardless 

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of the EP’s year of participation in the 

Medicare EHR Incentive Program. 

If the EP who selects one of the pilot 

options subsequently determines 

completion of the pilot is unfeasible, 

then we propose it is permissible for the 

EP to go back into the Medicare EHR 

Incentive Program attestation module on 

the CMS Web site and complete 

attestation for the CQMs assuming it is 

within the reporting timeframes 

established under the EHR Incentive 

Program. We note that EPs who are in 

their first year of participation in the 

EHR Incentive Program and choose to 

participate in the Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot only will have their EHR 

incentive payments delayed until the 

data submitted under the Pilot has been 

analyzed. However, participation in this 

Physician Quality Reporting SystemEHR Incentive Pilot will allow for the 

receipt of EHR Incentive Program and 

Physician Quality Reporting System 

incentives, provided an EP meets the 

provisions described later in this 

section. 

a. EHR Data Submission Vendor-Based 

Reporting Option 

As discussed further in the Physician 

Quality Reporting System section 

IV.F.1(d).(3).(b). of this proposed rule, 

EPs participating in the Physician 

Quality Reporting System may choose to 

report the Physician Quality Reporting 

System measures to CMS via a 

Physician Quality Reporting System 

qualified EHR data submission vendor. 

For purposes of the Physician Quality 

Reporting System, a Physician Quality 

Reporting System qualified EHR data 

submission vendor would receive data 

from an EP’s EHR and subsequently 

reformat and transmit the data on behalf 

of the EP to CMS. Under this reporting 

option, we propose that an EP 

participating in the Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot would submit CQM data 

from his or her certified EHR technology 

to a Physician Quality Reporting System 

qualified EHR data submission vendor. 

We expect to post a list of the 2012 

Physician Quality Reporting System 

EHR data submission vendors that are 

qualified to submit data from an EP’s 

certified EHR technology to CMS on the 

EP’s behalf on the Physician Quality 

Reporting System section of the CMS 

Web site (http://www.cms.gov/pqrs) by 

summer 2012. 

Under this option, the Physician 

Quality Reporting System qualified EHR 

data submission vendor would obtain 

data elements for the calculation of 

CQMs from the EP’s certified EHR 

technology and then submit the 

calculated results to CMS on the EP’s 

behalf via a secure portal. As discussed 

previously, in order for an EP to submit 

CQMs electronically through the 

Physician Quality Reporting SystemMedicare EHR Incentive Pilot EHR data 

submission vendor-based reporting 

option, we propose that such EPs must 

submit information on the same CQMs 

as required by the July 28, 2010 final 

rule, which must be based on data 

contained in the EP’s certified EHR 

technology. However, it would be 

sufficient for an EP participating in this 

EHR data submission vendor-based 

reporting option to submit CQM data as 

required by the pilot even though such 

data would differ from what is required 

by the July 28, 2010 final rule in the 

following two respects: (1) The data 

would be limited to Medicare patients 

rather than all patients, and (2) the data 

would be based on a CQM reporting 

period of 1-calendar year regardless of 

which year of participation in the 

Medicare EHR Incentive Program the EP 

is in (resulting in a later determination 

of whether the EP has successfully 

demonstrated meaningful use, for those 

EPs in their first year of program 

participation). We invite comment on 

the proposed EHR data submission 

vendor-based reporting option under the 

Physician Quality Reporting SystemMedicare EHR Incentive Pilot. 

b. EHR-Based Reporting Option 

As discussed further in the Physician 

Quality Reporting System section 

IV.F.1.(d).(3).(a). of this proposed rule, 

EPs participating in the Physician 

Quality Reporting System via the EHR 

reporting mechanism can choose to 

report the Physician Quality Reporting 

System measures to CMS directly from 

the EP’s EHR. Therefore, under this 

EHR-Based reporting option, we 

propose that an EP participating in the 

Physician Quality Reporting SystemMedicare EHR Incentive Pilot would 

submit CQM data directly from his or 

her certified EHR technology to CMS via 

a secure portal using the infrastructure 

of the Physician Quality Reporting 

System EHR reporting mechanism. We 

propose that in order to participate in 

the Physician Quality Reporting SystemMedicare EHR Incentive Pilot under this 

option, the EP’s certified EHR 

technology must also be a 2012 

Physician Quality Reporting System 

qualified EHR. We expect to post a list 

of the 2012 Physician Quality Reporting 

System qualified EHRs on the Physician 

Quality Reporting System section of the 

CMS Web site prior to January 1, 2012. 

Due to this proposed Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot, we are proposing to 

have an additional vetting process for 

EHR vendors wishing to participate in 

the Pilot. We expect to post an 

additional list of these additional 2012 

qualified EHR vendors, if applicable, 

and their products in the summer of 

2012. 

As discussed previously, in order for 

an EP to submit CQMs electronically 

through the Physician Quality Reporting 

System-Medicare EHR Incentive Pilot 

EHR-Based reporting option, we 

propose that such EPs must submit 

information on the same CQMs as 

required by the July 28, 2010 final rule, 

which must be based on data contained 

in the EP’s certified EHR technology. 

That is, EPs participating in this pilot 

must submit information on the three 

core measures included in Table 7, up 

to three of the alternate core measures 

included in Table 7 insofar as the 

denominator for one or more of the core 

measures is zero, and three additional 

measures from the measures included in 

Table 6, as is otherwise required by the 

final rule to successfully demonstrate 

meaningful use. If the EP cannot report 

three additional measures without zero 

denominators, the EP must report on all 

applicable measures (that is, 1 or 2 

measures) and attest that all remaining 

measures have zero denominators. 

However, as with the EHR data 

submission vendor-based reporting 

option, the data would be different from 

what is required by the July 28, 2010 

final rule in that it would be: (1) Limited 

to Medicare patients rather than all 

patients; (2) patient-level data from 

which we may calculate CQM results 

using a uniform calculation process, 

rather than aggregate results calculated 

by the EP’s certified EHR technology; 

and (3) based on a CQM reporting 

period of 1 calendar year regardless of 

the EP’s year of participation in the 

Medicare EHR Incentive Program 

(resulting in a later determination of 

whether the EP has successfully 

demonstrated meaningful use, for those 

EPs in their first year of program 

participation). We invite comment on 

the proposed EHR-Based reporting 

option under the Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot. 

In addition, as discussed in the 

Physician Quality Reporting System 

section of this proposed rule, we 

propose if an EP successfully submits 

all required CQM data from certified 

EHR technology, which also must be a 

Physician Quality Reporting System 

qualified EHR product, directly to CMS, 

then the EP would also meet the criteria 

for satisfactory reporting under the 2012 

Physician Quality Reporting System, 

which would also qualify the EP under 

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1The 12 geographic areas are: Boston, MA, 

Syracuse, NY, Northern New Jersey, Greenville, SC, 

Miami, FL, Little Rock, AR, Indianapolis, IN, 

Cleveland, OH, Lansing, MI, Phoenix, AZ, Seattle, 

WA, and Orange County, CA. 

2http://www.cms.gov/GEM. 

the 2012 Physician Quality Reporting 

System. 

The Medicare EHR Incentive Program 

measures, including the core and 

alternate core measures, and the 38 

additional measures, are specified in the 

Physician Quality Reporting System’s 

Table 31 of this proposed rule. It should 

be noted that while the EP is required 

to use certified EHR technology, the 

electronic submission format used for 

this pilot is not a functionality of 

certified EHR technology. Rather, for 

purposes of the pilot, the certified EHR 

technology must conform to the 

qualifications for an EHR under the 

Physician Quality Reporting System. 

3. Method for EPs To Indicate Election 

To Participate in the Physician Quality 

Reporting System-Medicare EHR 

Incentive Pilot for Payment Year 2012 

EPs electing to participate in the 

Physician Quality Reporting SystemMedicare EHR Incentive Pilot would be 

able to indicate their intent to fulfill the 

CQM objective by participating in the 

Physician Quality Reporting SystemMedicare EHR Incentive Pilot under the 

EHR Incentive Program attestation 

module. The EHR Incentive Program 

attestation module is available on the 

CMS Web site at https://www.cms.gov/ 

EHRIncentivePrograms/ 

32_Attestation.asp#TopOfPage. 

I. Improvements to the Physician 

Feedback Program and Establishment of 

the Value-Based Payment Modifier 

(Effect of Sections 3003 and 3007 of the 

Affordable Care Act on the Program) 

1. Overview 

The requirements of the Physician 

Feedback Program, in section 1848(n) of 

the Act, as amended by section 3003(a) 

of the Affordable Care Act, and the 

value-based payment modifier (‘‘value 

modifier’’), under section 1848(p) of the 

Act, as added by section 3007 of the 

Affordable Care Act, mutually reinforce 

our goal to provide physicians with fair, 

actionable and meaningful information 

concerning resource use and quality 

regarding their Medicare fee-for-service 

patients. We view value-based 

purchasing (‘‘VBP’’) as an important 

step toward revamping not only how 

care and services are paid for, but also 

moving increasingly toward rewarding 

better value, outcomes and innovations 

instead of volume. The approach used 

this year and that we anticipate using in 

future years for the Physician Feedback 

reports will serve as the testing basis to 

develop and implement the value 

modifier, which will be applied to 

certain physicians and physician groups 

under the physician fee schedule 

starting in 2015. 

In 2011, we will begin to include the 

quality measures that are reported in the 

Physician Quality Reporting System in 

the Physician Feedback reports. 

Aligning quality measures reduces 

potential program inconsistencies, 

ensures we do not measure the same 

clinical process or outcome using 

different data sources or methodologies, 

and does not place new reporting 

burdens on physicians. For physicians 

who participate in the Physician Quality 

Reporting System, it also identifies clear 

and consistent opportunities for 

improvement, because the Feedback 

reports will show how their 

performance compares to their peers on 

the same quality measures. 

Under section 1848(p)(4)(B) of the 

Act, we are required to begin 

implementing the value modifier 

through the rulemaking process during 

2013, so that it is ready for application 

to specific physicians and groups of 

physicians under the physician fee 

schedule in 2015. We expect the value 

modifier to evolve after its initial 

application in 2015. We anticipate that 

information we have obtained from the 

Physician Feedback reports, our efforts 

to learn from and build upon the best 

transparent practices and methodologies 

developed in the private sector, and our 

continued and sustained dialogue with 

the physician and patient communities 

will yield significant improvements to 

the development of the value modifier. 

We plan to move forward with 

substantial input from physicians and 

experts as we continue to develop and 

implement these programs. 

2. Background 

As required under section 1848 (n) of 

the Act, as added by section 131(c) of 

the Medicare Improvements for Patients 

and Providers Act and amended by 

section 3003(a) of the Affordable Care 

Act, we established and implemented 

by January 1, 2009, the Physician 

Resource Use Measurement & Reporting 

Program (now referred to as the 

Physician Feedback Program) (74 FR 

61844). The purpose of the Physician 

Feedback Program is to provide 

confidential reports to physicians that 

measure the resources involved in 

furnishing care to Medicare 

beneficiaries. Section 1848(n) of the Act 

also authorized us to include 

information on the quality of care 

furnished to Medicare beneficiaries by a 

physician or group of physicians. We 

have completed two phases of Physician 

Feedback reports and, by the end of 

2011, we intend to implement Phase III 

of the Physician Feedback Program, by 

providing reports on both resource use 

and quality measures that cover a larger 

number and increased breadth of 

physicians and groups of physicians. 

Phase I was discussed in the CY 2010 

PFS proposed and final rules (74 FR 

33589 and 74 FR 61844, respectively). 

In Phase I, we sent to several hundred 

individual practicing physicians in 12 

geographic areas reports that contained 

per capita and episode-based cost 

information based on 2007 claims.1 In 

creating these reports, we assessed 

patient attribution models and risk 

adjustment methodologies. We also 

tested various report designs with 

practicing physicians. 

In Phase II of the Physician Feedback 

Program, we expanded on Phase I by 

providing reports that included quality 

measures for both individual and groups 

of physicians in the same 12 geographic 

areas using the same 2007 claims data. 

(Phase II was discussed in the CY 2011 

PFS proposed and final rules 75 FR 

40113 and 75 FR 73377, respectively). 

The quality measures used were the 

claims-based measures developed by us 

in the Generating Medicare Physician 

Quality Performance Measurement 

Results (GEM) project (74 FR 61846).2

This initial core set of 12 quality 

measures was a first step to provide 

sufficient quality information to allow 

peer group comparisons. These 

measures were calculated using 

administrative claims data and did not 

require physicians to submit additional 

quality data. The measures captured 

several chronic conditions that are 

prevalent in the Medicare population 

and could be applied to all eligible 

physicians, although the measures were 

most applicable to primary care 

physicians. 

Phase II reports contained total per 

capita cost information, as well as total 

per capita cost information for those 

beneficiaries with the following five 

common chronic diseases: (1) Diabetes; 

(2) congestive heart failure; (3) coronary 

artery disease; (4) chronic obstructive 

pulmonary disease; and (5) prostate 

cancer. This information was not 

limited to the cost of treating the disease 

itself, but also included total Parts A 

and B per capita cost information, as 

well as service category breakdowns, for 

the care received by the subset of 

attributed beneficiaries with that 

disease. Phase II reports did not include 

episode-specific cost information (as we 

had included in the Phase I reports), 

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3Under a ‘‘single-provider plurality-minimum’’ 

attribution method, a beneficiary is attributed to the 

one physician who furnished the plurality of the 

beneficiary’s E/M services during the year so long 

as that physician billed at least 20 percent of the 

beneficiary’s E/M allowed charges for the year. If a 

beneficiary did not receive the plurality of services 

from the same physician that met the 20 percent 

minimum, the beneficiary was not assigned to a 

physician. For a more detailed discussion of 

methodology issues, see the Detailed Methodology 

Specification, available at https://www.cms.gov/ 

PhysicianFeedbackProgram/Downloads/ 

2010_QRUR_Detailed_Methodology.pdf. 

4Costs refer to allowed charges for Part A and B 

services. 

5We chose 30 beneficiaries because this 

threshold is commonly used for attribution 

purposes. 

6For more information about hierarchal condition 

categories model, see https://www.cms.gov/ 

MedicareAdvtgSpecRateStats/downloads/ 

Evaluation_Risk_Adj_Model_2011.pdf. 

because we found that the two 

commercially available proprietary 

groupers, which were not built for use 

with Medicare claims data, did not work 

well to create episodes for the 

significant number of Medicare 

beneficiaries with multiple chronic 

conditions (75 FR 73378). 

We provided Phase II reports to 36 

group practices and approximately 

1,650 individual physicians who were 

members of these practices in the 12 

geographic areas identified in Phase I. A 

group was defined as a single provider 

entity, identified by its tax identification 

number (TIN), which served at least 

5,000 Medicare beneficiaries and in 

which at least one primary care 

physician and at least one medical 

specialist or surgeon in the group billed 

for Evaluation and Management (E/M) 

Medicare services. The use of group 

reports allowed for more robust 

comparisons on a fuller set of quality 

measures, because the groups were more 

likely to have sufficient number of cases 

to calculate each measure. 

We used a ‘‘single-provider pluralityminimum 3’’ method to attribute 

beneficiaries to the 36 group practices 

and the individual physicians. This 

method was based on the highest 

number of E/M services furnished by an 

individual physician and a minimum 

threshold of 20 percent of E/M costs.4

Attribution of a beneficiary to a group 

practice was based on the group practice 

that provided the plurality of E/M 

services and a minimum threshold of 30 

percent of E/M costs. For both 

individuals and groups, we required at 

least 30 beneficiaries to be assigned to 

either the individual or the group 

practice.5 Seventy percent of eligible 

beneficiaries were attributed to an 

individual physician or group practice. 

These beneficiaries accounted for 53 

percent of total Parts A and B costs but 

covered only 30 percent of individual 

physicians. 

Our data analysis showed that the 

single-provider plurality-minimum rule 

generally assigned Medicare 

beneficiaries correctly to primary care 

physicians including internists, 

geriatricians, family practitioners, and 

general practitioners. However, this rule 

did not work well to attribute 

beneficiaries with multiple conditions 

that see a variety of physicians, because 

a single physician was unlikely to have 

both provided the plurality of E/M visits 

and to have also accounted for 20 

percent of E/M costs. 

As in Phase I, we price standardized 

the cost data to adjust for geographic 

differences. We also employed the same 

method of risk adjustment for per capita 

costs as we use in the Medicare 

Advantage (MA) program; that is, the 

hierarchal condition category (HCC) 

model for the cost data.6 We did not 

risk-adjust the quality data included in 

Phase II, because the GEM measures are 

all clinical process measures, measure 

specifications provided detailed 

inclusion/exclusion criteria, and it is 

generally accepted that these measures 

need not be risk adjusted. 

The individual-level reports in both 

phases of the program contained two 

peer group comparisons: (1) Physicians 

in the same specialty in the same 

geographic area; and (2) physicians in 

the same specialty across all 12 

geographic areas. Peer group 

comparisons were made for both 

measures of cost and quality. We 

imposed a minimum peer group size of 

30 physicians in Phase II for each of the 

cost and quality measures to ensure the 

group comparisons were credible to the 

physicians being compared. For the per 

capita cost measures, the physician was 

shown his or her position in a 

distribution that specifically identified 

the 10th, 50th, and 90th percentiles of 

performance. 

3. Future Considerations for Phase III 

Physician Feedback Program 

a. Phase III Physician Feedback Reports 

(Fall 2011) 

Based on the experience gained so far 

and our plan to provide reports to a 

greater number and percentage of 

physicians, we intend to increase 

production and dissemination of 

Physician Feedback reports. In 2011, we 

are examining several approaches to 

developing and disseminating reports 

based on our 2010 experience. We 

believe that many of the issues we 

address in these reports will assist us as 

we begin to implement the value 

modifier in 2013. 

We anticipate using quality measures 

reported in the Physician Quality 

Reporting System in the Physician 

Feedback reports this year. We further 

believe that use of these measures will 

begin to reduce potential program 

inconsistencies, ensure we do not 

measure the same clinical process or 

outcome using different data sources or 

methodologies, and not place new 

reporting burdens on physicians. In 

addition, elsewhere in this proposed 

rule, we are proposing to align the 

quality measures in the Physician 

Quality Reporting System with the 

Electronic Health Records incentive 

program quality measures. We seek 

comment on using the performance data 

in the Physician Quality Reporting 

System in the Physician Feedback 

program and on other issues discussed 

below that could help inform future 

phases of the Physician Feedback 

program. 

(1) Physician Group Reports 

We intend to create physician 

feedback reports for the 35 large medical 

group practices (each with 200 or more 

physicians) that chose to participate in 

the Physician Quality Reporting System 

Group Practice Reporting Option 

(GPRO–1) in 2010. We specifically 

chose these medical groups, because 

they could be compared on the common 

set of 26 quality measures included in 

the GPRO–1 reporting tool. The reports 

will be e-mailed to each group. We 

anticipate scheduling outreach and 

feedback sessions following 

dissemination of these reports to garner 

physician reaction to the information 

contained in the reports and elicit 

physician input on ways to increase 

their utility in future years. 

The resource use portion of these 

reports will present summary 

information based on 2010 Medicare 

Parts A and B paid claims for all 

Medicare providers paid under the PFS 

who treated patients attributed to a 

participating medical practice group. 

This information will allow each group 

to compare its per capita Medicare costs 

to the per capita Medicare costs 

attributed to all 35 medical practice 

groups that participated in the 2010 

GPRO–1 cohort. In addition, the report 

will show each medical group its 

average per capita costs for various 

types of fee-for-service patient services. 

The reports will also display groupspecific data on per capita costs and 

hospital utilization of patients who have 

chronic conditions such as diabetes, 

heart failure, COPD, and coronary artery 

disease. Data in these reports will be 

risk adjusted and price standardized in 

a similar manner to the Phase II reports. 

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The quality portion of these reports 

will present the group’s performance on 

each of the 26 quality measures 

included in the Physician Quality 

Reporting System 2010 GPRO–1 

reporting option. It will also show the 

average rate of preventable hospital 

admissions (for which a lower rate is 

better) for six ambulatory care-sensitive 

conditions: Diabetes, bacterial 

pneumonia, dehydration, chronic 

obstructive pulmonary disease (COPD), 

urinary tract infection, and congestive 

heart failure. The information presented 

will also allow each group to compare 

its performance to the performance of 

all of the 35 medical practice groups 

that participated in the 2010 GPRO–1 

cohort. 

(2) Reports to Individual Physicians 

Late in 2011, we also intend to 

disseminate Physician Feedback reports 

to physicians paid under the PFS within 

four states: Iowa, Kansas, Missouri, and 

Nebraska. We choose these four states 

because the Medicare Administrative 

Contractor (MAC) serving these states 

can assist us in e-mailing these reports 

to a substantial number of physicians 

because of its robust electronic 

communications infrastructure. There 

are approximately 56,000 physicians in 

these four states. We realize, however, 

that we will not produce reports for all 

of these physicians, because some 

portion of the total will not have 

sufficient numbers of fee-for-service 

Medicare patients to qualify for a report 

based on the attribution rules we use. 

As discussed later in this section, we are 

examining which attribution rules to 

apply to these individual reports. 

Individual physicians in these four 

States who satisfactorily reported data 

on quality measures under the 

Physician Quality Reporting System 

will receive a report that includes their 

performance on these quality measures. 

In addition, individual reports will 

display clinical quality measures that 

are derived from Medicare claims for all 

physicians in these four States. We used 

an internal multi-step process among 

our medical officers (who represent a 

variety of medical specialties) and other 

internal experts to identify these claimsbased quality measures. Our medical 

officers and internal experts thoroughly 

reviewed over 70 claims-based National 

Quality Forum-endorsed measures and 

ultimately recommended 28 claimsbased clinical measures to include in 

the 2011 individual physician reports. 

These measures include the 12 HEDIS 

measures that CMS included in the 2010 

reports. Use of these 28 measures in the 

2011 reports will allow us to have a 

sufficient number of cases to make peer 

group comparisons, which we believe 

are a critical component of the 

Physician Feedback program. The 

claims-based clinical measures for the 

2011 individual physician feedback 

reports are displayed in Table 61 and 

additional information on these 

measures is available at: http:// 

www.cms.gov/ 

physicianfeedbackprogram/. 

TABLE 61—CLAIMS-BASED MEASURES FOR THE 2011 INDIVIDUAL PHYSICIAN FEEDBACK REPORTS

Measure No. Measure title and description NQF measure No. or 

measure steward * Source of data 

1 .................. Acute Myocardial Infarction (AMI): Persistence of Beta-Blocker Treatment 

After a Heart Attack.

0071 ............................... Administrative Claims. 

Percentage of patients age 18 years and older during the measurement 

year who were hospitalized and discharged alive with a diagnosis of 

acute myocardial infarction (AMI) and who received persistent betablocker treatment for six months after discharge.

2 .................. Use of Spirometry Testing in the Assessment and Diagnosis of COPD) .... 0577 ............................... Administrative Claims. 

Percentage of patients at least 40 years old who have a new diagnosis or 

newly active chronic obstructive pulmonary disease (COPD) who received appropriate spirometry testing to confirm the diagnosis.

3 .................. Antidepressant Medication Management: (a) Effective Acute Phase Treatment.0105 ............................... Administrative Claims. 

Percentage of patients who were diagnosed with a new episode of depression and treated with antidepressant medication and who remained 

on an antidepressant drug during the entire 84-day Acute Treatment 

Phase.

(b) Effective Continuation Phase Treatment.

Percentage of patients who were diagnosed with a new episode of depression and treated with antidepressant medication and who remained 

on an antidepressant drug for at least 180 days.

4 .................. Follow-Up After Hospitalization for Mental Illness ........................................ 0576 ............................... Administrative Claims. 

Percentage of discharges for patients who were hospitalized for treatment 

of selected mental health disorders and who had an outpatient visit, an 

intensive outpatient encounter, or partial hospitalization with a mental 

health practitioner.

Two rates are reported: 

Rate 1: Percentage of patients who received follow-up within 30 days of 

discharge.

Rate 2: Percentage of patients who received follow-up within 7 days of 

discharge.

5 .................. Osteoporosis management in women who had a fracture .......................... 0053 ............................... Administrative Claims. 

Percentage of women 67 years and older who suffered a fracture and 

who had either a bone mineral density (BMD) test or prescription for a 

drug to treat or prevent osteoporosis in the six months after the date of 

fracture.

6 .................. Use of High-Risk Medications in the Elderly: (a) Patients Who Receive At 

Least One Drug To Be Avoided.

0022 ............................... Administrative Claims. 

Percentage of patients ages 65 years and older who received at least one 

high-risk medication in the measurement year.

(b) Patients Who Receive At Least Two Different Drugs To Be Avoided.

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TABLE 61—CLAIMS-BASED MEASURES FOR THE 2011 INDIVIDUAL PHYSICIAN FEEDBACK REPORTS—Continued 

Measure No. Measure title and description NQF measure No. or 

measure steward * Source of data 

Percentage of patients 65 years of age and older who received at least 

two different high-risk medications in the measurement year.

7 .................. Potentially Harmful Drug-Disease Interactions in the Elderly ...................... National Committee for 

Quality Assurance 

(NCQA).

Administrative Claims. 

Percentage of Medicare patients 65 years of age and older who have evidence of an underlying disease, condition or health concern and who 

were dispensed an ambulatory prescription for a contraindicated medication, concurrent with or after the diagnosis.

Report each of the three rates separately and as a total rate: 

Rate 1: A history of falls and a prescription for tricyclic antidepressants, 

antipsychotics or sleep agents.

Rate 2: Dementia and a prescription for tricyclic antidepressants or anticholinergic agents.

Rate 3: Chronic renal failure (CRF) and prescription for nonaspirin 

NSAIDs or Cox-2 Selective NSAIDs.

Total rate: The sum of the three numerators divided by the sum of the 

three denominators.

8 .................. International Normalized Ration (INR) for Beneficiaries Taking Warfarin 

and Interacting Anti-Infective Medications.

0556 ............................... Administrative Claims. 

Percentage of episodes with an INR test performed 3 to 7 days after a 

newly-started interacting anti-infective medication for Part D beneficiaries receiving warfarin.

9 .................. Appropriate Follow-Up for Patients with HIV ................................................ 0568 ............................... Administrative Claims. 

Percentage of patients diagnosed with HIV who received a CD4 count 

and an HIV RNA level laboratory test in the 6 months following diagnosis.

10 ................ Ischemic Vascular Disease (IVD): Complete Lipid Profile ........................... 0075 ............................... Administrative Claims. 

Percentage of patients 18 years of age and older who were discharged 

alive for acute myocardial infarction (AMI), coronary artery bypass graft 

(CABG) or percutaneous coronary interventions (PCI) from January 1– 

November 1 of the year prior to the measurement year, or who had a 

diagnosis of ischemic vascular disease (IVD) during the measurement 

year and the year prior to measurement year, who had a complete lipid 

profile during the measurement year.

11 ................ Breast Cancer—Cancer Surveillance ........................................................... 0623 ............................... Administrative Claims. 

Percentage of female patients 18 and older with breast cancer who had 

breast cancer surveillance in the past 12 months.

12 ................ Prostate Cancer—Cancer Surveillance ........................................................ 0625 ............................... Administrative Claims. 

Percentage of males with prostate cancer that have had their PSA monitored in the past 12 months.

13 ................ Diabetes: Eye Exam ..................................................................................... 0055 ............................... Administrative Claims. 

Percentage of adult patients with diabetes aged 18–75 years who received a dilated eye exam by an ophthalmologist or optometrist during 

the measurement year, or had a negative retinal exam (no evidence of 

retinopathy) by an eye care professional in the year prior to the measurement year.

14 ................ Diabetes: Hemoglobin A1c Testing .............................................................. 0057 ............................... Administrative Claims. 

Percentage of adult patients with diabetes aged 18–75 years receiving 

one or more A1c test(s) per year.

15 ................ Diabetes: Medical Attention for Nephropathy ............................................... 0062 ............................... Administrative Claims. 

Percentage of adult diabetes patients aged 18–75 years with at least one 

test nephropathy screening test during the measurement year or who 

had evidence existing nephropathy (diagnosis of nephropathy or documentation of microalbuminuria or albuminuria).

16 ................ Diabetes: LDL–C Screening ......................................................................... NCQA ............................. Administrative Claims. 

Percentage of adult patients with diabetes aged 18–75 who had an LDL– 

C test performed during the measurement year.

17 ................ Pharmacotherapy Management of COPD Exacerbation .............................. 0549 ............................... Administrative Claims. 

Percentage of chronic obstructive pulmonary disease (COPD) exacerbations for patients 40 years of age and older who had an acute inpatient discharge or ED encounter between January 1–November 30 of 

the measurement year and were dispensed appropriate medications.

Two rates are reported: 

Rate 1: Dispensed a systemic corticosteroid within 14 days of the event.

Rate 2: Dispensed a bronchodilator within 30 days of the event.

Note: The eligible population for this measure is based on acute inpatient 

discharges and emergency department (ED) visits, not on patients; it is 

possible for the denominator to include multiple events for the same individual.

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TABLE 61—CLAIMS-BASED MEASURES FOR THE 2011 INDIVIDUAL PHYSICIAN FEEDBACK REPORTS—Continued 

Measure No. Measure title and description NQF measure No. or 

measure steward * Source of data 

18 ................ Arthritis: Disease Modifying Antirheumatic Drug (DMARD) Therapy in 

Rheumatoid Arthritis.

0054 ............................... Administrative Claims. 

Percentage of patients 18 years and older, diagnosed with rheumatoid arthritis who have had at least one ambulatory prescription dispensed for 

a DMARD.

19 ................ Coronary Artery Disease and Medication Possession Ratio for Statin 

Therapy.

0543 ............................... Administrative Claims. 

Medication Possession Ratio (MPR) for statin therapy for individuals over 

18 years of age with coronary artery disease.

Rate 1: Percentage of patients who are prescribed statin therapy in the 

measurement year.

Rate 2: Average Medication Possession Ratio (MPR) of patients in the 

measurement year (MPR = the days supply of medication divided by 

the number of days in the measurement period).

Rate 3: The percentage of patients with MPR ≥ 0.80 in the measurement 

year.

20 ................ Therapeutic Monitoring: Annual Monitoring for Patients on Persistent 

Medications.

0021 ............................... Administrative Claims. 

Percentage of patients 18 years of age and older who received at least 

180 treatment days of ambulatory medication therapy for a select therapeutic agent during the measurement year and at least one therapeutic 

monitoring event for the therapeutic agent in the measurement year.

Report each of the four rates separately and as a total rate: 

Rate 1: Annual monitoring for patients on angiotensin converting enzyme 

(ACE) inhibitors or angiotensin receptor blockers (ARB).

Rate 2: Annual monitoring for patients on digoxin.

Rate 3: Annual monitoring for patients on diuretics.

Rate 4: Annual monitoring for patients on anticonvulsants.

Total Rate: The sum of the four numerators divided by the sum of the 

four denominators.

21 ................ Deep Vein Thrombosis Anticoagulation At Least 3 Months ......................... 0581 ............................... Administrative Claims. 

Percentage of patients diagnosed with a lower extremity DVT more than 3 

months prior to the end of the measurement year (who do not have 

contraindications to warfarin therapy and who do not have an IVC filter 

in the 90 days after the onset of PE) who had at least 3 months of 

anticoagulation after the event or patients showing compliance with 

anticoagulation therapy as indicated by a Home PT Monitoring device 

or multiple instances of prothrombin time testing over the 3-month period.

22 ................ Pulmonary Embolism Anticoagulation At Least 3 Months ........................... 0593 ............................... Administrative Claims. 

Percentage of patients diagnosed with a PE more than 3 months prior to 

the end of the measurement year (who do not have contraindications to 

warfarin therapy and who do not have an IVC filter in the 90 days after 

the onset of PE) who had at least 3 months of anticoagulation after the 

event or patients showing compliance with anticoagulation therapy as 

indicated by a Home PT Monitoring device or multiple instances of prothrombin time testing over the 3-month period.

23 ................ Monthly INR Monitoring for Beneficiaries on Warfarin ................................. 0555 ............................... Administrative Claims. 

Average percentage of 40-day intervals in which Part D beneficiaries with 

claims for warfarin do not receive an INR test during the measurement 

period.

24 ................ Steroid Use—Osteoporosis Screening ......................................................... 0614 ............................... Administrative Claims. 

Percentage of patients, 18 and older, who have been on chronic steroids 

for at least 180 days in the past 9 months and who had a bone density 

evaluation or osteoporosis treatment.

25 ................ Appropriate Work-Up Prior To Endometrial Ablation Procedure .................. 0567 ............................... Administrative Claims. 

Percentage of women who had an endometrial ablation procedure during 

the measurement year who received endometrial sampling or 

hysteroscopy with biopsy during the previous year.

26 ................ Breast Cancer Screening .............................................................................. 0031 ............................... Administrative Claims. 

Percentage of eligible women 40–69 who receive a mammogram in during the measurement year or in the year prior to the measurement year.

27 ................ Hepatitis C: Viral Load Test .......................................................................... 0584 ............................... Administrative Claims. 

Percentage of patients 18 years or older with Hepatitis C (HCV) who 

began HCV antiviral therapy during the measurement year and had 

HCV Viral Load testing prior to initiation of antiviral therapy.

28 ................ Dyslipidemia New Medication 12-Week Lipid Test ...................................... 0583 ............................... Administrative Claims. 

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TABLE 61—CLAIMS-BASED MEASURES FOR THE 2011 INDIVIDUAL PHYSICIAN FEEDBACK REPORTS—Continued 

Measure No. Measure title and description NQF measure No. or 

measure steward * Source of data 

Percentage of patients age 18 or older starting lipid-lowering medication 

during the measurement year who had a lipid panel checked within 3 

months after starting drug therapy.

* The NQF measure number is reported unless the measure is not NQF-endorsed, in which case the measure steward is reported. 

The individual reports will not 

contain the average rate of preventable 

hospital admissions for the six 

ambulatory care-sensitive conditions 

identified above because these measures 

are not specified at the individual 

physician level at this time. 

We again plan to display resource use 

measures that reflect average per capita 

cost for a given physician’s Medicare 

patients. In addition to comparing 

average per capita costs of one 

physician’s patients to the average per 

capita costs of his/her peers’ patients, 

the reports will compare total per capita 

costs for patients with the following 

chronic conditions: Heart failure, 

chronic pulmonary obstructive disease 

(COPD), diabetes, and coronary artery 

disease. 

b. Refinement of the Physician Feedback 

Program in 2011: Individual Physicians/ 

Medical Group Practices/Specialties 

As stated in the CY 2011 PFS 

proposed rule, deciding which 

physician(s) is/are responsible for the 

care of which beneficiaries is an 

important aspect of measurement (75 FR 

40115). When attributing beneficiary 

cost information to physicians, we must 

balance between costs for delivered 

services that are within the physician’s 

control and costs for delivered services 

that are not within their control. We 

recognize that attribution rules have the 

potential to alter incentives regarding 

how physicians coordinate and deliver 

care to beneficiaries and seek to 

encourage better care coordination and 

accountability for patient outcomes. In 

addition, determining how to make 

relevant comparisons of physicians to a 

standard or to their peers is also an 

important policy aspect of the Physician 

Feedback Program. In light of these 

issues, we are engaging in the efforts 

described below to help inform how to 

develop and produce this and future 

year’s reports. 

First, we are examining alternative 

attribution methods that would allow 

more Medicare beneficiaries to be 

matched to physicians for purposes of 

assessing the quality of care furnished 

and the associated resources. We plan to 

explore broader attribution models than 

we used in last year’s Physician 

Feedback reports, in which beneficiaries 

were attributed to physicians/groups 

based on E/M services and a minimum 

cost threshold. Cost of service rules, for 

example, may better apply to physicians 

who commonly furnish surgical 

procedures or interventions, especially 

those that are high volume and/or high 

cost. We anticipate combining this effort 

with work to identify quality measures 

appropriate to the practices of these 

specialists. We recognize that 

characteristics of physicians and the 

scope of their medical practices vary far 

more than those of other provider types 

such as hospitals, home health agencies, 

and nursing homes and, thus, we want 

to ensure we develop sound attribution 

rules that recognize these variations and 

are appropriate for physicians. 

We also are planning to investigate 

stratifying physicians by specialty and 

by the conditions they treat, which 

would allow both cost and clinical 

measures to reflect procedures and 

services that best portray physician 

practice patterns. 

Second, we intend to examine 

whether to provide reports to groups of 

physicians who submit Medicare claims 

under a single tax identification number 

(TIN) to see if we can provide feedback 

reports that cover more physicians. TINlevel reporting may prove useful in 

situations where individual physicians 

have too few of some types of patients 

to allow for accurate reporting of cost 

measures or certain quality measures. 

We seek comment on these and any 

other issues to ensure that the future 

Physician Feedback reports provide 

meaningful and actionable information. 

c. Beyond 2011: Future Scale Up and 

Dissemination for Increased Physician 

Feedback Reporting 

In CY 2012, we expect to expand 

dissemination of reports to cover 

100,000 physicians nationally. In 2012, 

we expect to be able to evaluate whether 

leveraging the quality measures in the 

Physician Quality Reporting System 

will help achieve this goal. We 

recognize that our current inventory of 

quality measures, both claims-based and 

those used in the 2010 GPRO–1 quality 

measures, best covers primary care 

practitioners including family 

physicians, general practitioners, 

internists, geriatricians, and related 

medical non-procedural specialists. As 

the scope of measures, including 

outcomes, in the Physician Quality 

Reporting System increases and as more 

physicians report measures, we expect 

to be able to provide meaningful and 

actionable quality information to an 

increasing number of physicians. This 

increased participation will increase the 

breadth of Medicare physicians for 

whom Physician Feedback reports can 

be created. 

Second, section 1848(n)(9)(A) of the 

Act, as added by section 3003 of the 

Affordable Care Act, requires the 

development, by not later than January 

1, 2012, of a Medicare-specific episode 

grouper so that physicians can be 

compared on episode-based costs of 

care. The episode grouper will require 

further testing and refinement in order 

to see how well it integrates with other 

parameters, such as attribution and 

benchmarking, before it can be fully 

operational. The episode grouper is 

being developed to determine episodebased costs for a subset of selected high 

cost, high volume conditions for 

Medicare beneficiaries, including six of 

the following nine conditions: Hip 

fracture/hip replacement; pneumonia; 

heart attack; coronary artery disease; 

asthma; COPD; stroke; diabetes; and 

heart failure. Aspects of the episode 

grouper could be applied, on a limited 

basis, in Physician Feedback reports in 

2012 or 2013, depending upon the 

testing and validation of the 

methodology. Section 1848(n)(9)(A)(iv) 

of the Act requires that the Secretary 

seek endorsement of the grouper by an 

entity with a contract under section 

1890(a) of the Act. Plans to secure this 

endorsement are under development. 

We plan to make details of the Medicare 

grouper publicly available as required 

by section 1848(n)(9)(A)(iii)) of the Act. 

In addition, we will continue to 

monitor developments regarding the 

National Quality Forum’s project 

regarding resource use measures. 

Learning from this project is likely to 

help refine the next steps related to the 

scale up of the Physician Feedback 

reports. 

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42908 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

7See, for example, section 1848(a)(8) of the Act, 

as added by section 3002(b) of the Affordable Care 

Act; section 1848(a)(7)(A) of the Act, as added by 

section Sec 4101 (b) of the HITECH Act. 

8Source: MedPAC, Report to the Congress: 

Reforming the Delivery System, Chapter 1 (June 

2008), available at: http://www.medpac.gov/ 

documents/Jun08_EntireReport.pdf. 

Lastly, we will pursue how best to 

incorporate the production and 

dissemination of the feedback reports 

into the IT infrastructure of the agency. 

For example, in this year’s reports we 

plan to use the Medicare Administrative 

Contractor to distribute the individual 

physician reports by e-mail. It is our 

intent in future years to use other 

mechanisms, such as a secure portal, for 

physicians to obtain and review their 

reports. It is critical for us to plan for the 

very significant, and ongoing, data and 

dissemination infrastructure that must 

be built for us to provide feedback 

reports to all physicians paid under the 

PFS. 

As the science of quality 

measurement improves, attribution 

methodologies mature, participation 

rates in our reporting programs increase, 

and our IT infrastructure evolves, we 

will determine how best to incorporate 

these advances into a better physician 

feedback program. Furthermore, it is our 

intent to engage in continued dialogue 

with the physician community about 

ways to improve these reports and their 

dissemination. 

4. The Value-Based Payment Modifier: 

Section 3007 of the Affordable Care Act 

Section 1848(p) of the Act, as added 

by Section 3007 of the Affordable Care 

Act, requires the Secretary to ‘‘establish 

a payment modifier that provides for 

differential payment to a physician or a 

group of physicians’’ under the 

physician fee schedule ‘‘based upon the 

quality of care furnished compared to 

cost * * * during a performance 

period.’’ The provision requires that 

‘‘such payment modifier be separate 

from the geographic adjustment factors’’ 

established for the physician fee 

schedule. We believe that this provision 

requires the Secretary to establish a 

differential payment under the 

physician fee schedule to reflect 

‘‘value,’’ for example, the quality of care 

compared to cost, and that the value 

modifier is independent from the 

geographic adjustments applied under 

the fee schedule. 

Section 1848(p)(4)(C) of the Act 

requires that the value modifier be 

implemented in a budget-neutral 

manner. Budget neutrality means that 

payments will increase for some 

physicians but decrease for others, 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 

modifier. Over time, we expect that 

implementation of the value modifier 

will lead to more efficient use of 

services. 

Section 1848(p)(4)(A) and (B) of the 

Act establish the time frame for 

implementation of the value modifier. 

Section 1848(p)(4)(B)(iii) of the Act 

requires the Secretary to apply the value 

modifier beginning January 1, 2015 to 

specific physicians and groups of 

physicians the Secretary determines 

appropriate. This section also requires 

the Secretary to apply the value 

modifier with respect to all physicians 

and groups of physicians beginning not 

later than January 1, 2017. 

Section 1848(p)(4) of the Act requires 

the Secretary to take a series of steps, 

beginning not later than January 1, 2012, 

and leading up to implementation of the 

value modifier on January 1, 2015. 

Section 1848(p)(4)(A) of the Act requires 

us to publish, not later than January 1, 

2012, three items related to the 

establishment of the value modifier: (a) 

The quality of care and cost measures 

established by the Secretary for 

purposes of the modifier; (b) the dates 

for implementation of the value 

modifier; and (c) the initial performance 

period for application of value modifier 

in 2015. 

Section 1848(p)(4)(B) of the Act 

requires the Secretary to begin 

implementing the value modifier 

through the physician fee schedule 

rulemaking process during 2013; this 

rulemaking would apply to value 

modifier payment adjustments for 2015. 

Section 1848(p)(4)(B) of the Act further 

requires the Secretary, to the extent 

practicable during the initial 

performance period, to provide 

information to physicians and physician 

groups about the quality of care 

furnished by the physician or group of 

physicians to Medicare beneficiaries 

compared to cost. 

The value modifier is an important 

component in revamping how care and 

services are paid for under the 

physician fee schedule. Currently, 

payments under the physician fee 

schedule are generally based on the 

relative resources involved with 

furnishing each service, and adjusted for 

differences in resource inputs among 

geographic areas. Thus, all physicians in 

a geographic area are paid the same 

amount for individual services 

regardless of the quality of care or 

outcomes of services they furnish. 

Although the fee schedule payments 

are or will soon be adjusted depending 

upon whether eligible professionals are 

satisfactory reporters of PQRS quality 

measures, successful electronic 

prescribers and meaningful users of 

electronic health records (EHRs),7 these 

adjustments do not currently take into 

account performance on these quality 

measures. In addition, the fee schedule 

does not take into account the overall 

cost of services furnished or ordered by 

physicians for individual Medicare 

beneficiaries. These limitations mean 

that the physician fee schedule does not 

contain incentives for physicians to 

focus on: (1) The relative cost or value 

of each service they furnish or order; (2) 

the cumulative cost of their own 

services and the services that their 

beneficiaries receive from other 

providers; or (3) the quality and 

outcomes of all the care furnished to 

beneficiaries.8

We note that Medicare is beginning to 

implement value-based payment 

adjustments for other types of services. 

For example, recently, we published a 

final rule to implement the hospital 

value-based purchasing program that 

will affect hospitals beginning with FY 

2013 discharges (76 FR 26490). In 

addition, section 3006 of the Affordable 

Care Act requires us to develop a plan 

to implement value-based purchasing 

programs for skilled nursing facilities, 

home health agencies, and ambulatory 

surgical centers. We view the physician 

value modifier as the companion valuebased payment mechanism for 

physicians. 

In implementing value-based 

purchasing initiatives generally, we seek 

to meet the following goals: 

• Improving quality. 

++ Value-based payment systems and 

public reporting should rely on a mix of 

standards, processes, outcomes, and 

patient experience measures, including 

measures of care transitions and 

changes in patient functional status. 

Across all programs, we seek to move as 

quickly as possible to the use of 

outcome and patient experience 

measures. To the extent practicable and 

appropriate, we believe these outcome 

and patient experience measures should 

be adjusted for risk or other appropriate 

patient population or provider 

characteristics. 

++ To the extent possible, and 

recognizing differences in payment 

system readiness and statutory 

requirements and authorities, measures 

should be aligned across Medicare and 

Medicaid’s public reporting and 

payment systems. We seek to evolve a 

focused core set of measures appropriate 

to each specific provider category that 

reflects the level of care and the most 

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Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 42909 

9See for example Ambulatory Quality Alliance, 

Performance Measurement Workgroup materials, 

available at: http:// 

www.ambulatoryqualityalliance.org/ 

performancewg.htm; New York Attorney General 

Settlement with Excellus, available at: http:// 

www.ag.ny.gov/bureaus/health_care/pdfs/

Excellus%20Settlement.pdf. 10Listening Session Regarding: Physician 

Feedback Program and Implementation of the 

Value-Based Payment Modifier for Fee-for-Service 

Medicare (Sept. 24, 2010) (see, for example, 

comments of Pacific Business Group on Health, 

Consumer Purchaser Disclosure Project), transcript 

available at: https://www.cms.gov/Physician

FeedbackProgram/Downloads/092410_

Listening_Session_Feedback_Program_

Transcript.pdf. 

important areas of service and measures 

for that provider. 

++ The collection of information 

should minimize the burden on 

providers to the extent possible. As part 

of that effort, we will continuously seek 

to align our measures with the adoption 

of meaningful use standards for health 

information technology (HIT), so the 

collection of performance information is 

part of care delivery. 

++ To the extent practicable, 

measures used by us should be 

nationally endorsed by a multistakeholder organization. Measures 

should be aligned with best practices 

among other payers and the needs of the 

end users of the measures. 

• Lowering per-capita growth in 

expenditures. 

++ Providers should be accountable 

for the cost of care, and be rewarded for 

reducing unnecessary expenditures and 

be responsible for excess expenditures. 

++ In reducing excess expenditures, 

providers should continually improve 

the quality of care they deliver. 

++ To the extent possible, and 

recognizing differences in payers’ value 

based purchasing initiatives, providers 

should apply cost-reducing and qualityimproving redesigned care processes to 

their entire patient population. 

Our experience with providing 

physicians confidential feedback 

reports, which include various measures 

of cost and quality, is helping us to 

design and develop the value modifier. 

In addition, we seek to build upon best 

practices that have evolved in the 

private sector to provide meaningful 

and actionable information to 

physicians. For example, we recognize 

the importance of transparent 

methodologies and of procedural 

safeguards necessary to provide 

physicians with an opportunity to 

review the value modifier such as the 

one we will develop.9

We intend to move both deliberately 

and carefully because we recognize the 

complexities of calculating a reliable 

and valid measure of value that 

compares physicians against their peers 

and uses the measure to differentiate 

payment. We view this rulemaking as 

one part of an ongoing and extensive 

dialogue with health care stakeholders 

on how best to ensure development of 

a fair, meaningful, and actionable value 

modifier on which to differentiate 

payments to physicians. 

a. Measures of Quality of Care and Costs 

(1) Quality of Care Measures 

Section 1848(p)(2) of the Act requires 

that the quality of care be evaluated, to 

the extent practicable, based on a 

composite of measures of the quality of 

care furnished. Section 1848(p)(2)(B) of 

the Act requires that the Secretary 

establish appropriate measures of the 

quality of care furnished by a physician 

or a group of physicians to Medicare 

beneficiaries such as measures that 

reflect health outcomes. The statute 

requires the measures to be risk adjusted 

as determined appropriate by the 

Secretary. Section 1848(p)(2)(B)(ii) of 

the Act requires the Secretary to seek 

endorsement of the quality of care 

measures by the entity with a contract 

under section 1890(a) of the Act, which 

is the National Quality Forum. 

In establishing the quality of care 

measures for the value modifier, our 

interest is to move toward a core set of 

measures so that we can assess and 

benchmark physician performance. We 

are interested in ensuring that this set of 

core measures includes outcome 

measures, especially for care provided 

by specialists. We also want to start a 

discussion of potential measures that 

could provide a richer picture of the 

quality of care furnished by a physician. 

At our September 24, 2010, Listening 

Session on the Physician Feedback 

Program and Implementation of the 

Value-Based Payment Modifier for Feefor-Service Medicare, the stakeholder 

community suggested the need for 

additional quality measures that focus 

on care coordination/care transitions, 

patient experience, and outcomes such 

as functional health status.10 We agree 

with these suggestions and believe that 

these measures could provide a richer 

picture of the quality of care furnished 

by physicians to Medicare beneficiaries. 

We view the requirement for the 

Secretary to establish, by January 1, 

2012, the quality measures for the value 

modifier to be the first step in 

identifying a robust core set of measures 

of the quality of care furnished by 

physicians for use in the value modifier. 

We envision incorporating additional 

quality measures into the value modifier 

over time. 

(A) Proposed Quality of Care Measures 

for the Value-Modifier 

For purposes of section 

1848(p)(4)(A)(i) of the Act, we propose 

to use performance on: (1) The measures 

in the core set of the Physician Quality 

Reporting System for 2012; (2) all 

measures in the GPRO of the Physician 

Quality Reporting System for 2012; and 

(3) the core measures, alternate core, 

and 38 additional measures in the 

Electronic Health Record Incentive 

Program measures for 2012. Table 62 

lists these measures. We recognize that 

there are measures common to these two 

programs because they are derived from 

the proposed 2012 Physician Quality 

Reporting System and may be available 

for reporting in other CMS programs, 

such as the Medicare and Medicaid EHR 

Incentive Program as well as the 

Medicare Shared Savings Program. We 

note that measure titles, in some 

instances, may vary from program to 

program. Once these measures are 

finalized, we will identify the measures 

more fully to eliminate any duplication. 

TABLE 62—PROPOSED QUALITY MEASURES FOR THE VALUE MODIFIER

Physician quality reporting system No. Measure title NQF Measure No. Measure developer 

EHR 

Incentive 

program 

PQRS 

GPRO 

PQRS 

Core 

110 ................................. Preventative Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old.0041 AMA–PCPI ............ X X 

111 ................................. Preventive Care and Screening: Pneumonia 

Vaccination for Patients 65 Years and Older.

0043 NCQA ................... X X 

112 ................................. Preventive Care and Screening: Screening 

Mammography.

0031 NCQA ................... X X 

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42910 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

TABLE 62—PROPOSED QUALITY MEASURES FOR THE VALUE MODIFIER—Continued 

Physician quality reporting system No. Measure title NQF Measure No. Measure developer 

EHR 

Incentive 

program 

PQRS 

GPRO 

PQRS 

Core 

113 ................................. Preventive Care and Screening: Colorectal Cancer Screening.0034 NCQA ................... X X 

128 ................................. Preventive Care and Screening: Body Mass 

Index (BMI) Screening and Follow-up.

0421 CMS–QIP .............. X 

TBD ................................ Preventive Care: Cholesterol-LDL test performed.N/A CMS ...................... X 

TBD ................................ Falls: Screening for Falls Risk ............................ 101 NCQA ................... X 

TBD ................................ Cervical Cancer Screening .................................. 0032 NCQA ................... X 

226 ................................. Preventive Care and Screening: Tobacco Use: 

Screening and Cessation Intervention.

0028 AMA–PCPI ............ X X X 

235 ................................. Hypertension (HTN): Plan of Care ...................... 0017 AMA–PCPI ............ X 

236 ................................. Controlling High Blood Pressure ......................... 0018 NCQA ................... X X X 

237 ................................. Hypertension (HTN): Blood Pressure Measurement.0013 AMA–PCPI ............ X X 

TBD ................................ Proportion of adults 18 years and older who 

have had their BP measured within the preceding 2 years.

N/A CMS ...................... X X 

6 ..................................... Coronary Artery Disease (CAD): Oral 

Antiplatelet Therapy Prescribed for Patients 

with CAD.

0067 AMA–PCPI ............ X X 

7 ..................................... Coronary Artery Disease (CAD): Beta-Blocker 

Therapy for CAD Patients with Prior Myocardial Infarction (MI).

0070 AMA–PCPI ............ X X 

118 ................................. Coronary Artery Disease (CAD): AngiotensinConverting Enzyme (ACE) Inhibitor or 

Angiotensin Receptor Blocker (ARB) Therapy 

for Patients with CAD and Diabetes and/or 

Left Ventricular Systolic Dysfunction (LVSD).

0066 AMA–PCPI ............ X 

TBD ................................ Coronary Artery Disease (CAD): LDL <100 mg/ 

dl.

NA CMS ...................... X 

197 ................................. Coronary Artery Disease (CAD): Lipid Control ... 0074 AMA–PCPI ............ X X 

201 ................................. Ischemic Vascular Disease (IVD): Blood Pressure Management Control.0073 NCQA ................... X X 

204 ................................. Ischemic Vascular Disease (IVD): Use of Aspirin 

or another Antithrombotic.

0068 NCQA ................... X X X 

TBD ................................ Ischemic Vascular Disease (IVD): Complete 

Lipid Profile and LDL Control < 100 mg/dl.

0075 NCQA ................... x X X 

5 ..................................... Heart Failure: Angiotensin-Converting Enzyme 

(ACE) Inhibitor or Angiotensin Receptor 

Blocker (ARB) Therapy for Left Ventricular 

Systolic Dysfunction (LVSD).

0081 AMA–PCPI ............ X X 

8 ..................................... Heart Failure: Beta-Blocker Therapy for Left 

Ventricular Systolic Dysfunction (LVSD).

0083 AMA–PCPI ............ X X 

228 ................................. Heart Failure: Left Ventricular Function (LVF) 

Testing.

N/A CMS ...................... X 

198 ................................. Heart Failure: Left Ventricular Function (LVF) 

Assessment.

0079 AMA–PCPI ............ X 

227 ................................. Heart Failure: Weight Measurement ................... 0085 AMA–PCPI ............ X 

199 ................................. Heart Failure: Patient Education ......................... 0082 AMA–PCPI ............ X 

200 ................................. Heart Failure: Warfarin Therapy for Patients with 

Atrial Fibrillation.

0084 AMA–PCPI ............ X X 

TBD ................................ Monthly INR for Beneficiaries on Warfarin .......... 555 CMS ...................... X 

1 ..................................... Diabetes Mellitus: Hemoglobin A1c Poor Control 

in Diabetes Mellitus.

0059 AMA–PCPI ............ X X 

TBD ................................ Diabetes: Aspirin Use .......................................... 0729 MN Community 

Measurement.

X 

3 ..................................... Diabetes Mellitus: High Blood Pressure Control 

in Diabetes Mellitus.

0061 NCQA ................... X X 

TBD ................................ Diabetes: Hemoglobin A 1 c Control (< 8.0%) .... 575 NCQA ................... X X 

2 ..................................... Diabetes Mellitus: Low Density Lipoprotein 

(LDL–C) Control in Diabetes Mellitus.

0064 NCQA ................... X X X 

117 ................................. Diabetes Mellitus: Dilated Eye Exam in Diabetic 

Patient.

0055 NCQA ................... X X 

18 ................................... Diabetic Retinopathy: Documentation of Presence or Absence of Macular Edema and 

Level of Severity of Retinopathy.

0088 AMA–PCPI ............ X 

TBD ................................ Diabetic Retinopathy: Communication with the 

Physician Managing Ongoing Diabetes Care.

0089 AMA–PCPI ............ X 

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TABLE 62—PROPOSED QUALITY MEASURES FOR THE VALUE MODIFIER—Continued 

Physician quality reporting system No. Measure title NQF Measure No. Measure developer 

EHR 

Incentive 

program 

PQRS 

GPRO 

PQRS 

Core 

119 ................................. Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy 

in Diabetic Patients.

0062 NCQA ................... X X 

163 ................................. Diabetes Mellitus: Foot Exam ............................. 0056 NCQA ................... X X 

TBD ................................ Diabetes Mellitus: Tobacco Non-Use .................. 0729 MN Community 

Measurement.

X 

239 ................................. Weight Assessment and Counseling for Children 

and Adolescents.

0024 NCQA ................... X 

240 ................................. Childhood Immunization Status ........................... 0038 NCQA ................... X 

TBD ................................ Appropriate Testing for Children with Pharyngitis 0002 NCQA ................... X 

TBD ................................ Prenatal Care: Screening for Human Immunodeficiency Virus (HIV).0012 AMA–PCPI ............ X 

TBD ................................ Prenatal Care: Anti-D Immune Globulin .............. 0014 AMA–PCPI ............ X 

53 ................................... Asthma Pharmacologic Therapy ......................... 0047 AMA–PCPI ............ X 

64 ................................... Asthma Assessment ............................................ 0001 AMA–PCPI ............ X 

TBD ................................ Use of Appropriate Medications for Asthma ....... 0036 NCQA ................... X 

51 ................................... Chronic Obstructive Pulmonary Disease 

(COPD): Spirometry Evaluation.

0091 NCQA ................... X 

52 ................................... Chronic Obstructive Pulmonary Disease 

(COPD): Bronchodilator Therapy.

0102 AMA–PCPI ............ X 

TBD ................................ Chronic Obstructive Pulmonary Disease 

(COPD): Smoking Cessation Counseling Received.

N/A CMS ...................... X 

71 ................................... Oncology Breast Cancer: Hormonal Therapy for 

Stage IC–IIIC Estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer.

0387 AMA–PCPI ............ X 

72 ................................... Oncology Colon Cancer: Chemotherapy for 

Stage III Colon Cancer Patients.

0385 AMA–PCPI ............ X 

102 ................................. Prostate Cancer: Avoidance of Overuse of Bone 

Scan for Staging Low Risk Prostate Cancer 

Patients.

0389 AMA–PCPI ............ X 

9 ..................................... Anti-depressant Medication Management: ..........

(a) Effective Acute Phase Treatment, (b) Effective Continuation Phase Treatment.

0105 NCQA ................... X 

TBD ................................ Initiation and Engagement of Alcohol and Other 

Drug Dependence Treatment: (a) Initiation, (b) 

Engagement.

0004 NCQA ................... X 

40 ................................... Osteoporosis: Management Following Fracture 

of Hip, Spine or Distal Radius for Men and 

Women Aged 50 Years and Older.

0045 NCQA ................... X 

TBD ................................ Low Back Pain: Use of Imaging Studies ............. 0052 NCQA ................... X 

TBD ................................ Chlamydia Screening for Women ....................... 0033 NCQA ................... X 

12 ................................... Primary Open Angle Glaucoma (POAG): Optic 

Nerve Evaluation.

0086 AMA–PCPI ............ X 

46 ................................... Medication Reconciliation: Reconciliation After 

Discharge from an Inpatient Facility.

0097 AMA–PCPI ............ X 

TBD ................................ 30-Day Post Discharge Physician Visit ............... N/A Colorado Foundation for Medical 

Care.

X 

We seek comment on whether to 

include additional measures from the 

Physician Quality Reporting System 

(which are described elsewhere in this 

proposed rule) in the measures that we 

propose for the value modifier. We also 

seek comment on whether there are any 

measures included here that should be 

excluded from the value modifier, and 

on the appropriate number of measures 

for inclusion. 

To the extent that the 2013 measures 

adopted for the Physician Quality 

Reporting System and Electronic Health 

Record Incentive Program are different 

than those used in 2012, we would 

consider, through rulemaking next year, 

revising the value modifier quality 

measures applicable to 2013 to be 

consistent with the revisions made to 

the measures for those programs. 

Indeed, Section 1848(p)(9) of the Act 

directs us to coordinate the value 

modifier quality measures with the 

Physician Feedback Program, and, as 

the Secretary determines appropriate, 

other similar provisions of Title XVIII of 

the Social Security Act. We plan to 

coordinate the value modifier with the 

Physician Feedback Program, the 

Physician Quality Reporting System, 

and the EHR incentive program. We 

seek comment on the proposed 

measures and on our interest to 

establish a core measure set for the 

value modifier. 

(B) Potential Quality of Care Measures 

for Additional Dimensions of Care in 

the Value Modifier 

As described previously, one of our 

goals is to start a discussion about 

potential measures that could provide a 

richer picture of the quality of care 

furnished by a physician. For example, 

we are very interested in quality 

measures that assess the care provided 

by specialists. We specifically seek 

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42912 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

11The Detailed Methodology Specifications are 

available at: https://www.cms.gov/PhysicianFeed

backProgram/Downloads/2010_QRUR_ Detailed_

Methodology.pdf. 

comment from specialists about 

measures that are not included in the 

list of proposed measures. We also seek comment on the types of 

measures identified below as well as the 

28 administrative claims measures 

(described above with respect to the 

2011 Physician Feedback reports) and 

whether we should include them in the 

value modifier. We especially urge the 

physician community and private 

payers that have been engaged in payfor-performance programs to identify 

other quality measures that they have 

used and to describe their experience 

with these measures. We seek comment 

on how the measures discussed below 

align with current private sector quality 

measurement initiatives. To the extent 

that such measures are not currently 

developed, we would use the 

established agency procedures to 

develop such measures. 

(i) Outcome Measures 

We are very interested in moving 

toward a core quality of care measure 

set for the value modifier that includes 

outcome measures. For example, the 

Physician Feedback reports already 

display the rate of potentially 

preventable hospital admissions for six 

ambulatory care sensitive conditions at 

the practice group level: Diabetes, 

bacterial pneumonia, dehydration, 

chronic obstructive pulmonary disease 

(COPD), urinary tract infection, and 

congestive heart failure. These measures 

have been developed by the Agency for 

Healthcare Research and Quality and 

specifications for these measures can be 

found at http:// 

www.qualityindicators.ahrq.gov/ 

modules/PQI_TechSpec.aspx. We also 

are developing an all-cause hospital 

readmission measure for potential use 

in the Shared Savings Program, and 

section 1886(q)(8) of the Act requires us 

to develop an all-patient hospital 

readmission measure. We are 

considering use of these measures for 

physicians and physician groups. Our 

goal is to focus on outcomes of care for 

which it would be appropriate to assess 

physician performance. We seek 

comments about these potential 

measures for physicians. Although we 

are not proposing these measures at this 

time, we are soliciting comment and 

will consider including these outcome 

measures in the value modifier. 

We also specifically seek suggestions 

about other outcome measures that 

would be appropriate measures of the 

quality of care furnished for purposes of 

the value modifier. For example, section 

931 of the Public Health Service Act, as 

added by section 3013(a) and amended 

by section 10303 of the Affordable Care 

Act, also requires the Secretary to 

develop and periodically update 

provider-level outcome measures for 

physicians, among other types of 

providers. We also could consider 

development of measures that examine 

emergency room use for ambulatory care 

sensitive conditions. We are interested 

in outcome measures that can be 

calculated from existing Medicare 

claims data and do not require reporting 

by physicians. In addition, we are 

particularly interested in comments on 

potential measures of complications that 

would be appropriate to include in the 

value modifier. 

(ii) Care Coordination/Transition 

Measures 

We believe that care transitions such 

as transition of a beneficiary from an 

inpatient setting to the community or to 

a post-acute setting are important 

aspects of quality of care furnished. 

Successful transitions help ensure that a 

beneficiary is on a path to improvement 

and could avoid readmission. We 

believe that several aspects of the care 

transition could be developed into 

quality of care measures for purposes of 

the value modifier. For example, we 

could potentially consider developing a 

measure that would assess whether an 

appointment was set up or whether the 

hospitalized beneficiary saw a physician 

during a specified post-discharge 

period. This measure could apply to 

both the hospital physician and the 

community physician. In addition, 

beneficiaries often have unscheduled 

admissions (such as, via an emergency 

room) of which their primary physician 

is not made aware. We are considering 

including a care transition/care 

coordination measure that would 

involve a hospital physician checking to 

see if the hospital has notified the 

beneficiary’s primary physician of an 

unscheduled admission (if the hospital 

and community physician were not the 

same). 

Another aspect of care coordination 

could involve services that are ordered 

by one physician but furnished by 

another physician. Under this scenario, 

the treating physician may send a report 

back to the ordering physician. 

However, this is not always the case. 

The lack of coordination between two 

physicians involved in the beneficiary’s 

care could be a missed opportunity to 

provide optimal, seamless care for the 

beneficiary. A care coordination 

measure could potentially assess the 

extent to which the report is sent back 

to the ordering physician and whether 

the furnishing physician has 

confirmation that the report was 

actually received. We seek input about these and other 

potential aspects of care coordination/ 

transitions for which measures could be 

developed and/or used for purposes of 

the value modifier. To the extent 

commenters are aware of potential 

measures that address care 

coordination/transitions that we could 

use, we welcome such suggestions. We 

would propose the specific measures 

through notice and comment 

rulemaking before including them as 

measures of the quality of care 

furnished for purposes of the value 

modifier. 

(iii) Patient Safety, Patient Experience 

and Functional Status: 

We believe that it is important to 

develop measures of patient safety, 

patient experience and functional status 

for purposes of the value modifier. A 

potential patient safety measure might 

involve use of a surgical checklist. We 

seek comment about such a measure 

and other potential patient safety 

measures that could be developed and/ 

or used for purposes of the value 

modifier. To the extent commenters are 

aware of potential measures of patient 

safety, patient experience, or functional 

status that we could use, we welcome 

such suggestions. We would propose the 

specific measures through notice and 

comment rulemaking before including 

them as measures of the quality of care 

furnished for purposes of the value 

modifier. 

(2) Cost Measures 

Section 1848(p)(3) of the Act requires 

that cost measures used in the value 

modifier be evaluated, to the extent 

practicable, based on a composite of 

appropriate measures of costs 

established by the Secretary. This 

composite would eliminate the effect of 

geographic adjustments in payment 

rates and account for risk factors and 

other factors determined appropriate by 

the Secretary. In our Physician 

Feedback reports, we currently use a 

total per capita cost measure and per 

capita cost measures for the overall 

costs for beneficiaries with four chronic 

conditions: Chronic obstructive 

pulmonary disease; heart failure; 

coronary artery disease; and diabetes. 

These per capita cost measures are price 

standardized and risk adjusted to ensure 

geographic and clinical comparability, 

as required by section 1848(p)(3) of the 

Act. These measures are described in 

more detail in the Detailed Methodology 

Specification document accompanying 

the 2010 Physician Feedback reports.11

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(A) Proposed Cost Measures for the 

Value Modifier 

For purposes of section 

1848(p)(4)(A)(i) of the Act, we propose 

to use total per capita cost measures and 

per capita cost measures for 

beneficiaries with these four chronic 

conditions (chronic obstructive 

pulmonary disease; heart failure; 

coronary artery disease; and diabetes) in 

the value modifier. These cost measures 

would be compared to the quality of 

care furnished for use in determining 

the value modifier. We seek comment 

on this proposal. 

(B) Potential Cost Measures for Future 

Use in the Value Modifier 

During 2012 we will test and plan 

how to use an ‘‘episode grouper.’’ The 

purpose of the episode grouper is to 

combine separate, but clinically related 

items and services into an episode of 

care for a beneficiary. Section 

1848(n)(9)(A) of the Act requires us to 

develop an episode grouper so that 

physicians can be compared on episodebased costs of care. In order to comply 

with this statutory requirement, we have 

awarded separate contracts to four 

different project teams. We have tasked 

each project team to design a 

‘‘prototype’’ of the episode grouper by 

determining episode-based costs for 

selected high-cost, high-volume 

conditions that occur among Medicare 

beneficiaries, including six of the 

following nine conditions: Hip fracture/ 

hip replacement; pneumonia; heart 

attack; coronary artery disease; asthma; 

COPD; stroke; diabetes; and heart 

failure. By January 1, 2012, we will 

select one project team’s prototype. The 

selected team will then be tasked to 

develop episode groupers for a more 

comprehensive set of conditions over a 

four-year period. 

As a transition to implementing the 

episode grouper, we could use cost 

measures based on the inpatient 

hospital Medicare Severity Diagnosis 

Related Groups (MS–DRG) classification 

system. Specifically, we could use 

allowed Parts A and B charges per 

beneficiary for all services furnished on 

the day of admission and furnished 

through a specific number of days after 

the day of discharge. We are currently 

assessing how to attribute episode costs 

to physicians. We seek comment on 

whether we should pursue the MS–DRG 

approach in the near term while we 

develop episode-based cost measures for 

a significant number of high-cost and 

high-volume conditions in the Medicare 

program. 

In addition, we specifically seek 

comment on the resource and cost 

measures used in private sector 

initiatives and how they are used to 

profile physicians compared to the 

quality of care provided. 

b. Assessing Physician Performance and 

Applying the Value Modifier 

Apart from the measures that would 

be used for purposes of applying the 

value modifier, there are a number of 

issues related to the implementation of 

the value modifier including steps for 

both measurement of performance and 

application of payment adjustments. 

While we are not making proposals on 

these issues at this time, we have briefly 

described them below and welcome 

public comments to be considered as we 

develop proposals on the value modifier 

for future rulemaking. 

Pursuant to statutory requirements, 

we are examining how to create 

composites of measures of quality of 

care and of cost from the measures we 

have proposed so that we can compare 

quality relative to cost. We are also 

examining how to make appropriate risk 

and other adjustments to these 

measures. In addition, we are examining 

how to attribute beneficiaries to 

physicians to develop meaningful and 

actionable physician profiles for use in 

the value modifier. Some of the issues 

involved with examining attribution 

rules were discussed earlier in the 

discussion of Physician Feedback 

reports and include issues of sample 

size. We are also developing appropriate 

peer groups or benchmarks in order to 

compare physicians on the value 

modifier. 

As previously mentioned, prior to 

application of the value modifier to all 

physicians and physician groups in 

2017, section 1848(p)(4)(B)(iii) of the 

Act allows the Secretary in 2015 and 

2016 to apply the value modifier to 

specific physicians and physician 

groups the Secretary determines 

appropriate. For example, we could 

apply the value modifier to physicians 

who are outliers (as identified 

individually, by practice group, or by 

geographic region) compared to national 

or regional areas in terms of high cost 

and low quality. Alternatively, we could 

apply the modifier to physicians who 

treat the conditions that are most 

prevalent and/or most costly, among 

Medicare beneficiaries. 

As stated previously, we seek 

comment on these issues and other 

issues related to implementation of the 

value modifier. Our plan is to begin 

implementing the value modifier 

through the rulemaking process during 

2013 as required by section 

1848(p)(4)(B)(i) of the Act. We seek 

input from stakeholders as we work on 

these issues. 

c. Dates for Implementation of the Value 

Modifier 

Section 1848(p)(4)(B)(iii) of the Act 

requires that the Secretary apply the 

value modifier for items and services 

furnished beginning on January 1, 2015, 

with respect to specific physicians and 

groups of physicians, and not later than 

January 1, 2017, with respect to all 

physicians and groups of physicians. As 

required by section 1848(p)(4)(B)(i) of 

the Act, we will begin implementation 

of the value modifier through the 

rulemaking process during 2013 for the 

physician fee schedule effective for CY 

2014. We anticipate that the 

methodology we propose to calculate 

the value modifier may be further 

refined, if necessary, during the 2014 

rulemaking process for the physician fee 

schedule that will take effect in 2015. 

d. Initial Performance Period 

Section 1848(p)(4)(B)(ii)(I) of the Act 

requires the Secretary to specify an 

initial performance period for the 

application of the value modifier with 

respect to 2015. We propose that the 

initial performance period be the full 

calendar year 2013, that is, January 1, 

2013 through December 31, 2013. The 

value modifier that is applied to items 

and services furnished by specific 

physicians and groups of physicians 

under the 2015 physician fee schedule 

would be based on performance during 

2013. We propose this performance 

period because some claims for 2013 

(which could be used in cost or quality 

measures) may not be fully processed 

until 2014. As such, we will need 

adequate lead time to collect 

performance data, assess performance, 

and construct and compute the value 

modifier during 2014 so that it can be 

applied to specific physicians starting 

January 1, 2015, as required by statute. 

As we have done in other payment 

systems, we plan to use claims that are 

paid within a specified time period, 

such as, 90-days after 2013, for 

assessment of performance and 

application of the value modifier for 

2015. We will propose the specific cutoff period as part of the more detailed 

methodology for computation and 

application of the value modifier in 

future rulemakings. We seek comment 

on this proposed performance period. 

e. Other Issues 

We also seek comment on a number 

of issues related to the development of 

the value modifier, which we will 

address in future rulemaking. Although 

we are not proposing particular policies 

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42914 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

at this time, we seek comment on two 

specific issues. 

(1) Systems-Based Care 

Section 1848(p)(5) of the Act requires 

the Secretary, as appropriate, to apply 

the value-based modifier in a manner 

that promotes systems-based care. We 

seek comment on how we might 

determine the scope of systems-based 

care and how best to promote it in 

applying the value modifier. For 

example, systems-based care might 

include an integrated group practice 

participation in the Shared Savings 

Program, a medical home, or an 

Innovation Center program that 

promotes systems-based care. We also 

could implement an attribution method 

that attributes patients to a collection of 

physicians that treat patients in 

common to encourage better 

coordination of care. Additionally, we 

could promote systems-based care by 

developing a common set of quality 

measures on which all providers would 

be evaluated. We seek comment on 

these and other ways in which we could 

promote systems-based care through the 

application of the value modifier. 

(2) Special Circumstances for Physicians 

in Rural Areas and Other Underserved 

Communities 

Section 1848(p)(6) of the Act requires 

the Secretary in applying the value 

modifier, as appropriate, to take into 

account the special circumstances of 

physicians or groups of physicians in 

rural areas and other underserved 

communities. We seek comment on how 

we should identify physicians or groups 

of physicians in rural areas and other 

underserved communities, the specific 

special circumstances they face, and 

once identified, how these special 

circumstances should be taken into 

account for purposes of applying the 

value modifier. In addition, we seek 

comment on the organizational 

structures and practices that rural 

physicians and other underserved 

communities use and how we could 

apply a value modifier in these areas to 

accommodate their special 

circumstances. 

J. Bundling of Payments for Services 

Provided to Outpatients Who Later Are 

Admitted as Inpatients: 3-Day Payment 

Window Policy and the Impact on 

Wholly Owned or Wholly Operated 

Physician Practices 

1. Introduction 

On June 25, 2010, the Preservation of 

Access to Care for Medicare 

Beneficiaries and Pension Relief Act of 

2010 (PACMBPRA) (Pub. L. 111–192) 

was enacted. Section 102 of this Act 

entitled, ‘‘Clarification of 3-Day 

Payment Window,’’ clarified when 

certain services furnished to Medicare 

beneficiaries in the 3-days (or, in the 

case of a hospital that is not a 

subsection (d) hospital, during the 1- 

day) preceding an inpatient admission 

should be considered ‘‘operating costs 

of inpatient hospital services’’ and 

therefore included in the hospital’s 

payment under the Hospital Inpatient 

Prospective Payment System (IPPS). 

This policy is generally known as the 

‘‘3-day payment window.’’ Under the 3- 

day payment window, a hospital (or an 

entity that is wholly owned or wholly 

operated by the hospital) must include 

on the claim for a Medicare 

beneficiary’s inpatient stay, the 

technical portion of any outpatient 

diagnostic services and admissionrelated nondiagnostic services provided 

during the payment window. The new 

law makes the policy pertaining to 

admission-related nondiagnostic 

services more consistent with common 

hospital billing practices. Section 102 of 

the PACMBPRA is effective for services 

furnished on or after June 25, 2010. 

2. Background 

We discussed changes to the 3-day 

payment window in the interim final 

rule with comment period that was 

issued as part of last year’s IPPS final 

rule (75 FR 50346). The law makes no 

changes to the billing of ‘‘diagnostic 

services’’ furnished during the 3-day 

payment window, which are included 

in the ‘‘operating costs of inpatient 

hospital services’’ pursuant to section 

1886(a)(4) of the Act. All diagnostic 

services furnished to a Medicare 

beneficiary by a hospital (or an entity 

wholly owned or wholly operated by 

the hospital), on the date of a 

beneficiary’s admission or during the 3- 

days (1-day for a non-subsection (d) 

hospital) immediately preceding the 

date of a beneficiary’s inpatient hospital 

admission, continue to be included on 

the Part A bill for the beneficiary’s 

inpatient stay at the hospital. In 

accordance with section 102(a)(1) of the 

PACMBPRA, for outpatient services 

furnished on or after June 25, 2010, all 

nondiagnostic services, other than 

ambulance and maintenance renal 

dialysis services, provided by the 

hospital (or an entity wholly owned or 

wholly operated by the hospital) on the 

date of a beneficiary’s inpatient 

admission and during the 3 calendar 

days (1 calendar day for a 

nonsubsection (d) hospital) immediately 

preceding the date of admission are 

deemed related to the admission and, 

therefore, must be billed with the 

inpatient stay, unless the hospital attests 

that certain nondiagnostic services are 

unrelated to the hospital claim (that is, 

the preadmission nondiagnostic services 

are clinically distinct or independent 

from the reason for the beneficiary’s 

inpatient admission). In such cases, the 

unrelated outpatient hospital 

nondiagnostic services are covered by 

Medicare Part B, and the hospital may 

separately bill for those services. 

Prior to the enactment of section 102 

of the PACMBPRA clarifying the 3-Day 

Payment Window, the term ‘‘related to 

the admission’’ was defined in section 

40.3, Chapter 3, Inpatient Hospital 

Billing, of the Medicare Claims 

Processing Manual (Pub. 100–04) to 

mean an exact match between the 

principal ICD–9 CM diagnosis codes for 

the outpatient encounter and the 

inpatient admission. On November 5, 

1990, section 4003(a) of the Omnibus 

Budget Reconciliation Act of 1990 (Pub. 

L. 101–508) amended the statutory 

definition of ‘‘operating cost of inpatient 

hospital services’’ to include the costs of 

certain services furnished prior to 

admission. Section 4003(a) also required 

that these preadmission services be 

included on the Medicare Part A bill for 

the subsequent inpatient stay. With this 

amendment, section 1886(a)(4) of the 

Act defines the operating costs of 

inpatient hospital services to include 

diagnostic services (including clinical 

diagnostic laboratory tests) or other 

services related to the admission (as 

defined by the Secretary) furnished by 

the hospital (or by an entity that is 

wholly owned or wholly operated by 

the hospital) to the patient during the 3- 

days prior to the date of the patient’s 

admission to the hospital. 

Section 1886(a)(4) of the Act was 

further amended by section 110 of the 

Social Security Amendments of 1994 

(Pub. L. 103–432) enacted on October 

31, 1994. This provision revised the 

payment window for hospitals that are 

excluded from the IPPS to include only 

those services furnished by the hospital 

or an entity wholly owned or wholly 

operated by the hospital during the 1- 

day (instead of the previous 3-days) 

prior to the patient’s hospital inpatient 

admission. The hospital and hospital 

units excluded from the IPPS and 

affected by this policy are psychiatric 

hospitals and units, inpatient 

rehabilitation hospitals and units, longterm care hospitals, children’s hospitals, 

and cancer hospitals. In the FY 1996 

IPPS final rule (60 FR 45840), we noted 

that the term ‘‘day’’ refers to the entire 

calendar-day immediately preceding the 

date of admission and not the 24-hour 

time period that immediately precedes 

the hour of admission. 

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On February 11, 1998, we published 

a final rule (63 FR 6864), that responded 

to public comments received on a prior 

interim final rule on this policy. In that 

final rule, we confirmed that ambulance 

services and chronic maintenance of 

renal dialysis services are excluded 

from the 3-day payment window. This 

final rule also clarified that the payment 

window applies to outpatient services 

that are otherwise billable under Part B 

and does not apply to nonhospital 

services that are generally covered 

under Part A (such as home health, 

skilled nursing facility, and hospice). In 

addition, the rule clarified the terms 

‘‘wholly owned or operated’’ and 

‘‘admission-related’’ for nondiagnostic 

services. 

The 1998 final rule (63 FR 6866) 

defined an entity as wholly owned or 

wholly operated if a hospital has direct 

ownership or control over another 

entity’s operations. Specifically, 42 CFR 

412.2(c)(5)(i) states, ‘‘An entity is 

wholly owned by the hospital if the 

hospital is the sole owner of the entity. 

An entity is wholly operated by a 

hospital if the hospital has exclusive 

responsibility for conducting and 

overseeing the entity’s routine 

operations, regardless of whether the 

hospital also has policymaking 

authority over the entity.’’ The 1998 

final rule also stated ‘‘that we have 

defined services as being related to the 

admission only when there is an exact 

match between the ICD–9–CM diagnosis 

code assigned for both the preadmission 

services and the inpatient stay.’’ The 

rule also stated ‘‘A hospital-owned or 

hospital-operated physician clinic or 

practice is subject to the payment 

window provision.’’ Therefore, related 

preadmission nondiagnostic services 

provided by a wholly owned or wholly 

operated physician clinic or practice are 

also included in the 3-Day (or 1-day) 

payment window policy, and services 

were considered related when there was 

an exact match between ICD–9 CM 

diagnosis codes for the outpatient 

encounter and the inpatient admission. 

Prior to the June 25, 2010 enactment 

of section 102(a)(1) of PACMBPRA (Pub. 

L. 111–192), the payment window 

policy for preadmission nondiagnostic 

services was rarely applied in the 

wholly-owned or operated physician’s 

office or clinic because, as noted, the 

policy required an exact match between 

the principal ICD–9 CM diagnosis codes 

for the outpatient services and the 

inpatient admission. Because of the 

exact match policy, very few services 

furnished in a physician’s office or 

clinic that is wholly owned or operated 

by the hospital would be subject to the 

policy. Because the policy applied only 

in such narrow circumstances, until the 

recent statutory change, we have not 

provided further guidance to wholly 

owned or wholly operated physician 

offices on how nondiagnostic services 

are to be included on hospital bills 

when the 3-day payment window 

applied. However, the statutory change 

to the payment window policy made by 

Public Law 111–192 significantly 

broadened the definition of 

nondiagnostic services that are subject 

to the payment window to include any 

nondiagnostic service that is clinically 

related to the reason for a patient’s 

inpatient admission, regardless of 

whether the inpatient and outpatient 

diagnoses are the same. 

The FY 2012 IPPS proposed rule (76 

FR 25960) further discusses application 

of the 3-day payment window for both 

preadmission diagnostic and related 

nondiagnostic services furnished to a 

patient at wholly owned or wholly 

operated physician practices after June 

25, 2010. We do not know how many 

physician offices will meet this 

definition of wholly owned or wholly 

operated. Our expectation is that most 

hospital-owned entities providing 

outpatient services would be considered 

part of the hospital, likely as an 

outpatient department, and not separate 

physician clinics or practices. However, 

we believe there may be at least some 

hospital-owned clinics that meet the 

definition of a wholly owned or wholly 

operated physician practice. When a 

physician furnishes a service in a 

hospital, including an outpatient 

department of a hospital, Medicare pays 

the physician under the physician fee 

schedule, generally at a facility-based 

payment rate that is lower than the 

‘‘nonfacility’’ payment rate in order to 

avoid duplication of payment for 

supplies, equipment, and staff that are 

paid directly to the hospital by 

Medicare. 

3. Applicability of the 3-Day Payment 

Window Policy for Services Furnished 

in Physician Practices 

In circumstances where the 3-day 

payment window applies to 

nondiagnostic services related to an 

inpatient admission furnished in a 

wholly owned or wholly operated 

physician practice, we propose that 

Medicare would make payment under 

the physician fee schedule for the 

physicians’ services that are subject to 

the 3-day payment window at the 

facility rate. As explained more fully 

later in this section, the services that are 

subject to the 3-day payment window 

would be billed to Medicare similar to 

services that are furnished in a hospital, 

including an outpatient department of a 

hospital. On or after January 1, 2012, we 

propose that when a physician furnishes 

services to a beneficiary in a hospital’s 

wholly owned or wholly operated 

physician practice and the beneficiary is 

admitted as an inpatient within 3 days 

(or, in the case of non-IPPS hospitals, 1 

day), the payment window will apply to 

all diagnostic services furnished and to 

any nondiagnostic services that are 

clinically related to the reason for the 

patient’s inpatient admission regardless 

of whether the reported inpatient and 

outpatient ICD–9–CM diagnosis codes 

are the same. 

a. Payment Methodology 

Specifically, we would establish a 

new Medicare HCPCS modifier that will 

signal claims processing systems to 

provide payment at the facility rate. We 

propose to pay only the Professional 

Component (PC) for CPT/HCPCS codes 

with a Technical Component (TC)/PC 

split that are provided in the 3-day (or, 

in the case of non-IPPS hospitals, 1-day) 

payment window in a hospital’s wholly 

owned or wholly operated physician 

practice. We propose to pay the facility 

rate for codes without a TC/PC split to 

avoid duplicate payment for the 

technical resources required to provide 

the services as those costs will be 

included on the hospital’s inpatient 

claim for the related inpatient 

admission. The facility rate includes 

physician work, malpractice, and the 

facility practice expense, which is a 

payment to support services provided 

by the physician office when a 

physician treats patients at another 

facility, such as updating medical 

records. We propose to modify our 

regulation at § 414.22(b)(5)(i), which 

defines the sites of service that result in 

a facility practice expense RVU for 

payment, to add an entity that is wholly 

owned or wholly operated by a hospital, 

as defined in § 412.2(c)(5)(ii) when that 

entity furnishes preadmission services. 

If this proposal is finalized, we would 

establish a new HCPCS modifier 

through sub-regulatory guidance. We 

would require that this modifier be 

appended to the physician 

preadmission diagnostic and admissionrelated nondiagnostic services, reported 

with HCPCS codes, which are subject to 

the 3-day payment window policy. Each 

wholly owned or wholly operated 

physician’s practice would need to 

manage its billing processes to ensure 

that it billed for its physician services 

appropriately when a related inpatient 

admission has occurred. The hospital 

would be responsible for notifying the 

practice of related inpatient admissions 

for a patient who received services in a 

wholly owned or wholly operated 

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42916 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

physician practice within the 3-day (or 

when appropriate 1-day) payment 

window prior to the inpatient stay. We 

would make the new modifier effective 

for claims with dates of service on or 

after January 1, 2012, and wholly owned 

or wholly operated physician practices 

would receive payment at the facility 

rate for related nondiagnostic services 

and receive payment for only the 

professional component for diagnostic 

services effective for services furnished 

on or after January 1, 2012. 

We realize that the time frames 

associated with the global surgical 

package for many surgical services 

could overlap with the 3-day (or 1-day) 

payment window policy. Global surgical 

payment rules apply to major and minor 

surgeries, and endoscopies. Section 40.1 

of the Claims Processing Manual (100– 

04 chapter 12 Physician/Nonphysician 

Practitioners) defines the global surgical 

package. Procedures can have a global 

surgical period of 0, 10, or 90-days. 

Generally, the global period for major 

surgeries is 1-day prior to the surgical 

procedure and 90-days immediately 

following the procedure. For minor 

surgeries, the global period is the-day of 

the procedure and 10-days immediately 

following the procedure. 

Medicare payment for the global 

surgical package is based on the typical 

case for a procedure, and includes 

preoperative visits, intra-operative 

services, and complications following 

surgery, postoperative visits, 

postsurgical pain management, 

supplies, and miscellaneous other 

services such as dressing changes and 

removal of sutures or staples. Medicare 

makes a single payment to the treating 

physician (or group practice) for the 

surgical procedure and any of the preand postoperative services typically 

associated with the surgical procedure 

provided within the global surgical 

period (10 or 90-days). The same section 

of the Claims Processing Manual (100– 

04 chapter 12 Physician/Nonphysician 

Practitioners) also discusses the services 

that are not included in payment for the 

global surgical period. In general, these 

services are unrelated to the surgery, are 

diagnostic or are part of the decision to 

pursue surgery, or are related to the 

surgery but are so significant they 

warrant an additional payment. Some 

examples of services not included in 

payment for the global surgical period 

include the initial evaluation of the 

problem by the surgeon to determine the 

need for major surgery; services of 

another physician; visits unrelated to 

the diagnosis for the surgical procedure 

unless the visits occur due to surgical 

complications; treatment that is not part 

of the normal recovery from surgery; 

diagnostic tests; distinct surgical 

procedures that are not re-operations; 

treatment for postoperative 

complications that require a return trip 

to the operating room; critical care 

unrelated to the surgery where a 

seriously injured or burned patient is 

critically ill and requires the constant 

attention of the physician; and 

immunosuppressive therapy for organ 

transplants. 

The time frames for application of the 

3-day payment window and the global 

surgical package could overlap. In some 

cases, the application of the 3-day 

payment window is straightforward. For 

example, a patient could have minor 

surgery in a wholly owned or wholly 

operated physician’s office and, due to 

complications, need to be admitted 

within 3-days to an acute care hospital 

paid under the IPPS for follow-up 

surgery. Under the 3-day payment 

window policy, the practice expense 

portion of the initial surgery and any 

pre- and postoperative visits associated 

with the surgery (both those subject to 

the global surgery rules and separate 

diagnostic procedures) should be 

included on the hospital’s Part A claim 

for the inpatient admission. The wholly 

owned or wholly operated physician 

practice would bill for the surgery 

performed for the inpatient as well as 

for the initial surgical procedure 

performed in the physician practice that 

started the global period. The wholly 

owned or wholly operated physician 

practice would apply the HCPCS 

modifier that CMS would pursue to 

implement the 3-day payment window 

to each of these services HCPCS code. 

Medicare would pay the physician 

practice for the initial surgical 

procedure and the related procedure 

following inpatient admission at the 

facility rate. Finally, any preadmission 

diagnostic tests conducted by the 

wholly owned or wholly operated 

physician practice in the 3-day payment 

window would be included on the 

physician practice’s claim with the 

anticipated HCPCS modifier, and 

Medicare would pay the wholly owned 

or wholly operated physician practice 

only the professional portion of the 

service. 

However, the situation could arise 

where a global surgical period overlaps 

with the 3-day payment window, but 

the actual surgical procedure with the 

global surgical package occurred before 

the 3-day payment window. In this case, 

several post-operative services, such as 

follow-up visits, would occur during the 

global period, but the surgeon would 

not bill separately for those services. We 

propose that services with a global 

surgical package would be subject to the 

3-day payment window policy when 

wholly owned or wholly operated 

physician practices furnish 

preadmission diagnostic and 

nondiagnostic services that are 

clinically related to an inpatient 

admission when the date of the actual 

surgical procedure falls within the 3-day 

payment window policy. However, 

when the actual surgical procedure for 

a service that has a global surgical 

package is furnished on a date that falls 

outside the 3-day payment window, the 

3-day window policy would not apply. 

We do not believe it would be 

appropriate to require the wholly owned 

or wholly operated physician practice to 

unbundle the post operative services 

associated with the global surgical 

procedure so that the practice expense 

portion of those services could be paid 

under the PFS at the facility rate and the 

costs included on the hospital’s 

inpatient claim. However, any service 

that a wholly owned or wholly operated 

physician practice would bill separately 

from the global surgical package, such 

as a separate initial evaluation of a 

problem by the surgeon to determine the 

need for surgery or separate diagnostic 

tests, would continue to be subject to 

the 3-day payment window policy. 

b. Identification of Wholly Owned or 

Wholly Operated Physician Practices 

The 1998 final rule (63 FR 6864) 

defined wholly owned or wholly 

operated as a hospital’s direct 

ownership or control over another 

entity’s operations. In that rule, we 

added the regulation at 42 CFR 

412.2(c)(5)(i) which states, ‘‘An entity is 

wholly owned by the hospital if the 

hospital is the sole owner of the entity. 

An entity is wholly operated by a 

hospital if the hospital has exclusive 

responsibility for conducting and 

overseeing the entity’s routine 

operations, regardless of whether the 

hospital also has policymaking 

authority over the entity.’’ Physician 

practices self-designate whether they are 

owned or operated by a hospital during 

the Medicare enrollment process. 

Currently, a physician practice enrolls 

in Medicare with CMS form ‘‘855B.’’ 

This enrollment form reports pertinent 

practice information such as ownership, 

organizational structure, and 

operational duties. Likewise, hospitals 

enroll in Medicare using CMS form 

‘‘855A’’ also reporting pertinent hospital 

information such as ownership, 

organizational structure and operational 

duties. Medicare Administrative 

Contractors update files of physician 

practices that are owned and operated 

by hospitals, and the files of hospitals 

that own those physician practices, in 

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their claims processing systems and use 

that data to confirm an ownership 

relationship for identified physician 

practices. We will investigate the 

feasibility of establishing national 

system edits within the Common 

Working File to fully identify whether a 

physician practice is wholly owned or 

wholly operated by a hospital and to 

associate such practice with its affiliated 

hospital. 

K. Hospital Discharge Care Coordination 

We are committed to achieving better 

care for individuals, better health for 

populations, and reduced expenditure 

growth. Reforms such as Accountable 

Care Organizations and Medical Homes 

work to achieve these goals. We are also 

committed to reforms to the fee-forservice payment system to achieve these 

goals. We recently launched the 

Partnership for Patients, (in April 2011), 

a national patient safety initiative that 

includes the Community Based Care 

Transitions Program, which provides 

funding to community-based 

organizations to coordinate a continuum 

of post-acute care in order to test models 

for improving care transitions for high 

risk Medicare beneficiaries. 

Care coordination involving the 

transition of a beneficiary from care 

furnished by a treating physician during 

a hospital stay to the beneficiary’s 

primary physician in the community 

could avoid adverse events such as 

readmissions or subsequent illnesses, 

improve beneficiary outcomes, and 

avoid a financial burden on the health 

care system. Successful efforts to 

improve hospital discharge care 

coordination and care transitions could 

improve the quality of care while 

simultaneously decreasing costs. We are 

interested in broad public comment on 

how to further improve physician care 

coordination within the statutory 

structure for physician payment and 

quality reporting, particularly for a 

beneficiary’s transition from the 

hospital to the community. 

Care coordination is a component of 

many evaluation and management (E/M) 

services. Under the physician fee 

schedule, there are two hospital 

discharge codes, hospital discharge day 

management services CPT codes 99238 

(Hospital discharge day management; 30 

minutes or less) and 99239 (Hospital 

discharge day management; more than 

30 minutes). Both of these codes include 

care coordination activities. The specific 

physician activities for care 

coordination associated with the 

hospital discharge day management 

codes as shown in Table 63 include the 

following: 

• Providing care coordination for the 

transition including instructions for 

aftercare to caregivers. 

• Ordering and arranging for post 

discharge follow-up professional 

services and testing. 

• Discussing aftercare treatment with 

the beneficiary, family, and other 

healthcare professionals. 

• Informing the primary care or 

referring physician of discharge plans. 

• Provide necessary care 

coordination, telephonic or electronic 

communication assistance, and other 

necessary management related to this 

hospitalization. 

• Revise treatment plan(s) and 

communicate with beneficiary and/or 

caregiver, as necessary. 

Providing necessary care coordination 

also is a component of the office visit 

CPT codes 99203 (Level 3 new patient 

office or other outpatient visit) and 

99213 (Level 3 established patient office 

or other outpatient visit) that a 

beneficiary’s primary physician would 

use to bill for the first visit after 

discharge. The physician activities for 

care coordination associated with these 

E/M services as shown in Table 63 

include providing necessary care 

coordination, telephonic or electronic 

communication assistance, and other 

necessary management related to this 

office visit. 

The clinical vignettes that are used to 

value the resources included in these 

codes are shown in Table 63. We have 

provided the full clinical vignettes used 

by the American Medical Association/ 

Specialty Society Relative Value Update 

Committee (AMA RUC) to develop 

recommended RVU values for the 

resources included in the discharge day 

management and E/M codes. These 

vignettes detail all the specific 

physician activities that the AMA RUC 

considered for these CPT codes, 

including hospital discharge care 

coordination activities. 

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TABLE 63—AMA RUC CLINICAL VIGNETTE

CPT code Long descriptor Vignette Pre service Intra service Post service 

99238 ..... Hospital discharge day management; 30 minutes or 

less.

Discharge visit for a 55- 

year-old male admitted 

with a community-acquired pneumonia is seen 

in preparation for discharge from the hospital. 

He is euvolemic, afebrile, 

asymptomatic, and his oxygen saturations are normal.

• Review data not available 

on the unit (such as diagnostic and imaging studies).

• Communicate with other 

professionals and with patient or patient’s family.

• Review medical records 

and data available on the 

unit.

• Obtain an interval history

• Perform a physical exam. 

• Consider relevant data, 

options, and risks and formulate/revise diagnosis 

and treatment plan(s) including making the decision for discharge.

• Discuss aftercare treatment with the patient, 

family and other 

healthcare professionals.

• Provide care coordination 

for the transition including 

instructions for aftercare 

to caregivers.

• Order/arrange for post 

discharge follow-up professional services and 

testing.

• Reconcile medications 

with attention to pre-admission therapy, inpatient 

therapy and outpatient formulary and write prescriptions.

• Complete discharge and 

aftercare forms.

• Inform the primary care or 

referring physician of discharge plans.

• Complete medical record 

documentation.

• Complete discharge 

records. 

• Handle (with the help of 

clinical staff) any treatment failures or adverse 

reactions to medications 

that may occur after discharge. 

• Provide necessary care 

coordination, telephonic or 

electronic communication 

assistance, and other necessary management related to this hospitalization. 

• Receive and respond to 

any interval testing results 

or correspondence, including obtaining any results pending at discharge. 

• Revise treatment plan(s) 

and communicate with patient and/or caregiver, as 

necessary. 

99239 ..... Hospital discharge day management; more than 30 

minutes.

Discharge visit for a 75- 

year-old female who required a below-the knee 

amputation for an infected 

non-healing ulcer on her 

right foot is seen in preparation for discharge from 

the hospital. She has 

Type 2 diabetes mellitus, 

ischemic cardiomyopathy, 

atherosclerotic peripheral 

vascular disease, hypertension, chronic renal insufficiency, and dementia. 

She is no longer delirious, 

her blood sugars are well 

controlled, and she is at 

her baseline weight. She 

is being discharged back 

to the nursing home.

• Review data not available 

on the unit (such as diagnostic and imaging studies).

• Communicate with other 

professionals and with patient or patient’s family.

• Review medical records 

and data available on the 

unit.

• Obtain an interval history. 

• Perform a physical exam. 

• Consider relevant data, 

options, and risks and formulate/revise diagnosis 

and treatment plan(s) including making the decision for discharge.

• Discuss aftercare treatment with the patient, 

family and other 

healthcare professionals.

• Provide care coordination 

for the transition including 

instructions for aftercare 

to caregivers.

• Order/arrange for post 

discharge follow-up professional services and 

testing.

• Reconcile medications 

with attention to pre-admission therapy, inpatient 

therapy and outpatient formulary and write prescriptions.

• Complete discharge and 

aftercare forms.

• Inform the primary care or 

referring physician of discharge plans.

• Complete medical record 

documentation.

• Complete discharge 

records. 

• Handle (with the help of 

clinical staff) any treatment failures or adverse 

reactions to medications 

that may occur after discharge. 

• Provide necessary care 

coordination, telephonic or 

electronic communication 

assistance, and other necessary management related to this hospitalization. 

• Receive and respond to 

any interval testing results 

or correspondence, including obtaining any results pending at discharge. 

• Revise treatment plan(s) 

and communicate with patient and/or caregiver, as 

necessary. 

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TABLE 63—AMA RUC CLINICAL VIGNETTE—Continued 

CPT code Long descriptor Vignette Pre service Intra service Post service 

99203 ..... Office/outpatient visit, new .. Initial office visit for a 63- 

year-old female with hypertension presents for a 

pre-employment physical 

after moving to the area. 

Her blood pressure has 

been adequately controlled with her current 

medication on home blood 

pressure monitoring.

• Review the medical history form completed by 

the patient and vital signs 

obtained by clinical staff.

• Communicate with other 

health professionals.

• Obtain a detailed history.

• Perform a detailed examination.

• Consider relevant data, 

options, and risks and formulate a diagnosis and 

develop a treatment plan 

(low complexity medical 

decision making).

• Discuss diagnosis and 

treatment options with the 

patient.

• Address the preventive 

health care needs of the 

patient.

• Reconcile medication(s) 

• Write prescription(s). 

• Order and arrange diagnostic testing or referral 

as necessary.

• Complete the medical 

record documentation. 

• Handle (with the help of 

clinical staff) any treatment failures or adverse 

reactions to medications 

that may occur after the 

visit. 

• Provide necessary care 

coordination, telephonic or 

electronic communication 

assistance, and other necessary management related to this office visit. 

• Receive and respond to 

any interval testing results 

or correspondence. 

• Revise treatment plan(s) 

and communicate with patient, as necessary. 

99213 ..... Office/outpatient visit, est .... Office visit, established patient, a 55-year-old male 

with a history of hypertension and 

hyperlipidemia who presents for follow up.

• Review the medical history form completed by 

the patient and vital signs 

obtained by clinical staff.

• Obtain an expended problem focused history (including response to treatment at last visit and reviewing interval correspondence or medical 

records received).* 

• Perform an expended 

problem focused examination.* 

• Consider relevant data, 

options, and risks and formulate a diagnosis and 

develop a treatment plan 

(low complexity medical 

decision making).* 

• Discuss diagnosis and 

treatment options with the 

patient.

• Address the preventive 

health care needs of the 

patient.

• Reconcile medication(s). 

• Write prescription(s). 

• Order and arrange diagnostic testing or referral 

as necessary.

• Complete the medical 

record documentation. 

• Handle (with the help of 

clinical staff) any treatment failures or adverse 

reactions to medications 

that may occur after the 

visit. 

• Provide necessary care 

coordination, telephonic or 

electronic communication 

assistance, and other necessary management related to this office visit. 

• Receive and respond to 

any interval testing results 

or correspondence. 

• Revise treatment plan(s) 

and communicate with patient, as necessary. 

* Two of these three components required. 

In order to ensure that these hospital 

discharge care coordination services are 

appropriately valued, we are seeking 

comment on the specific physician 

activities and the associated resources 

involved in physician provision of 

effective care coordination surrounding 

a hospital discharge. For the treating 

physician(s) overseeing the care of the 

beneficiary in the hospital, specific care 

coordination activities (for example, 

transfer of the beneficiary to a 

community physician) could include 

the following: 

• Transitioning responsibility for the 

beneficiary’s care to a receiving 

physician without a ‘‘gap’’ (that is, a 

seamless transition). This could include 

identifying the receiving physician by 

name and providing that physician’s 

contact information to the beneficiary 

and/or family representative. 

• Facilitating the transfer of ‘‘core’’ 

information to the receiving physician 

and/or beneficiary/family (if requested), 

via fax, secure e-mail, hard copy, or 

other mechanism. The core set of 

information could include (unless not 

applicable): 

++ Important lab and diagnostic test 

results and drugs and treatments, as 

well as pending tests and how and 

when to obtain results. 

++ Drugs prescribed, including 

planned changes. 

++ Other treatments and tests 

prescribed, including planned changes. 

++ Allergies. 

++ Receiving physician contact 

information and specification of 

physician coverage for problems before 

any initial appointment. For 

hospitalized beneficiaries, this could 

include a planned initial post-discharge 

appointment within 7 business days 

with a physician, NP, or PA (if 

authorized by State law). 

++ Overview of the caregiver 

situation. 

++ Summary of beneficiary/family 

goals of care, with time frames and any 

restrictions. 

++ Family caregiver and surrogate 

decision-maker identification, and 

assessment of needs (for the caregiver), 

as appropriate. 

++ Responding to inquiries from the 

receiving physician or other provider 

(such as, LTCH, IRF, SNF) about the 

beneficiary’s hospital stay and care plan 

in a timely and collaborative way. 

For the beneficiary’s primary 

physician(s) in the community 

overseeing the beneficiary’s care post 

hospital discharge, specific care 

coordination activities could include: 

• Assuming responsibility for the 

beneficiary’s care without a gap. 

• Notifying the patient that the 

receiving physician will be responsible 

for the beneficiary’s care, and checking 

on the beneficiary’s condition in the 

first few days after the transition. 

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• Obtaining and reviewing the core 

information provided by the sending 

physician. 

• Contacting the physician(s) 

involved in the beneficiary’s care during 

the hospital stay (as appropriate). 

• Setting up an appointment for a 

face-to-face visit with the beneficiary, as 

appropriate. 

We welcome comment on key 

physician activities associated with 

effective care coordination between the 

treating physician in the hospital and 

the beneficiary’s primary physician in 

the community upon hospital discharge. 

We request public comment on the 

extent to which the clinical vignette for 

the hospital discharge and office visit 

codes appropriately incorporate hospital 

discharge care coordination activities. 

We also seek comment about whether 

the relative values assigned to these 

services under the physician fee 

schedule appropriately reflect the 

resources involved in performing 

activities that are essential to hospital 

discharge care coordination, and on 

ways to ensure appropriate recognition 

of the resources involved in these 

services, specifically, the physician time 

and complexity of physician work as 

well as the associated practice expenses. 

We also seek comments on the current 

coding structure for these services and 

on any other suggested changes to 

improve care coordination, particularly 

for the beneficiary’s transition from the 

hospital to the community, to better 

reflect the resources required. We note 

that the Assistant Secretary of Planning 

and Evaluation (ASPE) in the 

Department of Health and Human 

Services hosted a technical expert panel 

in May 2011 identifying areas of 

additional research into equitable 

payment for services among specialties, 

with particular attention to valuing the 

resources required for primary care 

including generally identifying and 

valuing care coordination activities. We 

will consider the panel’s discussion and 

any available analyses as we broadly 

consider physician payment for hospital 

discharge care coordination activities. 

In addition to specific comments on 

the resources required for effective care 

coordination activities, we also broadly 

invite comment on other means to 

emphasize physician care coordination, 

such as educational efforts or the 

development of additional care 

coordination performance measures for 

the Physician Quality Reporting System 

and the Physician Fee Schedule Value 

Modifier. 

A new trend in care transition 

planning is the use of shared care plans 

between beneficiary and physician 

rather than those created solely by the 

physician and dictated as ‘‘doctor’s 

orders’’ to the beneficiary. Shared care 

plans are jointly developed between 

beneficiary and physician where the 

physician sets and documents selfmanagement goals collaboratively with 

beneficiaries. These jointly developed 

care plans can be particularly important 

to improving overall beneficiary 

outcomes for beneficiaries with chronic 

illnesses, such as diabetes or HIV/AIDS, 

by developing a sense of personal 

responsibility for health outcomes. 

These plans give the patients a tool to 

learn about and practice principles of 

self-management, producing motivated 

and engaged beneficiaries. In addition, 

they provide health care professionals a 

communication tool to provide timely 

information that supports planned care 

and beneficiary self-management. (For 

more information see http://www.

innovations.ahrq.gov/content.

aspx?id=2191 or http://www.ihi.org/IHI/ 

Topics/HIVAIDS/HIVDiseaseGeneral/

Tools/My+Shared+Care+Plan.htm.) 

We will carefully weigh all comments 

received as we consider changes to the 

Medicare physician fee schedule to 

appropriately reflect the relative value 

of effective post discharge care 

coordination or other means to focus 

attention in this area. We note that we 

are not proposing any changes at this 

time. If we believe it would be 

appropriate to make certain changes, 

they would be proposed through future 

notice and comment rulemaking and 

would be subject to the budget 

neutrality requirements of section 

1848(c)(2)(B)(ii)(II) of the Act. 

L. Technical Corrections 

1. Outpatient Speech-Language 

Pathology Services: Conditions and 

Exclusions 

We are proposing a technical 

correction to the heading of the 

condition of coverage at § 410.62(b) for 

outpatient speech-language pathology 

services. The heading was inadvertently 

changed in the course of rulemaking for 

CY 2009 when a new paragraph was 

added at § 410.62(c) to recognize 

speech-language pathologists in private 

practice. The section heading at 

§ 410.62(b) currently reads ‘‘Special 

provisions for services furnished by 

speech-language pathologists in private 

practice.’’ We are proposing to reinstate 

the correct heading at § 410.62(b) to read 

‘‘Condition for coverage of outpatient 

speech-language pathology services 

furnished to certain inpatients of a 

hospital or a CAH or SNF.’’ 

2. Outpatient Diabetes Self-Management 

Training and Diabetes Outcome 

Measurements 

a. Proposed Changes to the Definition of 

Deemed Entity 

We are proposing the following 

technical corrections to the definition of 

‘‘deemed entity’’ in § 410.140: 

• Removing the following phrases to 

clarify the purpose of the reference to an 

approved entity: 

++ ‘‘[B]y CMS to furnish and receive 

Medicare payment for the training’’. 

++ ‘‘Upon being approved’’. 

++ ‘‘CMS refers to this entity as an 

‘‘approved entity’’ ’’. 

• Removing an incorrect reference to 

§ 410.141(e) and replacing it with 

§ 410.145(b). 

The proposed revisions would read as 

follows: 

Deemed entity means an individual, 

physician, or entity accredited by an 

approved organization, but that has not 

yet been approved by CMS under 

§ 410.145(b) to furnish training. 

b. Proposed Changes to the Condition of 

Coverage Regarding Training Orders 

We are proposing the following 

technical correction to § 410.141(b)(1) 

entitled ‘‘training orders’’: 

• Removing the cross-reference 

‘‘§ 410.32(a)’’ and adding the crossreference ‘‘§ 410.32(a)(2)’’. 

• Removing the term ‘‘it’’ and adding 

the phrase ‘‘the training’’ in its place. 

The proposed revisions would read as 

follows: 

Training orders. Following an 

evaluation of the beneficiary’s need for 

the training, the training is ordered by 

the physician (or qualified 

nonphysician practitioner) (as defined 

in § 410.32(a)(2)) treating the 

beneficiary’s diabetes. 

3. Practice Expense Relative Value Units 

(RVUs) 

We are proposing the following 

technical corrections to the regulation at 

§ 414.22(b): 

• In paragraphs (b)(5)(i)(A) and (B)— 

++ Include additional examples of 

the settings in which the facility or 

nonfacility practice expense (PE) RVUs 

are applied, respectively; and 

++ Clarify that the lists of settings are 

not exhaustive; and amend these lists to 

include additional place of service 

examples. 

• In paragraph (b)(5)(i)(A) we would 

add ‘‘hospice’’ to the list of places of 

service after ‘‘community mental health 

center. 

• In paragraph (b)(5)(i)(B)— 

++ Revise the language to be more 

consistent with (b)(5)(i)(A) and to 

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include the ‘‘comprehensive outpatient 

rehabilitation facility (CORF)’’ as a place 

of service example; and 

++ Clarify this provision by removing 

the text regarding the use of the 

nonfacility PE RVUs for services in 

‘‘* * * a facility or institution other 

than the hospital, skilled nursing 

facility, community mental health 

center, or ASC’’ because this phrase 

does not accurately reflect the places of 

service where the nonfacility PE RVUs 

are applied. 

• In paragraph (b)(5)(i)(C)— 

++ Revise the paragraph introduction 

by adding ‘‘and CORF’’ after ‘‘outpatient 

therapy’’ and before ‘‘services’’ and, to 

more accurately define the term 

‘‘outpatient therapy services,’’ to add 

‘‘(including physical therapy, 

occupational therapy and speechlanguage pathology services)’’ after 

‘‘therapy services’’ and before ‘‘CORF 

services billed under * * *’’. 

The proposed revisions to 

§ 414.22(b)(5)(i)(A), (B), and (C) would 

read as follows: 

(A) Facility practice expense RVUs. 

The facility practice expense RVUs 

apply to services furnished to patients 

in places of service including, but not 

limited to, a hospital, a skilled nursing 

facility, a community mental health 

center, a hospice, or an ambulatory 

surgical center. 

(B) Nonfacility practice expense 

RVUs. The nonfacility practice expense 

RVUs apply to services furnished to 

patients in places of service including, 

but not limited to, a physician’s office, 

the patient’s home, a nursing facility, or 

a comprehensive outpatient 

rehabilitation facility (CORF). 

(C) Outpatient therapy and CORF 

services. Outpatient therapy services 

(including physical therapy, 

occupational therapy, and speechlanguage pathology services) and CORF 

services billed under the physician fee 

schedule are paid using the nonfacility 

practice expense RVUs. 

V. 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. 

The proposed rule imposes collection 

of information requirements as outlined 

in the regulation text and specified in 

various section of this proposed rule. 

However, this proposed rule also makes 

reference to several associated 

information collections that are not 

discussed in the regulation text 

contained in this document. The 

following is a discussion of these 

information collections, some of which 

have already received OMB approval. 

A. Part B Drug Payment 

The discussion of average sales price 

(ASP) issues in section IV.A.1 of this 

proposed rule with comment period 

pertains to payment for Medicare Part B 

drugs and biologicals under the ASP 

methodology. Drug manufacturers are 

required to submit ASP data to us on a 

quarterly basis. The ASP reporting 

requirements are set forth in section 

1927(b) of the Act. 

In order to facilitate more accurate 

and consistent ASP data reporting from 

manufacturers, we are proposing the 

following: 

• To revise existing reporting fields 

and add new fields to the Addendum A 

template. 

• To add a macro to the Addendum 

A template that will allow 

manufacturers to validate the format of 

their data prior to submission. 

• To maintain a list of HCPCS codes 

for which manufacturer’s report ASPs 

for NDCs on the basis of a specified 

unit. 

• A clarification to existing regulation 

text at § 414.802. Current regulation text 

states that ‘‘Unit means the product 

represented by the 11 digit National 

Drug Code.’’ We propose to update the 

definition to account for situations 

when an alternative unit of reporting 

must be used. 

Additionally, we will also be revising 

our instructions for the reporting of 

dermal grafting products in a user guide 

available on the ASP Web site at: 

Zhttp://www.cms.gov/ 

McrPartBDrugAvgSalesPrice/. 

The burden associated with this 

requirement is the time and effort 

required by manufacturers of Medicare 

Part B drugs and biologicals to calculate, 

record, and submit the required data to 

CMS. The Addendum A template is 

currently approved under OMB control 

number 0938–0921. For the first year, 

we estimate that collection of the 

additional data elements will take 

approximately 2 additional hours for 

each submission of data, or 12 hours per 

response, at a cost of $252 per response. 

Based on the current number of 

respondents, we estimate that this 

requirement will affect approximately 

180 manufacturers. Since manufacturers 

will respond 4 times per year, we 

estimate that, on an annual basis, the 

annual number of responses will be 720 

(180 manufacturers multiplied by 4 

responses) and the total annual hours 

burden will be 34,560 hours (720 annual 

responses multiplied by 48 annual 

hours per response). We estimate the 

annual cost burden to be $181,440 (cost 

per response multiplied by the annual 

number of responses). Once 

manufacturers adjust to the changes 

associated with electronic reporting 

after the first year, we anticipate that the 

burden estimate will decrease. 

B. The Physician Quality Reporting 

System 

Section IV.F.1. of this proposed rule 

discusses the background of the 

Physician Quality Reporting System, 

provides information about the 

proposed measures and reporting 

mechanisms that would be available to 

eligible professionals and group 

practices who choose to participate in 

the 2012 Physician Quality Reporting 

System, and the proposed criteria for 

satisfactory reporting in 2012. 

With respect to satisfactory 

submission of data on quality measures 

by eligible professionals, eligible 

professionals include physicians, other 

practitioners as described in section 

1842(b)(18)(c) of the Act, physical and 

occupational therapists, qualified 

speech-language pathologists, and 

qualified audiologists. Eligible 

professionals may choose whether to 

participate and, to the extent they 

satisfactorily submit data on quality 

measures for covered professional 

services, they can qualify to receive an 

incentive payment. To qualify to receive 

an incentive payment for 2012, we 

propose that the eligible professional (or 

group practice) would need to meet one 

of the criteria for satisfactory reporting 

described in section IV.F.1.e. or IV.F.1.f. 

of this proposed rule (or section 

IV.F.1.g. for group practices). 

Because this is a voluntary program, 

it is difficult to accurately estimate how 

many eligible professionals would opt 

to participate in the Physician Quality 

Reporting System in CY 2012. 

Information from the ‘‘Physician Quality 

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Reporting System 2009 Reporting 

Experience Report, ‘‘which is available 

on the Physician Quality Reporting 

System section of the CMS Web site at 

http://www.cms.hhs.gov/pqrs, indicates 

that eligible professionals from nearly 

120,000 unique TIN/NPI combinations 

attempted to submit Physician Quality 

Reporting System quality measures data 

for the 2009 Physician Quality 

Reporting System. Therefore, for 

purposes of conducting a burden 

analysis for the 2012 Physician Quality 

Reporting System, we will assume that 

all eligible professionals who attempted 

to participate in the 2009 Physician 

Quality Reporting System will also 

attempt to participate in the 2012 

Physician Quality Reporting System. 

Furthermore, we believe that the burden 

for eligible professionals who are 

participating in the Physician Quality 

Reporting System for the first time in 

2012 would be considerably higher than 

the burden for eligible professionals 

who have participated in the Physician 

Quality Reporting System in prior years. 

As described later in this section, some 

preparatory steps are needed to begin 

participating in the Physician Quality 

Reporting System. To the extent that we 

are not proposing to retire the measures 

that an eligible professional has 

reported in a prior year and there are no 

changes to the measure’s specifications 

from a prior year, such preparatory steps 

would not need to be repeated in 

subsequent years. 

For individual eligible professionals, 

the burden associated with the 

requirements of this reporting initiative 

would be the time and effort associated 

with eligible professionals identifying 

applicable Physician Quality Reporting 

System quality measures for which they 

can report the necessary information, 

collecting the necessary information, 

and reporting the information needed to 

report the eligible professional’s or 

group practice’s measures. We believe it 

is difficult to definitively quantify the 

burden because eligible professionals 

may have different processes for 

integrating the data collection for the 

Physician Quality Reporting System 

measures into their practice’s work 

flows. Moreover, we expect that the 

time needed for an eligible professional 

to review the quality measures and 

other information, select measures 

applicable to his or her patients and the 

services he or she furnishes to them, 

and incorporate the use of quality data 

codes into the office work flows would 

vary along with the number of measures 

that are potentially applicable to a given 

professional’s practice. Since a majority 

of eligible professionals participate via 

claims or registry-based reporting of 

individual measures, they would 

generally be required to report on at 

least three measures to earn a Physician 

Quality Reporting System incentive. 

Therefore, we will assume that each 

eligible professional who attempts to 

submit Physician Quality Reporting 

System quality measures data via claims 

or registry reporting is attempting to 

earn a Physician Quality Reporting 

System incentive payment and reports 

on an average of three measures for this 

burden analysis. 

Due to the fact that we have seen 

significant increases in participation 

each year since the program’s inception, 

we anticipate even greater participation 

in the 2012 Physician Quality Reporting 

System than in previous years, 

including participation by eligible 

professionals who are participating in 

the Physician Quality Reporting System 

for the first time in 2012. As discussed 

previously, eligible professionals who 

are participating in the Physician 

Quality Reporting System for the first 

time in 2012 need to take preparatory 

steps to begin participating in the 

program. Since this burden analysis 

focuses on those new to the Physician 

Quality Reporting System, we will 

assign 5 hours as the amount of time 

needed for eligible professionals to 

review the 2012 Physician Quality 

Reporting System Measures List, review 

the various reporting options, select the 

most appropriate reporting option, 

identify the applicable measures or 

measures groups for which they can 

report the necessary information, review 

the measure specifications for the 

selected measures or measures groups, 

and incorporate reporting of the selected 

measures or measures groups into the 

office work flows. This estimate is based 

on our assumption that an eligible 

professional would need up to 2 hours 

to review the 2012 Physician Quality 

Reporting System Measures List, review 

the reporting options, and select a 

reporting option and measures on which 

to report and 3 hours to review the 

measure specifications for up to 3 

selected measures or up to 1 selected 

measures group and to develop a 

mechanism for incorporating reporting 

of the selected measures or measures 

group into the office work flows. 

Information from the Physician 

Voluntary Reporting Program (PVRP), 

which was a predecessor to the 

Physician Quality Reporting System, 

indicated an average labor cost of $50 

per hour for 2006. To account for salary 

increases over time, we will use an 

average practice labor cost of $60 per 

hour in our estimates based on an 

assumption of an average annual 

increase of approximately 3 percent. 

Thus, we estimate the cost for an 

eligible professional associated with 

preparing to report Physician Quality 

Reporting System quality measures 

would be approximately $300 per 

eligible professional ($60 per hour × 5 

hours). 

We continue to expect the ongoing 

costs associated with Physician Quality 

Reporting System participation to 

decline based on an eligible 

professional’s familiarity with and 

understanding of the Physician Quality 

Reporting System, experience with 

participating in the Physician Quality 

Reporting System, and increased efforts 

by CMS and stakeholders to disseminate 

useful educational resources and best 

practices. We also continue to expect 

the ongoing costs associated with 

Physician Quality Reporting System 

participation to decline as we align the 

participation requirements in the 

Physician Quality Reporting System 

with the reporting requirements in the 

Medicare and Medicaid Electronic 

Health Record (EHR) Incentive Program 

such that an eligible professional would 

only need to submit data to CMS one 

time for multiple purposes. 

We believe the burden associated 

with actually reporting the Physician 

Quality Reporting System quality 

measures would vary depending on the 

reporting mechanism selected by the 

eligible professional. For the proposed 

claims-based reporting option, eligible 

professionals would need to gather the 

required information, select the 

appropriate quality data codes (QDCs), 

and include the appropriate QDCs on 

the claims they submit for payment. The 

Physician Quality Reporting System 

would collect QDCs as additional 

(optional) line items on the existing 

HIPAA transaction 837–P and/or CMS 

Form 1500 (OCN: 0938–0999). We do 

not anticipate any new forms and or any 

modifications to the existing transaction 

or form. We also do not anticipate 

changes to the 837–P or CMS Form 1500 

for CY 2012. 

Based on our experience with the 

PVRP, we continue to estimate that the 

time needed to perform all the steps 

necessary to report each measure (that 

is, reporting the relevant quality data 

code(s) for a measure) on claims would 

ranges from 15 seconds (0.25 minutes) 

to over 12 minutes for complicated 

cases and/or measures, with the median 

time being 1.75 minutes. At an average 

labor cost of $60 per hour per practice, 

the cost associated with this burden 

would range from $0.25 in labor to 

about $12.00 in labor time for more 

complicated cases and/or measures, 

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with the cost for the median practice 

being $1.75. 

The total estimated annual burden for 

this requirement would also vary along 

with the volume of claims on which 

quality data is reported. In previous 

years, when we required reporting on 80 

percent of eligible cases for claimsbased reporting, we found that on 

average, the median number of reporting 

instances for each of the Physician 

Quality Reporting System measures was 

9. Since we proposed to reduce the 

required reporting rate by over one-third 

to 50 percent, then for purposes of this 

burden analysis we will assume that an 

eligible professional will need to report 

each selected measure for 6 reporting 

instances. The actual number of cases 

on which an eligible professional would 

be required to report quality measures 

data would vary, however, with the 

eligible professional’s patient 

population and the types of measures on 

which the eligible professional chooses 

to report (each measure’s specifications 

includes a required reporting 

frequency). 

Based on the assumptions discussed 

previously, we estimate the total annual 

reporting burden per individual eligible 

professional associated with claimsbased reporting would range from 4.5 

minutes (0.25 minutes per measure × 3 

measures × 6 cases per measure) to 180 

minutes (12 minutes per measure × 3 

measures × 6 cases per measure), with 

the burden to the median practice being 

31.5 minutes (1.75 minutes per measure 

× 3 measures × 6 cases). We estimate the 

total annual reporting cost per eligible 

professional associated with claimsbased reporting would range from $4.50 

($0.25 per measure × 3 measures × 6 

cases per measure) to $216.00 ($12.00 

per measure × 3 measures × 6 cases per 

measure), with the cost to the median 

practice being $31.50 per eligible 

professional ($1.75 per measure × 3 

measures × 6 cases per measure). 

For registry-based reporting, there 

would be no additional time burden for 

eligible professionals to report data to a 

registry as eligible professionals opting 

for registry-based reporting would more 

than likely already be reporting data to 

the registry for other purposes and the 

registry would merely be re-packaging 

the data for use in the Physician Quality 

Reporting System. Little, if any, 

additional data would need to be 

reported to the registry solely for 

purposes of participation in the 2012 

Physician Quality Reporting System. 

However, eligible professionals would 

need to authorize or instruct the registry 

to submit quality measures results and 

numerator and denominator data on 

quality measures to CMS on their 

behalf. We estimate that the time and 

effort associated with this would be 

approximately 5 minutes per eligible 

professional. 

We are proposing that registries 

interested in submitting quality 

measures results and numerator and 

denominator data on quality measures 

to CMS on their participants’ behalf in 

2012 would need to complete a selfnomination process in order to be 

considered ‘‘qualified’’ to submit on 

behalf of eligible professionals unless 

the registry was qualified to submit on 

behalf of eligible professionals for prior 

program years and did so successfully. 

We estimate that the proposed selfnomination process for qualifying 

additional registries to submit on behalf 

of eligible professionals for the 2012 

Physician Quality Reporting System 

would involve approximately 1 hour per 

registry to draft the letter of intent for 

self-nomination. We estimate that each 

self-nominated entity would also spend 

2 hours for the interview with CMS 

officials and 2 hours calculating 

numerators, denominators, and measure 

results for each measure the registry 

wishes to report using a CMS-provided 

measure flow. However, the time it 

takes to produce calculated numerators, 

denominators, and measure results 

using the CMS-provided measure flows 

could vary depending on the registry’s 

experience and the number and type of 

measures for which the registry wishes 

to submit on behalf of eligible 

professionals. Additionally, part of the 

proposed self-nomination process 

involves the completion of an XML 

submission by the registry, which we 

estimate to take approximately 5 hours, 

but may vary depending on the 

registry’s experience. We estimate that 

the registry staff involved in the registry 

self-nomination process would have an 

average labor cost of $50 per hour. 

Therefore, assuming the total burden 

hours per registry associated with the 

registry self-nomination process is 10 

hours, we estimate that the total cost to 

a registry associated with the registry 

self-nomination process would be 

approximately $500 ($50 per hour × 10 

hours per registry). 

The burden associated with the 

proposed registry-based reporting 

requirements of the Physician Quality 

Reporting System would be the time 

and effort associated with the registry 

calculating quality measures results 

from the data submitted to the registry 

by its participants and submitting the 

quality measures results and numerator 

and denominator data on quality 

measures to CMS on behalf of their 

participants. We expect that the time 

needed for a registry to review the 

quality measures and other information, 

calculate the measures results, and 

submit the measures results and 

numerator and denominator data on the 

quality measures on their participants’ 

behalf is would vary along with the 

number of eligible professionals 

reporting data to the registry and the 

number of applicable measures. 

However, we believe that registries 

already perform many of these activities 

for their participants. Therefore, there 

may not necessarily be a burden on a 

particular registry associated with 

calculating the measure results and 

submitting the measures results and 

numerator and denominator data on the 

quality measures to CMS on behalf of 

their participants. Whether there is any 

additional burden to the registry as a 

result of the registry’s participation in 

the Physician Quality Reporting System 

would depend on the number of 

measures that the registry intends to 

report to CMS and how similar the 

registry’s measures are to CMS’ 

proposed Physician Quality Reporting 

System measures. 

For EHR-Based reporting we have 

proposed for the CY 2012 Physician 

Quality Reporting System, the 

individual eligible professional could 

either submit the quality measures data 

directly to CMS from their EHR or 

utilize an EHR data submission vendor 

to submit the data to CMS on the 

eligible professionals’ behalf. To submit 

data to CMS must directly from their 

EHR, the eligible professional would 

have to have access to a CMS-specified 

identity management system, such as 

IACS, which we believe takes less than 

1 hour to obtain. Once an eligible 

professional has an account for this 

CMS-specified identity management 

system, he or she would need to extract 

the necessary clinical data from his or 

her EHR, and submit the necessary data 

to the CMS-designated clinical data 

warehouse. With respect to our 

proposed requirement for an eligible 

professional to submit a test file, we 

believe that doing so would take less 

than 1 hour. With respect to submitting 

the actual 2012 data file in 2013, we 

believe that this would take an eligible 

professional no more than 2 hours, 

depending on the number of patients on 

which the eligible professional is 

submitting. We believe that once the 

EHR is programmed by the vendor to 

allow data submission to CMS, the 

burden to the eligible professional 

associated with submission of data on 

Physician Quality Reporting System 

quality measures should be minimal as 

all of the information required to report 

the measure should already reside in the 

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eligible professional’s EHR. We did not 

introduce the EHR-Based reporting 

mechanism into the Physician Quality 

Reporting System until 2010. We are 

still in the process of analyzing 2010 

data. As such, we believe it is difficult 

to predict how many eligible 

professionals may choose to participate 

in the 2012 Physician Quality Reporting 

System via the EHR-Based reporting 

mechanism. 

We are proposing that an EHR vendor 

interested in having their product(s) be 

used by eligible professionals to submit 

the proposed Physician Quality 

Reporting System quality measures data 

to CMS or interested in submitting data 

obtained from an EHR to CMS on behalf 

of eligible professionals would be 

required to complete a self-nomination 

process in order for the vendor and/or 

its product(s) to be considered 

‘‘qualified’’ for 2012. It is difficult to 

definitively quantify the burden 

associated with the proposed EHR selfnomination process as there is variation 

regarding the technical capabilities and 

experience among vendors. For 

purposes of this burden analysis, 

however, we estimate that the time 

required for an EHR vendor to complete 

the self-nomination process would be 

similar to the time required for registries 

to self-nominate, which is 

approximately 10 hours at $50 per hour 

for a total of $500 per EHR vendor ($50 

per hour × 10 hours per EHR vendor). 

The burden associated with the EHR 

vendor programming its EHR product(s) 

to extract the clinical data that the 

eligible professional would need to 

submit to CMS for purposes of reporting 

2012 Physician Quality Reporting 

System quality measures would be 

dependent on the EHR vendor’s 

familiarity with the Physician Quality 

Reporting System, the vendor’s system 

capabilities, as well as the vendor’s 

programming capabilities. Some 

vendors already have these necessary 

capabilities and for such vendors, we 

estimate that the total burden hours 

would be 40 hours at a rate of $50 per 

hour for a total burden estimate of 

$2,000 ($50 per hour × 40 hours per 

vendor). However, given the variability 

in the capabilities of the vendors, we 

believe those vendors with minimal 

experience would have a burden of 

approximately 200 hours at $50 per 

hour, for a total estimate of $10,000 per 

vendor ($50 per hour × 200 hours per 

EHR vendor). 

With respect to the proposed criteria 

for satisfactorily reporting data on the 

proposed quality measures for group 

practices to be treated as satisfactorily 

submitting quality measures data under 

the 2012 Physician Quality Reporting 

System discussed in section IV.F.1. of 

this proposed rule, group practices 

interested in participating in the 2012 

Physician Quality Reporting System 

through the proposed group practice 

reporting option (GPRO) would need to 

complete a proposed self-nomination 

process similar to the proposed selfnomination process required of 

registries and EHR vendors. Therefore, 

assuming it takes 2 hours for a group 

practice to decide whether to participate 

as a group or individually, 

approximately 2 hours per group 

practice to draft the letter of intent for 

self-nomination, gather the requested 

information, and provide this requested 

information, and an additional 2 hours 

undergoing the vetting process with 

CMS officials, we estimate a total of 6 

hours associated with the proposed selfnomination process. Assuming that the 

group practice staff involved in the 

group practice proposed selfnomination process have the same 

average practice labor cost as the 

average practice labor cost estimates we 

used for individual eligible 

professionals of $60 per hour, we 

estimate that the total cost to a group 

practice associated with the group 

practice self-nomination process would 

be approximately $360 ($60 per hour x 

6 hours per group practice). 

The burden associated with the 

proposed group practice reporting 

requirements of the 2012 Physician 

Quality Reporting System is the time 

and effort associated with the group 

practice submitting the proposed quality 

measures data. For practices 

participating under the proposed GPRO 

process, this would be the time 

associated with the physician group 

completing the data collection tool. The 

information collection components of 

this data collection tool have been 

reviewed by OMB and are currently 

approved under OMB control number 

0938–0941, with an expiration date of 

December 31, 2011, for use in the 

Physician Group Practice, Medicare 

Care Management Performance (MCMP), 

and EHR demonstrations. Based on 

burden estimates for the PGP 

demonstration, which uses the same 

data submission methods, we estimate 

the burden associated with a physician 

group completing the data collection 

tool would be approximately 79 hours 

per physician group. Based on an 

average labor cost of $60 per physician 

group, we estimate the cost of data 

submission per physician group 

associated with participating in the 

proposed 2012 Physician Quality 

Reporting System GPRO would be 

$4,740 ($60 per hour × 79 hours per 

group practice). 

Eligible professionals who wish to 

qualify for the additional 0.5 percent 

incentive payment authorized under 

section 1848(m)(7) of the Act 

(‘‘Additional Incentive Payments’’) for 

2012 would need to more frequently 

than is required to qualify for or 

maintain board certification status 

participate in a qualified Maintenance 

of Certification Program for 2012 and 

successfully complete a qualified 

Maintenance of Certification Program 

practice assessment for 2012. We 

believe that a majority of the eligible 

professionals who would attempt to 

qualify for this additional 0.5 percent 

incentive payment would be those who 

are already enrolled and participating in 

a Maintenance of Certification Board. 

The amount of time that it would take 

for the eligible professional to 

participate in the Maintenance of 

Certification Program more frequently 

than is required to qualify for or 

maintain board certification status 

would vary based on what each 

individual board determines constitutes 

‘‘more frequently.’’ We expect that the 

amount of time needed to complete a 

qualified Maintenance of Certification 

Program practice assessment would be 

spread out over time since a quality 

improvement component is often 

required. Information from an informal 

poll of a few ABMS member boards 

indicates that the time an individual 

eligible professional spends to complete 

the practice assessment component of 

the Maintenance of Certification ranges 

from 8 to 12 hours. 

We are seeking comments on this 

burden analysis, including the 

underlying assumptions used in 

developing our burden estimates. 

C. Electronic Prescribing (eRx) Incentive 

Program 

The eRx Incentive Program is a 

voluntary reporting program. In 2009, 

approximately 670,000 eligible 

professionals were eligible to participate 

in the eRx Incentive Program. 

Approximately 90,000 (or about 14 

percent) of eligible professionals 

participated in the eRx Incentive 

Program in 2009. For purposes of 

participation in the eRx Incentive 

Program to earn an incentive payment, 

we expect that the number of eligible 

professionals participating in the eRx 

Incentive Program to be approximately 

90,000, based on participation rates 

from the 2009 eRx Incentive Program. 

Due to the implementation of the 

2013 and 2014 payment adjustments as 

well as the proposals to expand the 

reporting mechanisms for purposes of 

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reporting the electronic prescribing 

measure for the 2013 and 2014 payment 

adjustments, we expect that there will 

be an increase in eligible professionals 

who participate in the eRx Incentive 

Program for CYs 2012 through 2014. 

Therefore, for purposes of conducting a 

burden analysis for the 2012 through 

2014 eRx Incentive Program, we will 

assume that approximately 90,000 

professionals eligible to participate in 

the 2009 eRx Incentive Program will 

participate. This is based on 

participation rates from the 2009 eRx 

Incentive Program, which is the highest 

participation level for the eRx Incentive 

Program we have yet recorded. As such, 

we can estimate that more than 90,000 

unique TIN/NPI combinations will 

participate in the 2012, 2013, and 2014 

eRx Incentive Program for purposes of 

the 2013 and 2014 payment adjustment 

(see the ‘‘2009 Reporting Experience,’’ 

which is available on the Physician 

Quality Reporting System section of the 

CMS Web site at http:// 

www.cms.hhs.gov/pqrs). Although this 

estimate only accounts for 

approximately 13 percent of all 

professionals eligible to participate in 

the eRx Incentive Program, we believe 

that participation may be offset by the 

limitations and significant hardship 

exemptions we have proposed for the 

2013 and 2014 payment adjustment. 

Section IV.F.2. of this proposed rule 

discusses the background of the eRx 

Incentive Program. For the proposed 

programs for 2012 through 2014, eligible 

professionals and group practices may 

choose whether to participate and, to 

the extent they meet—(1) Certain 

proposed thresholds with respect to the 

volume of covered professional services 

furnished; and (2) the proposed criteria 

for being a successful electronic 

prescriber described in section 

IV.F.2.b.(2). of this proposed rule, they 

would qualify to receive an incentive 

payment for 2012 and 2013 and/or 

avoid being subject to the 2013 and 

2014 payment adjustment. 

In section IV.F.2.b.(2). of this 

proposed rule, we propose the 

requirements for eligible professionals 

and group practices can qualify for 

being a successful electronic prescriber 

in order to earn a 2012 and/or 2013 

incentive payment. For the 2012 and 

2013 incentives, as discussed in section 

IV.F.2. of this proposed rule, each 

eligible professional would need to 

report the electronic prescribing 

measure’s numerator indicating that at 

least one prescription generated during 

an encounter was electronically 

submitted at least 25 instances during 

the reporting period in association with 

a denominator-eligible visit. 

In section IV.F.2.b.(2). of this 

proposed rule, we propose additional 

requirements for eligible professionals 

and group practices can meet for the 

2013 payment adjustment, as well as 

propose requirements for being a 

successful electronic prescriber for the 

2014 payment adjustment. For the 2013 

and 2014 payment adjustment, we 

propose that each eligible professional 

would need to report the electronic 

prescribing measure’s numerator at least 

10 instances during the reporting 

period. 

We expect the ongoing costs 

associated with participation in the eRx 

Incentive Program to decline based on 

an eligible professional’s understanding 

of the eRx Incentive Program, 

experience with participating in the eRx 

Incentive Program, and increased efforts 

by CMS and stakeholders to disseminate 

useful educational resources and best 

practices. 

Similar to the Physician Quality 

Reporting System, one factor in the 

burden to individual eligible 

professionals is the time and effort 

associated with individual eligible 

professionals reviewing the electronic 

prescribing measure to determine 

whether it is applicable to them, 

reviewing and selecting one of the 

available proposed reporting options 

(for purposes of the 2012 and 2013 

incentives and the 2013 and 2014 

payment adjustments, this measure 

would be reportable through claimsbased reporting, registry-based 

reporting, or through EHRs) and 

selecting one, gathering the required 

information, and incorporating 

reporting of the measure into their office 

work flows. Since the eRx Incentive 

Program consists of only 1 measure to 

report, we estimate 2 hours as the 

amount of time that would be needed 

for individual eligible professionals to 

prepare for participation in the eRx 

Incentive Program. At an average cost of 

approximately $60 per hour per 

practice, we estimate the total 

preparation costs to individual eligible 

professionals would be approximately 

$120 (2 hours × $60 per hour). 

Another factor that we believe 

influences the burden to eligible 

professionals is how they choose to 

report the electronic prescribing 

measure. For eligible professionals who 

choose to do so via claims, we estimate 

that the burden associated with the 

requirements of this incentive program 

would be the time and effort associated 

with gathering the required information 

and identifying when it is appropriate to 

include the measure’s quality data code 

(QDC) on the claims they submit for 

payment. For claims-based reporting, 

the measure’s QDC would be collected 

as additional (optional) line items on 

the existing HIPAA transaction 837–P 

and/or CMS Form 1500. We do not 

anticipate any new forms and or 

modifications to the existing transaction 

or form. We also do not anticipate 

changes to the 837–P or CMS Form 1500 

for CY 2012. 

Based on the information from the 

PVRP for the amount of time it takes a 

median practice to report one measure 

one time on claims (1.75 minutes) and 

our proposed requirement that eligible 

professionals report the measure 25 

times for purposes of the incentive 

payment, we estimate the burden 

associated with claims-based data 

submission to would be 43.75 minutes 

(1.75 minutes per case × 1 measure × 25 

cases per measure). This equates to a 

cost of approximately $43.75 (1.75 

minutes per case × 1 measure × 25 cases 

per measure × $60 per hour) per 

individual eligible professional. For 

purposes of the 2013 and 2014 eRx 

payment adjustment, where we propose 

that an eligible professional is required 

to report the measure only 10 times, we 

estimate the burden associated with 

claims-based submission would be 17.5 

minutes (1.75 minutes per case × 1 

measure × 10 cases per measure). This 

equates to a cost of approximately 

$17.50 (1.75 minutes per case × 1 

measure × 10 cases per measure × $60 

per hour) per individual eligible 

professional. 

Because registry-based reporting of 

the electronic prescribing measure to 

CMS was added to the eRx Incentive 

Program for 2010 and eligible 

professionals are not required to 

indicate to us how they plan to report 

the electronic prescribing measure each 

year, it is difficult to accurately estimate 

how many eligible professionals would 

opt to participate in the eRx Incentive 

Program through the proposed registrybased reporting mechanism in CYs 2012 

through 2014. We do not anticipate, 

however, any additional burden for 

eligible professionals to report data to a 

registry as eligible professionals opting 

for registry-based reporting would more 

than likely already be reporting data to 

the registry for other purposes. Little, if 

any, additional data would need to be 

reported to the registry for purposes of 

participation in the 2012, 2013, and 

2014 eRx Incentive Program since the 

only information that the registry would 

need to report to us is the number of 

times the eligible professional 

electronically prescribed. However, 

eligible professionals would need to 

authorize or instruct the registry to 

submit quality measures results and 

numerator and denominator data on the 

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42926 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

electronic prescribing measure to CMS 

on their behalf. We estimate that the 

time and effort associated with this 

would be approximately 5 minutes for 

each eligible professional that wishes to 

authorize or instruct the registry to 

submit quality measures results and 

numerator and denominator data on the 

electronic prescribing measure to CMS 

on their behalf. 

Based on our proposal to consider 

only registries qualified to submit 

Physician Quality Reporting System 

quality measures results and numerator 

and denominator data on quality 

measures to CMS on their participants’ 

behalf for the 2012 and 2013 Physician 

Quality Reporting System reporting 

periods to be qualified to submit results 

and numerator and denominator data on 

the electronic prescribing measure for 

the respective eRx Incentive Program 

reporting periods that occur in 2012 and 

2013, there would be no need for a 

registry to undergo a separate selfnomination process for the eRx 

Incentive Program and therefore, no 

additional burden associated with the 

registry self-nomination process. 

There would also be a burden to the 

registry associated with the registry 

calculating results for the electronic 

prescribing measure from the data 

submitted to the registry by its 

participants and submitting the quality 

measures results and numerator and 

denominator data on the electronic 

prescribing quality measure to CMS on 

behalf of their participants. We expect 

that the time needed for a registry to 

review the electronic prescribing 

measure’s specifications, calculate the 

measure’s results, and submit the 

measure’s results and numerator and 

denominator data on their participants’ 

behalf would vary along with the 

number of eligible professionals 

reporting data to the registry. However, 

we believe that registries already 

perform many of these activities for 

their participants. Since the eRx 

Incentive Program consists of only one 

measure, we believe that the burden 

associated with the registry reporting 

the measure’s results and numerator and 

denominator to CMS on behalf of their 

participants would be minimal. 

For the proposed EHR-Based 

reporting mechanism, the eligible 

professional would need to either 

extract the necessary clinical data from 

his or her EHR and submit the necessary 

data to the CMS-designated clinical data 

warehouse or have an EHR data 

submission vendor extract the necessary 

clinical data from his or her EHR and 

submit the necessary data to CMS on the 

professional’s behalf. Because this 

manner of reporting quality data to CMS 

was first added to the eRx Incentive 

Program in 2010 and eligible 

professionals are not currently required 

to (and we are not proposing to require 

that they) indicate to us how they 

intend to report the electronic 

prescribing measure, it is difficult to 

estimate how many eligible 

professionals would opt to participate in 

the eRx Incentive Program through the 

proposed EHR-Based reporting 

mechanism for reporting periods that 

occur in CYs 2012 and 2013. We believe 

that once an eligible professional’s EHR 

is programmed by the vendor to allow 

data submission to CMS, the burden to 

the eligible professional associated with 

submission of data on the electronic 

prescribing measure should be minimal. 

The eligible professional who chooses to 

submit the electronic prescribing 

measure data directly to CMS from his 

or her EHR would have to have access 

to a CMS-specified identity management 

system, such as IACS, though. We 

believe it takes less than 1 hour to 

obtain access to the identity 

management system. 

Since we are proposing that only EHR 

products and data submission vendors 

qualified for 2012 and 2013 Physician 

Quality Reporting System reporting 

periods could be used to submit data on 

the electronic prescribing measure for 

the respective eRx Incentive Program 

reporting periods that occur in CYs 2012 

and 2013, there would be no need for 

EHR vendors and/or their products to 

undergo a separate self-nomination 

process for the eRx Incentive Program 

and therefore, no additional burden 

associated with the self-nomination 

process for the eRx Incentive Program. 

There would also be a burden to the 

EHR vendor associated with the EHR 

vendor programming its EHR product(s) 

to extract the clinical data that the 

eligible professional and/or vendor 

would need to submit to CMS for 

purposes of reporting the proposed 

electronic prescribing measure. The 

time needed for an EHR vendor to 

review the measure’s specifications and 

program its product to submit data on 

the measure to the CMS-designated 

clinical data warehouse would be 

dependent on the EHR vendor’s 

familiarity with the electronic 

prescribing measure, the vendor’s 

system capabilities, as well as the 

vendor’s programming capabilities. 

Since we are proposing that only EHR 

products qualified for 2012 and 

2013Physician Quality Reporting 

System reporting periods would qualify 

for the respective eRx Incentive Program 

reporting periods that occur in CY 2012 

or 2013, and the eRx Incentive Program 

consists of only one measure, we believe 

that any burden associated with the 

EHR vendor to program its product(s) to 

submit data on the electronic 

prescribing measure to the CMSdesignated clinical data warehouse 

would be minimal. 

Finally, with respect to the proposed 

criteria for group practices to be treated 

as successful electronic prescribers for 

the 2012 and 2013 incentive, as well as 

with regard to the 2013 and 2014 

payment adjustments, as discussed in 

section IV.F.2. of this proposed rule, 

respectively, group practices would 

have the same options as individual 

eligible professionals in terms of the 

form and manner for reporting the 

electronic prescribing measure (that is, 

group practices would have the option 

of reporting the measure through claims, 

a qualified registry, or a qualified EHR 

product). There are only 2 differences 

between the proposed requirements for 

an individual eligible professional and a 

group practice: (1) The fact that a group 

practice would have to self-nominate; 

and (2) a difference in the number of 

times that a group practice would be 

required to report the electronic 

prescribing measure. 

We do not anticipate any additional 

burden associated with the proposed 

group practice self-nomination process 

since we propose to limit the group 

practices to those selected to participate 

in the Physician Quality Reporting 

System GPRO. We are proposing that 

the practice only would need to indicate 

its desire to participate in the proposed 

eRx GPRO at the same time it selfnominates for the Physician Quality 

Reporting System GPRO and indicate 

how it intends to report the electronic 

prescribing measure. 

In terms of the burden to group 

practices comprised of 25 to 99 eligible 

professionals associated with 

submission of the electronic prescribing 

measure, we believe that this would be 

similar to the burden to individual 

eligible professionals for submitting the 

electronic prescribing measure. In fact, 

overall, there could be less burden 

associated with a practice participating 

as a group rather than as individual 

eligible professionals because the total 

number of proposed reporting instances 

required by the group could be less than 

the total number of proposed reporting 

instances that would be required if each 

member of the group separately reported 

the electronic prescribing measure. 

Thus, we believe that the burden to a 

group practice associated with reporting 

the electronic prescribing measure 

could range from almost no burden (for 

groups who choose to do so through a 

qualified EHR or registry) to 18.22 hours 

(1.75 minutes per measure × 1 measure 

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× 625 cases per measure) for a group 

practice that chooses to report the 

electronic prescribing measures through 

the proposed claims submission 

process. Consequently, the total 

estimated cost per group practice to 

report the electronic prescribing 

measure could be as high as $1,093 

($1.75 per measure × 1 measure × 625 

cases per measure). 

In terms of the burden to group 

practices comprised of 100 or more 

eligible professionals associated with 

submission of the electronic prescribing 

measure, we believe that this would be 

similar to the burden to individual 

eligible professionals for submitting the 

electronic prescribing measure. In fact, 

overall, there could be less burden 

associated with a practice participating 

as a group rather than as individual 

eligible professionals because the total 

number of proposed reporting instances 

required by the group could be less than 

the total number of proposed reporting 

instances that would be required if each 

member of the group separately reported 

the electronic prescribing measure. 

Thus, we believe that the burden to a 

group practice associated with reporting 

the electronic prescribing measure 

could range from almost no burden (for 

groups who choose to do so through a 

qualified EHR or registry) to 72.92 hours 

(1.75 minutes per measure × 1 measure 

× 2,500 cases per measure) for a group 

practice that chooses to report the 

electronic prescribing measures through 

the proposed claims submission 

process. Consequently, the total 

estimated cost per group practice to 

report the electronic prescribing 

measure could be as high as $4,375 

($1.75 per measure × 1 measure × 2,500 

cases per measure). 

As with individual eligible 

professionals, we believe that group 

practices that choose to participate in 

the eRx GPRO through the proposed 

registry-based reporting mechanism of 

the electronic prescribing measure 

would more than likely already be 

reporting data to the registry. Little, if 

any, additional data would need to be 

reported to the registry for purposes of 

participation in the eRx Incentive 

Program for CYs 2012 through 2014 

beyond authorizing or instructing the 

registry to submit quality measures 

results and numerator and denominator 

data on the electronic prescribing 

measure to CMS on their behalf. We 

estimate that the time and effort 

associated with this proposed registry 

option would be approximately 

5 minutes for each group practice that 

wishes to authorize or instruct the 

registry to submit quality measures 

results and numerator and denominator 

data on the electronic prescribing 

measure to CMS on their behalf. 

For group practices that choose to 

participate in the eRx Incentive Program 

for CYs 2012 through 2014 via the 

proposed EHR-Based reporting of the 

electronic prescribing mechanism, once 

the EHR is programmed by the vendor 

to allow data submission to CMS, the 

burden to the group practice associated 

with submission of data on the 

electronic prescribing measure should 

be minimal. 

We invite comments on this burden 

analysis, including the underlying 

assumptions used in developing our 

burden estimates. 

D. Medicare Electronic Health Record 

(EHR) Incentive Program for Eligible 

Professionals for the 2012 Payment Year 

The EHR Incentive Program 

(discussed in section IV.H. of this 

proposed rule) is a voluntary program 

whereby eligible professionals (EPs) 

may earn an incentive payment for 

demonstrating meaningful use of 

certified EHR technology, which 

includes among other requirements, the 

submission of clinical quality measures 

(CQMs). The ‘‘Electronic Health Record 

Incentive Program’’ final rule (75 FR 

44314 through 75 FR 44588) describes 

the CQMs and the CQM reporting 

mechanisms that will be available to 

EPs who choose to participate in the 

EHR Incentive Program (75 FR 44380) 

and established the criteria for 

achieving meaningful use in Stage 1, 

which includes CY 2012. In the final 

rule, for CY 2012, we estimated that 

approximately 385,954 Medicare EPs 

will be eligible to receive an incentive 

under the EHR Incentive Program (75 

FR 44518). Section IV.H.2. of this 

proposed rule proposes changes to the 

EHR Incentive Program for EPs for the 

2012 payment year. Aside from 

continuing the attestation method of 

reporting CQMs, we propose to allow 

the reporting of CQMs for purposes of 

demonstrating meaningful use through 

participation in the Physician Quality 

Reporting System—Medicare EHR 

Incentive Pilot. Eligible professionals 

may participate in the Pilot by 

submitting CQMs via (1) a Physician 

Quality Reporting System ‘‘qualified’’ 

EHR data submission vendor or (2) an 

EHR-Based reporting option using the 

EP’s certified EHR technology, which 

must also be a Physician Quality 

Reporting System ‘‘qualified’’ EHR. 

Because this is a voluntary program, 

EPs may choose whether to participate 

in the EHR Incentive Program and attest 

that they have met the meaningful use 

objectives and measures. Registration 

for the EHR Incentive Program opened 

in January 2011. At this time, we do not 

have sufficient data available on 

participation in the EHR Incentive 

Program by EPs to revise the final rule’s 

estimate of how many EPs will opt to 

participate in the EHR Incentive 

Program for payment year 2012. 

We believe the burden associated 

with actually reporting CQMs will vary 

depending on the reporting mechanism 

selected by the EP. Attestation to the 

objectives and measures is the only 

method available for EPs to demonstrate 

that they have met the meaningful use 

criteria in 2011. Attestation was first 

available on April 18, 2011 and we do 

not yet have sufficient data on the 2011 

participation in the EHR Incentive 

Program. Therefore, it is difficult to 

estimate the level of participation in the 

proposed Pilot versus the number of EPs 

that would prefer to attest to the CQMs. 

However, we believe that the number of 

EPs who choose to participate via 

attestation will largely be those who are 

not participating in both the EHR 

Incentive Program and Physician 

Quality Reporting System. This is 

because EPs participating in the 

Physician Quality Reporting System 

would be more likely to participate in 

the Pilot. 

As we estimated in the EHR Incentive 

Program final rule, we estimate that it 

would take 8 hours and 52 minutes for 

an EP to attest that during the EHR 

reporting period, the EP used certified 

EHR technology, specify the technology, 

and satisfied all Stage 1 meaningful use 

core criteria for payment year 2012 (75 

FR 44518). We estimate that it will 

further take an additional 0.5 hours to 

select and attest to the clinical quality 

measures, in the format and manner 

specified by CMS (75 FR 44517). 

For reporting via a qualified EHR data 

submission vendor, there would be no 

additional time burden for eligible 

professionals to report CQM data to a 

‘‘qualified’’ EHR data submission 

vendor as EPs opting for this option 

would more than likely already be 

reporting data to the EHR data 

submission vendor for other purposes, 

such as the Physician Quality Reporting 

System, and the EHR data submission 

vendor would merely be re-packaging 

the data for use in the EHR Incentive 

Program. Furthermore, EPs more than 

likely would not need to authorize or 

instruct the EHR data submission 

vendor to submit CQM data to CMS on 

their behalf because this likely will have 

already been done as a requirement for 

reporting via an EHR data submission 

vendor under the Physician Quality 

Reporting System. 

Qualified EHR data submission 

vendors interested in submitting CQM 

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data to CMS on their participants’ behalf 

will not need to complete a selfnomination process in order to be 

considered ‘‘qualified’’ to submit on 

behalf of EPs as this process would have 

already been performed for the 

Physician Quality Reporting System. 

Therefore, we believe that there is no 

additional burden aside from the burden 

associated with being a Physician 

Qualified Reporting System qualified 

EHR data submission vendor for such 

vendors to submit CQMs on behalf of 

EPs. 

For EPs who choose to participate in 

the pilot via direct data submission to 

CMS from the EP’s certified her 

technology, an EP must have access to 

a CMS-specified identity management 

system, such as IACS, to participate in 

the Physician Quality Reporting System 

or eRx Incentive Program. We believe 

that EPs that choose the EHR-Based 

reporting pilot to report CQMs will do 

so only if they are participating in the 

Physician Quality Reporting System. As 

such, we believe there will be no 

additional burden on EPs to have access 

to a CMS-specified identity management 

system if the EP is already participating 

in the Physician Quality Reporting 

System. With respect to submitting the 

actual 2012 data file in 2013, we believe 

that this would take an EP no more than 

2 hours, depending on the number of 

patients on which the EP is submitting. 

We believe that once the EHR is 

programmed by the vendor to allow data 

submission to CMS and the EP 

participates in the Physician Quality 

Reporting System, the additional burden 

to the EP associated with electronic 

submission of the CQMs should be 

minimal. Since this is a new, proposed 

reporting mechanism for the EHR 

Incentive Program 2012 payment year, it 

is difficult to predict the level of 

participation in EHR-Based reporting. 

However, we believe that the number of 

EPs who choose to participate in the 

EHR-Based reporting pilot will be the 

same as the number of eligible 

professionals who choose the EHRBased reporting mechanism for the 

Physician Quality Reporting System. 

This is primarily because in addition to 

being certified EHR technology, the 

technology used under this reporting 

option would need to be ‘‘qualified’’ 

according to the Physician Quality 

Reporting System qualification process. 

The burden associated with the EHR 

vendor programming its EHR product(s) 

to extract the clinical data that the EP 

or vendor needs to submit to CMS for 

purposes of reporting CQMs will be 

dependent on the EHR vendor’s 

familiarity with the EHR Incentive 

Program, the vendor’s system 

capabilities, as well as the vendor’s 

programming capabilities. As we 

already propose to require ‘‘qualified’’ 

EHRs vendors to perform these 

functions under the Physician Quality 

Reporting System, the burden for 

submitting CQMs under the EHR 

Incentive Program will be similar to the 

EHR vendor reporting burden under the 

Physician Quality Reporting System. 

For vendors who already have these 

necessary capabilities, we estimate the 

total burden hours to be 40 hours at a 

rate of $50 per hour for a total burden 

estimate of $2,000 ($50 per hour × 40 

hours per vendor). However, given the 

variability in the capabilities of the 

vendors, those vendors with minimal 

experience would have a burden of 

approximately 200 hours at $50 per 

hour, for a total estimate of $10,000 per 

vendor ($50 per hour × 200 hours per 

EHR vendor). 

We invite comments on this burden 

analysis, including the underlying 

assumptions used in developing our 

burden estimates. 

To obtain copies of the supporting 

statement and any related forms for the 

proposed paperwork collections 

referenced above, access CMS’ Web site 

at http://www.cms.gov/ 

PaperworkReductionActof1995/PRAL/ 

list.asp#TopOfPage or e-mail your 

request, including your address, phone 

number, OMB number, and CMS 

document identifier, to 

Paperwork@cms.hhs.gov, or call the 

Reports Clearance Office at (410) 786– 

1326. 

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–1524–P], Fax: (202) 395–5806; or 

E-mail: OIRA_submission@omb.eop.gov. 

VI. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

VII. Regulatory Impact Analysis 

A. Statement of Need 

This proposed rule is necessary in 

order to make payment and policy 

changes under the Medicare PFS and to 

make required statutory changes under 

the Affordable Care Act and MIPPA and 

other statutory changes. This proposed 

rule is also necessary to make changes 

to the Part B drug payment policy and 

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 (January 18, 

2011), 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). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This rule 

has been designated an ‘‘economically’’ 

significant rule, under section 3(f)(1) of 

Executive Order 12866. Accordingly, 

the rule has been reviewed by the Office 

of Management and Budget. We have 

prepared a Regulatory Impact Analysis, 

that to the best of our ability presents 

the costs and benefits of the proposed 

rule. We solicit comment on the 

Regulatory Impact Analysis provided. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities, if a rule has a significant impact 

on a substantial number 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 $7.0 million to $34.5 million in any 

1 year (for details see the SBA’s Web 

site at http://www.sba.gov/content/ 

table-small-business-size-standards 

(refer to the 620000 series)). Individuals 

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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. A Regulatory Flexibility Act 

analysis must include a justification 

concerning the reason action is being 

taken, the kinds and number of small 

entities the rule affects, and an 

explanation of any meaningful options 

that achieve the objectives with less 

significant adverse economic impact on 

the small entities. 

For purposes of the RFA, physicians, 

NPPs, and suppliers including IDTFs 

are considered small businesses if they 

generate revenues of $10 million or less 

based on SBA size standards. 

Approximately 95 percent of physicians 

are considered to be small entities. 

There are over 1 million physicians, 

other practitioners, and medical 

suppliers that receive Medicare 

payment under the PFS. 

Because we acknowledge that many of 

the affected entities are small entities, 

the analysis provided here and 

throughout the preamble of this 

proposed rule constitutes our Initial 

Regulatory Flexibility Act (IRFA) 

analysis for the remaining provisions. 

This includes alternatives considered 

for the various proposed policies in this 

rule. We solicit public comment on the 

IRFA analysis provided. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 603 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Metropolitan Statistical Area 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 before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2011, that threshold is approximately 

$136 million. 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 

implementing a variety of changes to 

our regulations, payments, or payment 

policies to ensure that our payment 

systems reflect changes in medical 

practice and the relative value of 

services. We provide information for 

each of the policy changes in the 

relevant sections of this proposed rule. 

We are unaware of any relevant Federal 

rules that duplicate, overlap, or conflict 

with this proposed rule. The relevant 

sections of this proposed rule contain a 

description of significant alternatives if 

applicable. 

C. 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 2011 with 

proposed payment rates for CY 2012 

using CY 2010 Medicare utilization for 

all years. To the extent that there are 

year-to-year changes in the volume and 

mix of services provided by physicians, 

the actual impact on total Medicare 

revenues will be different than those 

shown in Table 64. The payment 

impacts reflect averages for each 

specialty based on Medicare utilization. 

The payment impact for an individual 

physician would be different from the 

average, based on the mix of services the 

physician furnishes. The average change 

in total revenues would be less than the 

impact displayed here because 

physicians furnish services to both 

Medicare and non-Medicare patients 

and specialties may receive substantial 

Medicare revenues for services that are 

not paid under the PFS. For instance, 

independent laboratories receive 

approximately 85 percent of their 

Medicare revenues from clinical 

laboratory services that are not paid 

under the PFS. 

Table 64 shows only the payment 

impact on PFS services. We note that 

these impacts do not include the effect 

of the January 2012 conversion factor 

changes under current law. The annual 

update to the PFS conversion factor is 

calculated based on a statutory formula 

that measures actual versus allowed or 

‘‘target’’ expenditures, and applies a 

sustainable growth rate (SGR) 

calculation intended to control growth 

in aggregate Medicare expenditures for 

physicians’ services. This update 

methodology is typically referred to as 

the ‘‘SGR’’ methodology, although the 

SGR is only one component of the 

formula. Medicare physician fee 

schedule 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. We currently estimate that 

the statutory formula used to determine 

the physician update will result in a CY 

2012 conversion factor of $23.9635 

which represents a PFS update of ¥29.5 

percent. By law, we are required to 

make these reductions in accordance 

with section 1848(d) and (f) of the Act, 

and these reductions can only be 

averted by an Act of the Congress. While 

the Congress has provided temporary 

relief from these reductions for every 

year since 2003, a long-term solution is 

critical. We are committed to working 

with the Congress to permanently 

reform the SGR methodology for 

Medicare physician fee schedule 

updates. 

The following is an explanation of the 

information represented in Table 64: 

• 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 

2010 utilization and CY 2011 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 2012 

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impact on total allowed charges of the 

changes in the work and malpractice 

RVUs, including the impact of changes 

due to potentially misvalued codes. 

These impacts are primarily due to the 

multiple procedure payment reduction 

(MPPR) for the professional component 

of advanced imaging services. 

• Column D (Impact of PE RVU 

Changes—Full): This column shows the 

estimated CY 2012 impact on total 

allowed charges of the changes in the PE 

RVUs if there were no remaining 

transition to the full use of the PPIS 

data. 

• Column E (Impact of PE RVU 

Changes—Tran): This column shows 

the estimated CY 2012 impact on total 

allowed charges of the changes in the PE 

RVUs under the third year of the 4-year 

transition to the full use of the PPIS 

data. This column also includes the 

impact of the MPPR policy and, and the 

impact of changes due to potentially 

misvalued codes. 

• Column F (Combined Impact— 

Full): This column shows the estimated 

CY 2012 combined impact on total 

allowed charges of all the changes in the 

previous columns if there were no 

remaining transition to the new PE 

RVUs using the PPIS data. 

• Column G (Combined Impact— 

Tran): This column shows the estimated 

CY 2012 combined impact on total 

allowed charges of all the changes in the 

previous columns under the third year 

of the 4-year transition to the new PE 

RVUs using the PPIS data. 

TABLE 64—CY 2012 PFS PROPOSED RULE TOTAL ALLOWED CHARGE ESTIMATED IMPACT FOR RVU AND MPPR 

CHANGES * 

Specialty 

Allowed 

charges 

(mil) 

Impact of work 

and MP RVU 

changes 

Impact of PE RVU changes Combined impact 

Full Tran Full Tran 

(A) (B) (C) (D) (E) (F) (G) 

TOTAL ...................................................... $83,014 0% 0% 0% 0% 0% 

ALLERGY/IMMUNOLOGY ....................... 194 0% 1% 1% 1% 1% 

ANESTHESIOLOGY ................................ 1,847 0% 4% 2% 4% 2% 

CARDIAC SURGERY .............................. 384 0% ¥2% ¥1% ¥2% ¥1% 

CARDIOLOGY ......................................... 6,778 0% ¥3% ¥1% ¥3% ¥1% 

COLON AND RECTAL SURGERY ......... 146 0% 2% 1% 2% 1% 

CRITICAL CARE ...................................... 252 0% 1% 0% 1% 0% 

DERMATOLOGY ..................................... 2,931 0% 0% 0% 0% 0% 

EMERGENCY MEDICINE ....................... 2,658 0% ¥1% ¥1% ¥1% ¥1% 

ENDOCRINOLOGY ................................. 415 0% 1% 0% 1% 0% 

FAMILY PRACTICE ................................. 5,640 0% 2% 1% 2% 1% 

GASTROENTEROLOGY ......................... 1,837 0% 1% 0% 0% 0% 

GENERAL PRACTICE ............................. 656 0% 2% 1% 2% 1% 

GENERAL SURGERY ............................. 2,277 0% 1% 0% 1% 0% 

GERIATRICS ........................................... 200 0% 2% 1% 2% 1% 

HAND SURGERY .................................... 121 0% 3% 1% 2% 1% 

HEMATOLOGY/ONCOLOGY .................. 1,912 0% ¥1% 0% ¥2% 0% 

INFECTIOUS DISEASE ........................... 597 0% 1% 1% 1% 0% 

INTERNAL MEDICINE ............................. 10,737 0% 1% 1% 1% 1% 

INTERVENTIONAL PAIN MGMT ............ 448 0% 3% 2% 2% 1% 

INTERVENTIONAL RADIOLOGY ........... 211 ¥1% ¥3% ¥1% ¥4% ¥2% 

MULTISPECIALTY CLINIC/OTHER ........ 84 1% 1% 1% 2% 1% 

NEPHROLOGY ........................................ 2,011 0% 0% 0% 0% 0% 

NEUROLOGY .......................................... 1,520 0% 4% 2% 4% 2% 

NEUROSURGERY .................................. 669 0% 1% 0% 1% 0% 

NUCLEAR MEDICINE ............................. 53 0% ¥4% ¥2% ¥5% ¥3% 

OBSTETRICS/GYNECOLOGY ................ 678 0% 0% 0% 0% 0% 

OPHTHALMOLOGY ................................ 5,316 0% 3% 2% 3% 2% 

ORTHOPEDIC SURGERY ...................... 3,572 0% 2% 1% 2% 1% 

OTOLARNGOLOGY ................................ 1,001 0% 2% 1% 1% 1% 

PATHOLOGY ........................................... 1,122 0% ¥2% ¥1% ¥2% ¥1% 

PEDIATRICS ............................................ 68 0% 1% 1% 1% 1% 

PHYSICAL MEDICINE ............................. 928 0% 3% 2% 3% 2% 

PLASTIC SURGERY ............................... 339 0% 2% 1% 1% 0% 

PSYCHIATRY .......................................... 1,134 0% 0% 0% 0% 0% 

PULMONARY DISEASE .......................... 1,758 0% 1% 0% 1% 0% 

RADIATION ONCOLOGY ........................ 1,968 0% ¥8% ¥4% ¥8% ¥4% 

RADIOLOGY ............................................ 4,722 ¥1% ¥5% ¥2% ¥6% ¥4% 

RHEUMATOLOGY ................................... 530 0% 0% 0% 0% 0% 

THORACIC SURGERY ........................... 371 0% ¥2% ¥1% ¥1% ¥1% 

UROLOGY ............................................... 1,919 0% ¥3% ¥2% ¥3% ¥2% 

VASCULAR SURGERY ........................... 749 0% ¥2% ¥1% ¥2% ¥1% 

AUDIOLOGIST ......................................... 56 0% ¥6% ¥3% ¥6% ¥3% 

CHIROPRACTOR .................................... 743 0% 2% 1% 2% 1% 

CLINICAL PSYCHOLOGIST ................... 559 0% ¥5% ¥3% ¥5% ¥3% 

CLINICAL SOCIAL WORKER ................. 386 0% ¥6% ¥3% ¥6% ¥3% 

DIAGNOSTIC TESTING FACILITY ......... 833 0% ¥8% ¥2% ¥8% ¥3% 

INDEPENDENT LABORATORY .............. 1,047 0% ¥3% ¥1% ¥3% ¥1% 

NURSE ANES/ANES ASST .................... 769 0% 5% 2% 5% 2% 

NURSE PRACTITIONER ......................... 1,376 0% 2% 1% 2% 1% 

OPTOMETRY .......................................... 980 0% 4% 2% 4% 2% 

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TABLE 64—CY 2012 PFS PROPOSED RULE TOTAL ALLOWED CHARGE ESTIMATED IMPACT FOR RVU AND MPPR 

CHANGES *—Continued 

Specialty 

Allowed 

charges 

(mil) 

Impact of work 

and MP RVU 

changes 

Impact of PE RVU changes Combined impact 

Full Tran Full Tran 

(A) (B) (C) (D) (E) (F) (G) 

ORAL/MAXILLOFACIAL SURGERY ....... 43 0% 2% 1% 2% 1% 

PHYSICAL/OCCUPATIONAL THERAPY 2,324 0% 5% 3% 5% 3% 

PHYSICIAN ASSISTANT ......................... 1,055 0% 1% 0% 1% 0% 

PODIATRY ............................................... 1,902 0% 3% 2% 3% 2% 

PORTABLE X-RAY .................................. 97 0% 4% 3% 4% 3% 

RADIATION THERAPY CENTERS ......... 73 0% ¥9% ¥5% ¥9% ¥5% 

OTHER ..................................................... 17 0% 5% 4% 5% 4% 

* Table 64 shows only the payment impact on PFS services. We note that these impacts do not include the effects of the January 2012 conversion factor change under current law. 

2. CY 2012 PFS Impact Discussion 

a. Changes in RVUs 

The most widespread specialty 

impacts of the RVU changes are 

generally related to several factors. First, 

as discussed in section II.A.2. of this 

proposed rule, we are currently 

implementing the third year of the 

4-year transition to new PE RVUs using 

the PPIS data that were adopted in the 

CY 2010 PFS final rule with comment 

period. The impacts of the third year of 

the transition are generally consistent 

with the impacts that would be 

expected based on the impacts 

displayed in the CY 2011 final rule with 

comment period. 

The second general factor 

contributing to the CY 2012 impacts 

shown in Table 64 is a secondary effect 

of the CY 2011 rescaling of the RVUs so 

that, in the aggregate, they match the 

work, PE, and malpractice proportions 

in the revised and rebased MEI for CY 

2011. That is, the rebased MEI had a 

greater proportion attributable to 

malpractice and PE and, 

correspondingly, a lesser proportion 

attributable to work. Specialties that 

have a high proportion of total RVUs 

attributable to work, such as emergency 

medicine, experienced a decrease in 

aggregate payments as a result of this 

rescaling, while specialties that have a 

high proportion attributable to PE, such 

as diagnostic testing facilities, 

experienced an increase in aggregate 

payments. (For further details on the 

MEI rebasing, see the discussion 

beginning on 75 FR 73262 in the CY 

2011 PFS final rule.) 

Table 64 also includes the impacts 

resulting from our proposal to expand 

the current 50 percent MPPR policy to 

the professional component of advanced 

imaging services. We estimate that this 

policy would redistribute approximately 

$100 million through a small increase in 

the conversion factor and a small 

adjustment to all PE RVUs. We estimate 

that this change would primarily reduce 

payments to the specialties of radiology 

and interventional radiology. Finally, 

Table 64 also reflects the impacts of our 

proposed adjustments to improve the 

accuracy of the time associated with the 

work RVUs for certain services, 

including group therapy services, as 

discussed previously in section II.A. of 

this proposed rule. 

b. Combined Impact 

Column F of Table 64 displays the 

estimated CY 2012 combined impact on 

total allowed charges by specialty of all 

the proposed RVU and MPPR changes. 

These impacts range from an increase of 

5 percent for nurse anesthetists to a 

decrease of 9 percent for radiation 

therapy centers. Again, these impacts 

are estimated prior to the application of 

the negative CY 2012 Conversion Factor 

(CF) update applicable under the 

current statute. 

Table 65 shows the estimated impact 

on total payments for selected highvolume procedures of all of the changes 

discussed previously. We have included 

CY 2012 payment rates with and 

without the effect of the CY 2012 

negative PFS CF update for comparison 

purposes. We selected these procedures 

because they are the most commonly 

furnished by a broad spectrum of 

physician specialties. There are separate 

columns that show the change in the 

facility rates and the nonfacility rates. 

For an explanation of facility and 

nonfacility PE, we refer readers to 

Addendum A of this proposed rule. 

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D. Effects of Proposal To Review 

Potentially Misvalued Codes on an 

Annual Basis Under the PFS 

This year’s proposal of a process to 

consolidate the Five-Year Reviews of 

Work and PE RVUs with the annual 

review of potentially misvalued codes, 

as discussed in section II.B.3. of this 

proposed rule with comment period, is 

not anticipated to have a budgetary 

impact in CY 2012. As noted previously, 

to the extent that for CY 2012 we have 

proposed revised RVUs for codes 

identified under the potentially 

misvalued codes initiative, Table 64 

includes the estimated CY 2012 impact 

on total allowed charges of the changes 

in the RVUs for these codes. 

E. Effect of Proposed Revisions to 

Malpractice RUVs 

As discussed in section II.D.2. of this 

proposed rule, we proposed to revise 

malpractice RVUs for a limited number 

of codes. The utilization of many of 

these services is 0, while the others have 

a very low utilization. Therefore, we 

estimate no significant budgetary impact 

from the proposed changes to the MP 

RVUs due to the very low utilization of 

these services. 

F. Effect of Proposed Changes to 

Geographic Practice Cost Indices 

(GPCIs) 

As discussed in section II.E. of this 

proposed rule, we are required to 

update the GPCI values at least every 3 

years and phase in the adjustment over 

2 years (if there has not been an 

adjustment in the past year). For CY 

2012, we are proposing to revise the PE 

GPCIs for each Medicare locality, as 

well as the cost share weights for all 

three GPCI components. Moreover, the 

proposed revised PE GPCI values are a 

result of our analysis of the PE 

methodology as required by section 

1848(e)(1)(H)(iv) of the Act. The new 

GPCIs rely upon the 2006–2008 

American Community Survey (ACS) 

data for determining the relative cost 

differences in the office rent component 

of the PE GPCIs. In addition, we utilized 

2006 through 2008 Bureau of Labor 

Statistics (BLS) and Occupational 

Employment Statistics (OES) data to 

determine the employee compensation 

component with data specific to the 

offices of physicians industry. Finally, 

we proposed to create a purchased 

services index that will be used to 

geographically adjust for differences in 

the labor-related share of the industries 

occupying the ‘‘All Other Services’’ and 

‘‘Other Professional Expenses’’ 2006- 

based MEI categories. 

To determine the cost share weights 

for the proposed CY 2012 PE GPCIs, we 

used the 2006-based MEI weight for the 

PE category of 51.734 percent minus the 

professional liability insurance category 

weight of 4.295 percent. Therefore, we 

propose a cost share weight for the PE 

GPCIs of 47.439 percent. For the 

employee compensation portion of the 

PE GPCIs, we used the non-physician 

employee compensation category weight 

of 19.153 percent. The fixed capital and 

utilities MEI categories were combined 

to achieve a total office rent weight of 

10.223 percent. As discussed in the 

previous paragraph, a new purchased 

services index was created to 

geographically adjust the labor-related 

components of the ‘‘All Other Services’’ 

and ‘‘Other Professional Expenses’’ 

categories of the MEI. In order to 

calculate the purchased services index, 

we are proposing to merge the 

corresponding weights of these two 

categories to form a combined 

purchased services weight of 8.095. 

However, since our proposed purchased 

services methodology only accounts for 

the labor related share of the industries 

comprising the ‘‘All Other Services’’ 

and ‘‘Other Professional Expenses’’ 

categories, only 5.011 percentage points 

of the 8.095 percentage points 

accounting for the purchased services 

cost share weight is adjusted for locality 

cost differences. We are proposing a cost 

share weight for the medical equipment, 

supplies, and other miscellaneous 

expenses component of 9.968 percent. 

Furthermore, the physician 

compensation cost category and its 

weight of 48.266 percent reflects the 

proposed work GPCI cost share weight 

and the professional liability insurance 

weight of 4.295 percent was used for the 

malpractice GPCI cost share weight. A 

more detailed discussion on the 

proposed CY 2012 GPCI cost share 

weights can be found in section II.E. of 

this proposed rule. 

Additionally, section 1848(e)(1)(E) of 

the Act (as amended by section 103 of 

the Medicare and Medicaid Extenders 

Act of 2010) extended the 1.000 work 

GPCI floor through December 31, 2011. 

Therefore, the CY 2012 GPCIs reflect the 

sunset of the 1.000 work GPCI floor. 

Section 1848(e)(1)(G) of the Act (as 

amended by section 134(b) of the 

MIPPA) established a permanent 1.500 

work GPCI floor in Alaska, beginning 

January 1, 2009 and, therefore, the 1.500 

work GPCI floor in Alaska will remain 

in place for CY 2012. Moreover, section 

1848(e)(1)(I) of the Act (as added by 

section 10324(c) of the Affordable Care 

Act) established a permanent 1.000 PE 

GPCI floor for services furnished in 

frontier States effective January 1, 2011. 

Addendum D to this proposed rule 

shows the estimated effects of the 

revised GPCIs on locality GAFs for CY 

2012. The GAFs reflect the use of 

revised GPCI data and the updated cost 

share weights. The GAFs are a weighted 

composite of each area’s work, PE, and 

malpractice GPCIs using the national 

GPCI cost share weights. While we do 

not actually use the GAFs in computing 

the PFS payment for a specific service, 

they are useful in comparing the 

estimated overall costs and payments 

for different localities. The cumulative 

effects of all of the GPCI revisions, 

including the updated underlying GPCI 

data, updated cost share weights, and 

provisions of the Affordable Care Act, 

are reflected in the CY 2012 GPCI values 

that are displayed in Addendum E in 

this proposed rule. 

The following Table 66 illustrates the 

impact by physician fee schedule 

geographic locality of moving from the 

current law CY 2011 Geographic 

Adjustment Factors (GAFs) to the 

proposed CY 2012 GAFs. The GAFs 

summarize the combined impact of the 

three separate GPCIs into a single 

number to more easily compare the 

impact of policy changes among 

localities. More specifically, the GAF for 

a locality is the weighted average of the 

individual work, practice expense, and 

malpractice. The table first shows the 

impact under current law and 

regulation, and then with the additional 

impact of our recommendations. As 

shown in the table, the primary driver 

of the CY 2012 impact is the current law 

expiration of the non-budget neutral 

increases to the CY 2011 GPCIs for 

lower expense areas authorized by the 

Affordable Care Act and the Medicare 

and Medicaid Extenders Act. The table 

is sorted by total impact from largest 

reductions to largest increases. When 

the overall impacts directly resulting 

from our proposed changes to the PE 

GPCI are isolated, the impacts are 

negligible (Column F). The following is 

an explanation of the information 

represented in Table 66: 

• Column (A): Medicare Locality— 

The PFS geographic locality. 

• Column (B): CY 2011 GAF—The 

current CY 2011 Geographic Adjustment 

Factor for the locality, which includes 

the non-budget neutral increases to the 

CY 2011 GPCIs for lower expense areas 

authorized by the Affordable Care Act 

and the Medicare and Medicaid 

Extenders Act. These figures also reflect 

the first year of the two-year transition 

to the latest GPCIs that began in 2011. 

• Column (C): CY 2012 GAF (Current 

Law/Reg)—The CY 2012 Geographic 

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Adjustment Factor for the locality under 

current law and regulations, which 

includes the expiration of the nonbudget neutral increases to the CY 2011 

GPCIs for lower expense areas 

authorized by the Affordable Care Act 

and the MMEA. These numbers also 

reflect the end of the transition to the 

latest GPCIs that began in 2011. 

• Column (D): CY 2012 GAF 

(Proposed NPRM)—The CY 2012 

Geographic Adjustment Factor for the 

locality under the recommended NPRM 

proposals. The two largest drivers are 

the proposed use of residential rent data 

from the Census Bureau’s ACS data 

instead of the Department of Housing 

and Urban Development’s HUD FMR 

data, and the proposed benchmarking of 

the GPCI practice expense weights to 

the 2006-based MEI cost share weights. 

The Geographic Adjustment Factors in 

this column are for 2012 and do not 

reflect any temporary increases to work 

and practice expense required by the 

Affordable Care Act. 

• Column (E): Percent Change CY 

2011 to CY 2012 (current)—Impact of 

the expiration of the non-budget neutral 

increases to the CY 2011 GPCIs for 

lower expense areas authorized by the 

Affordable Care Act and the MMEA and 

the end of the transition to the latest 

GPCIs that began in 2011. 

• Column (F): Percent Change CY 

2012 (No NPRM) to CY 2012 (NPRM)— 

Impact of the four regulatory changes 

described previously. 

• Column (G): Percent Change 

Combined Impact CY 2011 to CY 2012— 

Combined impact of all changes from 

CY 2011 to CY 2012. 

TABLE 66—CY 2012 GEOGRAPHIC ADJUSTMENT FACTORS (GAFS) CHANGES UNDER CURRENT LAW AND THE

PROPOSED RULE

(A) (B) (C) (D) (E) (F) (G) 

Medicare locality CY 2011 

GAF 

CY 2012 

GAF 

(current law/ 

reg) 

CY 2012 

GAF 

(proposed) 

% Change 

CY 2011 to 

CY 2012 

(current) Col 

(C)/Col (B) 

% Change 

CY 2012 

(curr) to CY 

2012 

(proposed 

rule) Col 

(D)/Col (C) 

% Change 

combined 

impact CY 

2011 to CY 

2012 

Col (D)/Col 

(B) 

PUERTO RICO ................................................................ 0.903 0.786 0.769 ¥13 ¥2 ¥15 

WEST VIRGINIA .............................................................. 0.972 0.910 0.909 ¥6 0 ¥6 

OKLAHOMA ..................................................................... 0.955 0.904 0.897 ¥5 ¥1 ¥6 

MISSISSIPPI .................................................................... 0.961 0.910 0.907 ¥5 0 ¥6 

REST OF MISSOURI ...................................................... 0.961 0.903 0.908 ¥6 1 ¥6 

ARKANSAS ...................................................................... 0.945 0.893 0.895 ¥6 0 ¥5 

REST OF LOUISIANA ..................................................... 0.965 0.914 0.914 ¥5 0 ¥5 

IOWA ................................................................................ 0.950 0.898 0.902 ¥5 0 ¥5 

BEAUMONT, TX .............................................................. 0.978 0.925 0.932 ¥5 1 ¥5 

KENTUCKY ...................................................................... 0.959 0.917 0.914 ¥4 0 ¥5 

ALABAMA ........................................................................ 0.949 0.905 0.907 ¥5 0 ¥4 

TENNESSEE ................................................................... 0.959 0.918 0.918 ¥4 0 ¥4 

NEBRASKA ...................................................................... 0.947 0.905 0.909 ¥4 0 ¥4 

REST OF MAINE ............................................................. 0.961 0.922 0.923 ¥4 0 ¥4 

IDAHO .............................................................................. 0.959 0.926 0.923 ¥3 0 ¥4 

KANSAS ........................................................................... 0.964 0.923 0.928 ¥4 1 ¥4 

SOUTH CAROLINA ......................................................... 0.959 0.925 0.924 ¥4 0 ¥4 

INDIANA ........................................................................... 0.966 0.928 0.932 ¥4 0 ¥4 

REST OF TEXAS ............................................................ 0.973 0.934 0.939 ¥4 1 ¥3 

REST OF GEORGIA ....................................................... 0.970 0.936 0.937 ¥4 0 ¥3 

METROPOLITAN BOSTON ............................................ 1.106 1.079 1.069 ¥2 ¥1 ¥3 

NORTH CAROLINA ......................................................... 0.970 0.934 0.938 ¥4 0 ¥3 

UTAH ............................................................................... 0.982 0.946 0.950 ¥4 0 ¥3 

MANHATTAN, NY ............................................................ 1.153 1.142 1.119 ¥1 ¥2 ¥3 

REST OF PENNSYLVANIA ............................................. 0.986 0.957 0.957 ¥3 0 ¥3 

NEW ORLEANS, LA ........................................................ 1.005 0.980 0.977 ¥2 0 ¥3 

SOUTH DAKOTA** .......................................................... 0.978 0.952 0.951 ¥3 0 ¥3 

LOS ANGELES, CA ......................................................... 1.106 1.099 1.076 ¥1 ¥2 ¥3 

REST OF ILLINOIS ......................................................... 0.985 0.950 0.959 ¥4 1 ¥3 

NEW MEXICO ................................................................. 0.979 0.949 0.955 ¥3 1 ¥2 

REST OF MICHIGAN ...................................................... 0.985 0.962 0.962 ¥2 0 ¥2 

ALASKA* .......................................................................... 1.289 1.289 1.260 0 ¥2 ¥2 

VENTURA, CA ................................................................. 1.113 1.105 1.090 ¥1 ¥1 ¥2 

REST OF NEW YORK .................................................... 0.965 0.948 0.946 ¥2 0 ¥2 

OHIO ................................................................................ 0.992 0.970 0.974 ¥2 0 ¥2 

METROPOLITAN KANSAS CITY, MO ............................ 0.996 0.975 0.978 ¥2 0 ¥2 

MONTANA** .................................................................... 0.996 0.976 0.978 ¥2 0 ¥2 

CONNECTICUT ............................................................... 1.094 1.086 1.075 ¥1 ¥1 ¥2 

NORTH DAKOTA** .......................................................... 0.979 0.964 0.963 ¥2 0 ¥2 

ANAHEIM/SANTA ANA, CA ............................................ 1.129 1.129 1.111 0 ¥2 ¥2 

REST OF FLORIDA ......................................................... 1.014 0.996 0.999 ¥2 0 ¥1 

NYC SUBURBS/LONG I., NY ......................................... 1.161 1.159 1.144 0 ¥1 ¥1 

SAN MATEO, CA ............................................................. 1.199 1.194 1.183 0 ¥1 ¥1 

EAST ST. LOUIS, IL ........................................................ 1.016 0.997 1.003 ¥2 1 ¥1 

REST OF MASSACHUSETTS ........................................ 1.040 1.039 1.028 0 ¥1 ¥1 

REST OF OREGON ........................................................ 0.968 0.950 0.958 ¥2 1 ¥1 

HAWAII ............................................................................ 1.074 1.091 1.063 2 ¥3 ¥1 

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TABLE 66—CY 2012 GEOGRAPHIC ADJUSTMENT FACTORS (GAFS) CHANGES UNDER CURRENT LAW AND THE

PROPOSED RULE—Continued 

(A) (B) (C) (D) (E) (F) (G) 

Medicare locality CY 2011 

GAF 

CY 2012 

GAF 

(current law/ 

reg) 

CY 2012 

GAF 

(proposed) 

% Change 

CY 2011 to 

CY 2012 

(current) Col 

(C)/Col (B) 

% Change 

CY 2012 

(curr) to CY 

2012 

(proposed 

rule) Col 

(D)/Col (C) 

% Change 

combined 

impact CY 

2011 to CY 

2012 

Col (D)/Col 

(B) 

ARIZONA ......................................................................... 0.989 0.977 0.979 ¥1 0 ¥1 

SAN FRANCISCO, CA .................................................... 1.198 1.194 1.186 0 ¥1 ¥1 

WISCONSIN .................................................................... 0.965 0.949 0.956 ¥2 1 ¥1 

METROPOLITAN ST. LOUIS, MO .................................. 0.988 0.971 0.979 ¥2 1 ¥1 

FORT WORTH, TX .......................................................... 0.991 0.981 0.982 ¥1 0 ¥1 

VERMONT ....................................................................... 0.982 0.980 0.974 0 ¥1 ¥1 

NORTHERN NJ ............................................................... 1.120 1.105 1.112 ¥1 1 ¥1 

AUSTIN, TX ..................................................................... 0.992 0.979 0.985 ¥1 1 ¥1 

MIAMI, FL ........................................................................ 1.108 1.100 1.101 ¥1 0 ¥1 

SOUTHERN MAINE ........................................................ 0.997 0.993 0.991 0 0 ¥1 

WYOMING** .................................................................... 1.002 0.994 0.996 ¥1 0 ¥1 

HOUSTON, TX ................................................................ 1.008 0.992 1.002 ¥2 1 ¥1 

METROPOLITAN PHILADELPHIA, PA ........................... 1.068 1.062 1.062 ¥1 0 ¥1 

VIRGINIA ......................................................................... 0.978 0.971 0.974 ¥1 0 0 

DETROIT, MI ................................................................... 1.060 1.047 1.056 ¥1 1 0 

OAKLAND/BERKELEY, CA ............................................. 1.133 1.136 1.130 0 ¥1 0 

REST OF NEW JERSEY ................................................. 1.074 1.066 1.072 ¥1 1 0 

BRAZORIA, TX ................................................................ 0.996 0.977 0.995 ¥2 2 0 

DC + MD/VA SUBURBS ................................................. 1.124 1.125 1.123 0 0 0 

RHODE ISLAND .............................................................. 1.042 1.039 1.042 0 0 0 

MARIN/NAPA/SOLANO, CA ............................................ 1.119 1.127 1.120 1 ¥1 0 

DELAWARE ..................................................................... 1.012 1.010 1.013 0 0 0 

DALLAS, TX ..................................................................... 1.004 0.997 1.005 ¥1 1 0 

VIRGIN ISLANDS ............................................................ 0.998 0.997 1.000 0 0 0 

FORT LAUDERDALE, FL ................................................ 1.061 1.062 1.064 0 0 0 

POUGHKEEPSIE/N NYC SUBURBS, NY ...................... 1.037 1.039 1.040 0 0 0 

ATLANTA, GA .................................................................. 1.002 0.997 1.005 0 1 0 

QUEENS, NY ................................................................... 1.140 1.150 1.144 1 ¥1 0 

CHICAGO, IL ................................................................... 1.081 1.076 1.085 0 1 0 

NEW HAMPSHIRE .......................................................... 1.007 1.012 1.011 0 0 0 

GALVESTON, TX ............................................................ 0.997 0.995 1.002 0 1 1 

COLORADO ..................................................................... 0.989 0.990 0.994 0 0 1 

MINNESOTA .................................................................... 0.969 0.968 0.974 0 1 1 

REST OF CALIFORNIA ................................................... 1.025 1.038 1.033 1 0 1 

REST OF WASHINGTON ............................................... 0.987 0.985 0.997 0 1 1 

NEVADA** ........................................................................ 1.024 1.031 1.037 1 1 1 

SUBURBAN CHICAGO, IL .............................................. 1.061 1.059 1.077 0 2 2 

BALTIMORE/SURR. CNTYS, MD ................................... 1.052 1.070 1.069 2 0 2 

REST OF MARYLAND .................................................... 1.004 1.024 1.021 2 0 2 

PORTLAND, OR .............................................................. 0.991 0.995 1.009 0 1 2 

SANTA CLARA, CA ......................................................... 1.156 1.164 1.179 1 1 2 

SEATTLE (KING CNTY), WA .......................................... 1.045 1.056 1.077 1 2 3 

* GAF reflects a 1.5 work GPCI floor in Alaska established by the MIPPA. 

** GAFs reflect a 1.0 PE GPCI floor for frontier States as required by the Affordable Care Act. 

G. Effects of Proposed Changes to 

Medicare Telehealth Services Under the 

Physician Fee Schedule 

As discussed in section III.D. of this 

proposed rule, we are proposing to add 

several new codes to the list of 

telehealth services and revise the 

criteria for adding services to the list of 

telehealth services. While we expect 

these changes to increase access to care 

in rural areas, based on recent 

utilization of similar services already on 

the telehealth list, we estimate no 

significant budgetary impact from the 

proposed additions. In addition, the 

proposed revision to the telehealth 

criteria would be effective for CY 2013 

PFS telehealth services, with no impact 

in CY 2012. 

H. Effects of the Impacts of Other 

Provisions of the Proposed Rule 

1. Part B Drug Payment: ASP Issues 

Application of our proposals for ‘‘ASP 

Reporting Template Update’’ and 

‘‘Reporting of ASP Units and Sales 

Volume for Certain Products,’’ as 

discussed in section IV.A. of this 

proposed rule involve revisions to the 

existing ASP reporting template which 

will facilitate the accuracy and 

efficiency of data transfer from 

manufacturers. Any impacts are 

dependent on the status and quality of 

quarterly manufacturer data 

submissions, so we cannot quantify 

associated savings. 

Finally, as discussed in section IV.A. 

of this proposed rule, we are proposing 

to provide for appropriate price 

substitutions that account for marketrelated pricing changes and would 

allow Medicare to pay based off lower 

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market prices for those drugs and 

biologicals that consistently exceed the 

applicable threshold percentage. Based 

on estimates published in various OIG 

reports (see section IV.A. for a list of 

citations), we believe that this proposal 

will generate minor savings for the 

Medicare program and its beneficiaries 

since any substituted prices would be 

for amounts less than the calculated 106 

percent of the ASP. 

2. Chiropractic Services Demonstration 

As discussed in section IV.B. of this 

proposed rule, we are continuing the 

recoupment of the $50 million in 

expenditures from this demonstration in 

order to satisfy the budget neutrality 

requirement in section 651(f)(1)(b) of the 

MMA. We initiated this recoupment in 

CY 2010 and this will be the third year. 

As discussed in the CY 2010 PFS final 

rule with comment period, we finalized 

a policy to recoup $10 million each year 

through adjustments to the PFS for all 

chiropractors in CYs 2010 through 2014. 

To implement this required budget 

neutrality adjustment, we are recouping 

$10 million in CY 2012 by reducing the 

payment amount under the PFS for the 

chiropractic CPT codes (that is, CPT 

codes 98940, 98941, and 98942) by 

approximately 2 percent. 

3. Extension of Payment for Technical 

Component of Certain Physician 

Pathology Services 

As discussed in section IV.D. of this 

proposed rule, we are proposing to 

implement the provision that specifies 

that for services furnished after 

December 31, 2011, an independent 

laboratory may not bill the Medicare 

contractor for the TC of physician 

pathology services furnished to a 

hospital inpatient or outpatient. The 

savings associated with implementing 

this provision are estimated to be 

approximately 80 million dollars for CY 

2012. 

4. Section 4103: Medicare Coverage of 

Annual Wellness Visit Providing a 

Personalized Prevention Plan: 

Incorporation of a Health Risk 

Assessment as Part of the Annual 

Wellness Visit 

As discussed in section IV.E. of this 

proposed rule, section 1861(s)(2)(FF) of 

the Act, as described more fully in 

section 1861(hhh), of the Act (as added 

by section 4103 of the Affordable Care 

Act) provides Medicare coverage for an 

annual wellness visit. Regulations for 

Medicare coverage of the AWV are 

established at 42 CFR 410.15. The 

annual wellness visit is covered with no 

coinsurance or deductible when 

furnished by a Medicare participating 

provider (a health professional as that 

term is defined in 42 CFR 410.15). The 

annual wellness visit entails the 

creation of a personalized prevention 

plan for an individual and includes 

elements, such as updating medical and 

family history, identifying providers 

that regularly provide medical care to 

the individual, measurement of height, 

weight, and body mass index, 

identification of risk factors, the 

provision of personalized health advice, 

and development of a screening 

schedule (such as a checklist), and 

referrals as appropriate for additional 

preventive services. Section 

1861(hhh)(1)(A) of the Act specifies that 

a personalized prevention plan for an 

individual includes a health risk 

assessment (HRA) that meets the 

guidelines established by the Secretary 

and takes into account the results of a 

HRA. We are proposing to incorporate 

the use and results of an HRA as part 

of the provision of personalized 

prevention plan services during the 

AWV. The estimated impact of 

incorporating the HRA as part of the 

AWV is unknown for CY 2012. We are 

specifically seeking public comment on 

the following: 

• The impact of use of the HRA on 

health professional practices. 

• The burden on health professional 

practices of incorporating an HRA into 

subsequent AWVs, as well as the first 

AWV. 

• The impact of the elements 

included in the definitions of first and 

subsequent AWVs. 

• Modification of those AWV 

elements for which the Secretary has 

authority to determine appropriateness. 

5. Physician Payment, Efficiency, and 

Quality Improvements—Physician 

Quality Reporting System 

As discussed in section IV.F.1 of this 

proposed rule, we are proposing several 

different reporting options for eligible 

professionals who wish to participate in 

the 2012 Physician Quality Reporting 

System. Although there may be some 

cost incurred by CMS for maintaining 

the Physician Quality Reporting System 

measures and their associated code sets, 

and for expanding an existing clinical 

data warehouse to accommodate the 

proposed registry-based reporting, EHRBased reporting, and group practice 

reporting options for the 2012 Physician 

Quality Reporting System, we do not 

anticipate a significant cost impact on 

the Medicare program. 

Participation in the CY 2012 

Physician Quality Reporting System by 

individual eligible professionals and 

group practices is voluntary and 

individual eligible professionals and 

group practices may have different 

processes for integrating the collection 

of the Physician Quality Reporting 

System measures into their practice’s 

work flows. Given this variability and 

the multiple reporting options that we 

provide, it is difficult to definitively 

estimate the impact of the Physician 

Quality Reporting System on providers. 

Furthermore, we believe that costs for 

eligible professionals who are 

participating in the Physician Quality 

Reporting System for the first time in 

2012 would be considerably higher than 

the cost for eligible professionals who 

participated in the Physician Quality 

Reporting System in prior years. Some 

preparatory steps are needed to begin 

participating in the Physician Quality 

Reporting System. To the extent that we 

are not proposing to retire the measures 

that an eligible professional has 

reported in a prior year and there are no 

changes to the measure’s specifications 

from a prior year, such preparatory steps 

would not need to be repeated in 

subsequent years. In addition, for many 

eligible professionals, the cost of 

participating in the Physician Quality 

Reporting System is offset by the 

incentive payment received. 

With respect to the potential incentive 

payments that would be made to 

satisfactory reporters under the 2012 

Physician Quality Reporting System, we 

estimate this amount for individual 

eligible professionals would be 

approximately $60 million. This 

estimate is derived from looking at our 

2009 incentive payment of 

approximately $235 million and then 

accounting for the fact that the 2009 

incentive payment was 2.0 percent of an 

eligible professional’s total estimated 

Medicare Part B PFS allowed charges for 

all such covered professional services 

furnished by the eligible professional 

during the 2009 reporting period. For 

2012, the incentive payment is 0.5 

percent of an eligible professional’s total 

estimated Medicare Part B PFS allowed 

charges for all covered professional 

services furnished by an eligible 

professional during the 2012 reporting 

period. Although we expect that the 

lower incentive payment percentage for 

2012 would reduce the total outlay by 

approximately one-fourth, we also 

expect more eligible professionals to 

participate in the 2012 Physician 

Quality Reporting System because there 

we are proposing more methods of data 

submission, additional alternative 

reporting methods, and because CMS 

seeks to align the Physician Quality 

Reporting System with the EHR 

Incentive Program. We also believe that 

some eligible professionals would 

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qualify for the additional 0.5 percent 

incentive authorized under section 

1848(m)(7) of the Act (‘‘Additional 

Incentive Payment’’). 

One factor that influences the cost to 

individual eligible professionals is the 

time and effort associated it would take 

individual eligible professionals to 

identify applicable proposed Physician 

Quality Reporting System quality 

measures and reviewing and selecting a 

reporting option. This burden would 

vary with each individual eligible 

professional by the number of 

applicable measures, the eligible 

professional’s understanding of the 

Physician Quality Reporting System, 

experience with Physician Quality 

Reporting System participation, and the 

proposed method(s) selected by the 

eligible professional for reporting of the 

proposed measures, and incorporating 

the reporting of the proposed measures 

into the office work flows. Information 

obtained from the Physician Voluntary 

Reporting Program (PVRP), which was a 

predecessor to the Physician Quality 

Reporting System and was the first step 

for the reporting of physician quality of 

care through certain quality metrics, 

indicated an average labor cost per 

practice of approximately $50 per hour 

in 2006. To account for salary increases 

over time, we will use an average 

practice labor cost of $60 per hour for 

our estimates, based on an assumption 

of an average annual increase of 

approximately 3 percent. Therefore, 

assuming that it takes an individual 

eligible professional approximately 5 

hours to review the Physician Quality 

Reporting System quality measures, 

review the various reporting options, 

select the most appropriate reporting 

option, identify the applicable measures 

for which they can report the necessary 

information, and incorporate reporting 

of the selected measures into their office 

work flows, we estimate that the cost to 

eligible professionals associated with 

preparing to report Physician Quality 

Reporting System quality measures 

would be approximately $300 per 

individual eligible professional ($60 per 

hour × 5 hours). 

Another factor that influences the cost 

to individual eligible professionals is 

how they choose to report the Physician 

Quality Reporting System measures 

(that is, whether they select the claimsbased, registry-based or EHR-Based 

reporting mechanism we are proposing). 

For the proposed claims-based reporting 

mechanism, estimates from the PVRP 

indicate the time needed to perform all 

the steps necessary to report quality 

data codes (QDCs) for 1 measure on a 

claim ranges from 15 seconds (0.25 

minutes) to 12 minutes for complicated 

cases or measures. In previous years, 

when we required reporting on 80 

percent of eligible cases for claimsbased reporting, we found that on 

average, the median number of reporting 

instances for each of the Physician 

Quality Reporting System measures was 

9. Since we are proposing to reduce the 

required reporting rate by over one-third 

to 50 percent, then for purposes of this 

impact analysis we will assume that an 

eligible professional will would need to 

report each selected measure for 6 

reporting instances, or 6 cases. 

Assuming that an eligible professional, 

on average, would report 3 measures 

since a majority of eligible professionals 

participate in the Physician Quality 

Reporting System by reporting 

individual measures via claims or 

registry and that an eligible professional 

reports on an average of 6 reporting 

instances per measure, we estimate that 

the cost to an individual eligible 

professional associated with the 

proposed claims-based reporting option 

of Physician Quality Reporting System 

measures would range from 

approximately $4.50 (0.25 minutes per 

reporting instance × 6 reporting 

instances per measure × 3 measures × 

$60 per hour) to $216.00 (12 minutes 

per reporting instance × 6 reporting 

instances per measure × 3 measures × 

$60 per hour). If an eligible professional 

satisfactorily reports, these costs would 

more than likely be negated by the 

incentive earned. For the 2009 

Physician Quality Reporting System, 

which had a 2.0 percent incentive, the 

mean incentive amount was close to 

$2,000 for an individual eligible 

professional. For the proposed registrybased reporting option, individual 

eligible professionals would generally 

incur a cost to submit data to registries. 

We estimate that fees for using a 

qualified registry would range from no 

charge, or a nominal charge, for an 

individual eligible professional to use a 

registry to several thousand dollars, 

with a majority of registries charging 

fees ranging from $500 to $1,000. 

However, our impact analysis is limited 

to the incremental costs associated with 

Physician Quality Reporting System 

reporting, which we believe are 

minimal. We believe that many eligible 

professionals who would select the 

proposed registry-based reporting 

option would already be utilizing the 

registry for other purposes and would 

not need to report additional data to the 

registry specifically for Physician 

Quality Reporting System. The registries 

also often provide the eligible 

professional services above and beyond 

what is required for Physician Quality 

Reporting System. 

For the proposed EHR-Based 

reporting option, an individual eligible 

professional generally would incur a 

cost associated with purchasing an EHR 

product. Although we do not believe 

that the majority of eligible 

professionals would purchase an EHR 

solely for the purpose of participating in 

Physician Quality Reporting System, 

cost estimates for EHR adoption by 

eligible professionals from the EHR 

Incentive Program final rule (75 FR 

44549) show that an individual eligible 

professional who chooses to do so 

would have to spend anywhere from 

$25,000 to $54,000 to purchase and 

implement an EHR and up to $18,000 

annually for ongoing maintenance. 

Although we believe that the majority 

of eligible professionals attempting to 

qualify for the additional 0.5 percent 

incentive payment authorized by 

section 1848(m)(7) of the Act would be 

those who are already required by their 

Boards to participate in a Maintenance 

of Certification Program, individual 

eligible professionals who wish to 

qualify for the additional 0.5 percent 

incentive payment and are not currently 

participating in a Maintenance of 

Certification Program would also have 

to incur a cost for participating in a 

Maintenance of Certification Program. 

The manner in which fees are charged 

for participating in a Maintenance of 

Certification Program vary by specialty. 

Some Boards charge a single fee for 

participation in the full cycle of 

Maintenance of Certification Program. 

Such fees appear to range anywhere 

from over $1,100 to nearly $1,800 per 

cycle. Some Boards have annual fees 

that are paid by their diplomates. On 

average, ABMS diplomates pay 

approximately $200.00 per year for 

participating in Maintenance of 

Certification Program. Some Boards 

have an additional fee for the 

Maintenance of Certification Program 

Part III secure examination, but most 

Boards do not have additional charges 

for participation in the Part IV practice/ 

quality improvement activities. 

With respect to the proposed 

requirements for group practices to be 

treated as satisfactorily submitting 

quality measures data for the CY 2012 

Physician Quality Reporting System 

discussed in section IV.F.1 of this 

proposed rule, group practices 

interested in participating in the CY 

2012 Physician Quality Reporting 

System through the proposed group 

practice reporting option (GPRO) may 

also incur a cost. However, for groups 

that satisfactorily report for the 

proposed 2012 Physician Quality 

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Reporting System, we believe these 

costs would be completely offset if the 

group practice earns the incentive 

payment since the group practice would 

be eligible for an incentive payment 

equal to 0.5 percent of the entire group’s 

total estimated Medicare Part B PFS 

allowed charges for covered 

professional services furnished by the 

group practice during the reporting 

period. 

One factor in the cost to group 

practices would be the costs associated 

with the proposed self-nomination 

process. Similar to our estimates for 

staff involved with the proposed claimsbased reporting option for individual 

eligible professionals, we also estimate 

that the group practice staff involved in 

the proposed group practice selfnomination process would have an an 

average labor cost of $60 per hour. 

Therefore, assuming 2 hours for a group 

practice to decide whether to participate 

as a group or have members of the 

practice participate individually and 4 

hours for the self-nomination process, 

we estimate the total cost to a group 

practice associated with the group 

practice self-nomination process would 

be approximately $360 ($60 per hour × 

6 hours per group practice). 

For groups participating under the 

proposed GPRO process that are 

comprised of 25 or more eligible 

professionals, another factor in the cost 

to the group would be the time and 

effort associated with the group practice 

completing and submitting the proposed 

data collection tool. Based on the 

Physician Group Practice (PGP) 

demonstration’s estimate that it takes 

approximately 79 hours for a group 

practice to complete the data collection 

tool, which uses the same data 

submission methods as those we have 

proposed, we estimate the cost 

associated with a physician group 

completing the data collection tool 

would be approximately $4,740 ($60 per 

hour × 79 hours per group practice). 

In addition to costs incurred by 

individual eligible professionals and 

group practices, registries and EHR 

vendors may also incur some costs 

related to the proposals for the 2012 

Physician Quality Reporting System. 

Registries interested in becoming 

‘‘qualified’’ to submit on behalf of 

individual eligible professionals would 

also have to incur a cost associated with 

the vetting process, and with calculating 

quality measures results from the data 

submitted to the registry by its 

participants, and submitting the quality 

measures results, as well as numerator 

and denominator data on quality 

measures, to CMS on behalf of their 

participants. We estimate the registry 

self-nomination process will cost 

approximately $500 per registry ($50 

per hour × 10 hours per registry). This 

cost estimate includes the cost of 

submitting the self-nomination letter to 

CMS and completing the proposed CMS 

vetting process. Our estimate of $50 per 

hour average labor cost for registries is 

based on the assumption that registry 

staff include IT professionals whose 

average hourly rates range from $36 to 

$84 per hour depending on experience, 

with an average rate of nearly $50 per 

hour for a mid-level programmer. We do 

not believe that there are any additional 

costs for registries associated with a 

registry calculating quality measures 

results from the data submitted to the 

registry by its participants and 

submitting the quality measures results 

and numerator and denominator data on 

quality measures to CMS on behalf of 

their participants under the proposed 

program for 2012. We believe that the 

majority of registries already perform 

these functions for their participants. 

An EHR vendor interested in having 

its product(s) be used by individual 

eligible professionals to submit the 

proposed Physician Quality Reporting 

System measures to CMS for 2012 

would have to complete the proposed 

vetting process during 2012 and 

program its EHR product(s) to extract 

the clinical data that the eligible 

professional would need to submit to 

CMS for purposes of reporting the 

proposed 2012 quality measures in 2013 

as well. We proposed that previously 

qualified vendors would need to only 

update their electronic measure 

specifications and data transmission 

schema during 2012 to incorporate any 

new EHR measures we proposed to 

maintain their qualification for the 2012 

Physician Quality Reporting System. 

Therefore, for EHR vendors that were 

not previously qualified, we estimate 

the cost associated with completing the 

proposed self-nomination process, 

including the proposed vetting process 

with CMS officials, is estimated would 

be $500 ($50 per hour × 10 hours per 

EHR vendor). Our estimate of a $50 per 

hour average labor cost for EHR vendors 

is based on the assumption that vendor 

staff include IT professionals whose 

average hourly rates range from $36 to 

$84 per hour depending on experience, 

with an average rate of nearly $50 per 

hour for a mid-level programmer. We 

believe that the cost associated with the 

time and effort needed for an EHR 

vendor to review the proposed quality 

measures and other information and 

program the EHR product to enable 

individual eligible professionals to 

submit Physician Quality Reporting 

System proposed quality measures data 

to the CMS-designated clinical 

warehouse would be dependent on the 

EHR vendor’s familiarity with the 

Physician Quality Reporting System, the 

vendor’s system’s capabilities, as well as 

the vendor’s programming capabilities. 

Some vendors already have the 

necessary capabilities and for such 

vendors, we estimate the total cost 

would be approximately $2,000 ($50 per 

hour × 40 hours per vendor). However, 

given the variability in the capabilities 

of the vendors, we believe an estimate 

for those vendors with minimal 

experience would be approximately 

$10,000 per vendor ($50 per hour × 200 

hours per EHR vendor). 

TABLE 67—ESTIMATED COSTS TO PROFESSIONALS: PHYSICIAN QUALITY REPORTING

Estimated 

hours 

Estimated 

instances 

Number of 

measures Hourly rate Total cost 

Individual Eligible Professional (EP): 

Preparation.

5.0 1 N/A $60 $300. 

Individual EP: Claims Reporting ....... 0.2 6 3 60 $216. 

Individual EP: Registry Reporting ..... N/A 1 N/A N/A $500 to $1,000. 

Individual EP: EHR Reporting .......... N/A 1 N/A N/A $25,000–$54,000 initial start-up. 

........................ ........................ ........................ ........................ $18,000 annually for subsequent

years. 

Group Practice: Self-Nomination ...... 6.0 1 N/A 60 $360. 

Group Practice: Reporting ................ 79 1 N/A 60 $4,740. 

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TABLE 68—ESTIMATED COSTS TO VENDORS: PHYSICIAN QUALITY REPORTING

Estimated hours Hourly rate Total cost 

Registry: Self-Nomination .................................................................................... 10 $50 $500 

EHR: Self-Nomination .......................................................................................... 10 50 500 

EHR: Programming .............................................................................................. 40–200 50 2,000–10,000 

6. Incentives for Electronic Prescribing 

(eRx)—The Electronic Prescribing 

Incentive Program 

Section IV.F.2. of this proposed rule 

describes the proposed Electronic 

Prescribing (eRx) Incentive Programs for 

CYs 2012 through 2014. To be 

considered a successful electronic 

prescriber in CYs 2012 through 2014, an 

individual eligible professional would 

need to meet the proposed requirements 

described in section IV.F.2. of this 

proposed rule. 

We estimate that the cost impact of 

the proposed eRx Incentive Programs for 

CYs 2012 through 2014 on the Medicare 

program would be the cost incurred for 

maintaining the electronic prescribing 

measure and its associated code set, and 

for maintaining the existing clinical data 

warehouse to accommodate the 

proposed registry-based reporting and 

EHR-Based reporting options for the 

electronic prescribing measure. 

However, we do not believe that the 

proposed program for CYs 2012 through 

2014 has a significant administrative 

cost impact on the Medicare program 

since much of this infrastructure has 

already been established for the eRx 

Incentive Program. 

Individual eligible professionals and 

group practices may have different 

processes for integrating data collection 

on the electronic prescribing measure 

into their practices’ work workflows. 

Given this variability and the multiple 

reporting options that we are proposing, 

it is difficult to accurately estimate the 

impact of the eRx Incentive Program for 

CYs 2012 through 2014 on providers. 

Furthermore, we believe that costs for 

eligible professionals who would 

participate in the eRx Incentive Program 

for the first time would be considerably 

higher than the cost for eligible 

professionals who participated in the 

eRx Incentive Program in prior years as 

there are preparatory steps that an 

eligible professional would need to take 

to begin participating in the program. In 

addition, for many eligible professionals 

(especially those who participated in 

the eRx Incentive Program in prior 

years), we believe the cost of 

participating in the eRx Incentive 

Program in 2012 or 2013 would be offset 

by the incentive payment received. As 

a result of the payment adjustment that 

begins in 2012 and continues until 

2014, the cost of not participating in the 

eRx Incentive Program for CYs 2012 

through 2014 could be higher than the 

cost of participating in the form of 

reduced Medicare payments as a result 

of the payment adjustment. 

For the 2009 eRx Incentive Program, 

based on an incentive of 2.0 percent of 

eligible professionals’ total estimated 

Medicare Part B allowed charges, 

approximately $148 million in total 

incentives were paid to eligible 

professionals with a mean incentive 

amount of approximately $3,000. Based 

on the aforementioned figures from the 

2009 eRx Incentive Program, we 

estimate that the total incentive 

payments for individual eligible 

professionals for the 2012 eRx incentive 

would be approximately $74 million, 

taking into account that the incentive 

payment for 2012 would be 1.0 percent. 

Assuming no changes in the 

participation rates, we estimate that the 

total incentive payments for the 2013 

eRx incentive would be approximately 

$37 million, taking into account that the 

incentive payment for 2013 would be 

0.5 percent. 

From 2009, 89,752 eligible 

professionals participated in the eRx 

Incentive Program. For purposes of the 

2013 and 2014 payment adjustment, we 

anticipate that despite a decrease in the 

incentive payment amount from 2 

percent in 2009 to 1 percent of total 

estimated Medicare Part B allowed 

charges for covered professional 

services in 2012 and 0.5 percent in 

2013, more eligible professionals (and 

groups) will choose to participate in the 

eRx Incentive Program due to the 2013 

and 2014 payment adjustments of 1.5 

percent and 2.0 percent respectively on 

eligible professionals’ totally estimated 

Medicare Part B allowed charges for not 

demonstrating that they are successful 

electronic prescribers. In order to 

become a successful electronic 

prescriber for purposes of the 2013 and 

2014 payment adjustments, we are 

proposing to provide more 

opportunities to report on the electronic 

prescribing measure by concentrating 

only on the numerator of the measure. 

Furthermore, we are proposing to 

expand the reporting mechanisms for 

the 2013 and 2014 payment adjustments 

to include registry and EHR-Based 

reporting. Although we expect an 

increase in participation for purposes of 

the 2013 and 2014 payment 

adjustments, we believe that at least 

some of these anticipated increases 

would be offset by the additional 

significant hardship exemptions we 

have proposed for the 2013 and 2014 

payment adjustments. As such, we 

expect that the participation level for 

the eRx Incentive Program will be 

approximately 90,000 eligible 

professionals, based on the level of 

participation in 2009 (which was the 

highest participation level for the eRx 

Incentive Program recorded as of yet). 

Since we do not have participation 

results for the implementation of the 

eRx payment adjustment as the 

reporting period for the 2012 payment 

adjustment (the first of 3 such payment 

adjustments), we will base our estimates 

for the distribution of payment 

adjustment amounts on the incentives 

earned in the 2009 eRx Incentive 

Program. For the 2013 payment 

adjustment, taking into account that the 

payment adjustment would be 1.5 

percent, we believe that the total 

payment adjustment amount would be 

$111 million. This is based off of the 

incentive amount distributed for the 

2009 eRx Incentive Program. For the 

2014 payment adjustment, taking into 

account that the payment adjustment 

would be 2.0 percent, we believe that 

the total payment adjustment amount 

would be $148 million. This is also 

based off of the incentive amount 

distributed for the 2009 eRx Incentive 

Program. 

We propose that any eligible 

professional who wishes to participate 

in the eRx Incentive Program must have 

a qualified electronic prescribing system 

in order to participate. Therefore, a onetime potential cost to some individual 

eligible professionals would be the cost 

of purchasing and using an electronic 

prescribing system, which varies by the 

commercial software package selected, 

the level at which the professional 

currently employs information 

technology in his or her practice and the 

training needed. One study indicated 

that a midrange complete electronic 

medical record with electronic 

prescribing functionality costs $2,500 

per license with an annual fee of $90 

per license for quarterly updates of the 

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drug database after setup costs while 

standalone prescribing, messaging, and 

problem list system may cost $1,200 per 

physician per year after setup costs. 

Hardware costs and setup fees 

substantially add to the final cost of any 

software package. (Corley, S.T. (2003). 

‘‘Electronic prescribing: a review of 

costs and benefits.’’ Topics in Health 

Information Management 24(1):29–38.). 

These are the estimates that we intend 

to use for our impact analysis. 

Similar to the Physician Quality 

Reporting System, one factor in the cost 

to individual eligible professionals is 

the time and effort associated with 

individual eligible professionals 

reviewing the electronic prescribing 

measure to determine whether it is 

applicable to them, reviewing the 

available reporting options and selecting 

one, gathering the required information, 

and incorporating reporting of the 

measure into their office work flows. 

Since the eRx Incentive Program 

consists of only 1 quality measure, we 

estimate 2 hours as the amount of time 

needed for individual eligible 

professionals to prepare for 

participation in the eRx Incentive 

Program. Information obtained from the 

PVRP, which was a predecessor to the 

Physician Quality Reporting System and 

was the first step for the reporting of 

physician quality of care through certain 

quality metrics, indicated an average 

labor cost per practice of approximately 

$50 per hour. To account for salary 

increases over time, we will use an 

average practice labor cost of $60 per 

hour for our estimates, based on an 

assumption of an average annual 

increase of approximately 3 percent. At 

an average cost of approximately $60 

per hour, we estimate the total 

preparation costs to individual eligible 

professionals to be approximately $120 

($60 per hour × 2 hours). 

Another factor that influences the cost 

to individual eligible professionals is 

how they choose to report the electronic 

prescribing measure (that is, whether 

they select the claims-based, registrybased or EHR-Based reporting 

mechanism). For claims-based 

reporting, there would be a cost 

associated with reporting the 

appropriate QDC on the claims an 

individual eligible professional submits 

for payment. Based on the information 

from the PVRP described previously for 

the amount of time it takes a median 

practice to report one measure one time 

(1.75 minutes) and the requirement to 

report 25 electronic prescribing events 

during 2012, we estimate the annual 

estimated cost per individual eligible 

professional to report the electronic 

prescribing measure via claimssubmission would be $43.75 (1.75 

minutes per case × 1 measure × 25 cases 

per measure × $60 per hour). We believe 

that for most successful electronic 

prescribers who earn an incentive, these 

costs would be negated by the incentive 

payment received given that the median 

incentive for eligible professionals who 

qualified for a 2010 eRx incentive was 

around $1,600. 

For eligible professionals who select 

the proposed registry-based reporting 

mechanism, we do not anticipate any 

additional cost for individual eligible 

professionals to report data to a registry, 

as individual eligible professionals 

opting for registry-based reporting are 

more than likely already reporting data 

to the registry. Little if any, additional 

data would need to be reported to the 

registry for purposes of participation in 

the eRx Incentive Program for CYs 2012 

through 2014. Individual eligible 

professionals using registries for 

Physician Quality Reporting System 

would likely experience minimal, if 

any, increased costs charged by the 

registry to report this 1 additional 

measure. 

For EHR-Based reporting, we propose 

that the eligible professional must 

extract the necessary clinical data from 

his or her EHR, and submit the 

necessary data to the CMS-designated 

clinical data warehouse. Once the EHR 

is programmed by the vendor to allow 

data submission to CMS, the cost to the 

individual eligible professional 

associated with the time and effort to 

submit data on the electronic 

prescribing measure should be minimal. 

With respect to the proposed process 

for group practices to be treated as 

successful electronic prescribers for the 

2012 and 2013 incentive and 2013 and 

2014 payment adjustment discussed in 

section IV.F.2. of this proposed rule, 

group practices have the same proposed 

options as individual eligible 

professionals in terms of the form and 

manner for reporting the electronic 

prescribing measure (that is, group 

practices have the option of reporting 

the measure through claims, a qualified 

registry, or a qualified EHR product). 

There are only 2 differences between the 

proposed requirements for an individual 

eligible professional and a group 

practice: (1) The fact that a group 

practice would have to self-nominate; 

and (2) the number of times a group 

practice would be required to report the 

electronic prescribing measure. Overall, 

there could be less cost associated with 

a practice participating in the eRx 

Incentive Program as a group rather than 

the individual members of the group 

separately participating. We do not 

believe that there are any additional 

costs associated with the group practice 

self-nomination process since we are 

limiting the group practices to those 

selected to participate in the 2012, 2013, 

and/or 2014 respective Physician 

Quality Reporting System GPRO. The 

practices only will need to indicate their 

desire to participate in the eRx GPRO at 

the time they self-nominate for the 

Physician Quality Reporting System 

GPRO. 

The costs for a group practice 

reporting to an EHR or registry should 

be similar to the costs associated with 

registry and EHR reporting for an 

individual eligible professional, as the 

process is the same with the exception 

that more electronic prescribing events 

must be reported by the group. For 

similar reasons, the costs for a group 

practice reporting via claims should also 

be similar to the costs associated with 

claims-based reporting for an individual 

eligible professional. Therefore, we 

estimate that the costs for group 

practices who are selected to participate 

in the eRx Incentive Program for CYs 

2012 through 2014 as a group would 

range from $3,349.61 (1.75 minutes per 

case × 1 measure × 625 cases per 

measure × $60 per hour) for groups 

comprised of 25–99 eligible 

professionals participating as an eRx 

GPRO to $4,375.00 (1.75 minutes per 

case × 2,500 cases per measure × $60 per 

hour) for the groups comprised of 100 

or more eligible professionals 

participating as an eRx GPRO. 

We believe that the costs to individual 

eligible professionals and group 

practices associated with avoiding the 

2013 and 2014 payment adjustment 

would be similar to the costs of an 

eligible professional or group practice 

reporting the electronic prescribing 

measure for purposes of the 2012 and 

2013 incentive. Specifically, we believe 

that the cost of reporting the electronic 

prescribing measure in one instance for 

purposes of the payment adjustment is 

identical to the cost of reporting the 

electronic prescribing measure for one 

instance on claims for purposes of the 

incentive payment. The only difference 

would be in the total costs for an 

individual eligible professional. Group 

practices would be required to report 

the electronic prescribing measure for 

the same number of electronic 

prescribing events for both the 2012 and 

2013 incentives and the 2013 and 2014 

payment adjustments. Individual 

eligible professionals, however, would 

be required to report the electronic 

prescribing measure for only 10 

electronic prescribing events for 

purposes of the 2013 and 2014 payment 

adjustments as opposed to 25 electronic 

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prescribing events for purposes of the 

2012 and 2013 incentives. 

Based on our decision to consider 

only registries qualified to submit 

quality measures results and numerator 

and denominator data on quality 

measures to CMS on their participant’s 

behalf for the 2012, 2013, and 2014 

Physician Quality Reporting System to 

be qualified to submit results and 

numerator and denominator data on the 

electronic prescribing measure for eRx 

Incentive Program for CYs 2012, 2013, 

and 2014 respectively, we do not 

estimate any cost to the registry 

associated with becoming a registry 

qualified to submit the electronic 

prescribing measure for CYs 2012 

through 2014. 

The cost for the registry would be the 

time and effort associated with the 

registry calculating results for the 

electronic prescribing measure from the 

data submitted to the registry by its 

participants and submitting the quality 

measures results and numerator and 

denominator data on the eRx quality 

measure to CMS on behalf of their 

participants. We believe such costs 

would be minimal as registries would 

already be required to perform these 

activities for Physician Quality 

Reporting System. 

Likewise, based on our decision to 

consider only EHR products qualified 

for the Physician Quality Reporting 

System for CYs 2012, 2013, and 2014 to 

be qualified to submit results and 

numerator and denominator data on the 

electronic prescribing measure for the 

eRx Incentive Program for CYs 2012, 

2013, and 2014, there would be no need 

for EHR vendors to undergo a separate 

self-nomination process for the eRx 

Incentive Program. Therefore, there 

would be no additional cost associated 

with the self-nomination process. 

The cost to the EHR vendor associated 

with the proposed EHR-Based reporting 

requirements of this reporting initiative 

is the time and effort associated with the 

EHR vendor programming its EHR 

product(s) to extract the clinical data 

that the individual eligible professional 

needs to submit to CMS for reporting 

the electronic prescribing measure. 

Since we determined that only EHR 

products qualified for the Physician 

Quality Reporting System would be 

qualified for the eRx Incentive Program, 

and the eRx Incentive Program consists 

of only one measure, we believe that 

any burden associated with the EHR 

vendor to program its product(s) to 

enable individual eligible professionals 

to submit data on the electronic 

prescribing measure to the CMSdesignated clinical data warehouse 

would be minimal. 

7. Physician Compare Web Site 

Section IV.G.2. of this proposed rule 

discusses the background of the 

Physician Compare Web site. As 

described in section IV.G.2. of this 

proposed rule, we propose to develop 

aspects of the Physician Compare Web 

site in stages. In the first stage, which 

was completed in 2011, we posted the 

names of those eligible professionals 

who satisfactorily participated in the 

2009 Physician Quality Reporting 

System. The second phase of the plan, 

which would occur during CYs 2011 

through 2012, would include the 

posting of the names of eligible 

professionals who are successful 

electronic prescribers under the 2009 

eRx Incentive Program, as well as 

eligible professionals (EPs) who 

participate in the EHR Incentive 

Program. 

We are proposing to include 

performance information with respect to 

the 2012 Physician Quality Reporting 

System GPRO measures. As reporting of 

physician performance rates on the 

Physician Compare Web site will be 

performed directly by us using the data 

that we collect under the 2012 

Physician Quality Reporting System 

GPRO, we do not anticipate any notable 

impact on eligible professionals with 

respect to the posting of information on 

the Physician Compare Web site. 

8. Medicare EHR Incentive Program 

Section IV.H.2. of this proposed rule 

proposes changes to the EHR Incentive 

Program for EPs for the 2012 payment 

year. Aside from continuing the 

attestation method of reporting CQMs, 

we propose to allow the reporting of 

CQMs for purposes of demonstrating 

meaningful use through participation in 

the Physician Quality Reporting 

System—Medicare EHR Incentive Pilot 

via—(1) A Physician Quality Reporting 

System ‘‘qualified’’ EHR data 

submission vendor or (2) using an EP’s 

certified EHR technology, which also 

must be a Physician Quality Reporting 

System ‘‘qualified’’ EHR. 

We believe the impact associated with 

actually reporting CQMs would vary 

depending on how the EP chooses to do 

so. We believe that the number of EPs 

who choose to participate via attestation 

would largely be those who are not 

participating in both the EHR Incentive 

Program and Physician Quality 

Reporting System as this is the method 

of reporting most favorable to EPs not 

participating in the Physician Quality 

Reporting System. EPs participating in 

the Physician Quality Reporting System 

would be more likely to participate in 

the proposed pilot. Therefore, based on 

the previously mentioned assumptions, 

we do not believe there would be any 

additional impact on EPs specific to the 

EP’s participation in the proposed pilot. 

All the steps necessary to participate in 

the proposed pilot would need to be 

performed to participate in the 

Physician Quality Reporting System. 

9. Physician Feedback Program/Value 

Modifier Payment 

The proposed changes to the 

Physician Feedback Program in section 

IV.I. of this proposed rule would not 

impact CY 2012 physician payments 

under the Physician Fee Schedule. 

However, we expect that our proposals 

to use the Physician Quality Reporting 

System quality measures in the 

Physician Feedback reports and in the 

value modifier to be implemented in CY 

2015 may result in increased 

participation in the Physician Quality 

Reporting System in CY 2012. 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. 

10. Bundling of Payments for Services 

Provided to Outpatients Who Later Are 

Admitted as Inpatients: 3-Day Payment 

Window Policy and the Impact on 

Wholly Owned or Wholly Operated 

Physician Offices 

Medicare traditionally collects 

ownership information obtained in the 

855 A and 855 B enrollment forms 

completed upon a facility or a 

practitioner’s Medicare enrollment. The 

855 forms are self-selecting enrollment 

forms that may be updated as necessary. 

Although the enrollment forms do not 

specifically require information on 

whether a physician office is wholly 

owned or wholly operated by a hospital, 

we will use this information to aid us 

in identifying physician offices and 

clinics that might be wholly owned or 

operated by a hospital. While we believe 

that most hospital owned entities 

providing physician services will be 

considered part of the hospital and 

operating as hospital outpatient 

departments; there will be at least some 

hospital owned physician offices and 

clinics that will meet the definition of 

‘‘wholly-owned or wholly-operated’’ 

and will be subject to the 3-day payment 

window policy. We are unable to 

accurately estimate and verify the 

number of wholly owned or wholly 

operated physician offices or clinics 

enrolled in Medicare and furnishing 

health services to Medicare beneficiaries 

that will be subject to the 3-day 

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payment window policy under the PFS 

because the 855 forms do not explicitly 

capture information on sole ownership 

or operation. We note that the 

application of the 3-day window policy 

is limited to only those outpatient 

services provided within the payment 

window to patients that are admitted to 

a hospital. The 3-day window policy 

would not apply to the majority of 

services provided by wholly-owned or 

wholly-operated physician offices. 

Furthermore, application of the 3-day 

window policy would be limited to only 

the practice expense component of the 

payment rate, and the professional 

component will be unchanged by the 

payment policy. For the CY 2012 PFS 

proposed rule, we are unable to estimate 

the impact of this proposed policy 

change. However, we note that if we 

were able to estimate a savings in Part 

B payments as a result of the application 

of the 3-day payment window, the 

program savings would be redistributed 

across all other services paid under the 

PFS in accordance with due to the PFS 

budget neutrality provisions. 

I. 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 

policies and, where relevant, 

alternatives that were considered. 

J. 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 

Physician Quality Reporting System 

with its focus on measuring, submitting, 

and analyzing quality data will have a 

positive impact and improve the quality 

and value of care provided to Medicare 

beneficiaries. 

The regulatory provisions may affect 

beneficiary liability in some cases. Most 

changes in aggregate beneficiary liability 

due to a particular provision would be 

a function of the coinsurance (20 

percent if applicable for the particular 

provision after the beneficiary has met 

the deductible). To illustrate this point, 

as shown in Table 65, the CY 2011 

national payment amount in the 

nonfacility setting for CPT code 99203 

(Office/outpatient visit, new) is $102.95, 

which means that in CY 2011 a 

beneficiary would be responsible for 20 

percent of this amount, or $20.59. Based 

on this proposed rule, including the 

negative update, the CY 2012 national 

payment amount in the nonfacility 

setting for CPT code 99203, as shown in 

Table 65, is $73.57, which means that, 

in CY 2012, the beneficiary coinsurance 

for this service would be $14.71. Most 

policies discussed in this proposed rule 

that impact payment rates, such as the 

expansion of the MPPR to the 

professional component of imaging 

procedures, would similarly impact 

beneficiaries’ coinsurance. 

K. Accounting Statement 

As required by OMB Circular A–4 

(available at http:// 

www.whitehouse.gov/omb/circulars/ 

a004/a-4.pdf), in Table 69, we have 

prepared an accounting statement 

showing the estimated expenditures 

associated with this proposed rule. This 

estimate includes the estimated CY 2012 

incurred benefit impact associated with 

the estimated CY 2012 PFS conversion 

factor update based on the FY 2012 

President’s Budget baseline. 

TABLE 69—ACCOUNTING STATEMENT: CLASSIFICATION OF ESTIMATED TRANSFERS

Category Transfers 

CY 2012 Annualized Monetized Transfers ........................ Estimated decrease in expenditures of $20.2 billion for the PFS update. 

From Whom To Whom? .................................................... Federal Government to physicians, other practitioners and providers and suppliers 

who receive payment under Medicare. 

L. Conclusion 

The analysis in the previous sections, 

together with the remainder of this 

preamble, provides an Initial Regulatory 

Flexibility Act Analysis. The previous 

analysis, together with the remainder of 

this preamble, provides a Regulatory 

Impact Analysis. 

VIII. Addenda Referenced in This 

Proposed Rule and Available Only 

Through the Internet on the CMS Web 

Site 

This section lists the Addenda 

referred to throughout the preamble of 

this proposed rule. Beginning with the 

CY 2012 PFS proposed rule, the PFS 

Addenda A, B, C, D, E, F, G, and H will 

no longer appear in the Federal 

Register. Instead, these Addenda, along 

with other supplemental documents, 

will be available through the Internet. 

Readers who experience any problems 

accessing any of the Addenda that are 

posted on the CMS Web sites identified 

above should contact Erin Smith at 

(410) 786–4497. 

The following PFS Addenda for CY 

2012 PFS proposed rule are available 

through the Internet on the CMS Web 

site 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 2012 PFS proposed rule, 

refer to item CMS–1524–P. 

Addendum A—Explanation and Use of 

Addendum B 

Addendum B—Proposed Relative Value 

Units and Relations Information 

Used in Determining Medicare 

Payments for CY 2012 

Addendum C—[Reserved] 

Addendum D—Proposed CY 2012 

Geographic Adjustment Factors 

(GAFs) 

Addendum E—Proposed CY 2012 

Geographic Practice Cost Indices 

(GPCIs) by States and Medicare 

Locality 

Addendum F—Proposed CY 2012 

Diagnostic Imaging Services Subject 

to the Multiple Procedure Payment 

Reduction 

Addendum G—CPT/HCPCS Imaging 

Codes Defined by Section 5102(b) of 

the DRA 

Addendum H—CY 2011 ‘‘Always 

Therapy’’ Services Subject to the 

Multiple Procedure Payment 

Reduction 

List of Subjects 

42 CFR Part 410 

Health facilities, Health professions, 

Kidney diseases, Laboratories, 

Medicare, Reporting and recordkeeping 

requirements, Rural areas, X-rays. 

42 CFR Part 414 

Administrative practice and 

procedure, Health facilities, Health 

professions, Kidney diseases, Medicare, 

Reporting and recordkeeping 

requirements. 

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42944 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Proposed Rules 

42 CFR Part 415 

Health facilities, Health professions, 

Medicare, Reporting and recordkeeping 

requirements. 

42 CFR Part 495 

Administrative practice and 

procedure, Electronic health records, 

Health facilities, Health professions, 

Health Maintenance Organizations 

(HMO), Medicaid, Medicare, Penalties, 

Privacy, Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble of this proposed rule, the 

Centers for Medicare & Medicaid 

Services proposes to amend 42 CFR 

chapter IV as set forth below: 

PART 410—SUPPLEMENTARY 

MEDICAL INSURANCE (SMI) 

BENEFITS 

Subpart B—Medical and Other Health 

Services 

1. The authority citation for part 410 

continues to read as follows: 

Authority: Secs. 1102, 1834, 1871, and 

1893 of the Social Security Act (42 U.S.C. 

1302, 1395m, 1395hh, and 1395ddd). 

2. Amend § 410.15(a) as follows: 

A. Amending the definition of ‘‘first 

annual wellness visit providing 

personalized prevention plan services’’ 

by— 

1. Revising the introductory text. 

2. Redesignating paragraphs (i) 

through (ix) as paragraphs (ii) through 

(x). 

3. Adding a new paragraph (i). 

4. Revising newly redesignated 

paragraph (viii)(A). 

B. Adding the definition of ‘‘Health 

risk assessment’’. 

C. In the definition of ‘‘subsequent 

annual wellness visit providing 

personalized prevention plan services’’. 

1. Revising the introductory text. 

2. Redesignating paragraphs (i) 

through (vii) as paragraphs (ii) through 

(viii). 

3. Adding a new paragraph (i). 

4. Revising newly redesigned 

paragraphs (iii) and (vi)(B). 

The revisions and additions read as 

follows: 

§ 410.15 Annual wellness visits providing 

Personalized Prevention Plan Services: 

Conditions for and limitations on coverage. 

(a) * * * 

First annual wellness visit providing 

personalized prevention plan services 

means the following services furnished 

to an eligible beneficiary by a health 

professional, taking into account the 

results of a health risk assessment, as 

those terms are defined in this section: 

(i) Review (and administration if 

needed) of a health risk assessment (as 

defined in this paragraph). 

* * * * * 

(viii) * * * 

(A) A written screening schedule for 

the individual such as a checklist for the 

next 5 to 10 years, as appropriate, based 

on recommendations of the United 

States Preventive Services Task Force 

and the Advisory Committee on 

Immunization Practices, and the 

individual’s health risk assessment (as 

that term is defined in this section), 

health status, screening history, and ageappropriate preventive services covered 

by Medicare. 

* * * * * 

Health risk assessment means, for the 

purposes of this section, an evaluation 

tool that meets the following criteria: 

(i) Collects self-reported information 

about the beneficiary. 

(ii) Can be administered 

independently by the beneficiary or 

administered by a health professional 

prior to or as part of the AWV 

encounter. 

(iii) Is appropriately tailored to and 

takes into account the communication 

needs of underserved populations, 

persons with limited English 

proficiency, and persons with health 

literacy needs. 

(iv) Takes no more than 20 minutes to 

complete. 

(v) Addresses, at a minimum, the 

following topics: 

(A) Demographic data, including but 

not limited to age, gender, race, and 

ethnicity. 

(B) Self assessment of health status, 

frailty, and physical functioning. 

(C) Psychosocial risks, including but 

not limited to, depression/life 

satisfaction, stress, anger, loneliness/ 

social isolation, pain, or fatigue. 

(D) Behavioral risks, including but not 

limited to, tobacco use, physical 

activity, nutrition and oral health, 

alcohol consumption, sexual practices, 

motor vehicle safety (seat belt use), and 

home safety. 

(E) Activities of daily living (ADLs), 

including but not limited to, dressing, 

feeding, toileting, grooming, physical 

ambulation (including balance/risk of 

falls), and bathing. 

(F) Instrumental activities of daily 

living (IADLs), including but not limited 

to, shopping, food preparation, using 

the telephone, housekeeping, laundry, 

mode of transportation, responsibility 

for own medications, and ability to 

handle finances. 

* * * * * 

Subsequent annual wellness visit 

providing personalized prevention plan 

services means the following services 

furnished to an eligible beneficiary by a 

health professional, taking into account 

the results of a health risk assessment, 

as those terms are defined in this 

section: 

(i) Review (and administration, if 

needed) of a health risk assessment (as 

defined in this section). 

* * * * * 

(iii) An update of the list of current 

providers and suppliers that are 

regularly involved in providing medical 

care to the individual as that list was 

developed for the first annual wellness 

visit providing personalized prevention 

plan services or the previous subsequent 

annual wellness visit providing 

personalized prevention plan services. 

* * * * * 

(vi) * * * 

(B) The list of risk factors and 

conditions for which primary, 

secondary or tertiary interventions are 

recommended or are underway for the 

individual as that list was developed at 

the first annual wellness visit providing 

personalized prevention plan services or 

the previous subsequent annual 

wellness visit providing personalized 

prevention plan services. 

* * * * * 

3. Amend § 410.62 paragraph (b) by 

revising the paragraph heading to read 

as follows: 

§ 410.62 Outpatient speech-language 

pathology services: Conditions and 

exclusions. 

* * * * * 

(b) Condition for coverage of 

outpatient speech-language pathology 

services furnished to certain inpatients 

of a hospital or a CAH or SNF.* * * 

* * * * * 

§ 410.78 [Amended] 

4. In § 410.78 the introductory text of 

paragraph (b) is amended by removing 

the phrase ‘‘and individual and group 

health and behavior assessment and 

intervention services furnished by an 

interactive telecommunications system 

if the following conditions are met:’’ 

and adding in its place the phrase 

‘‘individual and group health and 

behavior assessment and intervention 

services, and smoking cessation services 

furnished by an interactive 

telecommunications system if the 

following conditions are met:’’. 

5. Amend § 410.140 by revising the 

definition of ‘‘Deemed entity’’ to read as 

follows: 

§ 410.140 Definitions. 

* * * * * 

Deemed entity means an individual, 

physician, or entity accredited by an 

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approved organization, but that has not 

yet been approved by CMS under 

§ 410.145(b) to furnish training. 

§ 410.141 [Amended] 

6. Amend § 410.141 paragraph (b)(1) 

as follows: 

A. Removing the term ‘‘it’’ and adding 

the phrase ‘‘the training’’ in its place. 

B. Removing the cross-reference 

‘‘§ 410.32(a)’’ and adding the crossreference ‘‘§ 410.32(a)(2)’’. 

PART 414—PAYMENT FOR PART B 

MEDICAL AND OTHER HEALTH 

SERVICES 

Subpart B—Physicians and Other 

Practitioners 

7. 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)). 

8. Amend § 414.22 by revising 

paragraphs (b)(5)(i)(A) through 

(b)(5)(i)(C) to read as follows: 

§ 414.22 Relative value units (RVUs). 

* * * * * 

(b) * * * 

(5) * * * 

(i) * * * 

(A) Facility practice expense RVUs. 

The facility practice expense RVUs 

apply to services furnished to patients 

in places of service including, but not 

limited to, a hospital, a skilled nursing 

facility, a community mental health 

center, a hospice, or an ambulatory 

surgical center, or in a wholly owned or 

wholly operated physician practice 

providing preadmission services under 

§ 412.2(c)(5). 

(B) Nonfacility practice expense 

RVUs. The nonfacility practice expense 

RVUs apply to services furnished to 

patients in places of service including, 

but not limited to, a physician’s office, 

the patient’s home, a nursing facility, or 

a comprehensive outpatient 

rehabilitation facility (CORF). 

(C) Outpatient therapy and CORF 

services. Outpatient therapy services 

(including physical therapy, 

occupational therapy, and speechlanguage pathology services) and CORF 

services billed under the physician fee 

schedule are paid using the nonfacility 

practice expense RVUs. 

* * * * * 

§ 414.65 [Amended] 

9. In § 414.65 paragraph (a) is 

amended by removing the phrase ‘‘and 

individual and group health and 

behavior assessment and intervention 

furnished via an interactive 

telecommunications system is equal to 

the current fee schedule amount 

applicable for the service of the 

physician or practitioner.’’ and adding 

in its place the phrase ‘‘individual and 

group health and behavior assessment 

and intervention, and smoking cessation 

services furnished via an interactive 

telecommunications system is equal to 

the current fee schedule amount 

applicable for the service of the 

physician or practitioner.’’ 

10. Amend § 414.90 as follows: 

A. In paragraph (b), adding the 

definition of ‘‘Certified electronic health 

record technology’’. 

B. In paragraph (b), revising the 

definitions of ‘‘Group practice’’. 

C. Removing paragraph (c)(2). 

D. Redesignating paragraph (c)(3) as 

(c)(2). 

E. Revising paragraph (f)(1). 

F. Removing paragraph (f)(2). 

G. Redesignating paragraph (f)(3) as 

(f)(2). 

H. Revising newly redesignated 

paragraph (f)(2) introductory text. 

I. In newly redesignated paragraph 

(f)(2)(ii), removing the phrase ‘‘behalf; 

or’’ and adding in its place the phrase 

‘‘behalf.’’ 

J. In newly redesignated paragraph 

(f)(2)(iii), removing the phrase 

‘‘containing real or dummy’’ and adding 

in its place the phrase ‘‘containing 

dummy’’. 

K. Revising paragraphs (g)(1), (g)(5), 

(i)(1) and (i)(2) introductory text. 

The revisions and additions and read 

as follows: 

§ 414.90 Physician Quality Reporting 

System. 

* * * * * 

(b) * * * 

Certified electronic health record 

technology means an electronic health 

record vendor’s product and version as 

described in 45 CFR 170.102. 

Group practice means a physician 

group practice, as defined by a TIN, 

with 25 or more individual eligible 

professionals (or, as identified by NPIs) 

who have reassigned their billing rights 

to the TIN. 

* * * * * 

(f) * * * 

(1) Reporting periods. For purposes of 

this paragraph, the reporting period is— 

(i) The 12-month period from January 

1 through December 31 of such program 

year. 

(ii) Exceptions—(A) Program year 

2011. The reporting period for the 

program year 2011 is one of the 

following: 

(1) The 12-month period from January 

1 through December 31 of such program 

year; or 

(2) The 6-month period from July 1 

through December 31 of such program 

year. 

(B) For 2012 and subsequent program 

years, the 6-month reporting period 

from July 1 through December 31 of 

such program year is available for 

registry-based reporting of Physician 

Quality Reporting System measures 

groups by eligible professionals. 

(2) Reporting mechanisms. For 

program year 2011 and subsequent 

program years, an eligible professional 

who wishes to participate in the 

Physician Quality Reporting System 

must report information on the 

individual Physician Quality Reporting 

System quality measures or Physician 

Quality Reporting System measures 

groups identified by CMS in one of the 

following manners: 

(g) * * * 

(1) Meets the participation 

requirements specified by CMS for the 

Physician Quality Reporting System 

group practice reporting option; 

* * * * * 

(5) Payments to a group practice 

under this paragraph must be in lieu of 

the payments that would otherwise be 

made under the Physician Quality 

Reporting System to eligible 

professionals in the group practice for 

meeting the criteria for satisfactory 

reporting for individual eligible 

professionals. 

(i) If an eligible professional, as 

identified by an individual NPI, has 

reassigned his or her Medicare billing 

rights to a TIN selected to participate in 

the Physician Quality Reporting System 

group practice reporting option for a 

program year, then for that program year 

the eligible professional must 

participate in the Physician Quality 

Reporting System via the group practice 

reporting option. For any program year 

in which the TIN is selected to 

participate in the Physician Quality 

Reporting System group practice 

reporting option, the eligible 

professional cannot individually qualify 

for a Physician Quality Reporting 

System incentive payment by meeting 

the requirements specified in paragraph 

(f) of this section. 

(ii) If, for the program year, the 

eligible professional participates in the 

Physician Quality Reporting System 

under a TIN that is not selected to 

participate in the Physician Quality 

Reporting System group practice 

reporting option for that program year, 

then the eligible professional may 

individually qualify for a Physician 

Quality Reporting System incentive by 

meeting the requirements specified in 

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paragraph (f) of this section under that 

TIN. 

* * * * * 

(i) * * * 

(1) To request an informal review, an 

eligible professional (or in the case of 

reporting under paragraph (g) of this 

section, group practices) must submit a 

request to CMS within 90 days of the 

release of the feedback reports. The 

request must be submitted in writing 

and summarize the concern(s) and 

reasons for requesting an informal 

review and may also include 

information to assist in the review. 

(2) CMS will provide a written 

response within 90 days of the receipt 

of the original request. 

* * * * * 

11. Section 414.92 is amended as 

follows: 

A. In paragraph (b), adding the 

definition of ‘‘Certified electronic health 

record technology’’. 

B. In paragraph (b), revising 

paragraphs (ii) and (iii) of the definition 

of ‘‘Group practice’’. 

C. Revising paragraph (c)(1). 

D. In paragraph (c)(2), revise the 

paragraph heading. 

E. Revising paragraph (c)(2)(ii). 

F. Adding paragraph (c)(2)(iii). 

G. In paragraph (d)(1), removing the 

phrase ‘‘For purposes of this paragraph 

in 2011,’’ is removed and adding in its 

place the phrase ‘‘For purposes of this 

paragraph,’’. 

H. In paragraph (d)(2), removing the 

phrase ‘‘For program year 2011,’’ and 

adding in its place the phrase ‘‘For the 

2012 and 2013 incentive payments,’’ 

I. Redesignating paragraph (f) as (g). 

J. Adding a new paragraph (f). 

§ 414.92 Electronic Prescribing Incentive 

Program. 

* * * * * 

(b) * * * 

Certified electronic health record 

technology means an electronic health 

record vendor’s product and version as 

described in 45 CFR 170.102. 

Group practice * * * 

(ii) In a Medicare-approved 

demonstration project or other Medicare 

program, under which Physician 

Quality Reporting System requirements 

and incentives have been incorporated; 

and 

(iii) Has indicated its desire to 

participate in the electronic prescribing 

group practice reporting option. 

* * * * * 

(c) * * * 

(1) Incentive payments. Subject to 

paragraph (c)(3) of this section, with 

respect to covered professional services 

furnished during a reporting period by 

an eligible professional, if the eligible 

professional is a successful electronic 

prescriber for such reporting period, in 

addition to the amount otherwise paid 

under section 1848 of the Act, there also 

must be paid to the eligible professional 

(or to an employer or facility in the 

cases described in section 1842(b)(6)(A) 

of the Act) or, in the case of a group 

practice under paragraph (e) of this 

section, to the group practice, from the 

Federal Supplementary Medical 

Insurance Trust Fund established under 

section 1841 of the Act an amount equal 

to the applicable electronic prescribing 

percent (as specified in paragraph 

(c)(1)(ii) of this section) of the total 

estimated allowed part B charges for all 

such covered professional services 

furnished by the eligible professional 

(or, in the case of a group practice under 

paragraph (e) of this section, by the 

group practice) during the applicable 

reporting period. 

(2) Payment adjustment.* * * (ii) 

Significant hardship exception. CMS 

may, on a case-by-case basis, exempt an 

eligible professional (or in the case of a 

group practice under paragraph (e) of 

this section, a group practice) from the 

application of the payment adjustment 

under paragraph (c)(2) of this section if, 

CMS determines, subject to annual 

renewal, that compliance with the 

requirement for being a successful 

electronic prescriber would result in a 

significant hardship. Eligible 

professionals (or, in the case of a group 

practice under paragraph (e) of this 

section, a group practice) may request 

consideration for a significant hardship 

exemption from the 2013 and 2014 

payment adjustments if one of the 

following circumstances apply: 

(A) The eligible professional or group 

practice is located in a rural area 

without high speed internet access. 

(B) The eligible professional or group 

practice is located in an area without 

sufficient available pharmacies for 

electronic prescribing. 

(C) The eligible professional or group 

practice is unable to electronically 

prescribe due to local, State, or Federal 

law or regulation. 

(D) The eligible professional or group 

practice has limited prescribing activity, 

as defined by an eligible professional 

generating fewer than 100 prescriptions 

during a 6-month reporting period. 

(iii) Exemptions to the payment 

adjustment. An eligible professional (or 

in the case of a group practice under 

paragraph (b) of this section, a group 

practice) is exempt from the application 

of the payment adjustment under 

paragraph (c)(2) of this section if one of 

the following applies: 

(A) The eligible professional is not an 

MD, DO, podiatrist, nurse practitioner, 

or physician assistant. 

(B) The eligible professional does not 

have at least 100 cases containing an 

encounter code that falls within the 

denominator of the electronic 

prescribing measure for dates of service 

during the 6-month reporting period 

specified in paragraph (f)(1) of this 

section. 

* * * * * 

(f) Requirements for individual 

eligible professionals and group 

practices for the payment adjustment. In 

order to be considered a successful 

electronic prescriber for the electronic 

prescribing payment adjustment, an 

individual eligible professional (or, in 

the case of a group practice under 

paragraph (b) of this section, a group 

practice), as identified by a unique TIN/ 

NPI combination, must meet the criteria 

for being a successful electronic 

prescriber specified by CMS, in the form 

and manner specified in paragraph (f)(2) 

of this section, and during the reporting 

period specified in paragraph (f)(1) of 

this section. 

(1) Reporting periods. (i) For purposes 

of this paragraph, the reporting period 

for the 2013 payment adjustment is 

either of the following: 

(A) The 12-month period from 

January 1, 2011 through December 31, 

2011. 

(B) The 6-month period from January 

1, 2012 through June 30, 2012. 

(ii) For purposes of this paragraph, the 

reporting period for the 2014 payment 

adjustment is either of the following: 

(A) The 12-month period from 

January 1, 2012 through December 31, 

2012. 

(B) The 6-month period from January 

1, 2013 through June 30, 2013. 

(2) Reporting mechanisms. For 

program years 2012 through 2014, an 

eligible professional (or, in the case of 

a group practice under paragraph (e) of 

this section, a group practice) who 

wishes to participate in the Electronic 

Prescribing Incentive Program must 

report information on the electronic 

prescribing measure identified by CMS 

to one of the following: 

(i) CMS, by no later than 2 months 

after the end of the applicable 12-month 

reporting period or by no later than 1 

month after the end of the applicable 6- 

month reporting period, on the eligible 

professional’s Medicare Part B claims 

for covered professional services 

furnished by the eligible professional 

during the reporting period specified in 

paragraph (f)(1) of this section. 

(ii) A qualified registry (as defined in 

paragraph (b) of this section) in the form 

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and manner and by the deadline 

specified by the qualified registry 

selected by the eligible professional. 

The selected qualified registry submits 

information, as required by CMS, for 

covered professional services furnished 

by the eligible professional during the 

reporting period specified in paragraph 

(f)(1) of this section to CMS on the 

eligible professional’s behalf. 

(iii) CMS by extracting clinical data 

using a secure data submission method, 

as required by CMS, from a qualified 

electronic health record product (as 

defined in paragraph (b) of this section) 

by the deadline specified by CMS for 

covered professional services furnished 

by the eligible professional during the 

reporting period specified in paragraph 

(f)(1) of this section. Prior to actual data 

submission for a given program year and 

by a date specified by CMS, the eligible 

professional must submit a test file 

containing dummy clinical quality data 

extracted from the qualified electronic 

health record product selected by the 

eligible professional using a secure data 

submission method, as required by 

CMS. 

* * * * * 

Subpart J—Submission of 

Manufacturer’s Average Sales Price 

Data 

12. Section 414.802 is amended by 

revising the first sentence of the 

definition of ‘‘unit’’ to read as follows: 

§ 414.802 Definitions. 

* * * * * 

Unit means the product represented 

by the 11-digit National Drug Code, 

unless otherwise specified by CMS to 

account for situations where labeling 

indicates that the amount of drug 

product represented by an NDC varies. 

* * * 

* * * * * 

13. Section 414.904 is amended by 

revising paragraph (d)(3) to read as 

follows: 

§ 414.904 Average sales price as the basis 

for payment. 

* * * * * 

(d) * * * 

(3) Widely available market price and 

average manufacturer price. If the 

Inspector General finds that the average 

sales price exceeds the widely available 

market price or the average 

manufacturer price by the applicable 

threshold percentage specified in 

paragraph (d)(3)(iii) or (d)(3)(iv) of this 

section, the Inspector General is 

responsible for informing the Secretary 

(at such times as specified by the 

Secretary) and the payment amount for 

the drug or biological will be substituted 

subject to the following adjustments: 

(i) The payment amount substitution 

will be applied at the next ASP payment 

amount calculation period after the 

Inspector General informs the Secretary 

(at such times specified by the 

Secretary) about billing codes for which 

the ASP has exceeded the AMP by the 

applicable threshold percentage, and 

will remain in effect for one quarter 

after publication. 

(ii) Payment at 103 percent of the 

average manufacturer price for a billing 

code will be applied at such times 

when— 

(A) The threshold for making price 

substitutions, as defined in paragraph 

(d)(3)(iii) of this section is met; and 

(B) 103 percent of the AMP is less 

than the 106 percent of the ASP for the 

quarter in which the substitution would 

be applied. 

(iii) The applicable percentage 

threshold for AMP comparisons for CYs 

2005 through 2011 is 5 percent. For CY 

2012, the applicable percentage 

threshold for ASP comparisons is 

reached when— 

(A) The ASP for the billing code has 

exceeded the AMP for the billing code 

by 5 percent or more in two consecutive 

quarters, or three of the last 4 quarters 

immediately preceding the quarter to 

which the price substitution would be 

applied; and 

(B) The average manufacturer price 

for the billing code is calculated using 

the same set of NDCs used for the 

average sales price for the billing code. 

(iv) The applicable percentage 

threshold for WAMP comparisons for 

CYs 2005 through 2012 is 5 percent. 

* * * * * 

PART 415—SERVICES FURNISHED BY 

PHYSICIANS IN PROVIDERS, 

SUPERVISING PHYSICIANS IN 

TEACHING SETTINGS, AND 

RESIDENTS IN CERTAIN SETTINGS 

14. The authority citation for part 415 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh). 

Subpart C—Part B Carrier Payments 

for Physician Services to Beneficiaries 

in Providers 

§ 415.130 [Amended] 

15. In § 415.130, paragraphs (d)(1) and 

(d)(2) are amended by removing the date 

‘‘December 31, 2010’’ and adding the 

date ‘‘December 31, 2011’’ in its place. 

PART 495—STANDARDS FOR THE 

ELECTRONIC HEALTH RECORD 

TECHNOLOGY INCENTIVE PROGRAM 

16. The authority for part 495 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh). 

17. Amend § 495.8 as follows: 

A. In pargraph (a)(2)(ii), removing the 

phrase ‘‘selected by CMS electronically 

to CMS (or in the case of Medicaid EPs, 

the States) in the manner specified by 

CMS (or in the case of Medicaid EPs, the 

States).’’ and adding in its place the 

phrase ‘‘selected by CMS to CMS (or in 

the case of Medicaid EPs, the States) in 

the form and manner specified by CMS 

(or in the case of Medicaid EPs, the 

States).’’ 

B. Adding a new paragraph (a)(2)(v) to 

read as follows: 

§ 495.8 Demonstration of meaningful use 

criteria. 

(a) * * * 

(2) * * * 

(v) Exception for Medicare EPs for PY 

2012—Participation in the Physician 

Quality Reporting System-Medicare 

EHR Incentive Pilot. In order to satisfy 

the clinical quality measure reporting 

objective in § 495.6(d)(10), aside from 

attestation, an EP participating in the 

Physician Quality Reporting System 

may also participate in the Physician 

Quality Reporting System-Medicare 

EHR Incentive Pilot through one of the 

following methods: 

(A) Submission of data extracted from 

the EP’s certified EHR technology 

through a Physician Quality Reporting 

System qualified EHR data submission 

vendor; or 

(B) Submission of data extracted from 

the EP’s certified EHR technology, 

which must also be through a Physician 

Quality Reporting System qualified 

EHR. 

* * * * * 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: June 16, 2011. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: June 24, 2011. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2011–16972 Filed 7–1–11; 4:15 pm] 

BILLING CODE 4120–01–P 

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