65906 Federal Register / Vol. 65, No. 213 / Thursday, November 2, 2000 / Rules and Regulations

DEPARTMENT OF VETERANS

AFFAIRS

38 CFR Part 17

RIN 2900–AK39

Reasonable Charges for Medical Care

or Services

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule.

SUMMARY: This document amends the

Department of Veterans Affairs (VA)

medical regulations concerning

‘‘reasonable charges’’ for medical care or

services provided or furnished by VA to

a veteran:

• For a nonservice-connected

disability for which the veteran is

entitled to care (or the payment of

expenses of care) under a health plan

contract;

• For a nonservice-connected

disability incurred incident to the

veteran’s employment and covered

under a worker’s compensation law or

plan that provides reimbursement or

indemnification for such care and

services; or

• For a nonservice-connected

disability incurred as a result of a motor

vehicle accident in a State that requires

automobile accident reparations

insurance.

This document amends the

regulations to update databases and

other provisions for the purpose of

providing more precise charges.

DATES: Effective Date: These

amendments are effective November 2,

2000. Comments must be submitted by

January 2, 2001.

ADDRESSES: Mail or hand-deliver

written comments to: Director, Office of

Regulations Management (02D),

Department of Veterans Affairs, 810

Vermont Ave., NW, Room 1154,

Washington, DC 20420; or fax comments

to (202) 273–9289; or e-mail comments

to OGCRegulations@mail.va.gov.

Comments should indicate that they are

submitted in response to ‘‘RIN 2900–

AK39.’’ All comments received will be

available for public inspection in the

Office of Regulations Management,

Room 1158, between the hours of 8 a.m.

and 4:30 p.m., Monday through Friday

(except holidays).

FOR FURTHER INFORMATION CONTACT:

David Cleaver, VHA Revenue Office

(174), Veterans Health Administration,

Department of Veterans Affairs, 810

Vermont Avenue, NW., Washington, DC

20420, (202) 273–8210. (This is not a

toll free number.)

SUPPLEMENTARY INFORMATION: This

document amends VA’s medical

regulations that are set forth at 38 CFR

part 17. More specifically, we are

amending the regulations concerning

‘‘reasonable charges’’ for medical care or

services provided or furnished by VA to

a veteran:

(i) For a nonservice-connected

disability for which the veteran is

entitled to care (or the payment of

expenses of care) under a health plan

contract;

(ii) For a nonservice-connected

disability incurred incident to the

veteran’s employment and covered

under a worker’s compensation law or

plan that provides reimbursement or

indemnification for such care and

services; or

(iii) For a nonservice-connected

disability incurred as a result of a motor

vehicle accident in a State that requires

automobile accident reparations

insurance.

The regulations establish a

methodology for ‘‘reasonable charges’’

for such medical care and services. The

amount billed using this methodology

consists of inpatient facility charges,

skilled nursing facility/sub-acute

inpatient facility charges, outpatient

facility charges, physician charges, and

other provider charges.

Under the provisions of 38 U.S.C.

1729, VA has the right to recover or

collect its reasonable charges from a

third party to the extent that the veteran

or a provider of the care or services

would be eligible to receive payment

therefor from that third party if the care

or services had not been furnished by a

department or agency of the United

States. With respect to a third-party

payer liable under a health plan

contract, consistent with the statutory

authority, the third-party payer would

have the option of paying, to the extent

of its coverage, either the billed charges

or the amount the third-party payer

demonstrates it would pay for care or

services furnished by providers other

than entities of the United States for the

same care or services in the same

geographic area.

This document modifies the existing

regulations in three primary ways, and

also makes various other less significant

improvements. First, the original

formula used a number of databases for

1995 through 1998 which are now being

updated to use the 1997 through 2000

versions of these files (e.g., MedStat and

MediCode databases). Second, a number

of previously used data files are being

replaced with more current and easierto-use databases (e.g., use the 1998

Medicare MedPAR database in lieu of

the 1995 Medicare Standard Analytical

File 5% Sample). Lastly, the term

‘‘geographic area’’, which was defined

as the ‘‘Metropolitan Statistical Area

(MSA) or the local market, if the VA

facility is not located in a MSA’’, retains

that definition for inpatient facility

charges and skilled nursing facility/subacute inpatient facility charges, but is

now defined as ‘‘a three-digit ZIP Code

locality’’ for outpatient facility charges

and physician charges. These changes

and the various other improvements to

the methodology are described in

greater detail in the following

paragraphs. These changes and

improvements should not have a

significant impact on any affected party,

but will make this process more current,

accurate, and logical.

The formulas for inpatient facility

charges, skilled nursing facility/subacute inpatient facility charges,

outpatient facility charges, and

physician charges were designed to

replicate, insofar as possible, the 80th

percentile charge for a particular service

in a specific location. We have made

changes to ensure that the information

used in the methodology is as current

and precise as possible. As an example,

the formula for outpatient facility

charges included factors based on the

1995 MedStat claims database. We now

are able to use the 1997 MedStat claims

database. Therefore, we are changing the

formula to use the updated database. We

have made a number of other changes to

obtain more precise information as

explained below.

The formulas for inpatient facility

charges, skilled nursing facility/subacute inpatient facility charges,

outpatient facility charges, and

physician charges include geographic

area adjustment factors. The term

‘‘geographic area’’ was defined as the

‘‘Metropolitan Statistical Area (MSA) or

the local market, if the VA facility is not

located in a MSA.’’ This document

retains this definition for inpatient

facility charges and skilled nursing

facility/sub-acute inpatient facility

charges. However, for outpatient facility

charges and physician charges this

document changes the definition of

geographic area to mean a three-digit

ZIP Code locality. The three-digit ZIP

Code methodology is more precise than

the MSA and has been developed for

outpatient facility charges and

physician charges.

The formula for calculating inpatient

facility charges includes per diem

charges that are based in part on two

nationwide databases. Previously, the

formula used the 1995 Medicare

Standard Analytical File 5% Sample

and the 1995 MedStat claim database.

We are amending the formula to use the

1998 Medicare MedPAR database in lieu

of the 1995 Medicare Standard

Federal Register / Vol. 65, No. 213 / Thursday, November 2, 2000 / Rules and Regulations 65907

Analytical 5% Sample. The 1998

Medicare MedPAR database is not only

more current but also provides

information in an easier-to-use format.

We are also amending the formula to

use the 1997 MedStat database in lieu

of the 1995 MedStat database. This is a

more current database of the same

information. With these changes the

formula will utilize the latest available

data for calculating per diem charges.

The formula for inpatient facility

charges includes charge component

percentages. Previously, the formula

used the 1995 Medicare Standard

Analytical File 5% Sample. We are

amending the formula to use the 1998

Medicare MedPAR database in lieu of

the Medicare Standard Analytical 5%

Sample. As noted above, the 1998

Medicare MedPAR database is not only

more current but also provides

information in an easier-to-use format.

The formula for skilled nursing

facility/sub-acute inpatient facility

charges includes per diem charges that

are based on nationwide data

concerning skilled nursing facility

charges contained in the 1998 Milliman

& Robertson, Inc. Health Cost

Guidelines. We are amending the

formula to use the data, which has been

updated by Milliman & Robertson

through July 1, 2000. With this change,

the formula will use the latest available

data for calculating per diem charges.

The formula for outpatient facility

charges includes charge factors that are

based on the 1995 MedStat claims

database of nationwide commercial

insurance. We are amending the formula

to use the 1997 MedStat claims database

of nationwide commercial insurance.

With this change, the formula will use

the latest available data for calculating

the charge factors.

The formula for outpatient facility

charges included 37 Current Procedural

Terminology (CPT) procedure code

groups from which the median charge

was used for calculating the charge

factors. We are amending the formula to

use 45 CPT procedure code groups

instead of the previous 37 to better

group together those CPT procedure

codes with similar characteristics. This

will help ensure more accurate results

for the charge factors.

Previously, the formula for outpatient

facility charges established 80th

percentile charge levels using two

databases, MediCode and MedStat. The

formula is changed to use the MedStat

database for all CPT code groups since

it contains all of the information needed

for this purpose.

For physician charges other than

anesthesia charges, in general, we have

established several methods for

determining charges depending on the

availability of information. Under the

regulations, we employ methodology to

provide the most precise charges. If

work expense and practice expense

Relative Value Units (RVUs) are

established under Medicare, we employ

methodology utilizing these factors.

This enables us to use three geographic

area adjustment factors (GAAFs) in

calculating charges for each of these

CPT procedure codes: one for the work

expense RVUs, one for the practice

expense RVUs, and one for the

conversion factor. When work expense

and practice expense RVUs are not

available from Medicare, we use

methodology based on total RVUs

derived from Medicare’s Clinical

Diagnostic Laboratory Fee Schedule. For

each of these CPT procedure codes, we

are able to use two GAAFs in

calculating the charges: one for the total

RVUs and one for the conversion factor.

If neither of these methods is available,

we use methodology based directly on

billed charges. For each of these CPT

procedure codes, we develop total RVUs

and a conversion factor, using one

GAAF for RVUs and one GAAF for the

conversion factor. As a last resort, if

none of the above are available, we use

methodology based on work expense

and practice expense RVUs obtained

from St. Anthony’s RBRVS (Resource

Based Relative Value Scale). For each of

these CPT procedure codes, we develop

total RVUs and a conversion factor,

using one GAAF for RVUs and one

GAAF for the conversion factor.

Consistent with these principles, we are

making changes based on new

information to establish more precise

charges for CPT procedure codes. The

largest group of CPT procedure codes to

be changed involves laboratory and

pathology. Previously, we developed

nationwide charges for these CPT

procedure codes, to which we applied a

single GAAF. We are now changing the

methodology to develop total RVUs for

these CPT procedure codes, enabling us

to use two GAAFs, one for the total

RVUs and one for the conversion factor.

With respect to the formula for

physician charges, to make charges for

laboratory and pathology CPT procedure

codes more accurately reflect 80th

percentile charges, we adjusted the

relativities for laboratory and pathology

charges by including the 2000 RBRVS

work and practice expense RVUs,

representing the professional

component of these procedures, when

applicable.

We have deleted provisions in the

physician charges formula providing for

the Medicare work adjuster. This was

used as a budget constraint factor

designed for use in past years for

Medicare calculations. This is no longer

being used for Medicare calculations

and, therefore, we are also deleting it

from our formula.

The formula for physician charges

included facility-adjusted work expense

and practice expense RVUs for most

CPT procedure codes and base unit

values for anesthesia CPT procedure

codes. Previously, the formula used

information from the 1998 Medicare

Geographic Practice Cost Index, 1998

Medicare RBRVS Unit Values, and 1998

St. Anthony’s Complete RBRVS. We are

amending the formula to use the 2000

Medicare Geographic Practice Cost

Index, 2000 Medicare RBRVS Unit

Values, and the 2000 St. Anthony’s

RBRVS. With these changes the formula

will use the latest available data for

calculating physician charges.

The formula for physician charges

also included the Health Insurance

Association of America nationwide

commercial insurance database for

obtaining the 80th percentile charge for

facility-adjusted 80th percentile

conversion factors. We have instead

used the charge data compiled by

MediCode since it is easier to use for

this purpose.

The methodology for inpatient facility

charges, skilled nursing facility/subacute inpatient facility charges,

outpatient facility charges, and

physician charges includes trending to

update charges based on changes to the

consumer price index. This

methodology is updated to reflect

changes described above regarding

updated databases. This methodology is

also amended to reflect that charges are

trended to the midpoint of the calendar

year in which the charges will be

effective.

All of the above changes made by this

document are for the purpose of adding

precision to charges.

Also, changes are made to the

regulations for purposes of clarification.

Administrative Procedure Act

This document amends the

regulations to update databases and

other provisions for the purpose of

providing more precise charges.

Although some charges might be

slightly different, overall these changes

would not affect total VA charges.

Under these circumstances, we have

concluded under 5 U.S.C. 553 that there

is good cause for dispensing with prior

notice and comment and a delayed

effective date based on the conclusion

that such procedure is impracticable,

unnecessary, and contrary to the public

interest.

65908 Federal Register / Vol. 65, No. 213 / Thursday, November 2, 2000 / Rules and Regulations

Unfunded Mandates

The Unfunded Mandates Reform Act

requires (in section 202) that agencies

prepare an assessment of anticipated

costs and benefits before developing any

rule that may result in an expenditure

by State, local, or tribal governments, in

the aggregate, or by the private sector of

$100 million or more in any given year.

This rule would have no consequential

effect on State, local, or tribal

governments.

Executive Order 12866

The Office of Management and Budget

has reviewed this proposed rule under

Executive Order 12866.

Regulatory Flexibility Act

The Secretary hereby certifies that

this rule will not have a significant

economic impact on a substantial

number of small entities as they are

defined in the Regulatory Flexibility

Act, 5 U.S.C. 601–612. This rule would

affect mainly large insurance companies

and where small entities are involved

they would not be impacted

significantly since most of their

business is not with VA. Accordingly,

pursuant to 5 U.S.C. 605(b), this rule is

exempt from the initial and final

regulatory flexibility analysis

requirements of sections 603 and 604.

The Catalog of Federal domestic assistance

numbers for the programs affected by this

rule are 64.005, 64.007.64.008, 64,009,

64.010, 64.011, 64.012, 64.013, 64.014,

64.015, 64.016, 64.018, 64.019, 64.022, and

64.025.

List of Subjects in 38 CFR Part 17

Administrative practice and

procedure, Alcohol abuse, Alcoholism,

Claims, Day care, Dental health, Drug

abuse, Foreign relations, Government

contracts, Grant programs-health, Grant

programs-veterans, Health care, Health

facilities, Health professions, Health

records, Homeless, Medical and dental

schools, Medical devices, Medical

research, Mental health programs,

Nursing homes, Philippines, Reporting

and recordkeeping requirements,

Scholarships and fellowships, Travel

and transportation expenses, Veterans.

Approved: August 30, 2000.

Hershel W. Gober,

Acting Secretary of Veterans Affairs.

For the reasons set out in the

preamble, 38 CFR part 17 is amended as

set forth below:

PART 17—MEDICAL

1. The authority citation for part 17

continues to read as follows:

Authority: 38 U.S.C. 501, 1721, unless

otherwise noted.

2. Section 17.101 is amended by:

A. In paragraph (a)(4), revising the

definition of Geographic area.

B. In paragraph (b)(2) introductory

text, revising the first sentence; and by

removing ‘‘their 1995 base’’ from the

fifth sentence and adding, in its place

‘‘1998’’.

C. In paragraph (b)(2)(i), removing

‘‘Medicare Standard Analytical File 5%

Sample’’ and adding, in its place,

‘‘MedPAR file’’.

D. In paragraph (b)(2)(ii), removing

‘‘Medicare’’ and adding, in its place,

‘‘1995 Medicare’’.

E. Revising paragraph (b)(2)(iii).

F. In paragraph (c)(2) introductory

text, removing ‘‘1998’’ each time it

appears and adding, in its place,

‘‘2000’’.

G. Revising paragraph (c)(2)(ii).

H. Revising paragraph (d)(3).

I. In paragraph (e)(1), removing ‘‘and

pathology’’ each time it appears.

J. In the paragraph (e)(2)(i) heading

and in the remaining text of the

paragraph, removing ’’, pathology,’’.

K. In paragraph (e)(2)(i), introductory

text, removing ‘‘(e)(2)(ii) and

(e)((2)((iii)’’ and adding, in its place,

‘‘(e)(2)(ii) through (e)(2)(iv).

L. Revising paragraph (e)(2)(i)(A).

M. In paragraph (e)(2)(i)(B), removing

‘‘1998’’ each time it appears and adding,

in its place, ‘‘2000’’.

N. Revising paragraphs (e)(2)(ii)

through (e)(2)(iv); and adding new

(e)(2)(v).

O. In paragraph (e)(3), introductory

text, removing ‘‘1998’’ and adding,

‘‘2000’’.

P. In paragraph (e)(3); removing

‘‘insurance data base compiled by the

Health Insurance Association of

America, 555 13th Street NW, Suite

600E, Washington, D.C. 20004 (medical

data for 5/1/96–4/30/97, including

radiology and pathology; surgical data

for 3/1/96–2/28/97; anesthesia data for

3/1/96–2/28/97)).’’ and adding, in its

place, ‘‘charge database compiled by

MediCode, Inc., 5225 Wiley Post Way,

Suite 500, Salt Lake City, Utah 84116).’’

Q. In paragraph (e)(3)(ii), removing

‘‘representing charges for time periods

detailed’’ and adding, in its place,

‘‘representing charge levels described’’.

R. In paragraph (e)(3)(ii), removing

‘‘for the period August 1998 through

September 1999, and for each 12-month

calendar year period thereafter,

beginning January 1, 2000’’;

S. In paragraph (e)(3)(ii), removing

‘‘effective charge period’’ and adding, in

its place, ‘‘calendar year in which

charges will be effective’’.

T. Revising paragraph (e)(4)

introductory text.

U. In paragraph (e)(4)(i), removing

‘‘1998’’ each time it appears and adding,

in its place, ‘‘2000’’; and by removing

‘‘anesthesia time unit’’ and adding, in

its place, ‘‘anesthesia average time

unit’’.

The additions and revisions read as

follows:

§ 17.101 Collection or recovery by VA for

medical care or services provided or

furnished to a veteran for a non-service

connected disability.

(a) * * *

(4) * * *

Geographic area, for purposes of

inpatient facility and skilled nursing

facility/sub-acute inpatient facility

charges, means Metropolitan Statistical

Area (MSA) or the local market, if the

VA facility is not located in an MSA;

and for outpatient facility charges and

physician charges, means a three-digit

ZIP Code locality.

* * * * *

(b) * * *

(2) * * * To establish a baseline, two

nationwide average per diem charges for

each DRG are calculated for fiscal year

1998, one from the 1998 Medicare

MedPAR file and one from the MedStat

claim database, a database of

nationwide commercial insurance

claims. Because the MedStat data is

based on calendar year 1997, the

MedStat charges were trended forward

at an annual trend rate of 2.7%, based

on the Inpatient Hospital component of

the CPI–U. * * *

* * * * *

(iii) Trending forward. 80th percentile

charges for each DRG, representing

charge levels described in (b)(2) of this

section, are trended forward based on

changes to the hospital inpatient

component of the CPI–U. Actual CPI–U

changes are used through the latest

available month for room/board and

ancillary charges. Trends from the latest

available month to the midpoint of the

calendar year in which charges become

effective are based on the latest threemonth average annual trend rate from

the Inpatient Hospital component of the

CPI–U. The projected total CPI trend is

then applied to the 1998 80th percentile

charges.

* * * * *

(c) * * *

(2) * * *

(ii) Trending forward. The 80th

percentile charge is trended forward to

the midpoint of the calendar year in

which the charges will be effective,

based on the projected change in

Medicare reimbursement from the

Annual Report of the Board of Trustees

of the Federal Hospital Insurance Trust

Fund (this report can be found on the

Federal Register / Vol. 65, No. 213 / Thursday, November 2, 2000 / Rules and Regulations 65909

Health Care Financing Administration

Internet site at http://www.hcfa.gov/

under the headings ‘‘Publications and

Forms’’ and ‘‘Professional/Technical

Publications’’).

* * * * *

(d) * * *

(3) Charge factors. Using the 1997

MedStat claims database of nationwide

commercial insurance, the median

billed facility charge is calculated for

each applicable CPT procedure code.

All outpatient facility CPT procedure

codes are then separated into one of the

45 outpatient facility CPT procedure

code groups as set forth in paragraph

(d)(3)(i) of this section. Then, for each

CPT procedure code in each such group,

the median charge is adjusted to the

80th percentile as set forth in paragraph

(d)(3)(ii) of this section. The resulting

80th percentile charge for each CPT

procedure code is trended forward to

the effective time period for the charges

as set forth in paragraph d)(3)(iii) of this

section. Using the resulting charges and

the RVUs, mathematical approximation

methodology based on least squares

techniques is applied to the data for

each CPT procedure code group to

derive outpatient facility charges. For

each CPT procedure code, the charge

amount is calculated as an amount per

incremental RVU and a fixed charge

amount adjustment.

(i) Outpatient facility CPT procedure

code groups.

(A) Surgery—Integumentary System—

Skin, Subcutaneous & Accessory

Structures/Nails;

(B) Surgery—Integumentary System—

Repair—Simple, Intermediate, Complex,

Adjacent Tissue Transfer or

Rearrangement;

(C) Surgery—Integumentary System—

Not Otherwise Classified;

(D) Surgery—Musculoskeletal

System—Not Otherwise Classified;

(E) Surgery—Musculoskeletal

System—Incision/Excision/

Introduction/Removal;

(F) Surgery—Musculoskeletal

System—Repair/Revison/

Reconstruction/Arthrodesis/

Manipulation/Amputation;

(G) Surgery—Musculoskeletal

System—Fracture/Dislocation-Closed

Treatment;

(H) Surgery—Musculoskeletal

System—Fracture/Dislocation-Open

Treatment;

(I) Surgery—Musculoskeletal

System—Application of Casts and

Strapping;

(J) Surgery—Musculoskeletal

System—Endoscopy/Arthroscopy;

(K) Surgery—Respiratory System;

(L) Surgery—Cardiovascular System;

(M) Surgery—Digestive System—Not

Otherwise Classified;

(N) Surgery—Digestive System—

Endoscopy;

(O) Surgery—Urinary System;

(P) Surgery—Male Genital System;

(Q) Surgery—Female Genital System;

(R) Surgery—Maternity Care and

Delivery;

(S) Surgery—Endocrine System/

Nervous System;

(T) Surgery—Eye/Ocular Adnexa;

(U) Surgery—Auditory System;

(V) Radiology—Diagnostic—Head &

Neck/Chest/Spine & Pelvis;

(W) Radiology—Diagnostic—

Extremities/Abdomen/Gastrointestinal

Tract/Urinary Tract/Gynecological &

Obstetrical/Heart;

(X) Radiology—Diagnostic—Aorta &

Arteries/Veins & Lymphatics;

(Y) Radiology—Diagnostic

Ultrasound;

(Z) Radiology—Radiation Oncology/

Nuclear Medicine/Therapeutic;

(AA) Radiology—Diagnostic—CAT

Scans;

(BB) Radiology—Diagnostic—

Magnetic Resonance Imaging (MRI);

(CC) Medicine—Vaccines/Toxoids;

(DD) Medicine—Therapeutic or

Diagnostic Infusions (Excludes

Chemotherapy)/Therapeutic,

Prophylactic, or Diagnostic Injections;

(EE) Medicine—Psychiatry/

Biofeedback;

(FF) Medicine—Dialysis;

(GG) Medicine—Gastroenterology;

(HH) Medicine—Ophthalmology/

Special Otorhinolaryngologic Services;

(II) Medicine—Cardiovascular/NonInvasive Vascular Diagnostic Studies;

(JJ) Medicine—Pulmonary;

(KK) Medicine—Neurology &

Neuromuscular Procedures/Central

Nervous System Assessments & Tests;

(LL) Medicine—Chemotherapy

Administration;

(MM) Medicine—Special

Dermatological Procedures;

(NN) Medicine—Physical Medicine

and Rehabilitation—Evaluation/

Modalities; Photodynamic Therapy;

(OO) Medicine—Physical Medicine

and Rehabilitation—Therapeutic

Procedures/Tests and Measurements/

Other Procedures; Osteopathic

Manipulative Treatment/Chiropractic

Manipulative Treatment/Special

Services, Procedures, & Reports/Other

Services and Procedures;

(PP) Medicine—Evaluation &

Management—Consultations;

(QQ) Medicine—Evaluation &

Management—Hospital Observation

Services;

(RR) Medicine—Evaluation &

Management—Emergency Department

Services/Critical Care Services; and

(SS) Medicine—Evaluation &

Management—General

Ophthalmological Services/Office or

Other Outpatient Services/Prolonged

Services.

(ii) 80th percentile. For each of the 45

outpatient facility CPT procedure code

groups set forth in paragraph (d)(3)((i) of

this section, the median charge is

increased by the ratio of the 80th

percentile charge to median charge

obtained from the MedStat database of

nationwide charges. To mitigate the

impact of the variation in the intensity

of services by CPT procedure code, the

percent increase from the median to the

80th percentile in outpatient charges is

compared to the percent increase from

the median to the 80th percentile in

inpatient semi-private room and board

charges. Any percent increase in

outpatient charges in excess of the

inpatient semi-private room and board

percent increase is multiplied by a

factor of 0.50. The 80th percentile

outpatient facility charge is reduced

accordingly.

(iii) Trending forward. The charges for

each CPT procedure code, representing

charge levels described in paragraph

(d)(3) of this section, are trended

forward to the midpoint of the calendar

year in which the charges will be

effective. The trend factors are based on

changes to the Outpatient Hospital

component of the CPI–U. Actual CPI–U

changes are used through the latest

available month. The three-month

average annual trend rate as of the latest

available month is held constant to the

midpoint of the effective charge period.

The projected total CPI–U change from

the source data period to the effective

period is then applied to the 80th

percentile charges, as described in

paragraph (d)(3) of this section.

* * * * *

(e) * * *

(2) * * *

(i) * * *

(A) Facility-adjusted work expense

RVUs. For each CPT procedure code for

each geographic area, the 2000 work

expense RVU is multiplied by the work

expense 2000 Medicare Geographic

Practice Cost Index. The result

constitutes the facility-adjusted work

expense RVU.

* * * * *

(ii) RVUs based on laboratory and

pathology CPT codes based on

Medicare’s Clinical Diagnostic

Laboratory Fee Schedule. For CPT

procedure codes without modifiers that

are not assigned separately identified

work and practice units (in (e)(2)(i) of

this section), total RVUs are developed

based on the 2000 edition of Medicare’s

65910 Federal Register / Vol. 65, No. 213 / Thursday, November 2, 2000 / Rules and Regulations

Clinical Diagnostic Laboratory Fee

Schedule (found on the Health Care

Financing Administration public use

files Internet site at http://

www.hcfa.gov/stats/pufiles.htm under

the heading ‘‘Payment Rates/ NonInstitutional Providers’’ and the title

‘‘Clinical Diagnostic Laboratory Fee

Schedule’’). Such Medicare payment

amounts are upwardly adjusted such

that the payment level is, on average,

equivalent to standard RBRVS payment

levels, using statistical comparisons to

the 80th percentile derived from the

MediCode charge database. These

adjusted payment amounts are then

divided by the 2000 Medicare

conversion factor to derive RVUs

corresponding to each CPT code. The

total RVUs are added to the 2000

RBRVS work and practice expense

RVUs for the corresponding professional

component (if any) of a given CPT

procedure code to derive nationwide

total RVUs. The resulting nationwide

total RVUs are multiplied by the

geographic adjustment factors as set

forth in paragraph (e)(2)(v) of this

section to obtain the facility-specific

total RVUs.

(iii) RVUs for specified CPT procedure

codes. For CPT procedure codes without

modifiers that are not assigned RVUs in

(e)(2)(i) or (e)((2)(ii) of this section, total

RVUs are developed based on various

charge databases. For the following CPT

procedure codes, the nationwide 80th

percentile billed charges are obtained

from the nationwide commercial

insurance data base compiled by the

Health Insurance Association of

America (Health Insurance Association

of America, 555 13th Street, NW, suite

600E, Washington, DC 20004): 15876,

15877, 15878, 15879, 21088, 21089,

26587, 32850, 33940, 36468, 36469,

47133, 48550, 69710, 76140, 78990,

79900, 92390, 92391, 99024, 99071,

99075, 99078, 99080, 99082, 99090,

99100, 99116, 99135, 99140, 99288,

99420, 99450, 99455, 99456. For the

following CPT procedure codes, the

nationwide 80th percentile billed

charges are obtained from the Medicare

Standard Analytical File 5% Sample:

23929, 26989, 29909, 86849, 90749,

96549, 99070, 99429. For the following

CPT procedure codes, the nationwide

80th percentile billed charges are

obtained from the MediCode data:

15824, 15825, 15826, 15828, 15829,

17380, 20930, 20936, 22841, 24940,

36415, 38792, 41820, 41821, 41850,

41870, 48160, 50300, 54440, 58974,

65760, 65765, 65767, 65771, 69090,

80050, 80055, 80103, 82251, 86485,

86586, 86850, 86860, 86870, 86890,

86891, 86901, 86910, 86911, 86915,

86920, 86921, 86922, 86927, 86930,

86931, 86932, 86945, 86950, 86965,

86970, 86971, 86972, 86975, 86976,

86977, 86978, 86985, 88000, 88005,

88007, 88012, 88014, 88016, 88020,

88025, 88027, 88028, 88029, 88036,

88037, 88040, 88045, 88142, 88143,

88144, 88145, 88147, 88148, 89250,

90371, 90375, 90376, 90389, 90471,

90472, 90585, 90586, 90632, 90633,

90634, 90645, 90646, 90647, 90648,

90657, 90658, 90659, 90665, 90675,

90680, 90690, 90691, 90882, 90889,

90989, 90993, 92531, 92532, 92533,

92534, 92590, 92591, 92592, 92593,

92594, 92595, 92992, 92993, 93786,

93788, 93790, 94642, 95120, 95125,

95130, 95131, 95132, 95133, 95134,

96110, 99000, 99001, 99002, 99025,

99050, 99052, 99054, 99056, 99058,

99190, 99191, 99192, 99358, 99359,

99360, 99361, 99362, 99371, 99372, and

99373. The nationwide 80th percentile

billed charges so obtained are divided

by the untrended nationwide

conversion factor for the corresponding

physician CPT procedure code group as

set forth in paragraphs (e)(3) and (e)(3)(i)

of this section. The resulting nationwide

total RVUs are multiplied by the

geographic adjustment factors as set

forth in paragraph (e)(2)(v) of this

section to obtain the facility-specific

total RVUs.

(iv) RVUs for specified CPT procedure

codes. For CPT procedure codes without

modifiers that are not assigned RVUs in

paragraphs (e)(2)(i), (e)(2)(ii), or

(e)(2)(iii) of this section, the nationwide

total RVU is calculated by summing the

work expense and practice expense

RVUs found in the 2000 St. Anthony’s

Complete RBRVS (available from

Relative Value Studies, Inc., St.

Anthony Publishing, 11410 Isaac

Newton Square, Reston, VA 20190):

38120, 44201, 60650, 76092, 76350,

78351, 93000, 93040, 93224, 93230,

93235, 93268, 93720, 93760, 93762,

93784, 99185, 99186. The resulting

nationwide total RVUs are multiplied by

the geographic adjustment factors as set

forth in paragraph (e)(2)(v) of this

section to obtain the facility-specific

total RVUs.

(v) RVU geographic area adjustment

factors for specified CPT procedure

codes. The geographic area adjustment

factor for each facility location consists

of the weighted average of the 2000

work expense and practice expense

Medicare Geographic Practice Cost

Indices for each facility location using

charge data for representative CPT

procedure codes statistically selected

and weighted for work expense and

practice expense.

* * * * *

(4) Nationwide 80th percentile

charges for anesthesia CPT procedure

codes. The nationwide charges are

calculated by multiplying the RVUs as

set forth in paragraph (e)(4)(i) of this

section by the appropriate nationwide

trended 80th percentile conversion

factors as set forth in paragraph (e)(3) of

this section.

[FR Doc. 00–27721 Filed 11–1–00; 8:45 am]

BILLING CODE 8320–01–P