Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Proposed Rules 51321 

E. Executive Order 13132: Federalism 

Executive Order 13132, entitled 

‘‘Federalism’’ (64 FR 43255, August 10, 

1999), requires EPA to develop an 

accountable process to ensure 

‘‘meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications.’’ ‘‘Policies that have 

federalism implications’’ is defined in 

the Executive Order to include 

regulations that have ‘‘substantial direct 

effects on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’

This proposed rule does not have 

federalism implications. It will not have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. Today’s 

proposed rule is expected to primarily 

affect producers, suppliers, importers 

and exporters and users of methyl 

bromide. Thus, Executive Order 13132 

does not apply to this proposed rule. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 13175, entitled 

‘‘Consultation and Coordination with 

Indian Tribal Governments’’ (65 FR 

67249, November 9, 2000), requires EPA 

to develop an accountable process to 

ensure ‘‘meaningful and timely input by 

tribal officials in the development of 

regulatory policies that have tribal 

implications.’’ This proposed rule does 

not have tribal implications, as specified 

in Executive Order 13175. Today’s 

proposed rule does not significantly or 

uniquely affect the communities of 

Indian tribal governments. The 

proposed rule does not impose any 

enforceable duties on communities of 

Indian tribal governments. Thus, 

Executive Order 13175 does not apply 

to this proposed rule. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

Executive Order 13045: ‘‘Protection of 

Children from Environmental Health 

Risks and Safety Risks’’ (62 FR 19885, 

April 23, 1997) applies to any rule that: 

(1) is determined to be ‘‘economically 

significant’’ as defined under E.O. 

12866, and (2) concerns an 

environmental health or safety risk that 

EPA has reason to believe may have a 

disproportionate effect on children. If 

the regulatory action meets both criteria, 

the Agency must evaluate the 

environmental health or safety effects of 

the planned rule on children, and 

explain why the planned regulation is 

preferable to other potentially effective 

and reasonably feasible alternatives 

considered by the Agency. 

EPA interprets E.O. 13045 as applying 

only to those regulatory actions that are 

based on health or safety risks, such that 

the analysis required under Section 5–

501 of the Order has the potential to 

influence the regulation. This proposed 

rule is not subject to E.O. 13045 because 

it does not establish an environmental 

standard intended to mitigate health or 

safety risks. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This rule is not a ‘‘significant energy 

action’’ as defined in Executive Order 

13211, ‘‘Actions Concerning Regulations 

That Significantly Affect Energy Supply, 

Distribution, or Use’’ (66 FR 28355 (May 

22, 2001) because it is not likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy. 

This rule does not pertain to any 

segment of the energy production 

economy nor does it regulate any 

manner of energy use. Further, we have 

concluded that this rule is not likely to 

have any adverse energy effects. 

I. The National Technology Transfer 

and Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’), Pub. L. 104–

113, section 12(d) (15 U.S.C. 272 note) 

directs EPA to use voluntary consensus 

standards in its regulatory activities 

unless to do so would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures, and business 

practices) that are developed or adopted 

by voluntary consensus standards 

bodies. The NTTAA directs EPA to 

provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. This 

rulemaking does not involve technical 

standards. Therefore, EPA is not 

considering the use of any voluntary 

consensus standards. 

Dated: August 23, 2005. 

Stephen L. Johnson, 

Administrator. 

[FR Doc. 05–17190 Filed 8–29–05; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 410 

[CMS–6024–P] 

RIN 0938–AN10 

Medicare Program; Prior Determination 

for Certain Items and Services 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: Section 938 of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 requires the 

Secretary to establish a process for 

Medicare contractors to provide eligible 

participating physicians and 

beneficiaries with a determination of 

coverage relating to medical necessity 

for certain physicians’ services before 

the services are furnished. This rule is 

intended to afford the physician and 

beneficiary the opportunity to know the 

financial liability for a service before 

expenses are incurred. This proposed 

rule would establish reasonable limits 

on physicians’ services for which a prior 

determination of coverage may be 

requested and discusses generally our 

plans for establishing the procedures by 

which those determinations may be 

obtained. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on October 31, 2005. 

ADDRESSES: In commenting, please refer 

to file code CMS–6024–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (fax) 

transmission. 

You may submit comments in one of 

three ways (no duplicates, please): 

1. Electronically. You may submit 

electronic comments to http:// 

www.cms.hhs.gov/regulations/ 

ecomments or to http:// 

www.regulations.gov (attachments 

should be in Microsoft Word, 

WordPerfect, or Excel; however, we 

prefer Microsoft Word). 

2. By mail. You may mail written 

comments (one original and two copies) 

to the following address ONLY: Centers 

for Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–6024–P, P.O. 

Box 8017, Baltimore, MD 21244–8017. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

51322 Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Proposed Rules 

3. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786–

7195 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

(Because access to the interior of the 

HHH 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.) 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Misty Whitaker, (410) 786–3087. 

SUPPLEMENTARY INFORMATION: 

Submitting Comments: We welcome 

comments from the public on all issues 

set forth in this rule to assist us in fully 

considering issues and developing 

policies. You can assist us by 

referencing the file code CMS–6024–P 

and the specific ‘‘issue identifier’’ that 

precedes the section on which you 

choose to comment. 

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. CMS posts all electronic 

comments received before the close of 

the comment period on its public Web 

site as soon as possible after they have 

been received. Hard copy comments 

received timely will 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. 

I. Background 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘BACKGROUND’’ at the 

beginning of your comments.] 

Section 1862(a)(1)(A) of the Social 

Security Act (the Act) prohibits 

Medicare payments for items and 

services that are not reasonable and 

necessary for the diagnosis and 

treatment of an illness or injury. 

However, section 1879 of the Act 

provides that under certain 

circumstances Medicare will pay for 

services that are not considered 

reasonable and necessary if both the 

beneficiary and physician did not know 

and could not have reasonably been 

expected to know that Medicare 

payment would not be made. 

A physician may be held financially 

liable for noncovered services he or she 

furnishes if, for example, the Medicare 

contractor or CMS publishes specific 

requirements for those services or the 

physician has received a denial or 

reduction of payment for the same or 

similar service under similar 

circumstances. In cases where the 

physician believes that the service may 

not be covered as reasonable and 

necessary, an acceptable advance notice 

of Medicare’s possible denial of 

payment must be given to the patient if 

the physician does not want to accept 

financial responsibility for the service. 

These notices are referred to as Advance 

Beneficiary Notices (ABNs). 

ABNs must be given in writing, in 

advance of providing the service; 

include the description of service, as 

well as reasons why the service would 

not be covered; and must be signed and 

dated by the beneficiary to indicate that 

the beneficiary will assume financial 

responsibility for the service if Medicare 

payment is denied or reduced. 

Notwithstanding these ABNs, there is 

the potential that beneficiaries may be 

discouraged from obtaining services 

because they are uncertain whether or 

not Medicare contractors will deem 

them reasonable and necessary. 

Currently, beneficiaries can find out 

whether or not items or services are 

generally covered. However, when there 

is a question of whether Medicare will 

cover a specific item or service for a 

particular beneficiary under specific 

circumstances, there currently exists no 

process by which the beneficiary or his 

or her physician can find out if that item 

or service would be considered 

reasonable and necessary for that 

beneficiary before incurring financial 

liability. 

To address this issue, section 938 of 

the Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (Pub. L. 108–173, enacted on 

December 8, 2003) (MMA) requires the 

Secretary to establish a process whereby 

eligible requesters may submit to the 

contractor a request for a determination, 

before the furnishing of the physician’s 

service, as to whether the physician’s 

service is covered consistent with the 

applicable requirements of section 

1862(a)(1)(A) of the Act (relating to 

medical necessity). This MMA section 

also provides that an eligible requester 

is either: A participating physician, but 

only with respect to physicians’ services 

to be furnished to an individual who is 

entitled to benefits and who has 

consented to the physician making the 

request for those services; or an 

individual entitled to benefits, but only 

with respect to a physician’s service for 

which the individual receives an 

advance beneficiary notice under 

section 1879(a) of the Act. 

Requesting a prior determination 

under this proposed process is at the 

discretion of the eligible beneficiary or 

physician. Full knowledge regarding 

financial liability for the service would 

be available to physicians and 

beneficiaries before expenses are 

incurred, but prior determination of 

coverage is not required for submission 

of a claim. 

This proposed rule would establish 

reasonable limits on the physicians’

services for which a prior determination 

of coverage may be requested and 

discusses generally our plans for 

establishing the process by which prior 

determinations may be obtained. The 

procedures that Medicare contractors 

would use to make the determinations 

would be established in our manuals. 

II. Provisions of the Proposed Rule 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘Provisions of the Proposed 

Rule’’ at the beginning of your 

comments.] 

Section 1869(h)(1) of the Act, as 

added by section 938 of the MMA, 

requires the Secretary to establish a 

prior determination process for certain 

physicians’ services. Sections 1869(h)(3) 

through (6) of the Act are specific with 

respect to various aspects of the prior 

determination process, and we intend to 

follow these and any other applicable 

provisions in establishing the prior 

determination process. We intend to 

issue the detailed procedures through 

our instructions to contractors in our 

manuals. 

Section 1869(h)(2) of the Act, as 

added by section 938 of the MMA, 

requires the Secretary to establish by 

regulation reasonable limits on the 

Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Proposed Rules 51323 

physicians’ services for which a prior 

determination may be requested. This 

section provides that in establishing the 

reasonable limits, the Secretary may 

consider the dollar amount involved 

with respect to the physician’s service, 

administrative costs and burdens, and 

other relevant factors. 

We evaluated national data on 

physicians’ services including payment 

amounts, utilization, and denial rates. 

We considered using denial rates as one 

of the factors to be considered, but we 

have decided to use other factors 

instead. Although a service may have a 

relatively high denial rate, that number 

may be insignificant depending on the 

number of services performed annually. 

Based on our analysis, we are 

proposing to establish an initial pool of 

eligible physicians’ services comprised 

of at least those 50 services with the 

highest allowed average charges that are 

performed at least 50 times annually. 

We will exclude from this initial pool 

any services for which a national or 

local coverage determination exists that, 

based on CMS’ judgment, has 

sufficiently specific reasonable and 

necessary criteria to permit the 

beneficiary or physician to know 

whether the service is covered without 

a prior determination. We expect the 

number of physicians’ services in the 

final list, after excluding services with 

adequate national and local coverage 

determinations, may be fewer than 50. 

We propose to start with at least 50 

physicians’ services in the initial pool, 

but may expand the number of services 

eligible for the prior determination pool 

in the future if the need arises. In 

addition, we propose to allow prior 

determination for plastic and covered 

dental surgeries that may be covered by 

Medicare and that have an average 

allowed charge of at least $1,000. 

Specifically, in 42 CFR 410.20(d)(1), 

we propose to define a prior 

determination of medical necessity as a 

decision by a Medicare contractor, 

before a physician’s service is furnished, 

as to whether or not the physician’s 

service is covered consistent with the 

requirements of section 1862(a)(1)(A) of 

the Act relating to medical necessity. 

In § 410.20(d)(2), we propose that 

each Medicare contractor must, through 

the procedure established in CMS 

instructions, allow requests for prior 

determinations from eligible requesters 

under the contractor’s respective 

jurisdiction for those services identified 

by CMS and posted on that specific 

Medicare contractor’s Web site. Only 

those services listed on the date the 

request for a prior determination is 

made would be subject to prior 

determination. 

Each contractor’s list would consist of 

the following: At least the 50 most 

expensive physicians’ services listed in 

the national ceiling fee schedule amount 

of the Medicare Physician Fee Schedule 

Database performed at least 50 times 

annually minus those services excluded 

by § 410.20(d)(3) (with adequate 

national or local coverage 

determinations); and plastic and dental 

surgeries that may be covered by 

Medicare and that have an average 

allowed charge of at least $1,000. 

We have three reasons for proposing 

to establish the limit on physicians’

services based on the dollar amount of 

the service and including certain plastic 

and dental surgeries. First, beneficiaries 

are more likely to be discouraged from 

obtaining the most expensive 

physicians’ services because they are 

uncertain whether or not they would 

have to incur financial liability if 

Medicare does not pay for the service. 

The plastic and dental surgeries 

included are also relatively expensive, 

and there may be significant individual 

considerations in determining what is 

covered and what is excluded. Second, 

the majority of these services tend to be 

non-emergency surgical procedures 

generally performed in an inpatient 

setting. Since these services are not 

typically emergency services, 

beneficiaries would have adequate time 

to request a prior determination. Third, 

limiting prior determinations to these 

services is reasonable given the 

administrative cost to process each prior 

determination request. 

In § 410.20(d)(3), we propose that 

those services for which there is a 

national coverage determination (NCD) 

in effect or a local coverage 

determination/local medical review 

policy (LCD/LMRP) in effect through the 

local contractor at the time of the 

request for prior determination will not 

be eligible for prior determination. This 

exclusion only applies when the NCD or 

LCD/LMRP, in CMS’ judgment, provides 

the sufficiently specific reasonable and 

necessary criteria for the specific 

procedure for which the prior 

determination is requested. 

Our reason for this provision is that 

many national and local policies already 

provide the information necessary to 

make an informed decision about 

whether or not the service will be 

covered. In establishing the prior 

determination procedures through our 

manuals, we will instruct CMS 

contractors that, in cases where a prior 

determination is requested but an NCD 

or LCD/LMRP exists, the contractor will 

send the beneficiary a copy of that 

policy along with the explanation of 

why a prior determination will not be 

made. 

The lists will be consistent across all 

Medicare contractors except for the 

services excluded because of the 

presence of a local coverage 

determination. To ensure consistency, 

we will compile the list of at least 50 

services with the highest allowed 

charges performed at least 50 times 

annually and the plastic and dental 

surgeries that Medicare may cover 

under some circumstances and that 

have an average allowed charge of at 

least $1,000. We will then exclude those 

services that have an NCD that provides 

the sufficiently specific reasonable and 

necessary criteria for that specific 

procedure. Each Medicare contractor 

will then exclude the services for which 

that contractor has a local policy and 

post the remaining services by 

Healthcare Common Procedure Coding 

System procedure code and code 

description on its Web site. 

In § 410.20(d)(4), we propose that 

CMS may increase the number of 

services in the initial pool that are 

eligible for prior determination (over the 

minimum of 50) through manual 

instructions. Our reason for this 

provision is to ensure that CMS can 

provide for prior determinations for 

additional services when we detect a 

need. Sections 1869(h)(3) through (6) of 

the Act are specific with respect to 

various aspects of the prior 

determination process. Therefore, in 

§ 410.20(d)(5), we specify those 

mandatory provisions. The detailed 

procedures to be followed by our 

contractors will be published in our 

manual instructions. Section 

410.20(d)(5)(i) generally explains the 

prior determination process and 

accompanying documentation that may 

be required. Section 410.20(d)(5)(ii) 

describes how contractors will respond 

to prior determination requests. The 

statute provides that notice will be 

provided ‘‘within the same time period 

as the time period applicable to the 

contractor providing notice of initial 

determinations on a claim for benefits 

under section 1869(a)(2)(A) of the Act.’’

Therefore, the statute requires that 

contractors must mail the requestor the 

decision no later than 45 days after the 

request is received. Contractors will be 

instructed to process the requests as 

quickly as possible (but no longer than 

45 days), taking into consideration the 

beneficiary’s physical condition, the 

urgency of treatment, and the 

availability of the necessary 

documentation. We are soliciting 

comments on this issue. 

Section 410.20(d)(5)(iii) explains the 

binding nature of a positive 

51324 Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Proposed Rules 

determination. Section 410.20(d)(5)(iv) 

explains the limitation on further 

review. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

(PRA) of 1995, we are required to 

provide 30-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 PRA 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. 

Therefore, we are soliciting public 

comments on the information collection 

requirement discussed below, which are 

subject to the PRA. 

Section 410.20 Physicians’ Services 

Prior determination of medical 

necessity for physicians’ services. Before 

a physician’s service is furnished, an 

eligible requester, such as a physician or 

beneficiary, may request an 

individualized decision, a ‘‘Prior 

Determination of Medical Necessity,’’ by 

a Medicare contractor as to whether or 

not the physician’s service is covered 

consistent with the requirements of 

section 1862(a)(1)(A) of the Act relating 

to medical necessity. 

The burden associated with this 

proposed requirement would be the 

time spent by a requester to provide the 

appropriate level of documentation, as 

outlined in this section, to a Medicare 

contractor so that the contractor can 

provide a ‘‘Prior Determination of 

Medical Necessity.’’

We estimate 5000 requests will be 

made on an annual basis and it will 

require 15 minutes per request, for an 

annual burden of 1,250 hours. 

If you comment on any of these 

information collection and record 

keeping requirements, please mail 

copies directly to the following: 

Centers for Medicare & Medicaid 

Services, Office of Strategic Operations 

and Regulatory Affairs, Regulations 

Development and Issuances Group, 

Attn: John Burke, CMS–6024–P, Room 

C5–14–03, 7500 Security Boulevard, 

Baltimore, MD 21244–1850; and 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10235, New Executive 

Office Building, Washington, DC 20503, 

Attn: Christopher Martin, CMS Desk 

Officer, CMS–6024–P, 

Christopher_Martin@omb.eop.gov. Fax 

(202) 395–6974. 

IV. 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 major comments in the 

preamble to that document. 

V. Regulatory Impact Statement 

We have examined the impact of this 

rule as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 16, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), and Executive Order 13132. 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). A regulatory impact 

analysis (RIA) must be prepared for 

major rules with economically 

significant effects ($100 million or more 

in any 1 year). This rule does not reach 

the economic threshold and thus is not 

considered a major rule. Furthermore, 

this rule would not result in an increase 

in benefit spending. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and 

government agencies. Most hospitals 

and most other providers and suppliers 

are small entities, either by nonprofit 

status or by having revenues of $6 

million to $29 million in any 1 year. 

Individuals and States are not included 

in the definition of a small entity. We 

are not preparing an analysis for the 

RFA because we have determined that 

this rule would not have a significant 

economic impact on a substantial 

number of small entities. 

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 and has 

fewer than 100 beds. We are not 

preparing an analysis for section 1102(b) 

of the Act because we have determined 

that this 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 that may result in expenditure in 

any 1 year by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $110 million. This rule 

would have no consequential effect on 

the governments mentioned or on the 

private sector. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation would not impose 

any costs on State or local governments, 

the requirements of E.O. 13132 are not 

applicable. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects in 42 CFR Part 410 

Health facilities, Health professions, 

Kidney diseases, Laboratories, 

Medicare, Reporting and recordkeeping 

requirements, Rural areas, X-rays. 

For the reasons set forth in the 

preamble, 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: Sections 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395hh). 

Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Proposed Rules 51325 

2. Section 410.20 is amended by 

adding new paragraph (d) to read as 

follows: 

§ 410.20 Physicians’ services. 

* * * * * 

(d) Prior determination of medical 

necessity for physicians’ services. 

(1) Definition: A ‘‘Prior Determination 

of Medical Necessity’’ means an 

individual decision by a Medicare 

contractor, before a physician’s service 

is furnished, as to whether or not the 

physician’s service is covered consistent 

with the requirements of section 

1862(a)(1)(A) of the Act relating to 

medical necessity. 

(2) Each Medicare contractor will, 

through the procedures established in 

CMS manual instructions, allow 

requests for Prior Determinations of 

Medical Necessity from eligible 

requesters under its respective 

jurisdiction for those services identified 

by CMS and posted on that specific 

Medicare contractor’s Web site. Only 

those services listed on the date the 

request for a prior determination is 

made are subject to prior determination. 

Each contractor’s list will consist of the 

following: 

(i) At least the 50 most expensive 

physicians’ services listed in the 

national ceiling fee schedule amount of 

the Medicare Physician Fee Schedule 

Database performed at least 50 times 

annually minus those services excluded 

by paragraph (d)(3) of this section; and 

(ii) Plastic and dental surgeries that 

may be covered by Medicare and that 

have an average allowed charge of at 

least $1,000. 

(3) Within the services designated in 

paragraphs (d)(2)(i) and (d)(2)(ii) of this 

section, those services for which there is 

a national coverage determination 

(NCD) in effect or a local coverage 

determination/local medical review 

policy (LCD/LMRP) in effect through the 

local contractor at the time of the 

request for prior determination will be 

excluded from the list of services 

eligible for prior determination. This 

provision only applies when, in CMS’

judgment, the national or local policy 

provides the sufficiently specific 

reasonable and necessary criteria for the 

specific procedure for which the prior 

determination is requested. 

(4) CMS may increase the number of 

services that are eligible for prior 

determination through manual 

instructions. 

(5) Under section 1869(h)(3) through 

(6) of the Act, the procedures 

established in CMS manual instructions 

will include the following provisions: 

(i) Request for prior determination. 

(A) In general. An eligible requester 

may submit to the contractor a request 

for a determination, before the 

furnishing of a physicians’ service, as to 

whether the physicians’ service is 

covered under this title consistent with 

the applicable requirements of section 

1862(a)(1)(A) of the Act (relating to 

medical necessity). 

(B) Accompanying documentation. 

The Secretary may require that the 

request be accompanied by a 

description of the physicians’ service, 

supporting documentation relating to 

the medical necessity for the physicians’

service, and other appropriate 

documentation. In the case of a request 

submitted by an eligible requester who 

is described in section 1869(h)(1)(B)(ii) 

of the Act, the Secretary may require 

that the request also be accompanied by 

a copy of the advance beneficiary notice 

involved. 

(ii) Response to request. 

(A) General rule. The contractor will 

provide the eligible requester with 

notice of a determination as to 

whether—

(1) The physicians’ service is so 

covered; 

(2) The physicians’ service is not so 

covered; or 

(3) The contractor lacks sufficient 

information to make a coverage 

determination with respect to the 

physicians’ service. 

(B) Contents of notice for certain 

determinations. 

(1) Noncoverage. If the contractor 

makes the determination described in 

paragraph (d)(5)(ii)(A)(2) of this section, 

the contractor will include in the notice 

a brief explanation of the basis for the 

determination, including on what 

national or local coverage or 

noncoverage determination (if any) the 

determination is based, and a 

description of any applicable rights 

under section 1869(a) of the Act. 

(2) Insufficient information. If the 

contractor makes the determination 

described in paragraph (d)(5)(ii)(A)(3) of 

this section, the contractor will include 

in the notice a description of the 

additional information required to make 

the coverage determination. 

(C) Deadline to respond. That notice 

will be provided within the same time 

period as the time period applicable to 

the contractor providing notice of initial 

determinations on a claim for benefits 

under section 1869(a)(2)(A) of the Act. 

(D) Informing beneficiary in case of 

physician request. In the case of a 

request by a participating physician, the 

process will provide that the individual 

to whom the physicians’ service is 

proposed to be furnished will be 

informed of any determination 

described in paragraph (d)(5)(ii)(A)(2) of 

this section (relating to a determination 

of non-coverage) and the right to obtain 

the physicians’ service and have a claim 

submitted for the physicians’ service. 

(iii) Binding nature of positive 

determination. If the contractor makes 

the determination described in 

paragraph (d)(5)(ii)(A)(1) of this section, 

that determination will be binding on 

the contractor in the absence of fraud or 

evidence of misrepresentation of facts 

presented to the contractor. 

(iv) Limitation on further review. 

(A) General rule. Contractor 

determinations described in paragraph 

(d)(5)(ii)(A)(2) of this section or 

(d)(5)(ii)(A)(3) of this section (relating to 

pre-service claims) are not subject to 

further administrative appeal or judicial 

review. 

(B) Decision not to seek prior 

determination or negative determination 

does not impact right to obtain services, 

seek reimbursement, or appeal rights. 

Nothing in this paragraph will be 

construed as affecting the right of an 

individual who—

(1) Decides not to seek a prior 

determination under this paragraph 

with respect to physicians’ services; or 

(2) Seeks such a determination and 

has received a determination described 

in paragraph (d)(5)(ii)(A)(2) of this 

section, from receiving (and submitting 

a claim for) those physicians’ services 

and from obtaining administrative or 

judicial review respecting that claim 

under the other applicable provisions of 

this section. Failure to seek a prior 

determination under this paragraph 

with respect to physicians’ services will 

not be taken into account in that 

administrative or judicial review. 

(C) No prior determination after 

receipt of services. Once an individual 

is provided physicians’ services, there 

will be no prior determination under 

this paragraph with respect to those 

physicians’ services. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program.) 

Dated: September 29, 2004. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: August 23, 2005. 

Michael O. Leavitt, 

Secretary. 

[FR Doc. 05–17175 Filed 8–29–05; 8:45 am] 

BILLING CODE 4120–01–P