33882 Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules

proposes to amend 14 CFR part 71 as

follows:

PART 71—DESIGNATION OF CLASS A,

CLASS B, CLASS C, CLASS D, AND

CLASS E AIRSPACE AREAS;

AIRWAYS; ROUTES; AND REPORTING

POINTS

1. The authority citation for 14 CFR

part 71 continues to read as follows:

Authority: 49 U.S.C. 106(g), 40103, 40113,

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of the Federal Aviation

Administration Order 7400.9E, Airspace

Designations and Reporting Points,

dated September 10, 1997, and effective

September 16, 1997, is amended as

follows:

Paragraph 6005 Class E airspace areas

extending upward from 700 feet or more

above the surface of the earth.

* * * * *

ANM UT E5 Price, UT

Price, Carbon County Airport, UT

(Lat. 39°36′43′′ N, long. 110°45′02′′ W)

Carbon VOR/DME

(Lat. 39°36′11′′ N, long. 110°45′13′′ W)

That airspace extending upward from 700

feet above the surface within a 4.3-mile

radius of the Carbon VOR/DME, and within

1.8 miles each side of the 200° radial of the

Carbon VOR/DME extending from the 4.3-

mile radius to 7 miles south of the Carbon

VOR/DME; that airspace extending upward

from 1,200 feet above the surface bounded by

a line beginning at lat. 39°50′00′′ N, long.

111°00′00′′ W; to lat. 39°45′00′′ N, long.

110°30′00′′ W; to lat. 39°05′00′′ N, long.

110°30′00′′ W; to lat. 39°05′00′′ N, long.

111°00′00′′ W; to lat. 39°21′00′′ N, long.

111°05′00′′ W; thence to point of beginning;

excluding that airspace within Federal

Airways, the Moab, UT, and the Salt Lake

City, UT, Class E airspace areas.

* * * * *

Issued in Seattle, Washington, on June 8,

1998.

Joe E. Gingles,

Acting Assistant Manager, Air Traffic

Division, Northwest Mountain Region.

[FR Doc. 98–16546 Filed 6–19–98; 8:45 am]

BILLING CODE 4910–13–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 410 and 414

[HCFA–1906–P]

RIN 0938–AI44

Medicare Program; Payment for

Teleconsultations in Rural Health

Professional Shortage Areas

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Proposed rule.

SUMMARY: This proposed rule would

implement parts of section 4206 of the

Balanced Budget Act of 1997 by

amending our regulations to provide for

payment for professional consultation

by a physician and certain other

practitioners via interactive

telecommunication systems. Payment

may be made if the physician or other

practitioner is furnishing a service for

which payment may be made under

Medicare to a beneficiary residing in a

rural area that is designated as a health

professional shortage area.

This proposed rule would also

establish a methodology for determining

the amount of payments made for the

consultation.

DATES: Comments will be considered if

we receive them at the appropriate

address, as provided below, no later

than 5 p.m. on August 21, 1998.

ADDRESSES: Mail written comments (1

original and 3 copies) to the following

address: Health Care Financing

Administration, Department of Health

and Human Services, Attention: HCFA–

1906–P, P.O. Box 26676, Baltimore, MD

21207–0519.

If you prefer, you may deliver your

written comments (1 original and 3

copies) to one of the following

addresses:

Room 309–G, Hubert H. Humphrey

Building, 200 Independence Avenue,

SW., Washington, DC 20201, or

Room C5–09–26, 7500 Security

Boulevard, Baltimore, MD 21244–

1850.

Because of staffing and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

HCFA–1906–P. Comments received

timely will be available for public

inspection as they are received,

generally beginning approximately 3

weeks after publication of a document,

in Room 309–G of the Department’s

offices at 200 Independence Avenue,

SW., Washington, DC, on Monday

through Friday of each week from 8:30

a.m. to 5 p.m. (phone: (202) 690–7890).

FOR FURTHER INFORMATION CONTACT:

Craig Dobyski, (410) 786–4584.

SUPPLEMENTARY INFORMATION:

I. Background

A. General

Telemedicine is the use of

telecommunications to furnish medical

information and services. Generally, two

different kinds of technology are in use

in telemedicine. One technology is twoway interactive video. This technology

is used, for example, when a

consultation involving the patient, the

primary care giver, and a specialist is

necessary. The videoconferencing

equipment at two (or more) locations

permits a ‘‘real-time’’ or ‘‘live’’

consultation to take place, providing for

two-way exchange of information

between the locations during the

examination. We refer to this process as

‘‘teleconsultation.’’ Teleconsultation

typically involves a primary care

practitioner with a patient at a remote,

rural (spoke) site and a medical

specialist (consultant) at an urban or

referral center (hub) facility, with the

primary care practitioner seeking advice

from the consultant concerning the

patient’s condition or course of

treatment.

The other technology, called ‘‘store

and forward,’’ is used to transfer video

images from one location to another. A

camera or similar device records (stores)

an image(s) that is then sent (forwarded)

via telecommunications media to

another location for later viewing. The

sending of x-rays, computed

tomography scans, or magnetic

resonance images are common storeand-forward applications. The original

image may be recorded and/or

forwarded in digital or analog format

and may include video ‘‘clips’’ such as

ultrasound examinations, where the

series of images that are sent may show

full motion when reviewed at the

receiving location.

Currently, Medicare allows payment

for those telemedicine applications in

which, under conventional health care

delivery, the medical service does not

require face-to-face ‘‘hands on’’ contact

between patient and physician. For

example, Medicare permits coverage of

teleradiology, which is the most widely

used and reimbursed form of

telemedicine, as well as physician

interpretation of electrocardiogram and

electroencephalogram readings that are

transmitted electronically. In contrast,

Medicare does not cover other

physicians services delivered through

telecommunications systems because,
Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules 33883

under the conventional delivery of

medicine, those services are furnished

in person.

B. Legislation

In section 4206 of the Balanced

Budget Act of 1997 (BBA)(Public Law

105–33), the Congress required that, not

later than January 1, 1999, Medicare

Part B (Supplementary Medical

Insurance) pay for professional

consultation via telecommunications

systems. Under section 4206(a), the

provision applies to consultations with

a physician or with certain other

practitioners (identified below)

furnishing a service for which payment

may be made under Part B, provided the

service is furnished to a beneficiary who

resides in a county in a rural area that

is designated as a health professional

shortage area, and notwithstanding that

the physician or other practitioner

furnishing the consultation is not at the

same location as the physician or other

practitioner furnishing the service to the

beneficiary.

The practitioners listed in section

4206(a) are physicians (as defined in

section 1861(r) of the Social Security

Act (the Act)) and those practitioners

described in section 1842(b)(18)(C) of

the Act. The practitioners described in

1842(b)(18)(C) include: physician

assistants, nurse practitioners, clinical

nurse specialists, certified registered

nurse anesthetists, anesthesiologist’s

assistants, nurse-midwives, clinical

social workers, and clinical

psychologists.

Section 4206(b) requires that the

Secretary establish a methodology for

determining the amount of payments

made for a consultation, within the

following parameters:

• The payment is to be shared

between the referring practitioner and

the consulting practitioner. The amount

of the payment is not to exceed the

current fee schedule amount that would

be paid to the consulting practitioner.

• The payment is not to include any

reimbursement for any telephone line

charges or any facility fees, and a

beneficiary may not be billed for these

charges or fees.

• The payment is to be subject to the

coinsurance and deductible

requirements under section 1833(a)(1)

and (b) of the Act.

• The payment differential of section

1848(a)(3) of the Act is to be applied to

services furnished by nonparticipating

physicians. (Section 1848(a)(3) specifies

that, in the case of physicians services

furnished by a nonparticipating

physician, the payment basis is 95

percent of what it would have been had

the service been furnished by a

participating physician.)

• The provisions of sections 1848(g)

and 1842(b)(18) of the Act are to apply.

(Section 1848(g) provides a limitation

on charges to beneficiaries and provides

sanctions if a physician, supplier, or

other person knowingly and willfully

repeatedly bills or collects for services

in violation on the limitation. It also

provides for sanctions if a physician,

supplier, or other person fails (1) to

timely correct excess charges by

reducing the actual charge billed for the

service to an amount that does not

exceed the limiting charge for the

service, or (2) to timely refund excess

collections. In addition, it requires that

physicians and suppliers submit claims,

for services they furnished to a

beneficiary, to a carrier on behalf of the

beneficiary using a standard claim form

specified by the Secretary. The statute

imposes a penalty for failure to so

submit the claim. In addition, section

1848(g) prohibits imposing any charge

relating to completing and submitting

the claim. Section 1842(b)(18) provides

that services furnished by a physician

assistant, nurse practitioner, clinical

nurse specialist, certified registered

nurse anesthetist, anesthesiologist’s

assistant, certified nurse-midwife,

clinical social worker, or clinical

psychologist for which payment may be

made on a reasonable charge or fee

schedule basis may be made only on an

assignment-related basis. It also limits

the beneficiary’s liability to any

applicable deductible and coinsurance

amounts. It further provides for

sanctions against a practitioner who

knowingly and willfully bills (or

collects an amount) in violation of the

limitation.)

• Further, payment for the

consultation service is to be increased

annually by the update factor for

physicians services determined under

section 1848(d) of the Act.

In addition, the statute directs that, in

establishing the methodology for

determining the amount of payment, the

Secretary take into account the findings

of the report required by section 192 of

the Health Insurance Portability and

Accountability Act of 1996 (Public Law

104–191), the findings of the report

required by section 4206(c) of the BBA,

and any other findings related to

clinical efficacy and cost-effectiveness

of telehealth applications.

C. HCFA Telemedicine Demonstration

Program

In October 1996, we began a

demonstration of Medicare fee-forservice payment for teleconsultation

services. The demonstration is expected

to run through fiscal year 2001. Under

the demonstration, providers at selected

sites in Iowa, Georgia, North Carolina,

and West Virginia have been furnishing

teleconsultation services. These sites

were selected as a result of proposals

submitted during our 1993 and 1994

general research solicitations and a

subsequent expansion request in 1998.

Special data collection plans are in

place for those health care providers

participating in the demonstration. The

demonstration is being independently

evaluated through a cooperative

agreement with the Center for Health

Policy Research in Denver.

In this demonstration, we are

experimenting with a variety of

payment options beyond that proposed

under this rule. Since relatively little is

known at present about either the

process or content of telemedicine

service delivery, we expect to learn from

the demonstration about the general

characteristics and practice patterns of

telemedicine practitioners. After

completion of the demonstration, we

will compare the results to operations

under the reimbursement strategy that

would be established under this

proposed rule, and we may propose

adjustments, as appropriate.

II. Provisions of This Proposed Rule

This rule proposes to establish

policies for implementing the

provisions of section 4206 of the BBA

that address Medicare reimbursement

for telehealth services.

A. Professional Consultation Services

Via Telecommunications Systems

The title of section 4206 of the BBA

refers to telehealth services, although

the text specifically refers to

professional consultation services via

telecommunications systems. In this

document, we will refer to professional

consultation services via

telecommunications systems as

teleconsultations.

A consultation is a type of service

provided by a physician (or, under

section 4206, certain other health care

practitioners) ‘‘whose opinion or advice

regarding evaluation and/or

management of a specific problem is

requested by another physician or other

appropriate source. A [physician]

consultant may initiate diagnostic and/

or therapeutic services. The request for

a consultation from the attending

physician or other appropriate source

and the need for consultation must be

documented in the patient’s medical

record. The consultant’s opinion and

any services that were ordered or

performed must also be documented in

the patient’s medical record and
33884 Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules

1 [Physicians’] Current Procedural Terminology

(4th Edition, 1998, copyrighted by the American

Medical Association), p. 20.

communicated to the requesting

physician or other appropriate source.’’ 1

We do not consider a teleconsultation to

be a new medical service; rather, we

consider it to be a new way or process

of delivering a consultation.

Earlier in this document we included

a discussion of the two general

technologies used in telemedicine, that

is, store and forward, and interactive

video. We believe that, although

asynchronous transmission may be

sufficient for diagnostic interpretation of

images (such as radiological images), a

teleconsultation is equivalent to a

traditional, face-to-face consultation

only if it permits the consultant to

control the examination of the patient as

the examination is taking place. With

store-and-forward technology, the

consultant is reviewing an examination

that has already occurred and is limited

to whatever information was recorded at

that time.

We believe that a teleconsultation

instead must be an interactive patient

encounter. The teleconsultation must

meet the criteria included in the

descriptor quoted above for a given

consultation service and include—

• Clinical assessment via medical

examination directed by the consultant

(specialist);

• The use of multimedia

communications equipment that

includes, at a minimum, audio-video

equipment permitting two-way real time

communication;

• Participation of the referring

practitioner as appropriate to the

medical needs of the patient and as

needed to provide information to and at

the direction of the consultant; and

• Feedback of the consultation

assessment to the referring practitioner.

Note that, to qualify for Medicare

payment, the patient must be present

and the telecommunications technology

must allow the consulting practitioner

to control an interactive medical

examination of the patient. Store and

forward technologies would not allow a

medical examination of the patient but

would allow only a review of a prior

examination, test, or diagnostic

procedure, which would be outside the

scope of this proposed rule. By

requiring an interactive

communications system, however, we

are not mandating full motion video, but

are requiring interactive real time audiovideo communication. We recognize

that full motion video requires large

bandwidth that may be physically and/

or financially unavailable to many

health care entities in rural areas. This

rule would not prohibit the use of lower

end interactive video technology in

which less than full motion video is

sufficient for the consulting practitioner

to control an examination of the patient.

As such, we would encourage the use of

the simplest and least expensive

equipment that meets the real time

requirement proposed under this rule.

The [Physicians’] Current Procedural

Terminology (CPT) is a systematic

listing of descriptive terms and

identifying codes for reporting medical

services and procedures performed by

physicians and other medical

practitioners. We propose to cover as

teleconsultation services the following

categories of services listed as

consultant services in the 1998 CPT:

Office or Other Outpatient

Consultations—CPT codes 99241

through 99245;

Initial Inpatient Consultations—CPT

codes 99251 through 99255;

Follow-up Inpatient Consultations—

CPT codes 99261 through 99263; and

Confirmatory Consultations—CPT

codes 99271 through 99275.

Proposed Regulatory Provisions

Based on the above, we would

specify, in paragraph (a) of proposed

§ 410.75 (Consultations via

telecommunication systems), that

Medicare Part B pays for professional

consultations furnished by means of

interactive telecommunications systems

if the following conditions, and others

discussed later in this preamble, are

met:

• The medical examination of the

beneficiary is under the control of the

consultant practitioner.

• The consultation involves the

participation of the referring

practitioner, as appropriate to the

medical needs of the patient and as

needed to provide information to and at

the direction of the consultant.

• The consultation results in a

written report that is furnished to the

referring practitioner.

In addition, at paragraph (b) of

§ 410.75, we would define ‘‘interactive

telecommunications systems’’ as

multimedia communications equipment

that includes, at a minimum, audiovideo equipment permitting two-way,

real time consultation among the

patient, consulting practitioner, and

referring practitioner as appropriate to

the medical needs of the patient and as

needed to provide information to and at

the direction of the consulting

practitioner. We would also specify that

telephones, facsimile machines, and

electronic mail systems do not meet the

definition of interactive

telecommunications systems.

B. Coverage and Eligibility Provisions

In addition to limiting telemedicine

coverage to consultation services,

section 4206 of the BBA limits coverage

of teleconsultations to services

furnished to Medicare beneficiaries

residing in a ‘‘county in a rural area

* * * that is designated as a health

professional shortage area under section

332(a)(1)(A) of the Public Health Service

Act * * *.’’ Section 332 of the Public

Health Service Act authorizes the

Secretary to designate health

professional shortage areas (HPSAs)

based on criteria established by

regulation. HPSAs are defined in section

332 to include geographic areas,

population groups, and facilities with

shortages of health professionals.

Section 332(a)(1)(A) speaks to

geographic HPSAs.

We found the language ‘‘a county in

a rural area * * * that is designated as

a health professional shortage area’’ to

be somewhat ambiguous. We considered

that the Congress may have intended

that the benefit apply only to countywide HPSAs (an entire county that is

designated as an HPSA), but have

rejected that construction of the law.

First, it would seem illogical to restrict

coverage of teleconsultations to countywide HPSAs. The purpose of this

provision is to provide access to health

care for beneficiaries who now may face

barriers to that care because they reside

in rural areas where there is a shortage

of medical professionals. We do not

believe the Congress intended that only

beneficiaries in the largest HPSAs be

entitled to the telemedicine benefit. We

note that an existing statutory provision

related to HPSAs, that is, the 10 percent

incentive payment for physician

services furnished in HPSAs, does not

make a distinction between county-wide

HPSAs and other HPSAs. Second, we

found that, by limiting coverage of

teleconsultations to county-wide

HPSAs, we would perpetuate barriers to

care because many HPSAs would be

excluded. From a random review of

HPSA listings, we found that

beneficiaries in at least one eastern State

would not be entitled to telemedicine

coverage because there are no countywide HPSAs in that State. In several

western States, we found that between

50 percent and 95 percent of rural

HPSAs would be excluded as sites for

the telehealth benefit. Therefore, for

purposes of this section, we would

specify that teleconsultations are

covered only in rural HPSAs as defined

in the Public Health Service Act.
Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules 33885

We had a number of concerns about

the statutory language that ties coverage

of teleconsultations to services

furnished to a beneficiary ‘‘residing in a

county in a rural area * * *.’’ [emphasis

supplied]. Medicare claims processing

systems are not geared to making such

eligibility determinations. Therefore,

such a provision would add another

‘‘gatekeeping’’ responsibility to the

presenting practitioner by requiring him

or her to screen the beneficiary’s

address for eligibility for the

teleconsultation benefit. To do this, the

practitioner would need to develop and

maintain a list of HPSAs for all areas

covering the entire population base from

which he or she would potentially draw

patients. Moreover, the centralized

beneficiary file, which contains the

beneficiary’s address and is maintained

by us, would also have to contain a list

of HPSAs nationwide against which the

beneficiary’s address would be

compared. We note that, if an eligibility

error were made, it would not be

detected until a claim is submitted,

which occurs only after the service has

been furnished. At that point, Medicare

payment on the claim would be denied,

and the beneficiary would be liable for

the full charges for the teleconsultation

service. We believe that the Congress

did not intend to expose Medicare

beneficiaries to this financial risk.

Therefore, we propose to use the

location of the presenting practitioner at

the time of the service, that is, where the

beneficiary is receiving care, as proxy

for the beneficiary’s residence. If the

location of the presenting practitioner is

in a rural HPSA (as defined above), we

believe it can be reasonably presumed

that the beneficiary resides in a rural

HPSA. However, if a beneficiary can

demonstrate that he or she lives in a

rural HPSA, we would allow payment

for the teleconsultation without regard

to the location of the originating facility

(site of presentation).

Section 4206(a) of the BBA

specifically requires that Medicare make

payments for professional consultation

via telecommunications systems with a

physician or ‘‘a practitioner (described

in section 1842(b)(18)(C) of the Act.’’

Nonphysician practitioners who may

provide a teleconsultation include

physician assistants, nurse practitioners,

clinical nurse specialists, certified

registered nurse anesthetists or

anesthesiologists’ assistants, certified

nurse midwives, clinical social workers,

and clinical psychologists. However, for

consultation services delivered via

traditional face-to-face ‘‘hands on’’

methods, current Medicare policy does

not permit certified registered nurse

anesthetists, anesthesiologist’s

assistants, clinical social workers, or

clinical psychologists to bill for these

services. We note that, although section

4206 of the BBA provides for coverage

of teleconsultations furnished by certain

health practitioners other than

physicians, this provision does not

change current Medicare coverage

policy for consultation services

delivered in person.

Proposed Regulatory Provisions

Based on the above, we would

provide at § 410.75 that, as a condition

for Medicare Part B payment for the

teleconsultation—

• The referring and consultant

practitioner must be any of the

following:

+ A physician as described in existing

§ 410.20.

+ A physician assistant as defined in

existing § 491.2.

+ A nurse practitioner as defined in

existing § 491.2.

+ A clinical nurse specialist as

described in existing § 424.11(e)(6).

+ A certified registered nurse

anesthetist or anesthesiologist’s

assistant as defined in existing § 410.69.

+ A certified nurse-midwife as

defined in existing § 405.2401.

+ A clinical social worker as defined

in existing § 410.73(a).

+ A clinical psychologist as described

in existing § 410.71(d).

• The services must be furnished to a

beneficiary residing in a rural area as

defined in section 1886(d)(2)(D) of the

Act that is designated as an HPSA under

section 332(a)(1)(A) of the Public Health

Service Act. We would further specify

that for purposes of this requirement,

the beneficiary is deemed to be residing

in such an area if the teleconsultation

presentation takes place in such an area.

C. Payment Provisions

General Payment

Section 4206 of the BBA provides that

payment for a teleconsultation may not

exceed the amount in the current fee

schedule for the consulting practitioner.

Medicare payment for physicians

services is made, under section 1848 of

the Act, on the resource-based fee

schedule. Payment to the other health

care practitioners listed earlier,

authorized under section 1833 of the

Act, is based on a percentage of the

physician fee schedule. Therefore, we

would pay for teleconsultation services

furnished by physicians at 80 percent of

the lower of the actual charge or the fee

schedule amount for physicians

services, and those furnished by other

practitioners at 80 percent of the lower

of the actual charge or that practitioner’s

respective percentage of the physician

fee schedule (that is, the fee schedule

for clinical psychologists would be 100

percent of the physician fee schedule;

for clinical social workers, the fee

schedule would be 75 percent of the

clinical psychologist fee schedule; and

for all other eligible health care

practitioners, the fee schedule would be

85 percent of the physician fee

schedule).

Site of Service

We recognize that the consulting and

presenting practitioners will likely be

located a significant distance apart,

raising the issue of where the service is

being furnished. The site of service

determines the pricing locality to be

used for Medicare payment. In our view,

the use of telecommunications to

furnish a medical service effectively

transports the patient to the consultant

(a concept analogous to the traditional

delivery of health care, in which the

patient travels to the consultant’s

office). Therefore, we believe that the

site of service for a teleconsultation is

the location of the practitioner

providing the consultation. We thus

would designate the location of the

consultant at the time of the service as

the applicable pricing locality for

teleconsultation claims. As a result, the

fee schedule for the consultation will

reflect the geographic adjustment factor

applicable to the consulting

practitioner.

We considered designating the

location of the beneficiary as the site of

service (and pricing locality) but

rejected this option because this

alternative would likely result in lower

payment levels than the consultant

would have otherwise received if the

beneficiary had traveled to his or her

office for a consultation. This would

probably occur because the consulting

practitioner, who is a medical specialist,

is usually affiliated with a ‘‘hub’’

facility, which is typically a major

medical center located in an urban or

metropolitan area. The referring

practitioner is located at the ‘‘spoke’’

facility, which is typically a primary

care facility and, under the provisions of

section 4206 of the BBA, is in a rural

HPSA area. In the majority of cases, we

would expect that the different

geographic adjustment factors used to

adjust the relative value units (RVUs)

under the physician fee schedule are

somewhat higher for urban areas than

for rural areas because the cost of

operating a medical practice in an urban

area is generally higher.

We also considered using a neutral

site of service, which would be neither
33886 Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules

practitioner’s respective location. This

option was based on the proposition

that the service is furnished in ‘‘cyber

space’’ rather than at a fixed location.

Under this approach, payment would

have been based on the RVUs for the

service, with no geographic adjustment

factor applied. As a result, payment

would be the same nationwide,

regardless of the practitioners’

geographic locations. We rejected this

option because the use of unadjusted

national RVUs could result in a

payment amount that exceeds the

amount the consulting practitioner

would have otherwise received, thereby

exceeding the payment ceiling imposed

by section 4206 of the BBA. Conversely,

use of unadjusted national RVUs could

result in a lower payment amount than

the consulting practitioner would have

otherwise received, thereby creating a

disincentive for specialists to furnish

teleconsultations.

Payment Allocation

Section 4206 further provides that

payment be shared between the

referring and consulting practitioners.

We propose to allocate the payment in

the following manner: the consulting

practitioner will receive 75 percent of

the applicable amount, and the

presenting practitioner will receive the

remaining 25 percent of the applicable

amount. Using a hypothetical

consultation payment of $100, this

would result in a payment of $75 to the

consultant and $25 to the presenting

practitioner.

We arrived at these percentages by

developing a mean teleconsultation

RVU to simulate the level of intensity

for both a consulting practitioner and a

presenting practitioner. In determining

the mean RVUs for the consulting

practitioner, we used fiscal year (FY)

1997 RVUs applicable to the proposed

covered consultation services (that is,

CPT codes 99241–99245, 99251–99255,

99261–99263, and 99271–99275). In

determining the mean RVUs for the

presenting practitioner, we used FY

1997 RVUs applicable to office/

inpatient visit services for established

patients (that is, CPT codes 99211–

99215, 99221–99223, and 99231–

99233). We decided to use established

visit codes to represent the presenting

practitioner’s role in the

teleconsultation to reflect the fact that a

primary care practitioner has already

seen the patient to have determined that

a consultation is necessary. RVUs were

weighted by the frequency of 1997

national allowed services attributed to

each CPT code. The weighted mean

RVUs for both consulting and

presenting practitioner were calculated

as a percentage of the total simulated

weighted mean teleconsultation RVUs.

A summary of this process is shown in

the following table.

PRACTITIONER ALLOCATION SUMMARY TABLE

Model #1 w/50% work

expense reduction to

presentation component

Model #2 w/full RVUs

Intensity Simulation: *

Mean Consultation RVU ......................................................................................... 3.21 .................................... 3.21

Mean Established Office/Inpatient Visit RVU ......................................................... 0.91 .................................... 1.35

Total RVU ........................................................................................................ 4.12 .................................... 4.56

Percentage Allocation: **

Consulting Practitioner ............................................................................................ 80% ....................................

(3.21 + 4.12 = 77.91%) ......

Rounded to 80% ................

70%

(3.21 ÷ 4.56 = 70.39%)

Rounded to 70%

Presenting Practitioner ............................................................................................ 20% ....................................

(0.91 + 4.12 = 22.09%) ......

Rounded to 20% ................

30%

(1.35 ÷ 4.56 = 29.60%)

Rounded to 30%

Mid Point of Rounded Allocations:

Consultant 75%; Presenter 25%.

*FY 1997 National mean RVU weighted by FY 1997 national allowed services.

Consultation component includes CPT codes: 99241–99245; 99251–99255; 99261–99263; 99271–99275.

Presentation component includes CPT codes 99211–99215; 99221–99223; 99231–99233.

**Allocations rounded to nearest 5 percent.

The table illustrates two models. In

the first model, the work RVUs for

outpatient/inpatient evaluation and

management (E&M) services were

reduced by 50 percent to account for the

fact that the presenting practitioner is

performing no ‘‘new’’ work. This

reduction factor is used under the

current Medicare telemedicine

demonstration project. Under the

demonstration, the work expense for the

primary care practitioner is reduced by

50 percent to reflect the fact that the

practitioner would have already billed

for an initial E&M service prior to

initiating the teleconsultation. This

model results in a payment allocation in

which the consulting practitioner would

receive 80 percent of the payment and

the presenting practitioner would

receive 20 percent of the payment.

In the second model, we did not use

a 50 percent reduction in developing the

allocation methodology, on the theory

that there may be instances in which the

medical needs of the patient require a

greater amount of work on the part of

the presenting practitioner. This model

resulted in an allocation in which the

consulting practitioner would receive 70

percent and the presenting practitioner

would receive 30 percent of the total

payment. Because of our lack of

information about likely

teleconsultation scenarios, we believe

that it is reasonable to set the allocations

at the midpoint of the values resulting

from the two models, that is, a 75

percent allocation for the consulting

practitioner and a 25 percent allocation

for the presenting practitioner.

We considered reducing the

presenting practitioner’s share in cases

in which the presenting practitioner is

a nonphysician practitioner. Thus, if a

patient had been presented to a

physician by a physician assistant (PA),

for example, we considered applying

the PA payment rule to the PA’s

allocation; that is, we would have used

85 percent of the proposed 25 percent

allocation as the payment basis for the

presenting practitioner. Using a

hypothetical physician fee schedule

amount of $100, this would result in the

following allocation for the consulting
Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules 33887

practitioner and presenting practitioner

(physician assistant):

Physician fee schedule for teleconsultation .............................. $100.00

Less 75 percent consultant allocation ........................................ ¥75.00

Balance ......................................... $25.00

PA percent of physician fee

schedule .................................... × .85

PA allocation ............................... $21.25

We rejected this option because we

believe that only one service is being

furnished and that service is a

consultation; there is no ‘‘presentation’’

payable under the Medicare physician

fee schedule. In teleconsultation, the

resenting practitioner is acting as

directed by the consultant. Therefore, in

our view, he or she is acting as a

surrogate for the consultant rather than

as a nonphysician practitioner, and we

decided that the payment rule for

practitioners should not apply. Thus,

the following payment allocation would

apply for the consulting physician and

a nonphysician presentation

practitioner (using the hypothetical fee

schedule amount of $100):

Physician fee schedule for teleconsultation .............................. $100.00

75 percent consultant allocation 75.00

25 percent presentation allocation ............................................ 25.00

However, when a consultation service

is furnished by a nonphysician

practitioner, rather than a physician, the

amount of payment will be made

according to the appropriate percentage

of the physician fee schedule, which for

most nonphysician practitioners is 85

percent. Using the same hypothetical

physician fee schedule amount as

above, the payment amounts for a

nonphysician consulting practitioner

and referring practitioner are as follows

(when the nonphysician consulting

practitioner’s fee schedule is 85 percent

of the physician fee schedule):

Physician fee schedule for consultation .................................... $100.00

Nonphysician payment rule ....... × .85

Nonphysician fee schedule

amount ...................................... $85.00

75 percent consultant allocation ¥63.75

Presenting practitioner allocation $21.25

Bundled Payment

We propose to use a bundled payment

approach for teleconsultation services;

that is, a single Medicare payment for

the total amount due for the service will

be made to the consulting practitioner.

Under this approach, a claim for a

teleconsultation service will be

submitted by the consulting practitioner

to his or her Medicare carrier. The

carrier will make the full payment to the

consultant who, in turn, will remit 25

percent of the total to the presenting

practitioner. The consultant will be

responsible for billing the beneficiary

for coinsurance and deductible amounts

and also remitting 25 percent of the total

to the presenting practitioner. This

proposal is consistent with our view

that only one service—a

teleconsultation—is being provided. As

stated earlier, we believe that the

presenting practitioner is not providing

a distinct service, but acting as a

surrogate for the consultant. We believe,

moreover, that this approach is better

for Medicare beneficiaries because they

would receive only one bill for the

coinsurance and deductible amount.

Note that the method of payment we

have chosen for teleconsultations raises

some issues under the physician selfreferral law in section 1877 of the Act.

Under this provision, a physician is

prohibited from referring a Medicare

patient to an entity (which can include

another physician or a nonphysician

practitioner) for the furnishing of certain

designated health services if the

physician or a member of the

physician’s immediate family has a

financial relationship with that entity.

Section 1877 defines ‘‘financial

relationship’’ as an ownership or

investment interest in the entity or a

compensation arrangement with the

entity. It is the compensation aspect of

the self-referral law that could have a

negative impact on teleconsultation

payments.

We believe that a presenting

physician who refers a case to a

consulting practitioner has made a

referral under the self-referral law.

Under section 1877(h)(5)(A), a

physician’s referral is defined, in the

case of an item or service covered under

Part B, as the request by a physician for

the item or service, including the

request for a consultation with another

physician (and any test or procedure

ordered by, or to be performed by (or

under the supervision of) that other

physician. These referrals could

potentially be prohibited if the

physician and the providing entity have

a financial relationship, such as a

compensation arrangement. A

compensation arrangement is defined in

the law broadly to include any

arrangement involving any

remuneration between a physician and

an entity (other than certain very

narrowly defined exclusions).

‘‘Remuneration,’’ in turn, is defined to

include any remuneration, paid directly

or indirectly, overtly or covertly, in cash

or in kind. We have further defined the

concept of ‘‘remuneration’’ in our

regulations covering self-referrals for

clinical laboratory services in 42 CFR

411.351 to include any payment,

discount, forgiveness of debt, or other

benefit made directly or indirectly,

overtly or covertly, in cash or in kind,

by an entity to a referring physician.

Our payment policy could place a

presenting physician in the position of

violating section 1877 if the presenting

physician receives payments from the

practitioner to whom he or she has

referred and the services at issue are

designated health services. In order to

avoid such a result, we propose to

interpret the payments that the

consulting practitioner will forward to

the presenting physician as falling

outside of the definition of

‘‘remuneration.’’ That is, we will not

regard the consulting practitioner as

actually making a payment to the

presenting physician, but as simply

serving as a ‘‘conduit’’ to pass a portion

of the Medicare payment on to the

presenting physician, strictly as an

administrative convenience to us. We

do not believe this interpretation

violates the purpose of the self-referral

law, which was specifically designed to

prevent entities that furnish certain

health services from purchasing

referrals from physicians.

We considered requiring both the

consulting and presenting practitioners

to submit separate claims. This

alternative was rejected because (1) two

services are not being furnished; (2) the

beneficiary would receive two cost

sharing bills; and (3) the claims

processing system would need to link

claims from both practitioners to ensure

that the total payment does not exceed

the payment ceiling provided under

section 4206 of the BBA. It would be

difficult and costly to implement claims

processing systems modifications that

would be capable of identifying and

linking related teleconsultation claims

to prevent overpayments from

occurring. Such an effort would become

even more complex if two carriers were

involved because the practitioners’

locations fell within separate carrier

jurisdictions. Moreover, total payment

might exceed what the consultant

would have otherwise received if the

presenting practitioner were to submit a

claim for a consultation at a higher

intensity level than the consultant. For

example, the consulting practitioner

might bill for a consultation requiring

only a detailed examination and low

complexity medical decisionmaking,

whereas the presenting practitioner

might bill for a consultation with a
33888 Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules

comprehensive examination and

moderately complex decisionmaking.

There is a 40 percent difference in the

Medicare RVU values between these

two services. Another overpayment

could occur in those rare cases where

the factor for the pricing locality for the

presenting practitioner is higher than for

the consulting practitioner.

Because of the difficulty in linking

claims, we considered another approach

that would have involved separate

claims, but without linking. We

considered establishing a new code for

the presenting practitioner’s role and

pricing it at 25 percent of the average

consultation amount. Under this option,

the consultant’s fee would be based on

the appropriate fee schedule and

adjusted by the geographic practice cost

index, but would be reduced by the flat,

national value paid to the presenting

practitioner. However, this alternative

achieves anomalous results; in several

cases, the presenting practitioner would

receive more than the consulting

practitioner. Therefore, we rejected this

option.

Coding: For teleconsultation coding

purposes, we would develop modifiers

to use in conjunction with existing CPT

codes for consultation services. The

purpose of the modifier is to identify the

service as a consultation furnished via

telecommunications systems. This

approach conforms with our view that

a teleconsultation is simply a new way

of delivering a consultation, rather than

a new service.

We considered developing a new

coding structure for teleconsultations.

We rejected this option, however,

because it is administratively

cumbersome for both the medical

community and the Medicare program.

First, the practitioner community is

already familiar with the current codes

for consultation. We believe it will be

easier for practitioners to use a single

modifier than an entirely new set of

codes. Second, separate teleconsultation

codes would unnecessarily double the

number of current codes used for

consultation services.

Proposed Regulatory Provisions

To reflect the above proposals and the

payment provisions of section 4206 of

the BBA, we would add a new § 414.62

(Payment for consultations via

interactive telecommunication systems)

to our regulations. We would specify, in

paragraph (a), that Medicare total

payments for a professional consultation

conducted via interactive

telecommunications systems may not

exceed the current fee schedule amount

for the service when furnished by the

consulting practitioner. We would

further specify that the payment (1) may

not include any reimbursement for any

telephone line charges or any facility

fees, and (2) is subject to the

coinsurance and deductible

requirements of section 1833(a)(1) and

(b) of the Act. We would also specify

that the payment differential of section

1848(a)(3) of the Act applies to services

furnished by nonparticipating

physicians.

In paragraph (b), we would specify

that the beneficiary may not be billed

for any telephone line charges or any

facility fees. In paragraph (c), we would

provide that payment to nonphysician

practitioners is made only on an

assignment-related basis. Paragraph (d)

would provide that only the consultant

practitioner may bill for the

consultation, and paragraph (e) would

require the consultant practitioner to

provide the referring practitioner 25

percent of any payments, including any

applicable deductible or coinsurance

amounts, he or she received for the

consultation.

Paragraph (f) would specify that a

practitioner may be subject to the

sanctions provided for in 42 CFR

chapter V, parts 1001, 1002, and 1103 if

he or she (1) knowingly and willfully

bills or collects for services in violation

of the limitations of § 414.62 on a

repeated basis, or (2) fails to timely

correct excess charges by reducing the

actual charge billed for the service to an

amount that does not exceed the

limiting charge or fails to timely refund

excess collections.

III. Response to Comments

Because of the large number of items

of correspondence we normally receive

on Federal Register documents

published for comment, 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, if we proceed with

a subsequent document, we will

respond to the comments in the

preamble to that document.

IV. Regulatory Impact Statement

We have examined the impact of this

rule as required by Executive Order

12866 and the Regulatory Flexibility Act

(RFA) (Public Law 96–354). Executive

Order 12866 directs agencies to assess

all costs and benefits of available

regulatory alternatives and, when

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 must be prepared for proposed

rules with economically significant

effects (that is, a proposed rule that

would have an annual effect on the

economy of $100 million or more or

would adversely affect in a material way

the economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities). The benefit changes in

this proposed rule resulting from the

BBA will not result in additional

Medicare expenditures of $100 million

or more for any single FY through FY

2003. Therefore, this proposed rule is

not considered economically significant,

and, thus, we have not prepared a

regulatory impact analysis.

The RFA requires agencies to analyze

options for regulatory relief of small

businesses. For purposes of the RFA,

most hospitals, and most other

providers, physicians, and health care

suppliers are small entities, either by

nonprofit status or by having revenues

of $5 million or less annually.

Section 1102(b) of the Social Security

Act requires us to prepare a regulatory

impact analysis for any proposed rule

that 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 a Metropolitan

Statistical Area and has fewer than 50

beds.

We estimate that the cost of providing

consultation services in accordance

with section 4206 of the BBA will be

approximately $20 million in FY 1999

and approximately $90 million by FY

2003. Note that the FY 1999 estimate

reflects only a partial year estimate,

given the January 1, 1999 effective date

for teleconsultation coverage. We

estimate that teleconsultation will cost

approximately $270 million for the first

5 years of coverage, as indicated below:
Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules 33889

MEDICARE COSTS

[In millions]

FY 1999 FY 2000 FY 2001 FY 2002 FY 2003

$19 $39 $54 $70 $88

Additionally, this proposed rule

would provide for payment exclusively

for professional consultation with a

physician and certain other

practitioners via interactive

telecommunication systems. Section

4206 of the BBA does not provide for

payment for telephone line fees or any

facility fees associated with

teleconsultation that may be incurred by

hospitals included in the telemedicine

network.

Further, this rule does not mandate

that entities provide consultation

services via telecommunications. Thus,

this rule would not require entities to

purchase telemedicine equipment or to

acquire the telecommunications

infrastructure necessary to deliver

consultation services via

telecommunication systems. Therefore,

this rule does not impose costs

associated with starting and operating a

telemedicine network.

For these reasons, we are not

preparing analyses for either the RFA or

section 1102(b) of the Act because we

have determined, and we certify, that

this proposed rule would not have a

significant economic impact on a

substantial number of small entities or

a significant impact on the operations of

a substantial number of small rural

hospitals.

In accordance with the provisions of

Executive Order 12866, this regulation

was reviewed by the Office of

Management and Budget.

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, Rural areas, X-rays.

42 CFR chapter IV would be amended

as follows:

A. Part 410.

PART 410—SUPPLEMENTARY

MEDICAL INSURANCE (SMI)

BENEFITS

1. The authority citation for part 410

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

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

1395hh).

§ 410.1 [Amended]

2. Section 410.1, paragraph (a) is

amended by adding a sentence at the

end of the paragraph to read ‘‘Section

4206 of the Balanced Budget Act of 1997

(42 U.S.C. 1395j) sets forth the

conditions for payment for professional

consultations that take place by means

of telecommunications systems.’’.

3. A new § 410.75 is added to subpart

B to read as follows:

§ 410.75 Consultations via

telecommunications systems.

(a) General rule. Medicare Part B pays

for professional consultations furnished

by means of interactive

telecommunications systems if the

following conditions are met:

(1) Each of the referring and

consultant practitioner is any of the

following:

(i) A physician as described in

§ 410.20.

(ii) A physician assistant as defined in

§ 491.2 of this chapter.

(iii) A nurse practitioner as defined in

§ 491.2 of this chapter.

(iv) A clinical nurse specialist as

described in § 424.11(e)(6) of this

chapter.

(v) A certified registered nurse

anesthetist or anesthesiologist’s

assistant as defined in § 410.69.

(vi) A nurse-midwife as defined in

§ 405.2401 of this chapter.

(vii) A clinical social worker as

defined in section 1861(hh)(1) of the

Act.

(viii) A clinical psychologist as

described at § 417.416(d)(2) of this

chapter.

(2) The services are furnished to a

beneficiary residing in a rural area as

defined in section 1886(d)(2)(D) of the

Act, and the area is designated as a

health professional shortage area

(HPSA) under section 332(a)(1)(A) of the

Public Health Service Act (42 U.S.C.

254e(a)(1)(A)). For purposes of this

requirement, the beneficiary is deemed

to be residing in such an area if the

teleconsultation presentation takes

place in such an area.

(3) The medical examination of the

beneficiary is under the control of the

consultant practitioner.

(4) The consultation involves the

participation of the referring

practitioner, as appropriate to the

medical needs of the patient and as

needed to provide information to and at

the direction of the consultant.

(5) The consultation results in a

written report that is furnished to the

referring practitioner.

(b) Definition. For purposes of this

section, interactive telecommunications

systems means multimedia

communications equipment that

includes, at a minimum, audio-video

equipment permitting two-way, real

time consultation among the patient,

consulting practitioner, and referring

practitioner as appropriate to the

medical needs of the patient and as

needed to provide information to and at

the direction of the consulting

practitioner. Telephones, facsimile

machines, and electronic mail systems

do not meet the definition of interactive

telecommunications systems.

B. Part 414.

PART 414—PAYMENT FOR PART B

MEDICAL AND OTHER HEALTH

SERVICES

1. The authority citation for part 414

continues to read as follows:

Authority: Secs. 1102, 1871, and 1881(b)(1)

of the Social Security Act (42 U.S.C. 1302,

1395hh, and 1395rr(b)(1)).

2. Section 414.1 is revised to read as

follows:

§ 414.1 Basis and scope.

This part implements the following:

(a) The indicated provisions of the

following sections of the Act:

1833—Rules for payment for most Part B

services.

1834(a) and (h)—Amounts and frequency

of payments for durable medical equipment

and for prosthetic devices and orthotics and

prosthetics.

1848—Fee schedule for physician services.

1881(b)—Rules for payment for services to

ESRD beneficiaries.

1887—Payment of charges for physician

services to patients in providers.
33890 Federal Register / Vol. 63, No. 119 / Monday, June 22, 1998 / Proposed Rules

(b) Sections 4206(a) and (b) of the

Balanced Budget Act of 1997 (42 U.S.C.

1395j).

3. Section 414.62 is added to subpart

A, to read as follows:

§ 414.62 Payment for consultations via

interactive telecommunications systems.

(a) Limitations on payment. Medicare

payment for a professional consultation

conducted via interactive

telecommunications systems is subject

to the following limitations:

(1) The payment may not exceed the

current fee schedule amount of the

consulting practitioner for the health

care services provided.

(2) The payment may not include any

reimbursement for any telephone line

charges or any facility fees.

(3) The payment is subject to the

coinsurance and deductible

requirements of section 1833(a)(1) and

(b) of the Act.

(4) The payment differential of section

1848(a)(3) of the Act applies to services

furnished by nonparticipating

physicians.

(b) Prohibited billing. The beneficiary

may not be billed for any telephone line

charges or any facility fees.

(c) Assignment required for

nonphysician practitioners. Payment to

nonphysician practitioners is made only

on an assignment-related basis.

(d) Who may bill for the consultation.

Only the consultant practitioner may

bill for the consultation.

(e) Sharing of payment. The

consultant practitioner must provide to

the referring practitioner 25 percent of

any payments, including any applicable

deductible or coinsurance amounts, he

or she received for the consultation.

(f) Sanctions. A practitioner may be

subject to the applicable sanctions

provided for in chapter V, parts 1001,

1002, and 1003 of this title if he or she—

(1) Knowingly and willfully bills or

collects for services in violation of the

limitations of this section on a repeated

basis; or

(2) Fails to timely correct excess

charges by reducing the actual charge

billed for the service to an amount that

does not exceed the limiting charge for

the service or fails to timely refund

excess collections.

(Catalog of Federal Domestic Assistance

Program No. 93.774, Medicare—

Supplementary Medical Insurance Program)

Dated: February 8, 1998.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

Dated: April 14, 1998.

Donna E. Shalala,

Secretary.

[FR Doc. 98–16278 Filed 6–19–98; 8:45 am]

BILLING CODE 4120–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 22 and 64

[CC Docket No. 96–115; DA 98–971]

Telecommunications Carriers’ Use of

Customer Proprietary Network

Information and Other Customer

Information

AGENCY: Federal Communications

Commission.

ACTION: Clarification; proposed rule.

SUMMARY: The Order released May 21,

1998 clarifies various issues pertaining

to the Second Report and Order and

Further Notice of Proposed Rulemaking

released February 26, 1998.

FOR FURTHER INFORMATION CONTACT:

Brent Olson, Attorney, Common Carrier

Bureau, Policy and Program Planning

Division, (202) 418–1580.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Order

adopted and released May 21, 1998. The

full text of this Order is available for

inspection and copying during normal

business hours in the FCC Reference

Center, 1919 M St., NW., Room 239,

Washington, DC. The complete text also

may be obtained through the World

Wide Web, at http://www.fcc.gov/

Bureaus/Common Carrier/Orders/

da98971.wp, or may be purchased from

the Commission’s copy contractor,

International Transcription Service,

Inc., (202) 857–3800, 1231 20th St.,

NW., Washington, DC. 20036.

Synopsis of Order on Reconsideration

I. Introduction

1. On February 26, 1998, the

Commission released a Second Report

and Order and Further Notice of

Proposed Rulemaking, 63 FR 20326,

April 24, 1998 (Second Report and

Order), interpreting and implementing,

among other things, the portions of

section 222 of the Communications Act

of 1934, as amended, that govern the use

and disclosure of, and access to,

customer proprietary network

information (CPNI) by

telecommunications carriers. Since the

release of the Second Report and Order,

a number of parties have requested that

the Commission clarify various issues

pertaining to that order. In response to

these requests, the Common Carrier

Bureau issues this order clarifying the

Second Report and Order as follows:

(a) Independently-derived

information regarding customer

premises equipment (CPE) and

information services is not CPNI and

may be used to market CPE and

information services to customers in

conjunction with bundled offerings.

(b) A customer’s name, address, and

telephone number are not CPNI.

(c) A carrier has met the requirements

for notice and approval under section

222 and the Commission’s rules where

it has both provided annual notification

to, and obtained prior written

authorization from, customers with

more than 20 access lines in accordance

with the Commission’s former CPNI

rules.

(d) Although a carrier must ensure

that its certification of corporate

compliance with the Commission’s

CPNI rules is made publicly available, it

is not required to file this certification

with the Commission.

II. Clarification of Marketing Uses of

Customer Information Related to CPE

or Information Services

2. Section 222(c)(1) establishes the

limited circumstances in which carriers

can use, disclose, or permit access to

CPNI without first obtaining customer

approval. In interpreting section

222(c)(1) in the Second Report and

Order, the Commission adopted an

approach that allows carriers to use

CPNI, without first obtaining customer

approval, to market improvements or

enhancements to the package of

telecommunications services the carrier

already provides to a particular

customer, which it referred to as the

‘‘total service approach.’’

3. The Commission’s discussion,

however, did not specifically address a

carrier’s ability to use CPNI when its

customers obtain their

telecommunications service as part of a

bundled package that includes nontelecommunications service offerings,

such as CPE or certain information

services.

4. We make clear that, when a

customer purchases CPE or information

services from a carrier that are bundled

with a telecommunications service, the

carrier subsequently may use any

customer information independently

derived from the carrier’s prior sale of

CPE to the customer or the customer’s

subscription to a particular information

service offered by the carrier in its