[Federal Register Volume 87, Number 145 (Friday, July 29, 2022)]
[Proposed Rules]
[Pages 45860-46843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-14562]



[[Page 45859]]

Vol. 87

Friday,

No. 145

July 29, 2022

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 405, 410, 411, et al.





Medicare and Medicaid Programs; CY 2023 Payment Policies Under the 
Physician Fee Schedule and Other Changes to Part B Payment Policies; 
Medicare Shared Savings Program Requirements; Medicare and Medicaid 
Provider Enrollment Policies, Including for Skilled Nursing Facilities; 
Conditions of Payment for Suppliers of Durable Medicaid Equipment, 
Prosthetics, Orthotics, and Supplies (DMEPOS); and Implementing 
Requirements for Manufacturers of Certain Single-Dose Container or 
Single-Use Package Drugs To Provide Refunds With Respect To Discarded 
Amounts; Proposed Rule

Federal Register / Vol. 87, No. 145 / Friday, July 29, 2022 / 
Proposed Rules

[[Page 45860]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 411, 414, 415, 423, 424, 425, and 455

[CMS-1770-P]
RIN 0938-AU81


Medicare and Medicaid Programs; CY 2023 Payment Policies Under 
the Physician Fee Schedule and Other Changes to Part B Payment 
Policies; Medicare Shared Savings Program Requirements; Medicare and 
Medicaid Provider Enrollment Policies, Including for Skilled Nursing 
Facilities; Conditions of Payment for Suppliers of Durable Medicaid 
Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS); and 
Implementing Requirements for Manufacturers of Certain Single-Dose 
Container or Single-Use Package Drugs To Provide Refunds With Respect 
to Discarded Amounts

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

ACTION: Proposed rule.

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SUMMARY: This major proposed rule addresses: changes to the physician 
fee schedule (PFS); other changes to Medicare Part B payment policies 
to ensure that payment systems are updated to reflect changes in 
medical practice, relative value of services, and changes in the 
statute; Medicare Shared Savings Program requirements; updates to the 
Quality Payment Program; Medicare coverage of opioid use disorder 
services furnished by opioid treatment programs; updates to certain 
Medicare and Medicaid provider enrollment policies, including for 
skilled nursing facilities; updates to conditions of payment for DMEPOS 
suppliers; HCPCS Level II coding and payment for wound care management 
products; electronic prescribing for controlled substances for a 
covered Part D drug under a prescription drug plan or an MA-PD plan 
under the Substance Use-Disorder Prevention that Promotes Opioid 
Recovery and Treatment (SUPPORT) for Patients and Communities Act 
(SUPPORT Act); updates to the Medicare Ground Ambulance Data Collection 
System; and provisions under the Infrastructure Investment and Jobs 
Act.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on September 6, 
2022.

ADDRESSES: In commenting, please refer to file code CMS-1770-P.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-1770-P, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid 
Services,Department of Health and Human Services, Attention: CMS-1770-
P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-
1850.

FOR FURTHER INFORMATION CONTACT: 
    <a href="/cdn-cgi/l/email-protection#9ed3fbfaf7fdffecfbcef6e7edf7fdf7fff0d8fbfbcdfdf6fbfaebf2fbdefdf3edb0f6f6edb0f9f1e8"><span class="__cf_email__" data-cfemail="c28fa7a6aba1a3b0a792aabbb1aba1aba3ac84a7a791a1aaa7a6b7aea782a1afb1ecaaaab1eca5adb4">[email protected]</span></a>, for any issues not 
identified below. Please indicate the specific issue in the subject 
line of the email.
    Michael Soracoe, (410) 786-6312, for issues related to practice 
expense, work RVUs, conversion factor, and PFS specialty-specific 
impacts.
    Kris Corwin, (410) 786-8864, for issues related to the comment 
solicitation on strategies for updates to practice expense data 
collection and methodology.
    Sarah Leipnik, (410) 786-3933, and Anne Blackfield, (410) 786-8518, 
for issues related to the comment solicitation on strategies for 
improving global surgical package valuation.
    Larry Chan, (410) 786-6864, for issues related to potentially 
misvalued services under the PFS.
    Kris Corwin, (410) 786-8864, Patrick Sartini, (410) 786-9252, and 
Larry Chan, (410) 786-6864, for issues related to telehealth services 
and other services involving communications technology.
    Regina Walker-Wren, (410) 786-9160, for issues related to nurse 
practitioner and clinical nurse specialist certification by the Nurse 
Portfolio Credentialing Center (NPCC).
    Lindsey Baldwin, (410) 786-1694, or 
<a href="/cdn-cgi/l/email-protection#723f17161b11130017221a0b011b111b131c34171721111a1716071e1732111f015c1a1a015c151d04"><span class="__cf_email__" data-cfemail="733e16171a10120116231b0a001a101a121d35161620101b1617061f1633101e005d1b1b005d141c05">[email protected]</span></a>, for issues related to PFS 
payment for behavioral health services. 
<a href="/cdn-cgi/l/email-protection#feb39b9a979d9f8c9bae96878d979d979f90b89b9bad9d969b9a8b929bbe9d938dd096968dd0999188"><span class="__cf_email__" data-cfemail="d598b0b1bcb6b4a7b085bdaca6bcb6bcb4bb93b0b086b6bdb0b1a0b9b095b6b8a6fbbdbda6fbb2baa3">[email protected]</span></a>, for issues related to PFS 
payment for evaluation and management services.
    Geri Mondowney, (410) 786-1172, Morgan Kitzmiller, (410) 786-1623, 
Julie Rauch, (410) 786-8932, and Tamika Brock, (312) 886-7904, for 
issues related to malpractice RVUs and geographic practice cost indices 
(GPCIs).
    <a href="/cdn-cgi/l/email-protection#256840414c46445740754d5c564c464c444b63404076464d4041504940654648560b4d4d560b424a53"><span class="__cf_email__" data-cfemail="eda08889848e8c9f88bd85949e848e848c83ab8888be8e858889988188ad8e809ec385859ec38a829b">[email protected]</span></a>, for issues related to 
non-face-to-face nonphysician services/remote therapeutic monitoring 
services (RTM).
    Zehra Hussain, (214) 767-4463, or 
<a href="/cdn-cgi/l/email-protection#c38ea6a7aaa0a2b1a693abbab0aaa0aaa2ad85a6a690a0aba6a7b6afa683a0aeb0edababb0eda4acb5"><span class="__cf_email__" data-cfemail="de93bbbab7bdbfacbb8eb6a7adb7bdb7bfb098bbbb8dbdb6bbbaabb2bb9ebdb3adf0b6b6adf0b9b1a8">[email protected]</span></a>, for issues related to payment 
of skin substitutes.
    Pamela West, (410) 786-2302, for issues related to revisions to 
regulations to allow audiologists to furnish diagnostic Tests, as 
appropriate without a physician order.
    Emily Forrest, (202) 205-1922, Laura Ashbaugh, (410) 786-1113, and 
Erick Carrera, (410) 786-8949, for issues related to PFS payment for 
dental services.
    Heidi Oumarou, (410) 786-7942, for issues related to the rebasing 
and revising of the Medicare Economic Index (MEI).
    Laura Kennedy, (410) 786-3377, and Rachel Radzyner, (410) 786-8215, 
for issues related to requiring manufacturers of certain single-dose 
container or single-use package drugs payable under Medicare Part B to 
provide refunds with respect to discarded amounts.
    Laura Ashbaugh, (410) 786-1113, and Rasheeda Arthur, (410) 786-
3434, for issues related to Clinical Laboratory Fee Schedule.
    Lisa Parker, (410) 786-4949, or <a href="/cdn-cgi/l/email-protection#50160118137d00000310333d237e3838237e373f26"><span class="__cf_email__" data-cfemail="d197809992fc81818291b2bca2ffb9b9a2ffb6bea7">[email protected]</span></a>, for issues 
related to FQHCs.
    Michele Franklin, (410) 786-9226, or <a href="/cdn-cgi/l/email-protection#b0e2f8f3f0d3ddc39ed8d8c39ed7dfc6"><span class="__cf_email__" data-cfemail="b9ebf1faf9dad4ca97d1d1ca97ded6cf">[email protected]</span></a>, for issues 
related to RHCs.
    Daniel Feller, (410) 786-6913, and Elizabeth Truong (410) 786-6005, 
for issues related to coverage of colorectal cancer screening.
    Heather Hostetler, (410) 786-4515, for issues related to removal of 
selected national coverage determinations.
    Lindsey Baldwin, (410) 786-1694, for issues related to Medicare 
coverage of opioid use disorder treatment services furnished by opioid 
treatment programs.
    Kathleen Johnson, (410) 786-3295, and Sabrina Ahmed, (410) 786-
7499, for issues related to the Medicare Shared Savings Program (Shared 
Savings Program) Quality performance standard and quality reporting 
requirements.
    Sabrina Ahmed, (410) 786-7499, for issues related to the Medicare 
Shared

[[Page 45861]]

Savings Program burden reduction proposal on OHCAs.
    Janae James, (410) 786-0801, or Elizabeth November, (410) 786-4518, 
or <a href="/cdn-cgi/l/email-protection#62310a031007063103140b0c051132100d0510030f22010f114c0a0a114c050d14"><span class="__cf_email__" data-cfemail="2b78434a594e4f784a5d42454c587b59444c594a466b48465805434358054c445d">[email protected]</span></a>, for issues related to Shared 
Savings Program beneficiary assignment, and financial methodology.
    Naseem Tarmohamed, (410) 786-0814, or 
<a href="/cdn-cgi/l/email-protection#faa9929b889f9ea99b8c93949d89aa88959d889b97ba999789d4929289d49d958c"><span class="__cf_email__" data-cfemail="64370c051601003705120d0a031734160b03160509240709174a0c0c174a030b12">[email protected]</span></a>, for inquiries related to Shared 
Savings Program application, compliance and beneficiary notification 
requirements.
    Rachel Radzyner, (410) 786-8215, and Michelle Cruse, (443) 478-
6390, for issues related to vaccine administration services.
    Katie Parker, (410) 786-0537, for issues related to medical 
necessity and documentation requirements for nonemergency, scheduled, 
repetitive ambulance services.
    Frank Whelan, (410) 786-1302, for issues related to Medicare 
provider enrollment regulation updates (including for skilled nursing 
facilities), State options for implementing Medicaid provider 
enrollment affiliation provisions, and conditions of payment for DMEPOS 
suppliers.
    Mei Zhang, (410) 786-7837, and Daniel Standridge, (410) 786-2419, 
for issues related to requirement for electronic prescribing for 
controlled substances for a covered Part D drug under a prescription 
drug plan or an MA-PD plan (section 2003 of the SUPPORT Act).
    Amy Gruber, (410) 786-1542, or <a href="/cdn-cgi/l/email-protection#2a6b47485f464b44494f6e4b5e4b694546464f495e4345446a49475904424259044d455c"><span class="__cf_email__" data-cfemail="93d2fef1e6fff2fdf0f6d7f2e7f2d0fcfffff6f0e7fafcfdd3f0fee0bdfbfbe0bdf4fce5">[email protected]</span></a>, 
for issues related to the Medicare Ground Ambulance Data Collection 
System.
    Sundus Ashar, <a href="/cdn-cgi/l/email-protection#7023051e1405035e11031811024130131d035e1818035e171f06"><span class="__cf_email__" data-cfemail="fba88e959f8e88d59a88939a89cabb989688d5939388d59c948d">[email protected]</span></a>, for issues related to 
HCPCS Level II Coding for skin substitutes.
    Renee O'Neill, (410) 786-8821, or Kati Moore, (410) 786-5471, for 
inquiries related to Merit-based Incentive Payment System (MIPS).
    Richard Jensen, (410) 786-6126, for inquiries related to 
Alternative Payment Models (APMs).

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.
    Addenda Available Only Through the internet on the CMS website: The 
PFS Addenda along with other supporting documents and tables referenced 
in this proposed rule are available on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. Click on the link on the left side of the 
screen titled, ``PFS Federal Regulations Notices'' for a chronological 
list of PFS Federal Register and other related documents. For the CY 
2023 PFS proposed rule, refer to item CMS-1770-P. Readers with 
questions related to accessing any of the Addenda or other supporting 
documents referenced in this proposed rule and posted on the CMS 
website identified above should contact 
<a href="/cdn-cgi/l/email-protection#5e133b3a373d3f2c3b0e36272d373d373f30183b3b0d3d363b3a2b323b1e3d332d7036362d70393128"><span class="__cf_email__" data-cfemail="f9b49c9d909a988b9ca991808a909a909897bf9c9caa9a919c9d8c959cb99a948ad791918ad79e968f">[email protected]</span></a>.
    CPT (Current Procedural Terminology) Copyright Notice: Throughout 
this proposed rule, we use CPT codes and descriptions to refer to a 
variety of services. We note that CPT codes and descriptions are a 
copyright of 2020 American Medical Association (AMA); all rights 
reserved; and CPT is a registered trademark of the AMA. Applicable 
Federal Acquisition Regulations (FAR) and Defense Federal Acquisition 
Regulations (DFAR) apply.

I. Executive Summary

    This major annual rule proposes to revise payment polices under the 
Medicare PFS and makes other policy changes, including proposals to 
implement certain provisions of the Protecting Medicare and American 
Farmers from Sequester Cuts Act (PMAFSCA) (Pub. L. 117-71, December 10, 
2021), Infrastructure Investment and Jobs Act (Pub. L. 117-58, November 
15, 2021), Consolidated Appropriations Act, 2021 (CAA, 2021) (Pub. L. 
116-260, December 27, 2020), Bipartisan Budget Act of 2018 (BBA of 
2018) (Pub. L. 115-123, February 9, 2018) and the Substance Use-
Disorder Prevention that Promotes Opioid Recovery and Treatment 
(SUPPORT) for Patients and Communities Act (the SUPPORT Act) (Pub. L. 
115-271, October 24, 2018), related to Medicare Part B payment. In 
addition, this major proposed rule includes proposals regarding other 
Medicare payment policies described in sections III. and IV.

B. Summary of the Major Provisions

    The statute requires us to establish payments under the PFS, based 
on national uniform relative value units (RVUs) that account for the 
relative resources used in furnishing a service. The statute requires 
that RVUs be established for three categories of resources: work, 
practice expense (PE), and malpractice (MP) expense. In addition, the 
statute requires that we establish each year by regulation the payment 
amounts for physicians' services paid under the PFS, including 
geographic adjustments to reflect the variations in the costs of 
furnishing services in different geographic areas.
    In this major proposed rule, we are proposing to establish RVUs for 
CY 2023 for the PFS to ensure that our payment systems are updated to 
reflect changes in medical practice and the relative value of services, 
as well as changes in the statute. This proposed rule also includes 
discussions and provisions regarding several other Medicare Part B 
payment policies.
    Specifically, this proposed rule addresses:

<bullet> Determination of PE RVUs (section II.B.)
<bullet> Potentially Misvalued Services Under the PFS (section II.C.)
<bullet> Payment for Medicare Telehealth Services Under Section 1834(m) 
of the Act (section II.D.)
<bullet> Valuation of Specific Codes (section II.E.)
<bullet> Evaluation and Management (E/M) Visits (section II.F.)
<bullet> Geographic Practice Cost Indices (GPCI) (section II.G.)
<bullet> Determination of Malpractice Relative Value Units (RVUs) 
(section II.H.)
<bullet> Non-Face-to-Face/Remote Therapeutic Monitoring (RTM) Services 
(section II.I.)
<bullet> Payment for Skin Substitutes (section II.J.)
<bullet> Proposal to Allow Audiologists to Furnish Certain Diagnostic 
Tests Without a Physician Order (section II.K.)
<bullet> Proposals and Request for Information on Medicare Parts A and 
B Payment for Dental Services (section II.L.)
<bullet> Rebasing and Revising the Medicare Economic Index (MEI) 
(section II.M.)
<bullet> Requiring Manufacturers of Certain Single-dose Container or 
Single-use Package Drugs to Provide Refunds with Respect to Discarded 
Amounts (Sec. Sec.  414.902 and 414.940) (section III.A.)

[[Page 45862]]

<bullet> Rural Health Clinics (RHCs) and Federally Qualified Health 
Centers (FQHCs) (section III.B.)
<bullet> Clinical Laboratory Fee Schedule: Revised Data Reporting 
Period and Phase-in of Payment Reductions, and Proposals for Specimen 
Collection Fees and Travel Allowance for Clinical Diagnostic Laboratory 
Tests (section III.C.)
<bullet> Expansion of Coverage for Colorectal Cancer Screening and 
Reducing Barriers (section III.D.)
<bullet> Removal of Selected National Coverage Determinations (section 
III.E.)
<bullet> Modifications Related to Medicare Coverage for Opioid Use 
Disorder (OUD) Treatment Services Furnished by Opioid Treatment 
Programs (OTPs) (section III.F.)
<bullet> Medicare Shared Savings Program (section III.G.)
<bullet> Medicare Part B Payment for Preventive Vaccine Administration 
Services (section III.H.)
<bullet> Medical Necessity and Documentation Requirements for 
Nonemergency, Scheduled, Repetitive Ambulance Services (section III.I.)
<bullet> Medicare Provider and Supplier Enrollment and Conditions of 
DMEPOS Payment (section III.J.)
<bullet> State Options for Implementing Medicaid Provider Enrollment 
Affiliation Provision (section III.K.)
<bullet> Requirement for Electronic Prescribing for Controlled 
Substances for a Covered Part D Drug under a Prescription Drug Plan or 
an MA-PD Plan (section 2003 of the SUPPORT Act) (section III.L.)
<bullet> Medicare Ground Ambulance Data Collection System (GADCS) 
(section III.M.)
<bullet> Proposal to Revise HCPCS Level II Coding Procedures for Wound 
Care Management Products (section III.N.)
<bullet> Updates to the Quality Payment Program (section IV.)
<bullet> Collection of Information Requirements (section V.)
<bullet> Response to Comments (section VI.)
<bullet> Regulatory Impact Analysis (section VII.)
3. Summary of Costs and Benefits
    We have determined that this proposed rule is economically 
significant. For a detailed discussion of the economic impacts, see 
section VII., Regulatory Impact Analysis, of this proposed rule.

B. Determination of PE RVUs

1. Overview
    Practice expense (PE) is the portion of the resources used in 
furnishing a service that reflects the general categories of physician 
and practitioner expenses, such as office rent and personnel wages, but 
excluding malpractice (MP) expenses, as specified in section 
1848(c)(1)(B) of the Act. As required by section 1848(c)(2)(C)(ii) of 
the Act, we use a resource-based system for determining PE RVUs for 
each physicians' service. We develop PE RVUs by considering the direct 
and indirect practice resources involved in furnishing each service. 
Direct expense categories include clinical labor, medical supplies, and 
medical equipment. Indirect expenses include administrative labor, 
office expense, and all other expenses. The sections that follow 
provide more detailed information about the methodology for translating 
the resources involved in furnishing each service into service specific 
PE RVUs. We refer readers to the CY 2010 Physician Fee Schedule (PFS) 
final rule with comment period (74 FR 61743 through 61748) for a more 
detailed explanation of the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
    We determine the direct PE for a specific service by adding the 
costs of the direct resources (that is, the clinical staff, medical 
supplies, and medical equipment) typically involved with furnishing 
that service. The costs of the resources are calculated using the 
refined direct PE inputs assigned to each CPT code in our PE database, 
which are generally based on our review of recommendations received 
from the RUC and those provided in response to public comment periods. 
For a detailed explanation of the direct PE methodology, including 
examples, we refer readers to the 5-year review of work RVUs under the 
PFS and proposed changes to the PE methodology CY 2007 PFS proposed 
notice (71 FR 37242) and the CY 2007 PFS final rule with comment period 
(71 FR 69629).
b. Indirect Practice Expense per Hour Data
    We use survey data on indirect PEs incurred per hour worked, in 
developing the indirect portion of the PE RVUs. Prior to CY 2010, we 
primarily used the PE/HR by specialty that was obtained from the AMA's 
SMS. The AMA administered a new survey in CY 2007 and CY 2008, the 
Physician Practice Expense Information Survey (PPIS). The PPIS is a 
multispecialty, nationally representative, PE survey of both physicians 
and NPPs paid under the PFS using a survey instrument and methods 
highly consistent with those used for the SMS and the supplemental 
surveys. The PPIS gathered information from 3,656 respondents across 51 
physician specialty and health care professional groups. We believe the 
PPIS is the most comprehensive source of PE survey information 
available. We used the PPIS data to update the PE/HR data for the CY 
2010 PFS for almost all of the Medicare recognized specialties that 
participated in the survey.
    When we began using the PPIS data in CY 2010, we did not change the 
PE RVU methodology itself or the manner in which the PE/HR data are 
used in that methodology. We only updated the PE/HR data based on the 
new survey. Furthermore, as we explained in the CY 2010 PFS final rule 
with comment period (74 FR 61751), because of the magnitude of payment 
reductions for some specialties resulting from the use of the PPIS 
data, we transitioned its use over a 4-year period from the previous PE 
RVUs to the PE RVUs developed using the new PPIS data. As provided in 
the CY 2010 PFS final rule with comment period (74 FR 61751), the 
transition to the PPIS data was complete for CY 2013. Therefore, PE 
RVUs from CY 2013 forward are developed based entirely on the PPIS 
data, except as noted in this section.
    Section 1848(c)(2)(H)(i) of the Act requires us to use the medical 
oncology supplemental survey data submitted in 2003 for oncology drug 
administration services. Therefore, the PE/HR for medical oncology, 
hematology, and hematology/oncology reflects the continued use of these 
supplemental survey data.
    Supplemental survey data on independent labs from the College of 
American Pathologists were implemented for payments beginning in CY 
2005. Supplemental survey data from the National Coalition of Quality 
Diagnostic Imaging Services (NCQDIS), representing independent 
diagnostic testing facilities (IDTFs), were blended with supplementary 
survey data from the American College of Radiology (ACR) and 
implemented for payments beginning in CY 2007. Neither IDTFs, nor 
independent labs, participated in the PPIS. Therefore, we continue to 
use the PE/HR that was developed from their supplemental survey data.
    Consistent with our past practice, the previous indirect PE/HR 
values from the supplemental surveys for these specialties were updated 
to CY 2006 using the Medicare Economic Index (MEI) to put them on a 
comparable basis with the PPIS data.
    We also do not use the PPIS data for reproductive endocrinology and 
spine

[[Page 45863]]

surgery since these specialties currently are not separately recognized 
by Medicare, nor do we have a method to blend the PPIS data with 
Medicare recognized specialty data.
    Previously, we established PE/HR values for various specialties 
without SMS or supplemental survey data by crosswalking them to other 
similar specialties to estimate a proxy PE/HR. For specialties that 
were part of the PPIS for which we previously used a crosswalked PE/HR, 
we instead used the PPIS based PE/HR. We use crosswalks for specialties 
that did not participate in the PPIS. These crosswalks have been 
generally established through notice and comment rulemaking and are 
available in the file titled ``CY 2023 PFS proposed rule PE/HR'' on the 
CMS website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
c. Allocation of PE to Services
    To establish PE RVUs for specific services, it is necessary to 
establish the direct and indirect PE associated with each service.
(1) Direct Costs
    The relative relationship between the direct cost portions of the 
PE RVUs for any two services is determined by the relative relationship 
between the sum of the direct cost resources (that is, the clinical 
staff, medical supplies, and medical equipment) typically involved with 
furnishing each of the services. The costs of these resources are 
calculated from the refined direct PE inputs in our PE database. For 
example, if one service has a direct cost sum of $400 from our PE 
database and another service has a direct cost sum of $200, the direct 
portion of the PE RVUs of the first service would be twice as much as 
the direct portion of the PE RVUs for the second service.
(2) Indirect Costs
    We allocate the indirect costs at the code level based on the 
direct costs specifically associated with a code and the greater of 
either the clinical labor costs or the work RVUs. We also incorporate 
the survey data described earlier in the PE/HR discussion. The general 
approach to developing the indirect portion of the PE RVUs is as 
follows:
    <bullet> For a given service, we use the direct portion of the PE 
RVUs calculated as previously described and the average percentage that 
direct costs represent of total costs (based on survey data) across the 
specialties that furnish the service to determine an initial indirect 
allocator. That is, the initial indirect allocator is calculated so 
that the direct costs equal the average percentage of direct costs of 
those specialties furnishing the service. For example, if the direct 
portion of the PE RVUs for a given service is 2.00 and direct costs, on 
average, represent 25 percent of total costs for the specialties that 
furnish the service, the initial indirect allocator would be calculated 
so that it equals 75 percent of the total PE RVUs. Thus, in this 
example, the initial indirect allocator would equal 6.00, resulting in 
a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 
percent of 8.00).
    <bullet> Next, we add the greater of the work RVUs or clinical 
labor portion of the direct portion of the PE RVUs to this initial 
indirect allocator. In our example, if this service had a work RVU of 
4.00 and the clinical labor portion of the direct PE RVU was 1.50, we 
would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 
clinical labor portion) to the initial indirect allocator of 6.00 to 
get an indirect allocator of 10.00. In the absence of any further use 
of the survey data, the relative relationship between the indirect cost 
portions of the PE RVUs for any two services would be determined by the 
relative relationship between these indirect cost allocators. For 
example, if one service had an indirect cost allocator of 10.00 and 
another service had an indirect cost allocator of 5.00, the indirect 
portion of the PE RVUs of the first service would be twice as great as 
the indirect portion of the PE RVUs for the second service.
    <bullet> Then, we incorporate the specialty specific indirect PE/HR 
data into the calculation. In our example, if, based on the survey 
data, the average indirect cost of the specialties furnishing the first 
service with an allocator of 10.00 was half of the average indirect 
cost of the specialties furnishing the second service with an indirect 
allocator of 5.00, the indirect portion of the PE RVUs of the first 
service would be equal to that of the second service.
(3) Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a facility setting, where Medicare makes a separate payment 
to the facility for its costs in furnishing a service, we establish two 
PE RVUs: facility and nonfacility. The methodology for calculating PE 
RVUs is the same for both the facility and nonfacility RVUs, but is 
applied independently to yield two separate PE RVUs. In calculating the 
PE RVUs for services furnished in a facility, we do not include 
resources that would generally not be provided by physicians when 
furnishing the service. For this reason, the facility PE RVUs are 
generally lower than the nonfacility PE RVUs.
(4) Services With Technical Components and Professional Components
    Diagnostic services are generally comprised of two components: a 
professional component (PC); and a technical component (TC). The PC and 
TC may be furnished independently or by different providers, or they 
may be furnished together as a global service. When services have 
separately billable PC and TC components, the payment for the global 
service equals the sum of the payment for the TC and PC. To achieve 
this, we use a weighted average of the ratio of indirect to direct 
costs across all the specialties that furnish the global service, TCs, 
and PCs; that is, we apply the same weighted average indirect 
percentage factor to allocate indirect expenses to the global service, 
PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum 
to the global.)
(5) PE RVU Methodology
    For a more detailed description of the PE RVU methodology, we refer 
readers to the CY 2010 PFS final rule with comment period (74 FR 61745 
through 61746). We also direct readers to the file titled ``Calculation 
of PE RVUs under Methodology for Selected Codes'' which is available on 
our website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This file 
contains a table that illustrates the calculation of PE RVUs as 
described in this proposed rule for individual codes.
(a) Setup File
    First, we create a setup file for the PE methodology. The setup 
file contains the direct cost inputs, the utilization for each 
procedure code at the specialty and facility/nonfacility place of 
service level, and the specialty specific PE/HR data calculated from 
the surveys.
(b) Calculate the Direct Cost PE RVUs
    Sum the costs of each direct input.
    Step 1: Sum the direct costs of the inputs for each service.
    Step 2: Calculate the aggregate pool of direct PE costs for the 
current year. We set the aggregate pool of PE costs equal to the 
product of the ratio of the current aggregate PE RVUs to current 
aggregate work RVUs and the projected aggregate work RVUs.

[[Page 45864]]

    Step 3: Calculate the aggregate pool of direct PE costs for use in 
ratesetting. This is the product of the aggregate direct costs for all 
services from Step 1 and the utilization data for that service.
    Step 4: Using the results of Step 2 and Step 3, use the CF to 
calculate a direct PE scaling adjustment to ensure that the aggregate 
pool of direct PE costs calculated in Step 3 does not vary from the 
aggregate pool of direct PE costs for the current year. Apply the 
scaling adjustment to the direct costs for each service (as calculated 
in Step 1).
    Step 5: Convert the results of Step 4 to an RVU scale for each 
service. To do this, divide the results of Step 4 by the CF. Note that 
the actual value of the CF used in this calculation does not influence 
the final direct cost PE RVUs as long as the same CF is used in Step 4 
and Step 5. Different CFs would result in different direct PE scaling 
adjustments, but this has no effect on the final direct cost PE RVUs 
since changes in the CFs and changes in the associated direct scaling 
adjustments offset one another.
(c) Create the Indirect Cost PE RVUs
    Create indirect allocators.
    Step 6: Based on the survey data, calculate direct and indirect PE 
percentages for each physician specialty.
    Step 7: Calculate direct and indirect PE percentages at the service 
level by taking a weighted average of the results of Step 6 for the 
specialties that furnish the service. Note that for services with TCs 
and PCs, the direct and indirect percentages for a given service do not 
vary by the PC, TC, and global service.
    We generally use an average of the 3 most recent years of available 
Medicare claims data to determine the specialty mix assigned to each 
code. Codes with low Medicare service volume require special attention 
since billing or enrollment irregularities for a given year can result 
in significant changes in specialty mix assignment. We finalized a 
policy in the CY 2018 PFS final rule (82 FR 52982 through 59283) to use 
the most recent year of claims data to determine which codes are low 
volume for the coming year (those that have fewer than 100 allowed 
services in the Medicare claims data). For codes that fall into this 
category, instead of assigning specialty mix based on the specialties 
of the practitioners reporting the services in the claims data, we use 
the expected specialty that we identify on a list developed based on 
medical review and input from expert interested parties. We display 
this list of expected specialty assignments as part of the annual set 
of data files we make available as part of notice and comment 
rulemaking and consider recommendations from the RUC and other 
interested parties on changes to this list on an annual basis. Services 
for which the specialty is automatically assigned based on previously 
finalized policies under our established methodology (for example, 
``always therapy'' services) are unaffected by the list of expected 
specialty assignments. We also finalized in the CY 2018 PFS final rule 
(82 FR 52982 through 52983) a policy to apply these service-level 
overrides for both PE and MP, rather than one or the other category.
    Step 8: Calculate the service level allocators for the indirect PEs 
based on the percentages calculated in Step 7. The indirect PEs are 
allocated based on the three components: the direct PE RVUs; the 
clinical labor PE RVUs; and the work RVUs.
    For most services the indirect allocator is: indirect PE percentage 
* (direct PE RVUs/direct percentage) + work RVUs.
    There are two situations where this formula is modified:
    <bullet> If the service is a global service (that is, a service 
with global, professional, and technical components), then the indirect 
PE allocator is: indirect percentage (direct PE RVUs/direct percentage) 
+ clinical labor PE RVUs + work RVUs.
    <bullet> If the clinical labor PE RVUs exceed the work RVUs (and 
the service is not a global service), then the indirect allocator is: 
indirect PE percentage (direct PE RVUs/direct percentage) + clinical 
labor PE RVUs.
    (Note: For global services, the indirect PE allocator is based on 
both the work RVUs and the clinical labor PE RVUs. We do this to 
recognize that, for the PC service, indirect PEs would be allocated 
using the work RVUs, and for the TC service, indirect PEs would be 
allocated using the direct PE RVUs and the clinical labor PE RVUs. This 
also allows the global component RVUs to equal the sum of the PC and TC 
RVUs.)
    For presentation purposes, in the examples in the download file 
titled ``Calculation of PE RVUs under Methodology for Selected Codes'', 
the formulas were divided into two parts for each service.
    <bullet> The first part does not vary by service and is the 
indirect percentage (direct PE RVUs/direct percentage).
    <bullet> The second part is either the work RVU, clinical labor PE 
RVU, or both depending on whether the service is a global service and 
whether the clinical PE RVUs exceed the work RVUs (as described earlier 
in this step).
    Apply a scaling adjustment to the indirect allocators.
    Step 9: Calculate the current aggregate pool of indirect PE RVUs by 
multiplying the result of step 8 by the average indirect PE percentage 
from the survey data.
    Step 10: Calculate an aggregate pool of indirect PE RVUs for all 
PFS services by adding the product of the indirect PE allocators for a 
service from Step 8 and the utilization data for that service.
    Step 11: Using the results of Step 9 and Step 10, calculate an 
indirect PE adjustment so that the aggregate indirect allocation does 
not exceed the available aggregate indirect PE RVUs and apply it to 
indirect allocators calculated in Step 8.
    Calculate the indirect practice cost index.
    Step 12: Using the results of Step 11, calculate aggregate pools of 
specialty specific adjusted indirect PE allocators for all PFS services 
for a specialty by adding the product of the adjusted indirect PE 
allocator for each service and the utilization data for that service.
    Step 13: Using the specialty specific indirect PE/HR data, 
calculate specialty specific aggregate pools of indirect PE for all PFS 
services for that specialty by adding the product of the indirect PE/HR 
for the specialty, the work time for the service, and the specialty's 
utilization for the service across all services furnished by the 
specialty.
    Step 14: Using the results of Step 12 and Step 13, calculate the 
specialty specific indirect PE scaling factors.
    Step 15: Using the results of Step 14, calculate an indirect 
practice cost index at the specialty level by dividing each specialty 
specific indirect scaling factor by the average indirect scaling factor 
for the entire PFS.
    Step 16: Calculate the indirect practice cost index at the service 
level to ensure the capture of all indirect costs. Calculate a weighted 
average of the practice cost index values for the specialties that 
furnish the service. (Note: For services with TCs and PCs, we calculate 
the indirect practice cost index across the global service, PCs, and 
TCs. Under this method, the indirect practice cost index for a given 
service (for example, echocardiogram) does not vary by the PC, TC, and 
global service.)
    Step 17: Apply the service level indirect practice cost index 
calculated in Step 16 to the service level adjusted indirect allocators 
calculated in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
    Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs 
from Step 17 and apply the final PE budget

[[Page 45865]]

neutrality (BN) adjustment. The final PE BN adjustment is calculated by 
comparing the sum of steps 5 and 17 to the aggregate work RVUs scaled 
by the ratio of current aggregate PE and work RVUs. This adjustment 
ensures that all PE RVUs in the PFS account for the fact that certain 
specialties are excluded from the calculation of PE RVUs but included 
in maintaining overall PFS BN. (See ``Specialties excluded from 
ratesetting calculation'' later in this proposed rule.)
    Step 19: Apply the phase-in of significant RVU reductions and its 
associated adjustment. Section 1848(c)(7) of the Act specifies that for 
services that are not new or revised codes, if the total RVUs for a 
service for a year would otherwise be decreased by an estimated 20 
percent or more as compared to the total RVUs for the previous year, 
the applicable adjustments in work, PE, and MP RVUs shall be phased in 
over a 2-year period. In implementing the phase-in, we consider a 19 
percent reduction as the maximum 1-year reduction for any service not 
described by a new or revised code. This approach limits the year one 
reduction for the service to the maximum allowed amount (that is, 19 
percent), and then phases in the remainder of the reduction. To comply 
with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure 
that the total RVUs for all services that are not new or revised codes 
decrease by no more than 19 percent, and then apply a relativity 
adjustment to ensure that the total pool of aggregate PE RVUs remains 
relative to the pool of work and MP RVUs. For a more detailed 
description of the methodology for the phase-in of significant RVU 
changes, we refer readers to the CY 2016 PFS final rule with comment 
period (80 FR 70927 through 70931).
(e) Setup File Information
    <bullet> Specialties excluded from ratesetting calculation: For the 
purposes of calculating the PE and MP RVUs, we exclude certain 
specialties, such as certain NPPs paid at a percentage of the PFS and 
low volume specialties, from the calculation. These specialties are 
included for the purposes of calculating the BN adjustment. They are 
displayed in Table 1.
BILLING CODE 4120-01-P

[[Page 45866]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.000

BILLING CODE 4120-01-C
    <bullet> Crosswalk certain low volume physician specialties: 
Crosswalk the utilization of certain specialties with relatively low 
PFS utilization to the associated specialties.
    <bullet> Physical therapy utilization: Crosswalk the utilization 
associated with all physical therapy services to the specialty of 
physical therapy.
    <bullet> Identify professional and technical services not 
identified under the usual TC and 26 modifiers: Flag the services that 
are PC and TC services but do not use TC and 26 modifiers (for example, 
electrocardiograms). This flag associates the PC and TC with the 
associated global code for use in creating the indirect PE RVUs. For 
example, the professional service, CPT code 93010 (Electrocardiogram, 
routine ECG with at least 12 leads; interpretation and report only), is 
associated with the global service, CPT code 93000 (Electrocardiogram, 
routine ECG with at least 12 leads; with interpretation and report).
    <bullet> Payment modifiers: Payment modifiers are accounted for in 
the creation of the file consistent with current payment policy as 
implemented in claims processing. For example, services billed with the 
assistant at surgery modifier are paid 16 percent of the PFS amount for 
that service; therefore, the utilization file is modified to only 
account for 16 percent of any service that contains the assistant at 
surgery modifier. Similarly, for those services to which volume 
adjustments are made to account for the payment modifiers, time 
adjustments are applied as well. For time adjustments to surgical 
services, the intraoperative portion in the work time file is used; 
where it is not present, the intraoperative percentage from the payment 
files used by contractors to process Medicare claims is used instead. 
Where neither is available, we use the payment adjustment ratio to 
adjust the time

[[Page 45867]]

accordingly. Table 2 details the manner in which the modifiers are 
applied.
[GRAPHIC] [TIFF OMITTED] TP29JY22.001

    We also adjust volume and time that correspond to other payment 
rules, including special multiple procedure endoscopy rules and 
multiple procedure payment reductions (MPPRs). We note that section 
1848(c)(2)(B)(v) of the Act exempts certain reduced payments for 
multiple imaging procedures and multiple therapy services from the BN 
calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These MPPRs 
are not included in the development of the RVUs.
    Beginning in CY 2022, section 1834(v)(1) of the Act required that 
we apply a 15 percent payment reduction for outpatient occupational 
therapy services and outpatient physical therapy services that are 
provided, in whole or in part, by a physical therapist assistant (PTA) 
or occupational therapy assistant (OTA). Section 1834(v)(2)(A) of the 
Act required CMS to establish modifiers to identify these services, 
which we did in the CY 2019 PFS final rule (83 FR 59654 through 59661), 
creating the CQ and CO payment modifiers for services provided in whole 
or in part by PTAs and OTAs, respectively. These payment modifiers are 
required to be used on claims for services with dates of service 
beginning January 1, 2020, as specified in the CY 2020 PFS final rule 
(84 FR 62702 through 62708). We applied the 15 percent payment 
reduction to therapy services provided by PTAs (using the CQ modifier) 
or OTAs (using the CO modifier), as required by statute. Under sections 
1834(k) and 1848 of the Act, payment is made for outpatient therapy 
services at 80 percent of the lesser of the actual charge or applicable 
fee schedule amount (the allowed charge). The remaining 20 percent is 
the beneficiary copayment. For therapy services to which the new 
discount applies, payment will be made at 85 percent of the 80 percent 
of allowed charges. Therefore, the volume discount factor for therapy 
services to which the CQ and CO modifiers apply is: (0.20 + (0.80* 
0.85), which equals 88 percent.
    For anesthesia services, we do not apply adjustments to volume 
since we use the average allowed charge when simulating RVUs; 
therefore, the RVUs as calculated already reflect the payments as 
adjusted by modifiers, and no volume adjustments are necessary. 
However, a time adjustment of 33 percent is made only for medical 
direction of two to four cases since that is the only situation where a 
single practitioner is involved with multiple beneficiaries 
concurrently, so that counting each service without regard to the 
overlap with other services would overstate the amount of time spent by 
the practitioner furnishing these services.
    <bullet> Work RVUs: The setup file contains the work RVUs from this 
proposed rule.
(6) Equipment Cost per Minute
    The equipment cost per minute is calculated as:

(1/(minutes per year * usage)) * price * ((interest rate/(1 (1/((1 + 
interest rate)[caret] life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous 
(that is, usage=1); generally, 150,000 minutes.
usage = variable, see discussion below in this proposed rule.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of 
equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion below in this final rule.

    Usage: We currently use an equipment utilization rate assumption of 
50 percent for most equipment, with the exception of expensive 
diagnostic imaging equipment, for which we use a 90 percent assumption 
as required by section 1848(b)(4)(C) of the Act.
    Useful Life: In the CY 2005 PFS final rule we stated that we 
updated the useful life for equipment items primarily based on the 
AHA's ``Estimated Useful Lives of Depreciable Hospital Assets'' 
guidelines (69 FR 66246). The most recent edition of these guidelines 
was published in 2018. This reference material provides an estimated 
useful life for hundreds of different

[[Page 45868]]

types of equipment, the vast majority of which fall in the range of 5 
to 10 years, and none of which are lower than 2 years in duration. We 
believe that the updated editions of this reference material remain the 
most accurate source for estimating the useful life of depreciable 
medical equipment.
    In the CY 2021 PFS final rule, we finalized a proposal to treat 
equipment life durations of less than 1 year as having a duration of 1 
year for the purpose of our equipment price per minute formula. In the 
rare cases where items are replaced every few months, we noted that we 
believe it is more accurate to treat these items as disposable supplies 
with a fractional supply quantity as opposed to equipment items with 
very short equipment life durations. For a more detailed discussion of 
the methodology associated with very short equipment life durations, we 
refer readers to the CY 2021 PFS final rule (85 FR 84482 through 
84483).
    <bullet> Maintenance: We finalized the 5 percent factor for annual 
maintenance in the CY 1998 PFS final rule with comment period (62 FR 
33164). As we previously stated in the CY 2016 PFS final rule with 
comment period (80 FR 70897), we do not believe the annual maintenance 
factor for all equipment is precisely 5 percent, and we concur that the 
current rate likely understates the true cost of maintaining some 
equipment. We also noted that we believe it likely overstates the 
maintenance costs for other equipment. When we solicited comments 
regarding sources of data containing equipment maintenance rates, 
commenters were unable to identify an auditable, robust data source 
that could be used by CMS on a wide scale. We noted that we did not 
believe voluntary submissions regarding the maintenance costs of 
individual equipment items would be an appropriate methodology for 
determining costs. As a result, in the absence of publicly available 
datasets regarding equipment maintenance costs or another systematic 
data collection methodology for determining a different maintenance 
factor, we did not propose a variable maintenance factor for equipment 
cost per minute pricing as we did not believe that we have sufficient 
information at present. We noted that we would continue to investigate 
potential avenues for determining equipment maintenance costs across a 
broad range of equipment items.
    <bullet> Interest Rate: In the CY 2013 PFS final rule with comment 
period (77 FR 68902), we updated the interest rates used in developing 
an equipment cost per minute calculation (see 77 FR 68902 for a 
thorough discussion of this issue). The interest rate was based on the 
Small Business Administration (SBA) maximum interest rates for 
different categories of loan size (equipment cost) and maturity (useful 
life). The Interest rates are listed in Table 3.
[GRAPHIC] [TIFF OMITTED] TP29JY22.002

    We are not proposing any changes to the equipment interest rates 
for CY 2023.
3. Adjusting RVUs To Match PE Share of the Medicare Economic Index 
(MEI)
    For CY 2023, as explained in detail in section II.M. of this 
proposed rule, we are proposing to rebase and revise the Medicare 
Economic Index (MEI) to reflect more current market conditions faced by 
physicians in furnishing physicians' services. The MEI is an index that 
measures changes in the market price of the inputs used to furnish 
physician services. This index measure was authorized by statute and is 
developed by the CMS Office of the Actuary. We believe that the MEI is 
the best measure available of the relative weights of the three 
components in payments under the PFS--work, PE and malpractice. 
Accordingly, we believe that to assure that the PFS payments reflect 
the relative resources in each of these components as required by 
section 1848(c)(3) of the Act, the RVUs used in developing rates should 
reflect the same weights in each component as the MEI. In the past, we 
have proposed (and subsequently, finalized) to accomplish this by 
holding the work RVUs constant and adjusting the PE RVUs, the MP RVUs 
and the CF to produce the appropriate balance in RVUs among the PFS 
components and payment rates for individual services. The most recent 
adjustments to reflect changes in the MEI weights were made for the CY 
2014 RVUs, when the MEI was last updated. In the CY 2014 PFS proposed 
rule (78 FR 43287 through 43288) and final rule (78 FR 74236 through 
74237), we detailed the steps necessary to accomplish this result (see 
steps 3, 10, and 18). The CY 2014 proposed and finalized adjustments 
were consistent with our longstanding practice to make adjustments to 
match the RVUs for the PFS components with the MEI cost share weights 
for the components, including the adjustments described in the CY 1999 
PFS final rule (63 FR 58829), CY 2004 PFS final rule (68 FR 63246 and 
63247), and CY 2011 PFS final rule (75 FR 73275).
    In the past when we have proposed a rebasing and/or revision of the 
MEI, as we do in section II.M. of this proposed rule, we typically have 
also proposed to modify steps 3 and 10 to adjust the aggregate pools of 
PE costs (direct PE in step 3 and indirect PE in step 10) in proportion 
to the change in the PE share in the rebased and revised MEI cost share 
weights, as previously described in the CY 2014 PFS final rule (78 FR 
74236 and 74237), and to recalibrate the relativity adjustment that we 
apply in step 18 as described in the CY 2014 PFS final rule. Instead, 
we are proposing to delay the adjustments to the PE pools in steps 3 
and 10 and the recalibration of the relativity adjustment in step 18 
until the public has an opportunity to comment on the proposed rebased 
and revised MEI, as discussed in section II.M. of this proposed rule. 
Because there are significant proposed methodological and data source 
changes to the MEI for CY 2023 and significant time has elapsed since 
the last rebasing and revision of the MEI, we believe it is important 
to allow public comment and

[[Page 45869]]

finalization of the proposed MEI changes based on the review of public 
comment before we incorporate the updated MEI into PFS ratesetting, and 
we believe this is consistent with our efforts to balance payment 
stability and predictability with incorporating new data through more 
routine updates. We refer readers to the comment solicitation in 
section II.B. of this proposed rule, where we discuss our ongoing 
efforts to update data inputs for PE to aid stability, transparency, 
efficiency, and data adequacy. Similarly, we are delaying the 
implementation of the proposed rebased and revised MEI for use in the 
PE geographic practice cost index (GPCI) and soliciting comment on 
appropriate timing for implementation for potential future rulemaking, 
discussed in detail in section II.G. and section VII. of this proposed 
rule.
    In light of the proposed delay in using the proposed update to the 
MEI to make the adjustments to the PE pools in steps 3 and 10 and the 
relativity adjustment in step 18, we are soliciting comment on when and 
how to best incorporate the proposed rebased and revised MEI discussed 
in section II.M. of this proposed rule into PFS ratesetting, and 
whether it would be appropriate to consider a transition to full 
implementation for potential future rulemaking. In section VII. of this 
proposed rule, we present the impacts of implementing the proposed 
rebased and revised MEI in PFS ratesetting through a 4-year transition 
and through full immediate implementation, that is, with no transition 
period. Given the significance of the impacts that result from a full 
implementation and the interaction with other CY 2023 proposals, we did 
not consider proposing to fully implement a rebased and revised MEI in 
PFS ratesetting for CY 2023. We are seeking comment on other 
implementation strategies for potential future rulemaking that are not 
outlined in section VII. of this proposed rule.
4. Changes to Direct PE Inputs for Specific Services
    This section focuses on specific PE inputs. The direct PE inputs 
are included in the CY 2023 direct PE input public use files, which are 
available on the CMS website under downloads for the CY 2023 PFS 
proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
a. Standardization of Clinical Labor Tasks
    As we noted in the CY 2015 PFS final rule with comment period (79 
FR 67640 through 67641), we continue to make improvements to the direct 
PE input database to provide the number of clinical labor minutes 
assigned for each task for every code in the database instead of only 
including the number of clinical labor minutes for the preservice, 
service, and post service periods for each code. In addition to 
increasing the transparency of the information used to set PE RVUs, 
this level of detail would allow us to compare clinical labor times for 
activities associated with services across the PFS, which we believe is 
important to maintaining the relativity of the direct PE inputs. This 
information would facilitate the identification of the usual numbers of 
minutes for clinical labor tasks and the identification of exceptions 
to the usual values. It would also allow for greater transparency and 
consistency in the assignment of equipment minutes based on clinical 
labor times. Finally, we believe that the detailed information can be 
useful in maintaining standard times for particular clinical labor 
tasks that can be applied consistently to many codes as they are valued 
over several years, similar in principle to the use of physician 
preservice time packages. We believe that setting and maintaining such 
standards would provide greater consistency among codes that share the 
same clinical labor tasks and could improve relativity of values among 
codes. For example, as medical practice and technologies change over 
time, changes in the standards could be updated simultaneously for all 
codes with the applicable clinical labor tasks, instead of waiting for 
individual codes to be reviewed.
    In the CY 2016 PFS final rule with comment period (80 FR 70901), we 
solicited comments on the appropriate standard minutes for the clinical 
labor tasks associated with services that use digital technology. After 
consideration of comments received, we finalized standard times for 
clinical labor tasks associated with digital imaging at 2 minutes for 
``Availability of prior images confirmed'', 2 minutes for ``Patient 
clinical information and questionnaire reviewed by technologist, order 
from physician confirmed and exam protocoled by radiologist'', 2 
minutes for ``Review examination with interpreting MD'', and 1 minute 
for ``Exam documents scanned into PACS'' and ``Exam completed in RIS 
system to generate billing process and to populate images into 
Radiologist work queue.'' In the CY 2017 PFS final rule (81 FR 80184 
through 80186), we finalized a policy to establish a range of 
appropriate standard minutes for the clinical labor activity, 
``Technologist QCs images in PACS, checking for all images, reformats, 
and dose page.'' These standard minutes will be applied to new and 
revised codes that make use of this clinical labor activity when they 
are reviewed by us for valuation. We finalized a policy to establish 2 
minutes as the standard for the simple case, 3 minutes as the standard 
for the intermediate case, 4 minutes as the standard for the complex 
case, and 5 minutes as the standard for the highly complex case. These 
values were based upon a review of the existing minutes assigned for 
this clinical labor activity; we determined that 2 minutes is the 
duration for most services and a small number of codes with more 
complex forms of digital imaging have higher values. We also finalized 
standard times for a series of clinical labor tasks associated with 
pathology services in the CY 2016 PFS final rule with comment period 
(80 FR 70902). We do not believe these activities would be dependent on 
number of blocks or batch size, and we believe that the finalized 
standard values accurately reflect the typical time it takes to perform 
these clinical labor tasks.
    In reviewing the RUC-recommended direct PE inputs for CY 2019, we 
noticed that the 3 minutes of clinical labor time traditionally 
assigned to the ``Prepare room, equipment and supplies'' (CA013) 
clinical labor activity were split into 2 minutes for the ``Prepare 
room, equipment and supplies'' activity and 1 minute for the ``Confirm 
order, protocol exam'' (CA014) activity. We proposed to maintain the 3 
minutes of clinical labor time for the ``Prepare room, equipment and 
supplies'' activity and remove the clinical labor time for the 
``Confirm order, protocol exam'' activity wherever we observed this 
pattern in the RUC-recommended direct PE inputs. Commenters explained 
in response that when the new version of the PE worksheet introduced 
the activity codes for clinical labor, there was a need to translate 
old clinical labor tasks into the new activity codes, and that a prior 
clinical labor task was split into two of the new clinical labor 
activity codes: CA007 (Review patient clinical extant information and 
questionnaire) in the preservice period, and CA014 (Confirm order, 
protocol exam) in the service period. Commenters stated that the same 
clinical labor from the old PE worksheet was now divided into the

[[Page 45870]]

CA007 and CA014 activity codes, with a standard of 1 minute for each 
activity. We agreed with commenters that we would finalize the RUC-
recommended 2 minutes of clinical labor time for the CA007 activity 
code and 1 minute for the CA014 activity code in situations where this 
was the case. However, when reviewing the clinical labor for the 
reviewed codes affected by this issue, we found that several of the 
codes did not include this old clinical labor task, and we also noted 
that several of the reviewed codes that contained the CA014 clinical 
labor activity code did not contain any clinical labor for the CA007 
activity. In these situations, we continue to believe that in these 
cases, the 3 total minutes of clinical staff time would be more 
accurately described by the CA013 ``Prepare room, equipment and 
supplies'' activity code, and we finalized these clinical labor 
refinements. For additional details, we direct readers to the 
discussion in the CY 2019 PFS final rule (83 FR 59463 and 59464).
    Following the publication of the CY 2020 PFS proposed rule, one 
commenter expressed concern with the published list of common 
refinements to equipment time. The commenter stated that these 
refinements were the formulaic result of the applying refinements to 
the clinical labor time and did not constitute separate refinements; 
the commenter requested that CMS no longer include these refinements in 
the table published each year. In the CY 2020 PFS final rule, we agreed 
with the commenter that these equipment time refinements did not 
reflect errors in the equipment recommendations or policy discrepancies 
with the RUC's equipment time recommendations. However, we believed 
that it was important to publish the specific equipment times that we 
were proposing (or finalizing in the case of the final rule) when they 
differed from the recommended values due to the effect that these 
changes can have on the direct costs associated with equipment time. 
Therefore, we finalized the separation of the equipment time 
refinements associated with changes in clinical labor into a separate 
table of refinements. For additional details, we direct readers to the 
discussion in the CY 2020 PFS final rule (84 FR 62584).
    Historically, the RUC has submitted a ``PE worksheet'' that details 
the recommended direct PE inputs for our use in developing PE RVUs. The 
format of the PE worksheet has varied over time and among the medical 
specialties developing the recommendations. These variations have made 
it difficult for both the RUC's development and our review of code 
values for individual codes. Beginning with its recommendations for CY 
2019, the RUC has mandated the use of a new PE worksheet for purposes 
of their recommendation development process that standardizes the 
clinical labor tasks and assigns them a clinical labor activity code. 
We believe the RUC's use of the new PE worksheet in developing and 
submitting recommendations will help us to simplify and standardize the 
hundreds of different clinical labor tasks currently listed in our 
direct PE database. As we did in previous calendar years, to facilitate 
rulemaking for CY 2023, we are continuing to display two versions of 
the Labor Task Detail public use file: one version with the old listing 
of clinical labor tasks, and one with the same tasks crosswalked to the 
new listing of clinical labor activity codes. These lists are available 
on the CMS website under downloads for the CY 2023 PFS proposed rule at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
b. Updates to Prices for Existing Direct PE Inputs
    In the CY 2011 PFS final rule with comment period (75 FR 73205), we 
finalized a process to act on public requests to update equipment and 
supply price and equipment useful life inputs through annual 
rulemaking, beginning with the CY 2012 PFS proposed rule. Beginning in 
CY 2019 and continuing through CY 2022, we conducted a market-based 
supply and equipment pricing update, using information developed by our 
contractor, StrategyGen, which updated pricing recommendations for 
approximately 1300 supplies and 750 equipment items currently used as 
direct PE inputs. Given the potentially significant changes in payment 
that would occur, in the CY 2019 PFS final rule we finalized a policy 
to phase in our use of the new direct PE input pricing over a 4-year 
period using a 25/75 percent (CY 2019), 50/50 percent (CY 2020), 75/25 
percent (CY 2021), and 100/0 percent (CY 2022) split between new and 
old pricing. We believed that implementing the proposed updated prices 
with a 4-year phase-in would improve payment accuracy, while 
maintaining stability and allowing interested parties the opportunity 
to address potential concerns about changes in payment for particular 
items. This 4-year transition period to update supply and equipment 
pricing concluded in CY 2022; for a more detailed discussion, we refer 
readers to the CY 2019 PFS final rule with comment period (83 FR 59473 
through 59480).
    For CY 2023, we are proposing to update the price of eight supplies 
and two equipment items in response to the public submission of 
invoices following the publication of the CY 2022 PFS final rule. The 
eight supply and equipment items with proposed updated prices are 
listed in the valuation of specific codes section of the preamble under 
Table 15, CY 2023 Invoices Received for Existing Direct PE Inputs.
    We are not proposing to update the price of another eight supplies 
and two equipment items which were the subject of public submission of 
invoices. Our rationale for not updating these prices is detailed 
below:
    <bullet> Acetic acid 5% (SH001): We received an invoice submission 
for an increase in price from 3 cents per ml to 9.5 cents per ml for 
the SH001 supply. However, the invoice stated that this price was for 
an ``Alcian Blue 1% in 3% Acetic Acid pH 2.5'' supply and it is not 
clear that this represents the same supply as the ``Acetic acid 5%'' 
described by the SH001 supply item. We also do not believe that the 
typical price for this supply has increased 200 percent in the 3 years 
since StrategyGen researched its pricing, especially given that the 
price for the SH001 supply previously increased from 1.2 cents in CY 
2019 to its current price of 3 cents for CY 2022.
    <bullet> Cytology, lysing soln (CytoLyt) (SL039): We received an 
invoice submission for an increase in price from 6 cents per ml to 80 
cents per ml for the SL039 supply. We do not believe that the typical 
price for this supply has increased 1200% in the 3 years since 
StrategyGen researched its pricing, especially given that the price for 
the SL039 supply previously increased from 3.4 cents in CY 2019 to its 
current price of 6 cents for CY 2022.
    <bullet> Fixative (for tissue specimen) (SL068): We received an 
invoice submission for an increase in price from 1.3 cents per ml to 
$4.87 for the SL068 supply. We believe that this was the result of 
confusion on the part of the interested party regarding the unit 
quantity for the SL068 supply. This item is paid on a per ml basis and 
not a per unit basis; there was not enough information on the submitted 
invoice to determine the price for the SL068 supply on a per ml basis.
    <bullet> Ethanol, 100% (SL189): We received an invoice submission 
for an increase in price from 0.33 cents per ml to 1.2 cents per ml for 
the SL189 supply. However, we noted that the invoice was

[[Page 45871]]

based on the price for a single gallon of 100% ethanol which is 
typically sold in much larger quantities than a single gallon. We found 
that 100% ethanol was readily available for sale online in larger unit 
sizes and the current price of 0.33 cents per ml (based on the past 
StrategyGen market research) appears to be accurate based on online 
bulk pricing. We also found that the submitted invoices for the 
ethanol, 70% (SL190), ethanol, 95% (SL248), and stain, PAP OG-6 (SL491) 
supplies were also based on pricing for a single gallon. Each of these 
supply items was also available for purchase in larger unit quantities 
which indicated that the current pricing remained typical for these 
supplies. Therefore, we are not proposing to update the prices for the 
SL189, SL190, SL248 or SL491 supply, as we do not believe that the 
higher prices paid for smaller quantities of these supplies would be 
typical.
    <bullet> Biohazard specimen transport bag (SM008): We received an 
invoice submission for an increase in price from 8 cents to 45 cents 
for the SM008 supply. However, it is not clear that the item described 
on the invoice is the same item as the SM008 supply. The invoice states 
only that the price is for ``Supplied Case Red Bags'' which was not 
enough information to determine if this would be typical for the SM008 
supply. We also do not believe that the typical price for this supply 
has increased 460 percent in the 3 years since StrategyGen researched 
its pricing, especially given that the price for the SM008 supply 
previously increased from 3.5 cents in CY 2019 to its current price of 
8 cents for CY 2022.
    <bullet> International Normalized Ratio (INR) analysis and 
reporting system w-software (EQ312): We did not receive an invoice for 
this equipment item, only a letter stating that the cost of the EQ312 
equipment should be increased from the current price of $19,325 to 
$1,600,000. We previously finalized a policy in the CY 2011 PFS final 
rule (75 FR 73205) to update supply and equipment prices through an 
invoice submission process. We require pricing data indicative of the 
typical market price of the supply or equipment item in question to 
update the price. It is not sufficient to state a different price 
without providing information to support this new valuation. Since we 
did not receive an invoice to support the higher costs asserted in the 
letter, we are not proposing a new price for the EQ312 equipment item. 
Interested parties are encouraged to submit invoices with their public 
comments or, if outside the notice and comment rulemaking process, via 
email at <a href="/cdn-cgi/l/email-protection#18485d47486a717b7d475176686d6c474d687c796c7d587b756b3670706b367f776e"><span class="__cf_email__" data-cfemail="f4a4b1aba4869d9791abbd9a848180aba18490958091b4979987da9c9c87da939b82">[email protected]</span></a>. We also note that in order 
to be considered a direct PE input, an equipment item must be 
individually allocable to a particular patient for a particular 
service. Costs associated with the implementation, maintenance, and 
upgrade of equipment that is not individually allocable to a particular 
patient for a particular service, or other costs associated with 
running a practice, would typically be classified as forms of indirect 
PE under our methodology.
    The same interested parties that addressed the pricing of the EQ312 
equipment item questioned the assignment of the General Practice 
specialty crosswalk for indirect PE for home Prothrombin Time (PT)/INR 
monitoring services. These individuals stated that the predominant code 
used for PT/INR monitoring (HCPCS code G0249) will be significantly and 
negatively impacted by the continuing implementation over a 4-year 
period of changes in the clinical labor rates finalized in the CY 2022 
PFS final rule (86 FR 65024). The individuals requested that CMS change 
the crosswalk for home PT/INR monitoring services to All Physicians or 
Pathology which would partially offset the reduction that HCPCS code 
G0249 is facing due to changes in the clinical labor rates.
    We note for these interested parties that we finalized a crosswalk 
to the General Practice specialty for home PT/INR monitoring services 
(HCPCS codes G0248, G0249, and G0250) in the CY 2021 PFS final rule (85 
FR 84477 and 84478). The data submitted by the commenters at the time 
indicated that the direct-to-indirect cost percentages to furnish home 
PT/INR monitoring are in the range of 31:69, similar to the ratio 
associated with the General Practice specialty. We disagree, as we did 
in response to comments in the CY 2021 PFS final rule, that these home 
PT/INR monitoring services should be reassigned to a different 
specialty that is less reflective of the cost structure for these 
services to offset reductions in payment for the services that result 
from an unrelated policy proposal (the clinical labor pricing update). 
We also note that we have not received any new information about PT/INR 
monitoring services since CY 2021 to indicate that All Physicians or 
Pathology would be more accurate choices for use in indirect PE 
allocation but are open to receiving new relevant information that CMS 
could consider in future rulemaking. As such, we are not proposing to 
change the assigned specialty for PT/INR services; we direct interested 
parties to the previous discussion of this topic in the CY 2021 PFS 
final rule (85 FR 84477 and 84478) and again in the CY 2022 PFS final 
rule (86 FR 65000). Interested parties are encouraged to submit new 
information to support the most accurate specialty choice to use in 
indirect PE allocation for PT/INR monitoring services distinct from 
what has previously been reviewed during the last two rule cycles.
    <bullet> Remote musculoskeletal therapy system (EQ402): We received 
an invoice submission for a price of $1,000 for the EQ402 equipment 
item. Since this equipment already has a price of $1,000 we are not 
proposing to make any changes in the pricing; we thank the interested 
party for their invoice submission confirming the current price.
(1) Invoice Submission
    We routinely accept public submission of invoices as part of our 
process for developing payment rates for new, revised, and potentially 
misvalued codes. Often these invoices are submitted in conjunction with 
the RUC-recommended values for the codes. To be included in a given 
year's proposed rule, we generally need to receive invoices by the same 
February 10th deadline we noted for consideration of RUC 
recommendations. However, we will consider invoices submitted as public 
comments during the comment period following the publication of the PFS 
proposed rule, and would consider any invoices received after February 
10th or outside of the public comment process as part of our 
established annual process for requests to update supply and equipment 
prices. Interested parties are encouraged to submit invoices with their 
public comments or, if outside the notice and comment rulemaking 
process, via email at <a href="/cdn-cgi/l/email-protection#18485d47486a717b7d475176686d6c474d687c796c7d587b756b3670706b367f776e"><span class="__cf_email__" data-cfemail="ffafbaa0af8d969c9aa0b6918f8a8ba0aa8f9b9e8b9abf9c928cd197978cd1989089">[email protected]</span></a>.
c. Clinical Labor Pricing Update
    Section 220(a) of the PAMA provides that the Secretary may collect 
or obtain information from any eligible professional or any other 
source on the resources directly or indirectly related to furnishing 
services for which payment is made under the PFS, and that such 
information may be used in the determination of relative values for 
services under the PFS. Such information may include the time involved 
in furnishing services; the amounts, types and prices of PE inputs; 
overhead and accounting information for practices of physicians and 
other suppliers, and any other elements that would improve the 
valuation of services under the PFS.

[[Page 45872]]

    Beginning in CY 2019, we updated the supply and equipment prices 
used for PE as part of a market-based pricing transition; CY 2022 was 
the final year of this 4-year transition. We initiated a market 
research contract with StrategyGen to conduct an in-depth and robust 
market research study to update the supply and equipment pricing for CY 
2019, and we finalized a policy in CY 2019 to phase in the new pricing 
over a period of 4 years. However, we did not propose to update the 
clinical labor pricing, and the pricing for clinical labor has remained 
unchanged during this pricing transition. Clinical labor rates were 
last updated for CY 2002 using Bureau of Labor Statistics (BLS) data 
and other supplementary sources where BLS data were not available; we 
refer readers to the full discussion in the CY 2002 PFS final rule for 
additional details (66 FR 55257 through 55262).
    Interested parties raised concerns that the long delay since 
clinical labor pricing was last updated created a significant disparity 
between CMS' clinical wage data and the market average for clinical 
labor. In recent years, a number of interested parties suggested that 
certain wage rates were inadequate because they did not reflect current 
labor rate information. Some interested parties also stated that 
updating the supply and equipment pricing without updating the clinical 
labor pricing could create distortions in the allocation of direct PE. 
They argued that since the pool of aggregated direct PE inputs is 
budget neutral, if these rates are not routinely updated, clinical 
labor may become undervalued over time relative to equipment and 
supplies, especially since the supply and equipment prices are in the 
process of being updated. There was considerable interest among 
interested parties in updating the clinical labor rates, and when we 
solicited comment on this topic in past rules, such as in the CY 2019 
PFS final rule (83 FR 59480), interested parties supported the idea.
    Therefore, we proposed to update the clinical labor pricing for CY 
2022, in conjunction with the final year of the supply and equipment 
pricing update (86 FR 39118 through 39123). We believed it was 
important to update the clinical labor pricing to maintain relativity 
with the recent supply and equipment pricing updates. We proposed to 
use the methodology outlined in the CY 2002 PFS final rule (66 FR 
55257), which draws primarily from BLS wage data, to calculate updated 
clinical labor pricing. As we stated in the CY 2002 PFS final rule, the 
BLS' reputation for publishing valid estimates that are nationally 
representative led to the choice to use the BLS data as the main 
source. We believe that the BLS wage data continues to be the most 
accurate source to use as a basis for clinical labor pricing and this 
data will appropriately reflect changes in clinical labor resource 
inputs for purposes of setting PE RVUs under the PFS. We used the most 
current BLS survey data (2019) as the main source of wage data for our 
CY 2022 clinical labor proposal.
    We recognized that the BLS survey of wage data does not cover all 
the staff types contained in our direct PE database. Therefore, we 
crosswalked or extrapolated the wages for several staff types using 
supplementary data sources for verification whenever possible. In 
situations where the price wages of clinical labor types were not 
referenced in the BLS data, we used the national salary data from the 
Salary Expert, an online project of the Economic Research Institute 
that surveys national and local salary ranges and averages for 
thousands of job titles using mainly government sources. (A detailed 
explanation of the methodology used by Salary Expert to estimate 
specific job salaries can be found at www.salaryexpert.com). We 
previously used Salary Expert information as the primary backup source 
of wage data during the last update of clinical labor pricing in CY 
2002. If we did not have direct BLS wage data available for a clinical 
labor type, we used the wage data from Salary Expert as a reference for 
pricing, then crosswalked these clinical labor types to a proxy BLS 
labor category rate that most closely matched the reference wage data, 
similar to the crosswalks used in our PE/HR allocation. For example, 
there is no direct BLS wage data for the Mammography Technologist 
(L043) clinical labor type; we used the wage data from Salary Expert as 
a reference and identified the BLS wage data for Respiratory Therapists 
as the best proxy category. We calculated rates for the ``blend'' 
clinical labor categories by combining the rates for each labor type in 
the blend and then dividing by the total number of labor types in the 
blend.
    As in the CY 2002 clinical labor pricing update, the proposed cost 
per minute for each clinical staff type was derived by dividing the 
average hourly wage rate by 60 to arrive at the per minute cost. In 
cases where an hourly wage rate was not available for a clinical staff 
type, the proposed cost per minute for the clinical staff type was 
derived by dividing the annual salary (converted to 2021 dollars using 
the Medicare Economic Index) by 2080 (the number of hours in a typical 
work year) to arrive at the hourly wage rate and then again by 60 to 
arrive at the per minute cost. We ultimately finalized the use of 
median BLS wage data, as opposed to mean BLS wage data, in response to 
comments in the CY 2022 PFS final rule. To account for the employers' 
cost of providing fringe benefits, such as sick leave, we finalized the 
use of a benefits multiplier of 1.296 based on a BLS release from June 
17, 2021 (USDL-21-1094). As an example of this process, for the 
Physical Therapy Aide (L023A) clinical labor type, the BLS data 
reflected a median hourly wage rate of $12.98, which we multiplied by 
the 1.296 benefits modifier and then divided by 60 minutes to arrive at 
the finalized per-minute rate of $0.28.
    After considering the comments on our CY 2022 proposals, we agreed 
with commenters that the use of a multi-year transition would help 
smooth out the changes in payment resulting from the clinical labor 
pricing update, avoiding potentially disruptive changes in payment for 
affected interested parties, and promoting payment stability from year-
to-year. We believed it would be appropriate to use a 4-year 
transition, as we have for several other broad-based updates or 
methodological changes. While we recognized that using a 4-year 
transition to implement the update means that we will continue to rely 
in part on outdated data for clinical labor pricing until the change is 
fully completed in CY 2025, we agreed with the commenters that these 
significant updates to PE valuation should be implemented in the same 
way, and for the same reasons, as for other major updates to pricing 
such as the recent supply and equipment update. Therefore, we finalized 
the implementation of the clinical labor pricing update over 4 years to 
transition from current prices to the final updated prices in CY 2025. 
We finalized the implementation of this pricing transition over 4 
years, such that one quarter of the difference between the current 
price and the fully phased-in price is implemented for CY 2022, one 
third of the difference between the CY 2022 price and the final price 
is implemented for CY 2023, and one half of the difference between the 
CY 2023 price and the final price is implemented for CY 2024, with the 
new direct PE prices fully implemented for CY 2025. An example of the 
transition from the current to the fully-implemented new pricing that 
we finalized in the CY 2022 PFS final rule is provided in Table 4.
BILLING CODE 4120-01-P

[[Page 45873]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.003

(1) CY 2023 Clinical Labor Pricing Update Proposals
    For CY 2023, we received information from one interested party 
regarding the pricing of the Histotechnologist (L037B) clinical labor 
type. The interested party provided data from the 2019 Wage Survey of 
Medical Laboratories which supported an increase in the per-minute rate 
from the $0.55 finalized in the CY 2022 PFS final rule to $0.64. This 
rate of $0.64 for the L037B clinical labor type is a close match to the 
online salary data that we had for the Histotechnologist and matches 
the $0.64 rate that we initially proposed for L037B in the CY 2022 PFS 
proposed rule. Based on the wage data provided by the commenter, we are 
proposing this $0.64 rate for the L037B clinical labor type for CY 
2023; we are also proposing a slight increase in the pricing for the 
Lab Tech/Histotechnologist (L035A) clinical labor type from $0.55 to 
$0.60 as it is a blend of the wage rate for the Lab Technician (L033A) 
and Histotechnologist clinical labor types. We are also proposing the 
same increase to $0.60 for the Angio Technician (L041A) clinical labor 
type, as we previously established a policy in the CY 2022 PFS final 
rule that the pricing for the L041A clinical labor type would match the 
rate for the L035A clinical labor type (86 FR 65032). The proposed 
pricing increase for these three clinical labor types is included in 
Table 5; the CY 2023 pricing for all other clinical labor types would 
remain unchanged from the pricing finalized in the CY 2022 PFS final 
rule.

[[Page 45874]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.004

BILLING CODE 4120-01-C
    As was the case for the market-based supply and equipment pricing 
update, the clinical labor rates will remain open for public comment 
over the course of

[[Page 45875]]

the 4-year transition period. We updated the pricing of a number of 
clinical labor types in the CY 2022 PFS final rule in response to 
information provided by commenters. We welcome additional feedback on 
clinical labor pricing from commenters in response to this proposed 
rule, especially any data that will continue to improve the accuracy of 
our final pricing. For the full discussion of the clinical labor 
pricing update, we direct readers to the CY 2022 PFS final rule (86 FR 
65020 through 65037).
5. Soliciting Public Comment on Strategies for Updates to Practice 
Expense Data Collection and Methodology
    The PE inputs used in setting PFS rates, including both the 
development of PE RVUs and, historically, the relative shares among 
work, PE, and malpractice RVUs across the PFS, are central in 
developing accurate rates and maintaining appropriate relativity among 
PFS services and overall payment among the professionals and suppliers 
paid under the PFS. Consequently, the underlying PE data inputs are a 
consistent point of interest among interested parties. However, unlike 
other payment systems with cost reporting systems, PFS data inputs are 
primarily based on exogenous proprietary data that become available as 
the data are collected. Specifically, we rely on historical survey data 
(almost all of which is over a decade old), some publicly available 
data collected for other purposes (for example, Bureau of Labor 
Statistics (BLS) wage data), recommendations from the American Medical 
Association and other provider groups, and annual Medicare claims data.
a. History of Updates to PE Inputs
    Each year we continue to improve accuracy, predictability, and 
sustainability of updates to the PE valuation methodology to reduce the 
risks of possible misvaluation and other unintended outcomes. We have 
continued to develop policies geared toward providing more consistent 
updates to the direct PE inputs used in PFS ratesetting, including 
supply/equipment pricing and clinical labor rates. These efforts to 
develop these policies should contribute to improved standardization 
and transparency for all PE inputs used to update the PFS. As we 
continue our work to improve the information we use in our PE 
methodology, we are issuing a general comment solicitation to better 
understand how we might improve the collection of PE data inputs and 
refine the PE methodology.
    In recent years, we have refined specific PE data inputs using a 
combination of market research and publicly available data (for 
example, market research on medical supply and equipment items and BLS 
data to update clinical labor wages) to update the direct PE data 
inputs used in the PFS ratesetting process. Last year, we implemented a 
final transition year for supply and equipment pricing updates and 
started the first year of a 4-year phase-in update to the clinical 
labor rates. However, the indirect PE data inputs remain tied to legacy 
information that is well over a decade old. To build on much needed 
progress, we now believe indirect PE would also benefit from a refresh 
that implements similar standard and routine updates. We believe that a 
data refresh, and use of data sources that receive routine refreshes, 
would reduce the likelihood of unpredictable shifts in payment, 
especially when such shifts could be driven by the age of data 
available rather than comprehensive information about changes in actual 
costs.
b. Data Collection, Analysis and Findings
    In light of feedback from interested parties, CMS has prioritized 
stability and predictability over ongoing updates, and has taken a 
measured approach to updating PE data inputs. We have worked with 
interested parties and CMS contractors over a period of years to study 
the landscape and identify possible strategies to reshape the PE 
portion of physician payments. The fundamental issues are clear, but 
thought leaders and subject matter experts have advocated for more than 
one tenable approach to updating our PE methodology. Thus, we must 
balance the various interests of the public, and any path forward 
should allow for ongoing and routine cycles of PE updates.
    Of the various PE data inputs, we believe that indirect PE data 
inputs, which reflect costs such as office rent, IT costs, and other 
non-clinical expenses, present the opportunity to build consistency, 
transparency, and predictability into our methodology to update PE data 
inputs. The primary source for indirect PE information is the Physician 
Practice Information Survey (PPIS), fielded by the AMA. The survey was 
most recently conducted in 2007 and 2008 (reflecting 2006 data). The 
survey respondents were self-employed physicians and selected 
nonphysician practitioners.
    In general, interested parties have expressed the following 
concerns regarding CMS's approach to indirect PE allocation:
    <bullet> CMS seems to rely on increasingly out-of-date data 
sources, and there is a dearth of mechanisms to update empirical 
inputs.
    <bullet> The approach exacerbates payment differentials that 
possibly create inappropriate variation of reimbursement across 
ambulatory places of service (for example, significantly higher 
payments for the same service provided in a hospital outpatient 
department versus a physician office).
    <bullet> CMS's method of indirect PE allocation may not accurately 
reflect variation in PE across different types of services, different 
practice characteristics, or evolving business models.
    Beyond these issues, we have also explored other concerns with our 
indirect PE allocation method in depth in previous rulemaking. For 
example, refer to our previous comment solicitation and discussion of 
resource costs for services involving the use of innovative 
technologies in our CY 2022 PFS proposed rule (86 FR 39125). PE data 
inputs, and the methodological and evidence-based principles that shape 
use of such information in the context of reimbursement, are discussed 
in depth in a RAND Corporation (``RAND'') report prepared for CMS, 
entitled Practice Expense Methodology and Data Collection Research and 
Analysis, available at https://www.rand.org/pubs/research_reports/RR2166.html.\1\
---------------------------------------------------------------------------

    \1\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara 
O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al. 
``Practice Expense Methodology and Data Collection Research and 
Analysis.'' RAND Corporation, April 11, 2018. https://www.rand.org/pubs/research_reports/RR2166.html.
---------------------------------------------------------------------------

    Various interested parties have taken issue with the use of certain 
costs in our current PE allocation methodology that they do not believe 
are associated with increased indirect PE. Some interested parties 
argue that the costs of disposable supplies, especially expensive 
supplies, and equipment are not relevant to allocating indirect PE; or 
that similarly, work in the facility setting (for example, work RVUs 
for surgical procedures) is not relevant to allocating indirect PE, 
though they agree that work in the office setting may be relevant to 
allocating indirect PE. \2\ However, we do not believe that there is 
sufficient, if any,

[[Page 45876]]

data or peer-reviewed evidence available to definitively show that 
shifting indirect PE allocations based on the setting of care, or based 
on specialty, would result in improved allocations of PE that reflect 
true costs. Further, varying indirect PE allocations based on setting 
of care or based on specialty might create unintended consequences such 
as reduced access to care for beneficiaries, or reduced competition and 
autonomy of small group practices or individual clinicians whose 
revenue is based in part on services furnished under contract in the 
facility setting.
---------------------------------------------------------------------------

    \2\ Kazungu, Jacob S., Edwine W. Barasa, Melvin Obadha, and Jane 
Chuma. ``What Characteristics of Provider Payment Mechanisms 
Influence Health Care Providers' Behaviour? A Literature Review.'' 
The International Journal of Health Planning and Management 33, no. 
4 (October 2018): e892-905. https://doi.org/10.1002/hpm.2565.
---------------------------------------------------------------------------

    We believe it is necessary to establish a roadmap toward more 
routine PE updates, especially because potentially improper or outdated 
allocation of PE across services may affect access to certain services, 
which could exacerbate disparities in care and outcomes. Establishing 
payments that better reflect current practice costs would mitigate 
possible unintended consequences, such as labor market distortions due 
to indirect cost allocations that do not reflect the current evolution 
of health care practice.\3\ Interested parties have reiterated their 
desire for CMS to move away from the current PE allocation approach and 
continued to raise concerns with CMS's methodology and the underlying 
PE data inputs. In response to these and other concerns, we continue to 
review the methodology we use to establish the PE RVUs and to identify 
refinements. As part of this effort, we have contracted with RAND to 
develop and assess potential improvements in the current methodology 
used to allocate indirect practice costs in determining PE RVUs for a 
service, model alternative methodologies for determining PE RVUs, and 
identify and assess alternative data sources that CMS could use to 
regularly update indirect practice cost estimates.\4\
---------------------------------------------------------------------------

    \3\ Laugesen, Miriam J. ``Regarding `Committee Representation 
and Medicare Reimbursements: An Examination of the Resource-Based 
Relative Value Scale.' '' Health Services Research 53, no. 6 
(December 2018): 4123-31. https://doi.org/10.1111/1475-6773.13084.
    \4\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara 
O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al. 
``Practice Expense Methodology and Data Collection Research and 
Analysis.'' RAND Corporation, April 11, 2018. https://www.rand.org/pubs/research_reports/RR2166.html.
---------------------------------------------------------------------------

    In this proposed rule, we are signaling our intent to move to a 
standardized and routine approach to valuation of indirect PE and we 
welcome feedback from interested parties on what this might entail, 
given our discussion above. We would propose the new approach to 
valuation of indirect PE in future rulemaking.
    We seek comment on the following topics related to identification 
of the appropriate instrument, methods, and timing for updating 
specialty-specific PE data:
    <bullet> Potential approaches to design, revision, and fielding of 
a PE survey that foster transparency (for example, transparency in 
terms of the methods of survey design, the content of the survey 
instrument, and access to raw results for informing PFS ratesetting); 
and
    <bullet> Mechanisms to ensure that data collection and response 
sampling adequately represent physicians and non-physician 
practitioners across various practice ownership types, specialties, 
geographies, and affiliations.
    We also seek comment on any alternatives to the above that would 
result in more predictable results, increased efficiencies, or reduced 
burdens. For example:
    <bullet> Use of statistical clustering or other methods that would 
facilitate a shift away from specialty-specific inputs to inputs that 
relate to homogenous groups of specialties without a large change in 
valuation relative to the current PE allocations.
    <bullet> Avenues by which indirect PE can be moved for facility to 
non-facility payments, based on data reflecting site of service cost 
differences.
    <bullet> Methods to adjust PE to avoid the unintended effects of 
undervaluing cognitive services due to low indirect PE.
    <bullet> A standardized mechanism and publicly available means to 
track and submit structured data and supporting documentation that 
informs pricing of supplies or equipment.
    <bullet> Sound methodological approaches to offset circularity 
distortions, where variable costs are higher than necessary costs for 
practices with higher revenue.
    We also seek comment on the cadence, frequency, and phase-in of 
adjustments for each major area of prices associated with direct PE 
inputs (Clinical Labor, Supplies/Equipment). We ask that commenters 
address the following:
    <bullet> Whether CMS should stagger updates year-to-year for each 
update, or establish ``milestone'' years at regular intervals during 
which all direct PE inputs would be updated in the same year.
    <bullet> The optimal method of phasing in the aggregate effect of 
adjustments, such that the impacts of updates gradually ramp up to a 
full 100 percent over the course of a few years (for example, 25 
percent of the aggregate adjustment in Year 1, then 50 percent of the 
aggregate adjustment in Year 2, etc.).
    <bullet> How often CMS should repeat the cycle to ensure that 
direct PE inputs are based on the most up-to-date information, 
considering the burden of data collection on both respondents and 
researchers fielding instruments or maintaining datasets that generate 
data.
c. Changes to Health Care Delivery and Practice Ownership Structures, 
and Business Relationships Among Clinicians and Health Care 
Organizations
    Market consolidation, and shifts in workforce alignment, as well as 
an evolution in the type of business entities predominant in health 
care markets, all suggest significant transformation in the composition 
and proportions of practice expenses required to furnish care. These 
evolving conditions collectively highlight the need for a comprehensive 
update to PE data inputs, and possibly the PE methodology as a 
whole.\5\ Ideally, more comprehensive PE data inputs and a different PE 
calculation methodology would better account for indirect/overhead 
costs, current trends in the delivery of health care, the use of 
machine learning technology, and EHRs, and the cost differentials in 
independent versus facility-based practices.
---------------------------------------------------------------------------

    \5\ Burgette, Lane F., Jodi L. Liu, Benjamin M. Miller, Barbara 
O. Wynn, Stephanie Dellva, Rosalie Malsberger, Katie Merrell, et al. 
``Practice Expense Methodology and Data Collection Research and 
Analysis.'' RAND Corporation, April 11, 2018. https://www.rand.org/pubs/research_reports/RR2166.html.
---------------------------------------------------------------------------

    We seek comment on current and evolving trends in health care 
business arrangements, use of technology, or similar topics that might 
affect or factor into indirect PE calculations. We are interested in 
learning whether any PE data inputs may be obsolete, unnecessary, or 
misrepresentative of the actual costs involved in operating a medical 
practice.
d. Unintended Consequences and Missing Information
    We request comment on additional information that we may have not 
considered or discussed above about updating and maintaining PE data 
inputs, as well as any unintended impacts (or positive outcomes) that 
could result from changes to the overall strategy. We are especially 
interested in public comment on any concerns about beneficiaries' 
access to care, possible consolidation of group practices, or burden on 
small group or solo practitioners. We are also interested in public 
comments on any collateral

[[Page 45877]]

program integrity or quality issues that could arise from potential 
updates. We request that any respondents who provide feedback ensure 
that the response includes discussion of any possible health equity 
impacts.
6. Soliciting Public Comment on Strategies for Improving Global 
Surgical Package Valuation
    In preparation for future rulemaking, we are seeking public comment 
on strategies to improve the accuracy of payment for the global 
surgical packages (herein referred to as ``global packages') under the 
PFS. Currently, there are over 4,000 physicians' services paid as 
global packages under the PFS. Global packages generally include the 
surgical procedure and any services typically provided during the pre- 
and postoperative periods (including evaluation and management (E/M) 
services and hospital discharge services). There are three types of 
global packages:
    <bullet> The 0-day global package, which includes the procedure and 
the preoperative and postoperative physicians' services on the day of 
the procedure.
    <bullet> The 10-day global package, which includes services on the 
day of, and 10 days after, the procedure.
    <bullet> The 90-day global package, which includes services 
furnished one day prior to the procedure, and on the day of, and 90 
days immediately following the day of the procedure.
    More detail about how global packages are billed and what 
activities are included may be found in Chapter 12, Section 40, of the 
Medicare Claims Processing Manual (Pub. 100-04).
    We have applied the concept of global payment for some procedures 
since the inception of the PFS on January 1, 1992 (54 FR 59502). 
However, in the past decade we have engaged with interested parties 
regarding numerous concerns about the accuracy and validity of the 
valuation of global packages, with particular attention paid to the E/M 
visits included in the services. We have made previous requests for 
public feedback on global packages, including solicitations for 
information or data that could be used to help support more accurate 
valuations. We now wish to expand on our conversations with the public, 
considering the current status of a multi-year data collection and 
analysis project, as well as ongoing changes we have made to payments 
for other types of patient care that may impact the global packages.
a. History of Global Valuation Discussion
    In the CY 2013 PFS proposed rule (77 FR 44737 through 44738), we 
discussed two reports released by the HHS Office of the Inspector 
General in 2005 and 2012 with findings that practitioners were 
performing fewer E/M postoperative visits than had been included in the 
valuation for these global packages, suggesting that Medicare was 
paying for care that was not being delivered. In response to the 
concerns raised by the OIG reports, we solicited public feedback on 
methods of obtaining accurate and current data on E/M services 
furnished as part of a global package. We summarized public comment in 
the CY 2013 PFS final rule (77 FR 68911 through 68913).
    In the CY 2015 PFS proposed rule (79 FR 40341), we delved into 
barriers to accurate valuation of global packages, especially as 
compared to other forms of bundled payments made under the inpatient or 
outpatient prospective payment systems. In addition to the ongoing 
concerns about whether E/M visits presumed to be furnished in 
connection with global packages were actually being performed by the 
physician receiving the global package payment, we noted issues such 
as:
    <bullet> E/M services in the global period that occur post-
discharge are valued with practice expense values associated with 
follow-up visits in the physician's office. Many of these follow-up 
visits may occur in a hospital outpatient department where the 
physician may not incur many PE costs.
    <bullet> The direct PE inputs often differ slightly between an E/M 
service furnished in a global period and a stand-alone E/M service. For 
example, follow-up visits for certain surgeries may include specialized 
clinical labor such as an RN rather than a general nurse blend.
    <bullet> The types of physicians furnishing a specific service 
dictate the direct and indirect percentages, as well as the indirect 
practice cost index, in the PE methodology. Most surgical specialties 
have a lower direct percentage mix, resulting in higher indirect costs 
that extend to the E/M visits in the global periods.
    <bullet> Because the E/M visits embedded in the global package are 
not reported separately and do not appear in claims data, it is 
difficult to quantify the number and level of E/M services furnished in 
connection with global packages under the fee-for-service system.
    <bullet> In some cases we have limited billing of the 10- and 90-
day global packages in conjunction with some of the payment policies 
intended to encourage coordination of care through payments for non-
face-to-face services, such as transitional care management and chronic 
care management, because of presumed overlap between these services.
    To address these concerns, we solicited comment and finalized a 
policy in the CY 2015 PFS final rule (79 FR 67586) intended to, over a 
period of several years, transition all services with 10-day and 90-day 
global periods to 0-day global periods. As stated in the CY 2015 PFS 
final rule, we believed it would be more accurate to value the surgical 
procedure-day services separately from postop E/M visits, and would 
avoid potentially duplicative or unwarranted payments. For our full 
discussion and rationale, refer to 79 FR 67586 through 67591. 
Implementation of this policy, however, was halted by the Medicare 
Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L.110-14). 
Section 523(a) of the MACRA amended section 1848(c)(8) of the Act to 
prohibit the Secretary from implementing the transition policy 
finalized in the CY 2015 PFS final rule. The amendments to section 
1848(c)(8) also require CMS to collect additional data on how best to 
value global packages and to reassess every 4 years the continued need 
for this data collection. Section 1848(c)(8) of the Act directs CMS to 
use the information collected to improve the accuracy of valuation of 
these services under the PFS starting in CY 2019. (Refer to the CY 2016 
PFS final rule at 80 FR 70915 for additional discussion of these 
requirements.)
    In response to the statutory requirements as added by section 
523(a) of the MACRA, we engaged in multiple discussions with interested 
parties about methods of data collection and analysis, including 
through public comment solicitation in the CY 2016 PFS proposed rule 
(80 FR 41707) and CY 2017 PFS proposed rule (81 FR 46191), a national 
listening session, and a town hall meeting. (Materials for the January 
20, 2016 listening session are available at https://www.cms.gov/Outreach-and-Education/Outreach/NPC/Downloads/2016-01-20-MCRA-Presentation.pdf. The transcript of the town hall meeting held August 
25, 2016 is available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/CY2017-PFS-FR-Townhall.pdf.) In the CY 2017 PFS final rule (81 FR 80209 through 
80213), we finalized a claims-based process to collect data from 
practitioners on both

[[Page 45878]]

the number and level of postoperative visits furnished as part of the 
10- and 90-day global packages. We also contracted with RAND to support 
this data collection and analysis.
b. Data Collection, Analysis, and Findings
    In 2019, RAND issued two reports based on its analysis of the data 
collected through the data collection process we established. The 
reports examined, using claims-based and survey-based data, the number 
of postoperative visits furnished during the 10- and 90-day global 
periods for certain high-volume procedures and the level of visits 
furnished for certain procedures. (Complete details about the data 
collected are discussed in the CY 2017 PFS final rule starting at 81 FR 
80212, the CY 2020 PFS final rule at 84 FR 62857, and in the reports 
themselves, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-.) 
Notably, RAND's analysis found that, according to claims-based data, 
the reported number of E/M visits matched the expected number (included 
for purposes of PFS valuation) for only 4 percent of reviewed 10-day 
global packages and 38 percent of reviewed 90-day global packages. 
Based on these analyses, RAND released a third report that analyzed the 
current valuation of global packages based on the difference between 
the number of postoperative E/M visits observed via the claims-based 
data collection process and the expected number of such E/M visits. The 
report modeled how valuation for global packages would change by 
adjusting the work RVUs, physician time, and direct PE inputs to 
reflect the observed number of E/M visits. The report provided 
hypothetical valuations for the global packages based on these 
adjustments. These three RAND reports were made available to the public 
and are available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-.
    The RAND reports were shared with the public, and we received 
public comment about these reports in the CY 2020 PFS final rule (84 FR 
62866). Public commenters raised concerns about the findings in the 
reports, including questions as to whether the E/M visit data were 
collected from a true representative sample of practitioners, and 
various other challenges to the validity of the RAND methodology. Other 
members of the public, however, were supportive of our overall efforts 
to collect and analyze the data, and supplied additional data similarly 
suggesting that the 10- and 90-day global packages are overvalued. In 
2021, RAND responded to the CY 2020 public comments that were critical 
of the methodologies used in the three earlier reports in a separate 
report entitled, ``Responses to Comments on RAND Global Services 
Reports,'' which is available at https://www.rand.org/content/dam/rand/pubs/research_reports/RR4300/RR4314-1/RAND_RR4314-1.pdf/.
    While some interested parties have challenged the methodology or 
conclusions of the RAND reports, we have not yet received data 
suggesting that postoperative E/M visits are being performed more 
frequently than indicated by the data collected and analyzed in the 
RAND reports. We continue to be concerned that our current valuations 
of the global packages reflect certain E/M visits that are not 
typically furnished in the global period, and thus, are not occurring. 
We also believe that RAND has adequately responded to critiques of its 
methodologies and findings. However, as part of our ongoing assessment 
of our data collection process, we continue to welcome any comments 
from the public on ideas for other sources of data that would help us 
to assess global package valuation (including the typical number and 
level of E/M services), as well as our data collection methodology and 
the RAND report findings.
c. Changes to Health Care Delivery and Payment for E/M Services
    Since the inception of the PFS 30 years ago, there have been 
significant changes in health care, including improvements in medical 
and information technology, new models of health care delivery and 
coordination between multiple clinicians furnishing care to a single 
patient, and an expanding beneficiary population. (For information on 
Medicare service utilization, beneficiary demographics, provider 
characteristics, and payment models, please visit the resources at 
data.cms.gov.) We are interested in hearing from the public on whether 
the postoperative health care landscape has changed in ways that impact 
the relevance of the global packages.
    We believe that changes to health care delivery may impact proper 
valuation of global services. We are soliciting comment on whether 
changes to health care delivery, including changes in coordination of 
care and use of medical technology over the past 3 decades, as well as 
during the recent PHE, have impacted: the number and level of 
postoperative E/M visits needed to provide effective follow-up care to 
patients; the timing of when postoperative care is being provided; and 
who is providing the follow-up care. We have formed hypotheses that 
some beneficiaries are not receiving the number of postoperative visits 
that were contemplated when valuing the global surgical packages or are 
not receiving any follow-up E/M visits at all during global periods 
either because the physician who performed the surgical procedure has 
determined they are unnecessary (perhaps due to improvements in medical 
technology or evolution in standards of care) or as the result of more 
comprehensive discharge planning. It has also been suggested by some 
interested parties that physicians are, in fact, performing the number 
of postoperative visits that were contemplated when valuing the global 
surgical packages, but the visits may, for various reasons, be 
scheduled outside the global period. Others have suggested that 
physicians are, without formally transferring follow-up care to another 
clinician, instructing patients to follow up with another physician or 
NPP (such as the patient's primary care physician or other 
practitioner), and that the other clinician then furnishes and bills 
for E/M services furnished for postoperative care (whether the care is 
performed during or after the global period). We would appreciate 
comments on these ideas, and on other factors not mentioned here that 
could affect the ways that postoperative E/M care is provided.
    We are also soliciting comment on whether, or how, recent changes 
in the coding and valuation of separately billable E/M services may 
have impacted global packages. One change is the expansion of payment 
for non-face-to-face care management services. Historically, an 
advantage of global packages was that they compensated physicians for 
non-face-to-face work related to the patient's transition from the 
hospital to the community, or management of other health care needs 
following a procedure or serious illness. Over the years, we have 
implemented payment for many care management services to better reflect 
non-face-to-face time spent by physicians and clinical staff on behalf 
of patients with complex health care needs, including transitional care 
management services in CY 2013 (77 FR 68978); chronic care management 
in CY 2015 (78 FR 74414) and CY 2019 (83 FR 58577); complex chronic 
care management in CY 2017 (81 FR 80244); and principal care management 
in CY 2020 (84 FR 62962).

[[Page 45879]]

We solicit comment on whether global packages, and especially those 
with 10- and 90-day global periods, continue to serve a purpose when 
physicians could otherwise bill separately not only for the 
postoperative E/M visits they furnish, but also for aspects of 
postoperative care management they furnish for some patients. We also 
would like to hear generally what, if any, components of preoperative 
or postoperative care are currently only compensated as part of payment 
for global packages.
    We have also heard from some interested parties who believe that 
recent changes to the coding and valuation of standalone office and 
outpatient E/M visits finalized in the CY 2021 PFS final rule have 
skewed the relativity between these visits and the E/M visits included 
in the current global package valuations (which were not modified in 
response to the coding and valuation changes). In the CY 2020 PFS final 
rule (84 FR 62851 through 84 FR 62854), we finalized new--and generally 
increased, RVUs for the CPT-revised office and outpatient E/M code set. 
Some commenters encouraged us to increase the value of the E/M visits 
included in the global surgical packages commensurate with the 
increased RVUs for the standalone E/M visits. However, we declined to 
do so, noting that at the time that it was unclear whether it would be 
appropriate to treat the E/M visits reflected in global packages as 
discrete components of the package (in other words, to use a building-
block approach to calculating the value of the service, versus valuing 
the services using the more holistic magnitude estimation, or possibly 
another approach.) Furthermore, we cited the uncertainty as to whether 
the E/M services included in valuing the global packages are typically 
furnished as part of global surgery services, reasoning that if the 
number and level of E/M services for global packages is not 
appropriate, adopting increases in the value of E/M services in global 
surgery codes would exacerbate rather than ameliorate any potential 
relativity issues. (Refer to the CY 2020 PFS final rule at 84 FR 62856 
through 62860 for a complete summary of comments and our responses on 
the topic of increasing the value of E/M visits included in the global 
packages.) We welcome additional comments on the perceived misalignment 
between the E/M visits included in global packages and separately 
billable E/M services, including thoughts on how this current tension 
reflects on global payment valuation and the appropriate methodology 
for determining appropriate values for global packages.
d. Strategies To Address Global Package Valuation
    Consistent with the discussion above, we continue to believe that: 
(1) there is strong evidence suggesting that the current RVUs for 
global packages are inaccurate; (2) many interested parties agree that 
the current values for global packages should be reconsidered, whether 
they believe the values are too low or too high; and (3) it is 
necessary to take action to improve the valuation of the services 
currently valued and paid under the PFS as global surgical packages.
    We would like to re-engage with the public about whether the global 
packages are indeed misvalued, and if so, what would be an appropriate 
approach to valuation. We have previously sought assistance from the 
public on possible methods of revaluation, such as in the CY 2015 PFS 
rule (at 79 FR 67586).
    As noted in the ``Data Collection, Analysis, and Findings'' section 
above (section II.B.6.b.), RAND has provided a comprehensive roadmap 
for a possible revaluation strategy. (See specifically the RAND report, 
``Using Claims-Based Estimates of Postoperative Visits to Revalue 
Procedures with 10- and 90-Day Global Periods,'' available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-) We are soliciting 
additional input on the RAND methodology, including advantages and 
drawbacks of applying the RAND methodology to revaluation (in addition 
to previous feedback that was provided by the public in the CY 2020 
final rule at 84 FR 62867). We also request input on specific 
alternatives, including: (1) requesting the RUC to make recommendations 
on new values; or (2) another method proposed by the public.
    We solicit feedback from the public on possible strategies for a 
revaluation process for global services. We believe that the available 
information provided in the RAND reports (discussed in section 
II.B.6.b. of this proposed rule and available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-) indicates that there is a mismatch between 
the value of the global package and work being performed. In 
particular, it appears that for some services, the number of 
postoperative visits typically furnished by the billing physician is 
much lower than what was reflected in the global package value, and 
thus we believe it may be necessary to revalue those services. (As 
noted in section II.B.6.b. of this proposed rule, RAND's analysis found 
that the reported number of E/M visits matched the expected E/M visits 
for only 4 percent of reviewed 10-day global packages and 38 percent of 
reviewed 90-day global packages. We refer specifically to the RAND 
report, ``Claims-Based Reporting of Postoperative Visits for Procedures 
with 10- or 90-Day; Global Periods--Updated Results Using Calendar Year 
2019 Data'' available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Global-Surgery-Data-Collection-). 
Because there are a large number and volume of services paid as global 
packages, we must consider the resources needed to revalue even a 
subset of the global packages, as well as the impacts across the PFS 
and healthcare delivery system in general if we were to change the 
values of a significant number of services at one time. We are 
considering various approaches we could pursue, such as: (1) revaluing 
all 10- and 90-day global packages at one time (perhaps with staggered 
implementation dates); (2) revaluing only the 10-day global packages 
(because these appear to have the lowest rate of postoperative visit 
performance, per RAND's analysis of claims data); (3) revaluing 10-day 
global packages and some 90-day global packages (such as those with 
demonstrated low postoperative visit performance rates as identified in 
RAND's analysis of these services); or (4) relying on the Potentially 
Misvalued Code process to identify and revalue misvalued global 
packages over the course of many years. (We note that regardless of 
whether we review particular global packages as part of a specific 
revaluation strategy, the public may always nominate any global 
packages to be reviewed through the Potentially Misvalued Code process; 
refer to the description of the Potentially Misvalued Code process in 
section II.C. of this proposed rule.) We solicit comment on any of the 
strategies identified in this paragraph, as well as any additional 
ideas members of the public may have that would address the concerns 
described above about valuation of global packages. We also welcome 
comment on ancillary considerations including timing considerations for 
implementation of any future strategy (such as whether to have 
staggered effective dates for new valuations and what criteria to use 
if assigning staggered effective dates.)
    We also solicit comment on additional considerations affecting 
valuation of global services that may not have been thoroughly explored 
in

[[Page 45880]]

previous public comment opportunities. For instance, we are aware that 
some interested parties are concerned that not enough attention has 
been paid to the value of preservice work bundled into the global 
payment, which could affect accurate valuation of 10- and 90-day global 
packages, as well as the value of the service if it is transitioned to 
a 0-day global. We solicit additional information about this concern, 
as well as any other concerns about valuation not otherwise mentioned 
here.
e. Other Payment Structure Changes, Unintended Consequences, and 
Missing Information
    We solicit public comment on any other aspects of the global 
payment structure (aside from the valuation of services) that 
commenters believe are noteworthy. Much of the discussion over the 
years has focused on whether global surgical packages are properly 
valued and whether they are needed at all. We encourage commenters to 
point out ways in which global surgical packages may continue to have a 
positive impact on health care delivery (such as their potential to 
support innovation). We also solicit suggestions on other ways that 
global surgical package payments could be modified (aside from changing 
their valuation) that could help improve accurate valuation or help 
address other concerns about the payments (such as the lack of 
transparency about what care is being provided as part of the package).
    We also request comment on additional information that we may not 
have considered or discussed above about proper valuation of the global 
packages, as well as any unintended impacts (or positive outcomes) that 
could result from changes to how we value global services. We are 
especially interested in public comment on any concerns about 
beneficiaries' access to care, continuity of care, cost sharing, or 
program integrity.

C. Potentially Misvalued Services Under the PFS

1. Background
    Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a 
periodic review, not less often than every 5 years, of the relative 
value units (RVUs) established under the PFS. Section 1848(c)(2)(K) of 
the Act requires the Secretary to periodically identify potentially 
misvalued services using certain criteria and to review and make 
appropriate adjustments to the relative values for those services. 
Section 1848(c)(2)(L) of the Act also requires the Secretary to develop 
a process to validate the RVUs of certain potentially misvalued codes 
under the PFS, using the same criteria used to identify potentially 
misvalued codes, and to make appropriate adjustments.
    As discussed in section II.E. of this proposed rule, Valuation of 
Specific Codes, each year we develop appropriate adjustments to the 
RVUs taking into account recommendations provided by the American 
Medical Association (AMA) Resource-Based Relative Value Scale (RVS) 
Update Committee (RUC), MedPAC, and other interested parties. For many 
years, the RUC has provided us with recommendations on the appropriate 
relative values for new, revised, and potentially misvalued PFS 
services. We review these recommendations on a code-by-code basis and 
consider these recommendations in conjunction with analyses of other 
data, such as claims data, to inform the decision-making process as 
authorized by statute. We may also consider analyses of work time, work 
RVUs, or direct PE inputs using other data sources, such as Department 
of Veteran Affairs (VA), National Surgical Quality Improvement Program 
(NSQIP), the Society for Thoracic Surgeons (STS), and the Merit-based 
Incentive Payment System (MIPS) data. In addition to considering the 
most recently available data, we assess the results of physician 
surveys and specialty recommendations submitted to us by the RUC for 
our review. We also consider information provided by other interested 
parties. We conduct a review to assess the appropriate RVUs in the 
context of contemporary medical practice. We note that section 
1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and 
other techniques to determine the RVUs for physicians' services for 
which specific data are not available and requires us to take into 
account the results of consultations with organizations representing 
physicians who provide the services. In accordance with section 1848(c) 
of the Act, we determine and make appropriate adjustments to the RVUs.
    In its March 2006 Report to the Congress (http://www.medpac.gov/docs/default-source/reports/Mar06_Ch03.pdf?sfvrsn=0), MedPAC discussed 
the importance of appropriately valuing physicians' services, noting 
that misvalued services can distort the market for physicians' 
services, as well as for other health care services that physicians 
order, such as hospital services. In that same report, MedPAC 
postulated that physicians' services under the PFS can become misvalued 
over time. MedPAC stated, ``When a new service is added to the 
physician fee schedule, it may be assigned a relatively high value 
because of the time, technical skill, and psychological stress that are 
often required to furnish that service. Over time, the work required 
for certain services would be expected to decline as physicians become 
more familiar with the service and more efficient in furnishing it.'' 
We believe services can also become overvalued when PE costs decline. 
This can happen when the costs of equipment and supplies fall, or when 
equipment is used more frequently than is estimated in the PE 
methodology, reducing its cost per use. Likewise, services can become 
undervalued when physician work increases or PE costs rise.
    As MedPAC noted in its March 2009 Report to Congress (http://www.medpac.gov/docs/default-source/reports/march-2009-report-to-congress-medicare-payment-policy.pdf), in the intervening years since 
MedPAC made the initial recommendations, CMS and the RUC have taken 
several steps to improve the review process. Also, section 
1848(c)(2)(K)(ii) of the Act augments our efforts by directing the 
Secretary to specifically examine, as determined appropriate, 
potentially misvalued services in the following categories:
    <bullet> Codes that have experienced the fastest growth.
    <bullet> Codes that have experienced substantial changes in PE.
    <bullet> Codes that describe new technologies or services within an 
appropriate time-period (such as 3 years) after the relative values are 
initially established for such codes.
    <bullet> Codes which are multiple codes that are frequently billed 
in conjunction with furnishing a single service.
    <bullet> Codes with low relative values, particularly those that 
are often billed multiple times for a single treatment.
    <bullet> Codes that have not been subject to review since 
implementation of the fee schedule.
    <bullet> Codes that account for the majority of spending under the 
PFS.
    <bullet> Codes for services that have experienced a substantial 
change in the hospital length of stay or procedure time.
    <bullet> Codes for which there may be a change in the typical site 
of service since the code was last valued.
    <bullet> Codes for which there is a significant difference in 
payment for the same service between different sites of service.

[[Page 45881]]

    <bullet> Codes for which there may be anomalies in relative values 
within a family of codes.
    <bullet> Codes for services where there may be efficiencies when a 
service is furnished at the same time as other services.
    <bullet> Codes with high intraservice work per unit of time.
    <bullet> Codes with high PE RVUs.
    <bullet> Codes with high cost supplies.
    <bullet> Codes as determined appropriate by the Secretary.
    Section 1848(c)(2)(K)(iii) of the Act also specifies that the 
Secretary may use existing processes to receive recommendations on the 
review and appropriate adjustment of potentially misvalued services. In 
addition, the Secretary may conduct surveys, other data collection 
activities, studies, or other analyses, as the Secretary determines to 
be appropriate, to facilitate the review and appropriate adjustment of 
potentially misvalued services. This section also authorizes the use of 
analytic contractors to identify and analyze potentially misvalued 
codes, conduct surveys or collect data, and make recommendations on the 
review and appropriate adjustment of potentially misvalued services. 
Additionally, this section provides that the Secretary may coordinate 
the review and adjustment of any RVU with the periodic review described 
in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of 
the Act specifies that the Secretary may make appropriate coding 
revisions (including using existing processes for consideration of 
coding changes) that may include consolidation of individual services 
into bundled codes for payment under the PFS.
2. Progress in Identifying and Reviewing Potentially Misvalued Codes
    To fulfill our statutory mandate, we have identified and reviewed 
numerous potentially misvalued codes as specified in section 
1848(c)(2)(K)(ii) of the Act, and we intend to continue our work 
examining potentially misvalued codes in these areas over the upcoming 
years. As part of our current process, we identify potentially 
misvalued codes for review, and request recommendations from the RUC 
and other public commenters on revised work RVUs and direct PE inputs 
for those codes. The RUC, through its own processes, also identifies 
potentially misvalued codes for review. Through our public nomination 
process for potentially misvalued codes established in the CY 2012 PFS 
final rule with comment period (76 FR 73026, 73058 through 73059), 
other individuals and groups submit nominations for review of 
potentially misvalued codes as well. Individuals and groups may submit 
codes for review under the potentially misvalued codes initiative to 
CMS in one of two ways. Nominations may be submitted to CMS via email 
or through postal mail. Email submissions should be sent to the CMS 
emailbox at <a href="/cdn-cgi/l/email-protection#59143c3d303a382b3c0931202a303a3038371f3c3c0a3a313c3d2c353c193a342a7731312a773e362f"><span class="__cf_email__" data-cfemail="c588a0a1aca6a4b7a095adbcb6aca6aca4ab83a0a096a6ada0a1b0a9a085a6a8b6ebadadb6eba2aab3">[email protected]</span></a>, with the phrase 
``Potentially Misvalued Codes'' and the referencing CPT code number(s) 
and/or the CPT descriptor(s) in the subject line. Physical letters for 
nominations should be sent via the U.S. Postal Service to the Centers 
for Medicare & Medicaid Services, Mail Stop: C4-01-26, 7500 Security 
Blvd., Baltimore, Maryland 21244. Envelopes containing the nomination 
letters must be labeled ``Attention: Division of Practitioner Services, 
Potentially Misvalued Codes.'' Nominations for consideration in our 
next annual rule cycle should be received by our February 10th 
deadline. Since CY 2009, as a part of the annual potentially misvalued 
code review and Five-Year Review process, we have reviewed over 1,700 
potentially misvalued codes to refine work RVUs and direct PE inputs. 
We have assigned appropriate work RVUs and direct PE inputs for these 
services as a result of these reviews. A more detailed discussion of 
the extensive prior reviews of potentially misvalued codes is included 
in the CY 2012 PFS final rule with comment period (76 FR 73052 through 
73055). In the same CY 2012 PFS final rule with comment period, we 
finalized our policy to consolidate the review of physician work and PE 
at the same time, and established a process for the annual public 
nomination of potentially misvalued services.
    In the CY 2013 PFS final rule with comment period (77 FR 68892, 
68896 through 68897) we built upon the work we began in CY 2009 to 
review potentially misvalued codes that have not been reviewed since 
the implementation of the PFS (so-called ``Harvard-valued codes''). In 
the CY 2019 PFS proposed rule (73 FR 38589), we requested 
recommendations from the RUC to aid in our review of Harvard-valued 
codes that had not yet been reviewed, focusing first on high-volume, 
low intensity codes. In the fourth Five-Year Review of Work RVUs 
proposed rule (76 FR 32410, 32419), we requested recommendations from 
the RUC to aid in our review of Harvard-valued codes with annual 
utilization of greater than 30,000 services. In the CY 2013 PFS final 
rule with comment period, we identified specific Harvard-valued 
services with annual allowed charges that total at least $10,000,000 as 
potentially misvalued. In addition to the Harvard-valued codes, in the 
CY 2013 PFS final rule with comment period we finalized for review a 
list of potentially misvalued codes that have stand-alone PE (codes 
with physician work and no listed work time and codes with no physician 
work that have listed work time). We continue each year to consider and 
finalize a list of potentially misvalued codes that have or will be 
reviewed and revised as appropriate in future rulemaking.
3. CY 2023 Identification and Review of Potentially Misvalued Services
    In the CY 2012 PFS final rule with comment period (76 FR 73058), we 
finalized a process for the public to nominate potentially misvalued 
codes. In the CY 2015 PFS final rule with comment period (79 FR 67548, 
67606 through 67608), we modified this process whereby the public and 
interested parties may nominate potentially misvalued codes for review 
by submitting the code with supporting documentation by February 10th 
of each year. Supporting documentation for codes nominated for the 
annual review of potentially misvalued codes may include the following:
    <bullet> Documentation in peer reviewed medical literature or other 
reliable data that demonstrate changes in physician work due to one or 
more of the following: technique, knowledge and technology, patient 
population, site-of-service, length of hospital stay, and work time.
    <bullet> An anomalous relationship between the code being proposed 
for review and other codes.
    <bullet> Evidence that technology has changed physician work.
    <bullet> Analysis of other data on time and effort measures, such 
as operating room logs or national and other representative databases.
    <bullet> Evidence that incorrect assumptions were made in the 
previous valuation of the service, such as a misleading vignette, 
survey, or flawed crosswalk assumptions in a previous evaluation.
    <bullet> Prices for certain high cost supplies or other direct PE 
inputs that are used to determine PE RVUs are inaccurate and do not 
reflect current information.
    <bullet> Analyses of work time, work RVU, or direct PE inputs using 
other data sources (for example, VA, NSQIP, the STS National Database, 
and the MIPS data).
    <bullet> National surveys of work time and intensity from 
professional and management societies and

[[Page 45882]]

organizations, such as hospital associations.
    We evaluate the supporting documentation submitted with the 
nominated codes and assess whether the nominated codes appear to be 
potentially misvalued codes appropriate for review under the annual 
process. In the following year's PFS proposed rule, we publish the list 
of nominated codes and indicate for each nominated code whether we 
agree with its inclusion as a potentially misvalued code. The public 
has the opportunity to comment on these and all other proposed 
potentially misvalued codes. In each year's final rule, we finalize our 
list of potentially misvalued codes.
a. Public Nominations
    In each proposed rule, we seek nominations from the public and from 
interested parties of codes that they believe we should consider as 
potentially misvalued. We received public nominations for potentially 
misvalued codes by February 10th and we displayed these nominations on 
our public website, where we include the submitter's name and their 
associated organization for full transparency. Some submissions are for 
specific, PE-related inputs for codes, and we refer readers to section 
II.B. of this rule under Determination of PE RVUs for further 
discussions on PE-related submissions. We summarize below this year's 
submissions under the potentially misvalued code initiative.
    An interested party nominated the home-based physician visit codes: 
CPT code 99344 (Home visit for the evaluation and management of a new 
patient, which requires these 3 key components: A comprehensive 
history; A comprehensive examination; and Medical decision making of 
moderate complexity. Counseling and/or coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and/or family's needs. Usually, the presenting problem(s) are of high 
severity. Typically, 60 minutes are spent face-to-face with the patient 
and/or family), CPT code 99345 (Home visit for the evaluation and 
management of a new patient, which requires these 3 key components: A 
comprehensive history; A comprehensive examination; and Medical 
decision making of high complexity. Counseling and/or coordination of 
care with other physicians, other qualified health care professionals, 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and/or family's needs. Usually, the patient is 
unstable or has developed a significant new problem requiring immediate 
physician attention. Typically, 75 minutes are spent face-to-face with 
the patient and/or family), CPT code 99349 (Home visit for the 
evaluation and management of an established patient, which requires at 
least 2 of these 3 key components: A detailed interval history; A 
detailed examination; Medical decision making of moderate complexity. 
Counseling and/or coordination of care with other physicians, other 
qualified health care professionals, or agencies are provided 
consistent with the nature of the problem(s) and the patient's and/or 
family's needs. Usually, the presenting problem(s) are moderate to high 
severity. Typically, 40 minutes are spent face-to-face with the patient 
and/or family), and CPT code 99350 (Home visit for the evaluation and 
management of an established patient, which requires at least 2 of 
these 3 key components: A comprehensive interval history; A 
comprehensive examination; Medical decision making of moderate to high 
complexity. Counseling and/or coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and/or family's needs. Usually, the presenting problem(s) are of 
moderate to high severity. The patient may be unstable or may have 
developed a significant new problem requiring immediate physician 
attention. Typically, 60 minutes are spent face-to-face with the 
patient and/or family) as potentially misvalued.
    In their submission, the nominator expressed concern that there is 
no payment for transportation costs incurred when it is medically 
necessary for a physician to drive to the home of the patient for a 
face-to-face in-home E/M Visit, and that they are not compensated for 
opportunity loss they incur by seeing fewer patients because they spend 
time commuting to patients' homes, versus seeing more patients that 
come to their offices. The nominator also argued that Medicare does not 
compensate physicians for the work and time associated with assessing a 
patient's home environment, which provides insight into a patient's 
overall health and living conditions. The nominator collectively called 
these non-medical factors that can affect a patient's overall health 
the ``Social Determinants of Health'' (SDoH). The nominator requested 
that we increase the overall RVUs for CPT codes 99344, 99345, 99349, 
and 99350, by including the resources associated with: (1) the 
physician's transportation costs to patients' homes; (2) lost income 
opportunity for home versus in-office visits; and (3) in-home SDoH 
assessment work. The nominator estimated that the adjustments to RVUs 
to reflect transportation costs and opportunity costs would result in 
Medicare payment that is 67 percent higher than the current Home-based 
E/M Visits payment rates, and that adjustments to account for the 
physician's SDoH assessment would add an additional 55 percent increase 
to the payment rates for Home-based E/M Visits. In total, the nominator 
suggests that if these resources were taken into account, the payment 
rates for Home-based E/M CPT codes would increase by what the nominator 
estimates as a 222 percent increase from their current amounts.
    The nominator included references as evidence to support their 
claim that the home-based E/M CPT codes are potentially misvalued, such 
as the CMS ``Medicaid Non-Emergency Medical Transportation Booklet for 
Providers'' (April 2016) <SUP>6 7</SUP> and a press release from the 
Better Medicare Alliance entitled, ``Report Shows Dramatic Increase in 
Medicare Advantage Activity to Address Social Determinants of Health, 
But Barriers Remain''.\8\
---------------------------------------------------------------------------

    \6\ https://www.cms.gov/Medicare-Medicaid-Coordination/Fraud-Prevention/Medicaid-Integrity-Education/Downloads/nemt-booklet.pdf.
    \7\ https://storage.aanp.org/www/documents/NP-Infographic.pdf.
    \8\ https://bettermedicarealliance.org/news/report-shows-
dramatic-increase-in-medicare-advantage-activity-to-address-social-
determinants-of-health-but-barriers-remain/
#:~:text=Social%20determinants%20of%20health%20are,to%20the%20World%2
0Health%20Organization.
---------------------------------------------------------------------------

    We note that the nominator did not nominate the entire family of 
home- based E/M visit codes.
    When we establish values for codes or consider whether codes are 
potentially misvalued under the PFS, we take into account the resources 
involved in furnishing the specific service as described by the CPT 
code. As such, historically, we do not take into account: (1) travel 
costs incurred by the physician or other practitioner; (2) potential 
opportunity costs to a physician or other practitioner when care is 
delivered in one setting versus another; or (3) the physician or other 
practitioner's work and time expended in performing activities that are 
outside the scope of the specific service as described by the CPT code. 
These are not considered to be resources involved in furnishing the 
service, are not included in establishing payment rates under the PFS 
in accordance with

[[Page 45883]]

section 1848 of the Act, and, as such, do not provide justification for 
potential misvaluation of those payments. That said, in February 2021, 
the AMA CPT Editorial Panel deleted the family of domiciliary codes, 
CPT codes 99324 to 99340, and merged the services described by those 
codes into the existing family of home-based E/M visits, CPT codes 
99341 to 99350 (a range of codes that includes CPT codes 99344, 99345, 
99349, and 99350). In addition, the AMA RUC has made recommendations 
regarding the values for these home-based E/M codes in section II.E. of 
this proposed rule. Since CMS has already received AMA RUC 
recommendations for these home-based E/M visit codes for this year's 
proposed rule, we refer readers to the discussion found in section 
II.E. of this proposed rule, Valuation of Specific Codes, where we seek 
additional public comments, recommendations, and independent analysis 
as supporting evidence from all interested parties regarding the 
valuations for the home-based E/M visits, including CPT codes 99344, 
99345, 99349, and 99350. Because we address and are soliciting public 
comment on the valuation of these codes in section II.E. of this 
proposed rule, there is no need to consider these home-based E/M visits 
here as potentially misvalued.
    An interested party has nominated the following cataract surgery 
codes, CPT codes 65820 (Goniotomy--Incision to improve eye fluid flow), 
66174 (Transluminal dilation of aqueous outflow canal; without 
retention of device or stent), 66982 (Complex Extracapsular cataract 
removal with insertion of intraocular lens prosthesis (one stage 
procedure), manual or mechanical technique (e.g., irrigation and 
aspiration or phacoemulsification), 66984 (Extracapsular cataract 
removal with insertion of intraocular lens prosthesis (one stage 
procedure), manual or mechanical technique (e.g., irrigation and 
aspiration or phacoemulsification)), 66989 (Complex Extracapsular 
cataract removal w/IOL insertion, complex; with insertion of 
intraocular (e.g., trabecular meshwork, supraciliary, suprachoroidal) 
anterior segment aqueous drainage device, without extraocular 
reservoir, internal approach, one or more), and 66991 (Extracapsular 
cataract removal w/IOL insertion; with insertion of intraocular (e.g., 
trabecular meshwork, supraciliary, suprachoroidal) anterior segment 
aqueous drainage device, without extraocular reservoir, internal 
approach, one or more), as well as the following retinal procedure 
codes, CPT codes 67015 (Aspiration or release of vitreous, subretinal 
or choroidal fluid, pars plana approach (posterior sclerotomy)), 67036 
(Vitrectomy, mechanical, pars plana approach), 67039 (Vitrectomy, 
mechanical, pars plana approach; with focal endolaser 
photocoagulation), 67040 (Vitrectomy, mechanical, pars plana approach; 
with endolaser panretinal photocoagulation), 67041 (Vitrectomy, 
mechanical, pars plana approach; with removal of preretinal cellular 
membrane (e.g., macular pucker)), 67042 (Vitrectomy, mechanical, pars 
plana approach; with removal of internal limiting membrane of retina 
(e.g., for repair of macular hole, diabetic macular edema), includes, 
if performed, intraocular tamponade (i.e., air, gas or silicone oil)), 
67043 (Vitrectomy, mechanical, pars plana approach; with removal of 
subretinal membrane (e.g., choroidal neovascularization), includes, if 
performed, intraocular tamponade (i.e., air, gas or silicone oil) and 
laser photocoagulation), 67108 (Repair of retinal detachment; with 
vitrectomy, any method, including, when performed, air or gas 
tamponade, focal endolaser photocoagulation, cryotherapy, drainage of 
subretinal fluid, scleral buckling, and/or removal of lens by same 
technique), and 67113 (Repair of complex retinal detachment (e.g., 
proliferative vitreoretinopathy, stage C-1 or greater, diabetic 
traction retinal detachment, retinopathy of prematurity, retinal tear 
of greater than 90 degrees), with vitrectomy and membrane peeling, 
including, when performed, air, gas, or silicone oil tamponade, 
cryotherapy, endolaser photocoagulation, drainage of subretinal fluid, 
scleral buckling, and/or removal of lens), as potentially misvalued 
because there is currently no established non-facility payment rate for 
these global 090-day surgical procedures. These codes are complex 
surgical eye procedures and they require dedicated spaces, similar to 
facility-based spaces that are not typically found in an 
ophthalmologist's office, such as a well-lighted and sterile surgical 
theater, specific eye surgery equipment and possibly clinical staff and 
other medical personnel trained to assist in these surgeries and the 
patient's immediate post-surgery recovery, including anesthesia 
services. In the past, with concerns for patient safety and given the 
intricate and delicate nature of these surgeries, we understood that 
these procedures would only be performed in a well-equipped and fully 
staffed medical facility. This may still be the case, but this 
nominator suggests that these cataract and retinal procedures can be 
properly performed in the non-facility office, safely, effectively, and 
perhaps more conveniently for patients and physicians; and thus 
requests that we should establish non-facility RVUs under the PFS to 
recognize the additional resources that would be expended in the non-
facility setting.
    The nominator has included a list of practice expense items 
involved in furnishing these services in the non-facility setting to 
help us to consider establishing non-facility values for these codes. 
They include the possible number and types of clinical staff and their 
work time in minutes, and a list of various equipment and supplies 
typically needed to furnish the services described by the nominated 
codes.
    The nominator also noted that there is projected backlog for these 
cataract and retinal services that may have been building up due to the 
COVID-19 restrictions from the past 2 years. We seek comment on the 
merits of continuing to value these codes only in the facility setting, 
as opposed to also establishing non-facility values for these cataract 
and retinal surgery codes. We also seek comment on any appropriate 
safety considerations for these codes in the non-facility setting and 
whether these codes are potentially misvalued. We note that in last 
year's CY 2022 PFS final rule with comment (86 FR 65096 through 65097), 
we did review CPT codes 66982, 66984, 66987, 66988, 66989, 66991, and 
0671T (Cataract Removal with Drainage Device Insertion) and did not 
establish non-facility values for those services, but we did note a 
potential rank order anomaly when considering minimally invasive 
glaucoma surgeries (MIGS) and cataract surgeries together, and 
suggested that the AMA RUC should consider re-surveying all of these.
    An interested party has nominated add-on CPT code 20931 (Allograft, 
structural, for spine surgery only (List separately in addition to code 
for primary procedure)) as a potentially misvalued service with respect 
to the physician's labor for spinal surgeries involving the use of 
biomechanical synthetic cage devices versus the use of structural 
allograft bone as it relates to a set of CPT codes related to anterior 
cervical discectomy and fusion (ACDF). Ordinarily, interested parties 
nominate a primary service code as potentially misvalued, or a primary 
service code and its related add-on codes, but not an add-on code 
alone. The valuation of an add-on code is typically developed with 
reference to some portion of the work (or other resource inputs) 
involved in furnishing the primary service code. For

[[Page 45884]]

example, the AMA CPT 2022 Professional Edition, page 147, states ``Use 
code 20931 in conjunction with codes 22319, 22532-22533, 22548-22558, 
22590-22612, 22630, 22633, 22634, 22800-22812''). The primary spinal 
surgery codes and the add-on CPT code 20931 have not been recently 
reconsidered or reviewed by the AMA RUC or CMS, and no new or 
additional information has been included with this nomination to 
persuade CMS that CPT code 20931 is individually potentially misvalued. 
This nomination of an add-on code as potentially misvalued is similar 
to the nomination we discussed in the CY 2022 PFS proposed rule (86 FR 
65044) of CPT code 22551 (Arthrodesis, anterior interbody, including 
disc space preparation, discectomy, osteophytectomy and decompression 
of spinal cord and/or nerve roots; cervical below C2) and the 
accompanying add-on codes.
    The nominator refers to two different methods of vertebral fusion--
one using biomechanical synthetic cage devices, the other using 
structural allograft bone; and describes a typical vertebral fusion 
case that uses three units of one of these products. Both of these 
methods of vertebral fusion are described by CPT code 22551 (includes a 
90-day global period), which has a work RVU of 25.00. Both methods of 
vertebral fusion also involve two units of CPT code 22552 (Arthrodesis, 
anterior interbody, including disc space preparation, discectomy, 
osteophytectomy and decompression of spinal cord and/or nerve roots; 
cervical below C2, each additional interspace (List separately in 
addition to code for primary procedure)), which have a total work RVU 
of 13.00 (6.50 x 2), and 1 unit of CPT code 22846 (Anterior 
instrumentation; 4 to 7 vertebral segments (List separately in addition 
to code for primary procedure)), which has a work RVU of 12.40. The 
vertebral fusion method employing three synthetic cage devices with 
plate would involve three units of CPT code 22853 (Insertion of 
interbody biomechanical device(s) (e.g., synthetic cage, mesh) with 
integral anterior instrumentation for device anchoring (e.g., screws, 
flanges), when performed, to intervertebral disc space in conjunction 
with interbody arthrodesis, each interspace (List separately in 
addition to code for primary procedure)) for a total work RVU of 12.75 
(4.25 x 3), and one unit of CPT code 20930 (Allograft, morselized, or 
placement of osteopromotive material, for spine surgery only (List 
separately in addition to code for primary procedure)) with a work RVU 
of 0.00 (because Medicare considers this code to be bundled into codes 
for other services). The nominator states that the typical vertebral 
fusion employing three synthetic cage devices with plate would total to 
63.15 work RVUs.
    In contrast, the nominator asserts that the vertebral fusion method 
employing structural allograft bones with plate involves the same set 
of services and codes (that is, one unit of CPT code 22551, two units 
of CPT code 22552, and one unit of CPT code 22846), but the structural 
allograft bone method includes CPT code 20931 (Allograft, structural, 
for spine surgery only (List separately in addition to code for primary 
procedure)), with a work RVU of 1.81, instead of CPT codes 22853 and 
20930, for a total work RVU of 52.21. The nominator suggests that this 
difference in total work RVUs for the two methods of vertebral fusion, 
63.15 versus 52.21, is evidence that add-on CPT code 20931 is 
potentially misvalued; however, we do not agree with this nominator's 
method of aggregating and comparing sums of work RVUs for groups of 
services that may be furnished together as being potentially misvalued, 
nor consider CPT code 20931 as the source of misvaluation within this 
grouping.
    We understand that the nominator believes there should be an 
equivalent total sum payment for all services involved in vertebral 
fusion surgeries using either method, and that there should not be a 
potential incentive for physicians to prefer the method that uses 
synthetic cage devices because of the higher available payment amount. 
The nominator asserts that the total sum payment for this kind of 
spinal surgery using the structural allograft bone method is 
undervalued as compared to the total sum payment for this kind of 
spinal surgery using the synthetic cage method.
    We note that CPT code 22853, which the commenter associates with 
the synthetic cage device method of vertebral fusion, is a 45-minute 
ZZZ-code (indicating an add-on code) with an IWPUT (intra-service work 
(RVU) per unit of time) of 0.0944, whereas CPT code 20931, which the 
commenter associates with the allograph method of vertebral fusion, is 
a 20-minute ZZZ-code with an IWPUT of 0.0905. Given the much longer 
intra-service time and greater IWPUT for CPT code 22853 than for CPT 
code 20931, the allograph method of vertebral fusion would be expected 
to have a lower total sum of work RVUs.
    The nominator's description of why and how each vertebral fusion 
method is potentially misvalued when compared to the other does not 
present a situation that fits within our process for identifying 
individual services that are potentially misvalued using certain 
criteria, as described in the beginning of this section. Our 
determination that one or more codes are potentially misvalued 
generally revolves around the specific RVUs assigned to individual 
codes, or with the inter-code relativity between the RVUs assigned to 
several individual codes found within a family of codes with 
hierarchical relationships. CMS generally does not examine the summed 
differences in total RVUs (as is the case presented here), based on 
billing patterns for a combination of codes representing differing 
physician work for different methods of performing a service, and then 
comparing the total RVUs of each method as evidence of the potential 
misvaluation of codes. We do not believe that the nominator has 
provided sufficient evidence to demonstrate that CPT code 20931 itself 
is misvalued, and therefore, we are not inclined to propose this code 
as potentially misvalued; however, we seek additional comment and any 
independent analysis and studies (see the supporting documentation 
options listed above under ``CY 2023 Identification and Review of 
Potentially Misvalued Services,'' particularly in regard to any changes 
in the resources to providing a service) as supporting evidence from 
commenters in agreement or disagreement with this nomination.
    See Table 6 for the listing of nominated potentially misvalued 
codes.
BILLING CODE 4120-01-P

[[Page 45885]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.005

BILLING CODE 4120-01-C

D. Payment for Medicare Telehealth Services Under Section 1834(m) of 
the Act

    As discussed in prior rulemaking, several conditions must be met 
for Medicare to make payment for telehealth services under the PFS. See 
further details and full discussion of the scope of Medicare telehealth 
services in the CY 2018 PFS final rule (82 FR 53006) and CY 2021 PFS 
final rule (85 FR 84502) and in 42 CFR 410.78 and 414.65.
1. Payment for Medicare Telehealth Services Under Section 1834(m) of 
the Act
a. Changes to the Medicare Telehealth Services List
    In the CY 2003 PFS final rule with comment period (67 FR 79988), we 
established a regulatory process for adding services to or deleting 
services from the Medicare Telehealth Services List in accordance with 
section 1834(m)(4)(F)(ii) of the Act (42 CFR 410.78(f)). This process 
provides the public with an ongoing opportunity to submit requests for 
adding services, which are then reviewed by us and assigned to 
categories established through notice and comment rulemaking. 
Specifically, we assign any submitted request to add to the Medicare 
Telehealth Services List to one of the following two categories:
    <bullet> Category 1: Services that are similar to professional 
consultations, office visits, and office psychiatry services that are 
currently on the Medicare Telehealth Services List. In reviewing these 
requests, we look for similarities between the requested and existing 
telehealth services for the roles of, and interactions among, the 
beneficiary, the physician (or other practitioner) at the distant site 
and, if necessary, the telepresenter, a practitioner who is present 
with the beneficiary in the originating site. We also look for 
similarities in the telecommunications system used to deliver the 
service; for example, the use of interactive audio and video equipment.
    <bullet> Category 2: Services that are not similar to those on the 
current Medicare Telehealth Services List. Our review of these requests 
includes an assessment of whether the service is accurately described 
by the corresponding code when furnished via telehealth and whether the 
use of a telecommunications system to furnish the service produces 
demonstrated clinical benefit to the patient. Submitted evidence should 
include both a description of relevant clinical studies that 
demonstrate the service furnished by telehealth to a Medicare 
beneficiary improves the diagnosis or treatment of an illness or injury 
or improves the functioning of a malformed body part, including dates 
and findings, and a list and copies of published peer reviewed articles 
relevant to the service when furnished via telehealth. Our evidentiary 
standard of clinical benefit does not include minor or incidental 
benefits. Some examples of other clinical benefits that we consider 
include the following:
    <bullet> Ability to diagnose a medical condition in a patient 
population without access to clinically appropriate in-person 
diagnostic services.
    <bullet> Treatment option for a patient population without access 
to clinically appropriate in-person treatment options.
    <bullet> Reduced rate of complications.
    <bullet> Decreased rate of subsequent diagnostic or therapeutic 
interventions (for example, due to reduced rate of recurrence of the 
disease process).
    <bullet> Decreased number of future hospitalizations or physician 
visits.
    <bullet> More rapid beneficial resolution of the disease process 
treatment.
    <bullet> Decreased pain, bleeding, or other quantifiable symptom.
    <bullet> Reduced recovery time.

[[Page 45886]]

    In the CY 2021 PFS final rule (85 FR 84507), we created a third 
category of criteria for adding services to the Medicare Telehealth 
Services List on a temporary basis following the end of the PHE for the 
COVID-19 pandemic: Category 3. This new category describes services 
that were added to the Medicare Telehealth Services List during the PHE 
for which there is likely to be clinical benefit when furnished via 
telehealth, but there is not yet sufficient evidence available to 
consider the services for permanent addition under the Category 1 or 
Category 2 criteria. Services added on a temporary, Category 3 basis 
will ultimately need to meet the criteria under Category 1 or 2 in 
order to be permanently added to the Medicare Telehealth Services List. 
To add specific services on a Category 3 basis, we conducted a clinical 
assessment to identify those services for which we could foresee a 
reasonable potential likelihood of clinical benefit when furnished via 
telehealth. We considered the following factors:
    ++ Whether, outside of the circumstances of the PHE for COVID-19, 
there are concerns for patient safety if the service is furnished as a 
telehealth service.
    ++ Whether, outside of the circumstances of the PHE for COVID-19, 
there are concerns about whether the provision of the service via 
telehealth is likely to jeopardize quality of care.
    ++ Whether all elements of the service could fully and effectively 
be performed by a remotely located clinician using two-way, audio-video 
telecommunications technology.
    In the CY 2021 PFS final rule (85 FR 84507), we also temporarily 
added several services to the Medicare Telehealth Services List using 
the Category 3 criterion described above. We assessed codes that were 
temporarily available on the list for the duration of the PHE to 
determine their appropriateness for inclusion on the Medicare 
Telehealth Services List on a Category 3 basis. We have reassessed the 
services that are temporarily available via telehealth for the PHE, 
based on both information provided by interested parties and our own 
internal review. We have assessed whether or not these services can, 
outside of the circumstances of the PHE, be furnished using the full 
scope of service elements via two-way, audio-video communication 
technology, without jeopardizing patient safety or quality of care, and 
we now believe that there are additional services that would be 
appropriate for addition to the Medicare Telehealth Services List on a 
Category 3 basis that we did not identify in the CY 2021 rulemaking. In 
this proposed rule, we are proposing to add these additional services 
to the Medicare Telehealth Services List on a Category 3 basis, as 
further discussed below.
    The Medicare Telehealth Services List, including the additions 
described later in this section, is available on the CMS website at 
https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
    Beginning in CY 2019, we stated that for CY 2019 and onward, we 
intend to accept requests through February 10, consistent with the 
deadline for our receipt of code valuation recommendations from the RUC 
(83 FR 59491). For CY 2023, requests to add services to the Medicare 
Telehealth Services List must have been submitted and received by 
February 10, 2022. Each request to add a service to the Medicare 
Telehealth Services List must have included any supporting 
documentation the requester wishes us to consider as we review the 
request. Because we use the annual PFS rulemaking process as the 
vehicle to make changes to the Medicare Telehealth Services List, 
requesters are advised that any information submitted as part of a 
request is subject to public disclosure for this purpose. For more 
information on submitting a request in the future to add services to 
the Medicare Telehealth Services List, including where to submit these 
requests, see our website at https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/index.html.
b. Requests To Add Services to the Medicare Telehealth Services List 
for CY 2023
    Under our current policy, we add services to the Medicare 
Telehealth Services List on a Category 1 basis when we determine that 
they are similar to services on the existing Medicare Telehealth 
Services List for the roles of, and interactions among, the 
beneficiary, physician (or other practitioner) at the distant site and, 
if necessary, the telepresenter. As we stated in the CY 2012 PFS final 
rule with comment period (76 FR 73098), we believe that the Category 1 
criterion not only streamlines our review process for publicly 
requested services that fall into this category, but also expedites our 
ability to identify codes for the Medicare Telehealth Services List 
that resemble those services already on the Medicare Telehealth 
Services List. We add services on a Category 2 basis when the service 
does not fall within Category 1, and based upon our assessment of 
whether the services are accurately described by the corresponding code 
when delivered via telehealth and whether the use of a 
telecommunications system to deliver the service produces demonstrated 
clinical benefit to the patient. We add services on a temporary 
Category 3 basis when the services were temporarily included on the 
Medicare Telehealth Services List during the PHE, and we find that 
there is likely to be clinical benefit when furnished via telehealth, 
but there is not yet sufficient evidence available to consider the 
services for permanent addition under the Category 1 or Category 2 
criteria.
    We received several requests to permanently add various services to 
the Medicare Telehealth Services List effective for CY 2023. We found 
that none of the requests we received by the February 10th submission 
deadline met our Category 1 or Category 2 criteria for permanent 
addition to the Medicare Telehealth Services List. We also assessed the 
appropriateness of adding these services to the Medicare Telehealth 
Services List on a Category 3 basis instead.
    We are not proposing changes to the length of time the services 
that we temporarily included on a Category 3 basis will remain on the 
Medicare Telehealth Services List; the services we temporarily included 
on the Medicare Telehealth Services List on a Category 3 basis will 
continue to be included through the end of CY 2023. In the event that 
the PHE extends well into CY 2023, we may consider revising this 
policy.
    We are proposing to add some services to the Medicare Telehealth 
Services List on a Category 3 basis through the end of 2023, some of 
which we had not previously added to the Medicare Telehealth List 
during the PHE, but will be added on a subregulatory basis as provided 
in Sec.  410.78(f) of our regulations. For some of these services, we 
have received information from interested parties suggesting potential 
clinical benefit. For others, we continue to believe there is 
sufficient evidence of potential clinical benefit to warrant allowing 
additional time for interested parties to gather data to support their 
possible inclusion on the Medicare Telehealth Services List on a 
Category 1 or 2 basis. The Medicare Telehealth Services List requests 
for CY 2023 are listed in Table 7.
    Additionally, the Consolidated Appropriations Act, 2022 (CAA, 2022) 
(Pub. L. 117-103, March 15, 2022) amended section 1834(m) of the Act to 
extend a number of flexibilities that are in place during the PHE for 
COVID-19 for 151 days after the end of the PHE. To align the 
availability of these services with those flexibilities

[[Page 45887]]

extended under the Act, we are proposing to continue to allow certain 
telehealth services that would otherwise not be available via 
telehealth after the expiration of the PHE to remain on the Medicare 
Telehealth Services List for 151 days after the expiration of the PHE.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP29JY22.006


[[Page 45888]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.007


[[Page 45889]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.008

BILLING CODE 4120-01-C
    We remind interested parties that the criterion for adding services 
to the Medicare Telehealth Services List under Category 1 is that the 
requested services are similar to professional consultations, office 
visits, and/or office psychiatry services that are currently on the 
Medicare Telehealth Services List, and that the criterion for adding 
services under Category 2 is that there is evidence of clinical benefit 
if provided as telehealth. As explained below, we find that none of the 
requested services listed in Table 7 met the Category 1 or 2 criteria.
    We received a request to permanently add CPT code S9443 (Lactation 
classes, non-physician provider, per session) to the Medicare 
Telehealth Services List. This service has a status code of ``I,'' 
which means that it is not valid for Medicare billing purposes. We 
understand that this is a temporary code established by a private payor 
for private payor use, and thus, it is not valid for nor payable by 
Medicare. As such, this code is not separately billable under the PFS. 
We generally do not add services to the Medicare Telehealth Services 
List unless they are separately billable under the PFS. Outside of the 
circumstances of the PHE, the Medicare Telehealth Services List only 
includes services that are covered if they are furnished without the 
use of telecommunication technology in-person. Because CPT code S9443 
is not billable under the PFS when furnished in-person, we do not 
believe it would be appropriate to allow the service to be billed 
separately when furnished as a Medicare telehealth service. As noted in 
the CY 2018 PFS final rule (82 FR 53011), if a service does not 
describe a service typically furnished in-person, it would not be 
considered a telehealth service under the applicable provisions of the 
statute. We are not proposing to add CPT code S9443 to the Medicare 
Telehealth Services List.
(1) Therapy Services
    We received requests to add Therapy Procedures: CPT codes 97110, 
97112, 97116, 97150, and 97530; Physical Therapy Evaluations: CPT codes 
97161-97164; Therapy Personal Care services: CPT codes 97535, 97537, 
and 97542; and Therapy Tests and Measurements services: CPT codes 
97750, 97755, and 97763, to the Medicare Telehealth Services List on a 
Category 1 basis.
    In the CY 2022 PFS final rule (86 FR 65051), we determined that 
these services did not meet the Category 1 criteria for addition to the 
Medicare Telehealth Services List because they involve direct 
observation and/or physical contact between the practitioner and the 
patient and, in many instances, are therapeutic in nature, and that 
they did not meet Category 2 criteria, because we thought

[[Page 45890]]

that the request did not provide sufficient detail to determine whether 
all of the necessary elements of the service could be furnished 
remotely. We continue to believe this is the case. We still do not have 
sufficient information to determine whether these services meet the 
Category 2 criteria. However, we note that some of these codes, 
including codes 97110, 97112, 97116, 97150, 97530, 97161-97164, 97535, 
97542, 97750, and 97755 have been added to the list on a temporary 
basis for the duration of the PHE.
    In assessing the evidence that was supplied by interested parties 
in support of adding these services to the Medicare Telehealth Services 
List on a Category 2 basis, we concluded that there was not sufficient 
information to determine whether all of the necessary elements of these 
services could be furnished remotely. Information regarding safety, 
appropriateness, and that indicates that all elements of a given CPT 
code can be furnished via telehealth is still needed to assess whether 
these services meet the Category 2 criteria. However, we also believe 
that the therapy services that are currently on the Medicare Telehealth 
Services List on a temporary basis for the PHE (including CPT codes 
97150, 97530, and 97542), but are not currently included on a Category 
3 basis, may continue to be furnished safely via two-way, audio-video 
communication technology outside of the circumstances of the PHE.
    Therefore, we are proposing that CPT codes 97150, 97530, and 97542 
(the set of therapy services that are currently on the Medicare 
Telehealth Services List on a temporary basis for the PHE), should be 
added to the Medicare Telehealth Services List through the end of CY 
2023 on a temporary, Category 3 basis, to allow time to gather 
additional data that could support their inclusion on the list on a 
permanent basis. Therefore, we are proposing to add CPT codes 97150, 
97530, and 97542 to the Medicare Telehealth Services List on a Category 
3 basis. CPT codes 97110, 97112, 97116, 97161-97164, 97535, 97750, and 
97755 will continue to be available on the Medicare Telehealth Services 
List on a Category 3 basis. We anticipate that keeping these services 
on the Medicare Telehealth Services List on a Category 3 basis, as 
proposed, through the end of CY 2023 would preserve access to care and 
promote health equity, and based on information provided by interested 
parties and internal review, we believe that they may safely be 
furnished as telehealth outside of the circumstances of the PHE through 
the end of CY 2023. However, we remind readers that the practitioners 
who primarily furnish these services, physical therapists, are not, 
outside the circumstances of the PHE (and the 151 day period following 
the expiration of the PHE), authorized to furnish Medicare telehealth 
services. We note that if the PHE and the 151 day period following the 
expiration of the PHE both end in CY 2023, the pre-PHE rules will take 
effect, and these services could no longer be furnished by therapists 
as Medicare telehealth services.
    Certain other requested therapy services, namely CPT codes 97537, 
97763, 90901, and 98960-98962 are not currently on the Medicare 
Telehealth Services List; however, we are adding these services to the 
Medicare Telehealth Services List on a temporary basis during the PHE, 
in accordance with Sec.  410.78(f). As explained below in section 
II.D.1.d. of this proposed rule, services included on the Medicare 
Telehealth Services List on a temporary basis during the PHE that have 
not been added to the list on a Category 3 basis will remain on the 
list for 151 days following the end of the PHE. Furthermore, we are 
proposing to add CPT codes 97537, 97763, 90901, and 98960-98962 to the 
Medicare Telehealth Services List on a Category 3 basis through the end 
of CY 2023. Our clinical analyses of these services indicate that they 
can be furnished in full using two-way, audio and video technology 
during the circumstances of the PHE, and information provided by 
requestors indicates that there may be clinical benefit; however, there 
is not yet sufficient evidence available to consider the services for 
permanent addition to the Medicare Telehealth Services List under the 
Category 1 or Category 2 criteria. Including these services on the 
Medicare Telehealth Services List during the PHE and through CY 2023 
would allow additional time for the development of evidence for CMS to 
consider when evaluating these services for potential permanent 
addition to the Medicare Telehealth Services List on a Category 1 or 2 
basis. We continue to encourage commenters to supply additional 
information in support of adding these services to the Medicare 
Telehealth Services List on a permanent basis, including information 
regarding the safety and appropriateness of furnishing these services 
via telehealth.
(2) Telephone E/M Services
    We have also received requests to temporarily add Telephone E/M 
visit codes, CPT codes 99441, 99442, and 99443 to the Medicare 
Telehealth Services List on a Category 3 basis. In the March 31, 2020 
interim final rule with comment period (IFC), we established separate 
payment for audio-only telephone E/M services (85 FR 19264 through 
19266) for the duration of the PHE for the COVID-19 pandemic. Although 
these services were previously considered non-covered under the PFS, in 
the context of the PHE for COVID-19 and with the goal of reducing 
exposure risks associated with COVID-19 (especially in situations when 
two-way, audio and video technology is not available to furnish a 
Medicare telehealth service), we believed there were circumstances 
where prolonged, audio-only communication between the practitioner and 
the patient could be clinically appropriate, yet not fully replace a 
face-to-face visit. In the May 8, 2020 COVID-19 IFC, we noted that 
interested parties had informed us that use of audio-only services was 
more prevalent than we had previously considered, especially because 
many beneficiaries were not using video-enabled communication 
technology from their homes. In other words, there were many cases 
where practitioners who would ordinarily furnish audio-video telehealth 
or in-person visits to evaluate and manage patients' medical concerns 
were instead using audio-only interactions to manage more complex care 
(85 FR 27589 through 27590). While we had previously acknowledged the 
likelihood that, under the circumstances of the PHE for COVID- 19, more 
time would be spent interacting with the patient via audio-only 
technology, we stated that the intensity of furnishing an audio-only 
visit to a beneficiary during the unique circumstances of the PHE for 
COVID-19 was not accurately captured by the valuation of these services 
that we established in the March 31, 2020 IFC (85 FR 27590). This would 
be particularly true to the extent that these audio-only services are 
serving as a substitute for office/outpatient (O/O) Medicare telehealth 
visits for beneficiaries not using video-enabled telecommunications 
technology, which is contrary to the situation we anticipated when 
establishing separate payment for them in the March 31, 2020 IFC. In 
the May 8, 2020 COVID-19 IFC, we stated that, given our understanding 
that these audio-only services were being furnished primarily as a 
replacement for care that would otherwise be reported as an in-person 
or telehealth visit using the O/O E/M codes, we established new RVUs 
for the telephone E/M services based on crosswalks to the most 
analogous O/O E/M codes, based on the time

[[Page 45891]]

requirements for the telephone codes and the times assumed for 
valuation for purposes of the O/O E/M codes. Specifically, we 
crosswalked the levels 2-4 O/O E/Ms for established patients, as 
described by CPT codes 99212, 99213, and 99214, to CPT codes 99441, 
99442, and 99443, respectively. Additionally, we stated that, given our 
understanding that these audio-only services were being furnished as 
substitutes for O/O E/M services, we recognized that they should be 
considered as telehealth services, and added them to the Medicare 
Telehealth Services List for the duration of the PHE for COVID-19 (85 
FR 27590).
    In the CY 2022 PFS final rule (86 FR 65055), in response to 
requests that these codes be added to the Medicare Telehealth Services 
List on a Category 3 basis, we stated that we were finalizing a change 
to the definition of ``telecommunications system'' to allow telehealth 
services for the diagnosis, evaluation, and treatment of mental health 
conditions to be furnished through audio-only technology in certain 
circumstances after the end of the PHE. For example, the O/O E/M codes 
are on the Medicare Telehealth Services List permanently and when used 
to describe care for mental health conditions, will be reportable when 
furnished via audio-only technology to patients in their homes. Since 
audio-only telecommunications technology can be used to furnish mental 
health telehealth services to patients in their homes, the addition of 
these codes to the Medicare Telehealth Services List is unnecessary for 
mental health telehealth services. For telehealth services other than 
mental health care, we stated that we believe that two-way, audio-video 
communications technology is the appropriate standard that will apply 
for telehealth services after the PHE ends. Further, we note that 
section 1834(m)(2)(A) of the Act requires that payment to a distant 
site physician or practitioner that furnishes Medicare telehealth 
services to an eligible telehealth individual be equal to the amount 
that would have been paid under Medicare if such physician or 
practitioner had furnished the service without a telecommunications 
system. We believe that the statute requires that telehealth services 
be so analogous to in-person care such that the telehealth service is 
essentially a substitute for a face-to-face encounter. However, these 
audio-only telephone E/M services are inherently non-face-to-face 
services, since they are furnished exclusively through remote, audio-
only communications. Outside the circumstances of the PHE, the 
telephone E/M services would not be analogous to in-person care; nor 
would they be a substitute for a face-to-face encounter. Therefore, we 
do not believe it would be appropriate for these codes to remain on the 
Medicare Telehealth Services List after the end of the PHE and the 151-
day post-PHE extension period. Accordingly, we are not proposing to 
keep these telephone E/M services on the Medicare Telehealth Services 
List after that period on a Category 3 basis, because the codes 
describe services that can only be furnished using audio-only 
telecommunications technology, and outside of the circumstances of the 
PHE, they do not describe services that are a substitute for an in-
person visit. While we acknowledge that audio-only technology can be 
used to furnish mental health telehealth services to patients in their 
homes under certain circumstances after the PHE ends, two-way, audio-
video communications technology continues to be the appropriate 
standard that will apply for Medicare telehealth services after the PHE 
and the 151-day extension period. As we noted in the CY 2021 PFS final 
rule (85 FR 84535), we will assign these Telephone E/M visit codes (CPT 
codes 99441, 99442, and 99443) a ``bundled'' status after the end of 
the PHE and the 151-day extension period, and we will post the RUC-
recommended RVUs for these codes in accordance with our usual practice.
(3) GI Tract Imaging and Continuous Glucose Monitoring
    We received requests to add CPT codes describing GI Tract Imaging, 
CPT code 91110 (Gastrointestinal tract imaging, intraluminal (e.g., 
capsule endoscopy), esophagus through ileum, with interpretation and 
report) and Ambulatory Continuous Glucose Monitoring, CPT code 95251 
(Ambulatory continuous glucose monitoring of interstitial tissue fluid 
via a subcutaneous sensor for a minimum of 72 hours; analysis, 
interpretation and report), to the Medicare Telehealth Services List on 
a Category 3 basis. We believe these codes may describe services that 
are inherently non-face-to-face services, (the patient need not be 
present in order for the service to be furnished in its entirety), and 
therefore, they do not describe services that are a substitute for an 
in-person visit. As stated earlier, we believe that the statute 
requires that telehealth services be so analogous to in-person care 
such that the telehealth service is essentially a substitute for a 
face-to-face encounter. For this and other reasons, we are not 
proposing to add these services to the Medicare Telehealth Services 
List on a Category 3 basis; we do not believe these CPT codes describe 
services that are a substitute for an in-person visit, and we believe 
that services that are not inherently face-to-face services are not 
services that can be furnished as Medicare telehealth services. Even 
so, we are interested in information that would help us to understand 
whether these services would meet the criteria for inclusion on the 
Medicare Telehealth Services List either for the PHE, as Category 3 
services, or permanently on a Category 1 or 2 basis, given our 
questions as to whether they are inherently non-face-to-face services, 
and therefore, may not fit within the scope of services that could be 
furnished as Medicare telehealth services. Therefore, we are also 
seeking comment on whether these services would involve an in-person 
service when furnished without the use of a telecommunications system.
(4) Neurostimulator Pulse Generator/Transmitter
    We received requests to add codes describing the electronic 
analysis of an implanted neurostimulator pulse generator/transmitter to 
the Medicare Telehealth Services List. These included a request to add 
CPT codes 95976 (Electronic analysis of implanted neurostimulator pulse 
generator/transmitter (e.g., contact group[s], interleaving, amplitude, 
pulse width, frequency [Hz], on/off cycling, burst, magnet mode, dose 
lockout, patient selectable parameters, responsive neurostimulation, 
detection algorithms, closed loop parameters, and passive parameters) 
by physician or other qualified health care professional; with simple 
cranial nerve neurostimulator pulse generator/transmitter programming 
by physician or other qualified health care professional) and 95977 
(Electronic analysis of implanted neurostimulator pulse generator/
transmitter (e.g., contact group[s], interleaving, amplitude, pulse 
width, frequency [Hz], on/off cycling, burst, magnet mode, dose 
lockout, patient selectable parameters, responsive neurostimulation, 
detection algorithms, closed loop parameters, and passive parameters) 
by physician or other qualified health care professional; with complex 
cranial nerve neurostimulator pulse generator/transmitter programming 
by physician or other qualified health care professional) permanently 
on a Category 1 basis, as well as a request to add CPT codes 95970 
(Electronic analysis of implanted neurostimulator pulse generator/
transmitter (e.g., contact group[s],

[[Page 45892]]

interleaving, amplitude, pulse width, frequency [Hz], on/off cycling, 
burst, magnet mode, dose lockout, patient selectable parameters, 
responsive neurostimulation, detection algorithms, closed loop 
parameters, and passive parameters) by physician or other qualified 
health care professional; with brain, cranial nerve, spinal cord, 
peripheral nerve, or sacral nerve, neurostimulator pulse generator/
transmitter, without programming), 95983 (Electronic analysis of 
implanted neurostimulator pulse generator/transmitter (e.g., contact 
group[s], interleaving, amplitude, pulse width, frequency [Hz], on/off 
cycling, burst, magnet mode, dose lockout, patient selectable 
parameters, responsive neurostimulation, detection algorithms, closed 
loop parameters, and passive parameters) by physician or other 
qualified health care professional; with brain neurostimulator pulse 
generator/transmitter programming, first 15 minutes face-to-face time 
with physician or other qualified health care professional), and 95984 
(Electronic analysis of implanted neurostimulator pulse generator/
transmitter (e.g., contact group[s], interleaving, amplitude, pulse 
width, frequency [Hz], on/off cycling, burst, magnet mode, dose 
lockout, patient selectable parameters, responsive neurostimulation, 
detection algorithms, closed loop parameters, and passive parameters) 
by physician or other qualified health care professional; with brain 
neurostimulator pulse generator/transmitter programming, each 
additional 15 minutes face-to-face time with physician or other 
qualified health care professional (List separately in addition to code 
for primary procedure)) to the Medicare Telehealth Services List on a 
temporary Category 3 basis.
    The request to add CPT codes 95976 and 95977, which are codes that 
describe analysis of cranial nerve neurostimulation, indicated that the 
ability to fully furnish this service using two-way, audio-video 
communication technology was forthcoming, but is currently unavailable. 
Therefore, we are not proposing to add CPT codes 95976 and 95977 to the 
Medicare Telehealth Services List, because the full scope of service 
elements described by these codes cannot currently be furnished via 
two-way, audio-video communication technology. However, we will 
consider additional evidence regarding the ability to furnish these 
services as telehealth services, such as information indicating that 
current technology has evolved, as it becomes available for future 
rulemaking. We are also not proposing to add them on a Category 1 basis 
because they do not describe services that are similar to professional 
consultations, office visits, and office psychiatry services that are 
currently on the Medicare Telehealth Services List.
    With regard to CPT codes 95970, 95983, and 95984, which describe 
general brain nerve neurostimulation, we have some concerns about 
whether the full scope of service elements could be furnished via two-
way, audio-video communication technology, particularly since it is 
unclear whether the connection between the implanted device and the 
analysis/calibration equipment can be done remotely. Additionally, we 
are concerned about the immediate safety of the patient if the 
calibration of the neurostimulator were done incorrectly or if some 
other problem occurred. However, we did include these services on the 
Medicare Telehealth Services List on a temporary basis during the PHE, 
and Medicare claims data suggest that these services are being provided 
via telehealth. Based on this information, we believe there is some 
possible clinical benefit for these services when furnished via 
telehealth; however, there is not yet sufficient evidence available to 
consider the services for permanent addition to the Medicare Telehealth 
Services List under the Category 1 or Category 2 criteria. With that 
said, CPT codes 95970, 95983, and 95984 do meet the criteria for 
temporary inclusion on the Medicare Telehealth Services List on a 
Category 3 basis. Therefore, we are proposing to add CPT codes 95970, 
95983, and 95984 to the Medicare Telehealth Services List on a Category 
3 basis, while soliciting comment on our concerns regarding patient 
safety and whether these services are appropriate for inclusion on the 
Medicare Telehealth Services List outside the circumstances of the PHE.
(5) Emotional/Behavior Assessment, Psychological, or Neuropsychological 
Testing and Evaluation Services
    We received requests to add a number of emotional/behavior 
assessment, psychological, or neuropsychological testing and evaluation 
services, described by CPT codes 97151 (Behavior identification 
assessment, administered by a physician or other qualified health care 
professional, each 15 minutes of the physician's or other qualified 
health care professional's time face-to-face with patient and/or 
guardian(s)/caregiver(s) administering assessments and discussing 
findings and recommendations, and non-face-to-face analyzing past data, 
scoring/interpreting the assessment, and preparing the report/treatment 
plan), 97152 (Behavior identification-supporting assessment, 
administered by one technician under the direction of a physician or 
other qualified health care professional, face-to-face with the 
patient, each 15 minutes), 97153 (Adaptive behavior treatment by 
protocol, administered by technician under the direction of a physician 
or other qualified health care professional, face-to-face with one 
patient, each 15 minutes), 97154 (Group adaptive behavior treatment by 
protocol, administered by technician under the direction of a physician 
or other qualified health care professional, face-to-face with two or 
more patients, each 15 minutes), 97155 (Adaptive behavior treatment 
with protocol modification, administered by physician or other 
qualified health care professional, which may include simultaneous 
direction of technician, face-to-face with one patient, each 15 
minutes), 97156 (Family adaptive behavior treatment guidance, 
administered by physician or other qualified health care professional 
(with or without the patient present), face-to-face with guardian(s)/
caregiver(s), each 15 minutes), 97157 (Multiple-family group adaptive 
behavior treatment guidance, administered by physician or other 
qualified health care professional (without the patient present), face-
to-face with multiple sets of guardians/caregivers, each 15 minutes), 
97158 (Group adaptive behavior treatment with protocol modification, 
administered by physician or other qualified health care professional, 
face-to-face with multiple patients, each 15 minutes), 0362T (Behavior 
identification supporting assessment, each 15 minutes of technicians' 
time face-to-face with a patient, requiring the following components: 
administration by the physician or other qualified health care 
professional who is on site; with the assistance of two or more 
technicians; for a patient who exhibits destructive behavior; 
completion in an environment that is customized to the patient's 
behavior.), and 0373T (Adaptive behavior treatment with protocol 
modification, each 15 minutes of technicians' time face-to-face with a 
patient, requiring the following components: administration by the 
physician or other qualified health care professional who is on site; 
with the assistance of two or more technicians; for a patient who 
exhibits destructive behavior; completion in an environment that is 
customized to the patient's behavior.) to the Medicare Telehealth 
Services List permanently on a Category 2 basis. These services are 
currently on

[[Page 45893]]

the Medicare Telehealth Services List temporarily for the duration of 
the PHE. We believe that, for these services, there is likely to be 
clinical benefit when furnished via telehealth, and therefore, they 
meet the criteria for temporary inclusion on a Category 3 basis. We did 
not identify these services during our initial assessment of services 
that should be temporarily available on the Medicare Telehealth 
Services List on a Category 3 basis in the CY 2021 rulemaking; however, 
we are now proposing to include these services on the Medicare 
Telehealth Services List on a Category 3 basis, in light of information 
we received from the requestors describing the potential clinical 
benefit of these services when furnished via telehealth. However, we do 
have concerns regarding whether, outside the circumstances of the PHE, 
the full scope of service elements can occur in a manner that does not 
jeopardize quality of care, whether this patient population could be 
fully assessed via interactive audio-video technology, and whether 
these services could be conducted in a way that maintains the safety of 
the beneficiary. This patient population often includes patients with 
moderate to severe challenges in oral communication, and they may 
require close observation of their movements within all of their 
environmental cues, which include, for instance, smell, sound, and 
colors around the room. We are concerned that two-way, audio and video 
communications technology would not fully capture these behavioral 
nuances. We believe more time may be necessary to develop evidence that 
could support the decision to add these services to the Medicare 
Telehealth Services List permanently on a Category 1 or Category 2 
basis. We are soliciting comment on our patient safety concerns.
c. Other Services Proposed for Addition to the Medicare Telehealth 
Services List
    As discussed above, there are services that are included on the 
Medicare Telehealth Services List temporarily during the PHE for which 
there is likely to be clinical benefit when furnished via telehealth, 
but there is not yet sufficient evidence available to consider the 
services for permanent addition to the list under the Category 1 or 
Category 2 criteria. In addition to the services discussed above that 
we are proposing for addition to the Medicare Telehealth Services List 
on a Category 3 basis in response to requests, we are also proposing to 
add a number of services to the list on a Category 3 basis that are 
currently included on the Medicare Telehealth Services List temporarily 
during the PHE. These services would be included on the Medicare 
Telehealth Services List through 2023 to allow us to evaluate data that 
may support their permanent addition to the list on a Category 1 or 
Category 2 basis.
    The services we are proposing for inclusion to the Medicare 
Telehealth Services List on a Category 3 basis include CPT codes 90875 
(Individual psychophysiological therapy incorporating biofeedback 
training by any modality (face-to-face with the patient), with 
psychotherapy (e.g., insight oriented, behavior modifying or supportive 
psychotherapy); 30 minutes), 92012 (Ophthalmological services: medical 
examination and evaluation, with initiation or continuation of 
diagnostic and treatment program; intermediate, established patient), 
92014 (Ophthalmological services: medical examination and evaluation, 
with initiation or continuation of diagnostic and treatment program; 
comprehensive, established patient, 1 or more visits), 92507 (Treatment 
of speech, language, voice, communication, and/or auditory processing 
disorder; individual), 94005 (Home ventilator management care plan 
oversight of a patient (patient not present) in home, domiciliary or 
rest home (e.g., assisted living) requiring review of status, review of 
laboratories and other studies and revision of orders and respiratory 
care plan (as appropriate), within a calendar month, 30 minutes or 
more), 96105 (Assessment of aphasia (includes assessment of expressive 
and receptive speech and language function, language comprehension, 
speech production ability, reading, spelling, writing, e.g., by Boston 
Diagnostic Aphasia Examination) with interpretation and report, per 
hour), 96110 (Developmental screening (e.g., developmental milestone 
survey, speech and language delay screen), with scoring and 
documentation, per standardized instrument), 96112 (Developmental test 
administration (including assessment of fine and/or gross motor, 
language, cognitive level, social, memory and/or executive functions by 
standardized developmental instruments when performed), by physician or 
other qualified health care professional, with interpretation and 
report; first hour), 96113 (Developmental test administration 
(including assessment of fine and/or gross motor, language, cognitive 
level, social, memory and/or executive functions by standardized 
developmental instruments when performed), by physician or other 
qualified health care professional, with interpretation and report; 
each additional 30 minutes (List separately in addition to code for 
primary procedure)), 96127 (Brief emotional/behavioral assessment 
(e.g., depression inventory, attention-deficit/hyperactivity disorder 
[ADHD] scale), with scoring and documentation, per standardized 
instrument), 96170 (Health behavior intervention, family (without the 
patient present), face-to-face; initial 30 minutes), 96171 (Health 
behavior intervention, family (without the patient present), face-to-
face; each additional 15 minutes (List separately in addition to code 
for primary service)), 97129 (Therapeutic interventions that focus on 
cognitive function (e.g., attention, memory, reasoning, executive 
function, problem solving, and/or pragmatic functioning) and 
compensatory strategies to manage the performance of an activity (e.g., 
managing time or schedules, initiating, organizing, and sequencing 
tasks), direct (one-on-one) patient contact; initial 15 minutes), 97130 
(Therapeutic interventions that focus on cognitive function (e.g., 
attention, memory, reasoning, executive function, problem solving, and/
or pragmatic functioning) and compensatory strategies to manage the 
performance of an activity (e.g., managing time or schedules, 
initiating, organizing, and sequencing tasks), direct (one-on-one) 
patient contact; each additional 15 minutes (List separately in 
addition to code for primary procedure)), and 99473 (Self-measured 
blood pressure using a device validated for clinical accuracy; patient 
education/training and device calibration). Our analyses of these 
services indicate that there is some evidence of possible clinical 
benefit associated with these services when furnished via telehealth. 
We believe these services can safely be furnished via real-time, audio 
and visual interactive telecommunications under the circumstances of 
the PHE, but there is not yet sufficient evidence available to consider 
the services for permanent addition to the Medicare Telehealth Services 
List under the Category 1 or Category 2 criteria.
    Some audiology testing services are currently temporarily available 
on the Medicare Telehealth Services List for the duration of the PHE. 
These are CPT codes 92550 (Tympanometry and reflex threshold 
measurements), 92552 (Pure tone audiometry (threshold); air only), 
92553 (Pure tone audiometry (threshold); air and bone), 92555 (Speech 
audiometry threshold;), 92556 (Speech audiometry threshold; with speech 
recognition), 92557 (Comprehensive audiometry threshold

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evaluation and speech recognition (92553 and 92556 combined)), 92563 
(Tone decay test), 92565 (Stenger test, pure tone), 92567 (Tympanometry 
(impedance testing)), 92568 (Acoustic reflex testing, threshold), 92570 
(Acoustic immittance testing, includes tympanometry (impedance 
testing), acoustic reflex threshold testing, and acoustic reflex decay 
testing), 92587 (Distortion product evoked otoacoustic emissions; 
limited evaluation (to confirm the presence or absence of hearing 
disorder, 3-6 frequencies) or transient evoked otoacoustic emissions, 
with interpretation and report), 92588 (Distortion product evoked 
otoacoustic emissions; comprehensive diagnostic evaluation 
(quantitative analysis of outer hair cell function by cochlear mapping, 
minimum of 12 frequencies), with interpretation and report), 92601 
(Diagnostic analysis of cochlear implant, patient younger than 7 years 
of age; with programming), 92625 (Assessment of tinnitus (includes 
pitch, loudness matching, and masking)), 92626 (Evaluation of auditory 
function for surgically implanted device(s) candidacy or postoperative 
status of a surgically implanted device(s); first hour), 92627 
(Evaluation of auditory function for surgically implanted device(s) 
candidacy or postoperative status of a surgically implanted device(s); 
each additional 15 minutes (List separately in addition to code for 
primary procedure)). We have received information that, during the PHE, 
certain practitioners have developed the capacity to perform these 
services using remote technology including specialized equipment inside 
an audiometric soundproof booth. We believe that, in circumstances in 
which such equipment is available at the originating site, these 
services can be furnished in a way in which all of the elements of the 
services are met and that there is likely to be a clinical benefit when 
these services are furnished via telehealth. Therefore, we are 
proposing to add these services to the Medicare Telehealth Services 
List on a Category 3 basis, which would allow these services to be 
available via telehealth through the end of CY 2023. We are soliciting 
comments regarding how widespread the availability of this remote 
technology is, and whether interested parties believe these services 
can be furnished in a way that does not jeopardize patient safety or 
quality of care when these services are furnished remotely.
    Additionally, as discussed in section II.F. of this proposed rule, 
we are proposing to create HCPCS codes GXXX1 (Prolonged hospital 
inpatient or observation care evaluation and management service(s) 
beyond the total time for the primary service (when the primary service 
has been selected using time on the date of the primary service); each 
additional 15 minutes by the physician or qualified healthcare 
professional, with or without direct patient contact (list separately 
in addition to CPT codes 99223, 99233, and 99236 for hospital inpatient 
or observation care evaluation and management services). (Do not report 
GXXX1 on the same date of service as other prolonged services for 
evaluation and management 99358, 99359, 993X0). (Do not report GXXX1 
for any time unit less than 15 minutes)), GXXX2 (Prolonged nursing 
facility evaluation and management service(s) beyond the total time for 
the primary service (when the primary service has been selected using 
time on the date of the primary service); each additional 15 minutes by 
the physician or qualified healthcare professional, with or without 
direct patient contact (list separately in addition to CPT codes 99306, 
99310 for nursing facility evaluation and management services). (Do not 
report GXXX2 on the same date of service as other prolonged services 
for evaluation and management 99358, 99359, 993X0,). (Do not report 
GXXX2 for any time unit less than 15 minutes)), and GXXX3 (Prolonged 
home or residence evaluation and management service(s) beyond the total 
time for the primary service (when the primary service has been 
selected using time on the date of the primary service); each 
additional 15 minutes by the physician or qualified healthcare 
professional, with or without direct patient contact (list separately 
in addition to CPT codes 99345, 99350 for home or residence evaluation 
and management services). (Do not report GXXX3 on the same date of 
service as other prolonged services for evaluation and management 
99358, 99359, 99417). (Do not report GXXX3 for any time unit less than 
15 minutes)) to describe prolonged services associated with certain 
types of E/M services. These codes would be replacing existing codes 
that describe prolonged services, specifically inpatient prolonged 
services CPT codes 99356 (Prolonged service in the inpatient or 
observation setting, requiring unit/floor time beyond the usual 
service; first hour (List separately in addition to code for inpatient 
or observation Evaluation and Management service)) and 99357 (Prolonged 
service in the inpatient or observation setting, requiring unit/floor 
time beyond the usual service; each additional 30 minutes (List 
separately in addition to code for prolonged service)). These services 
are similar to services currently on the Medicare Telehealth Services 
List, such as CPT codes 99356 and 99357, which were added to the 
Medicare Telehealth Services List on a Category 1 basis in the CY 2016 
rule (80 FR 71060-71062), as well as O/O prolonged service HCPCS code 
G2212 (Prolonged service in the inpatient or observation setting, 
requiring unit/floor time beyond the usual service; each additional 30 
minutes (List separately in addition to code for prolonged service)), 
which was added to the Medicare Telehealth Services List on a Category 
1 basis in the CY 2021 rule (85 FR 84506). Similarly, we believe that 
these proposed HCPCS G codes would be sufficiently similar to 
psychiatric diagnostic procedures or O/O visits currently on the 
Medicare Telehealth Services List to qualify for inclusion on the list 
on a Category 1 basis. Therefore, we are proposing to add proposed 
HCPCS codes GXXX1, GXXX2, and GXXX3 to the Medicare Telehealth Services 
List on a Category 1 basis.
    Table 8 lists the services that we are proposing for addition to 
the Medicare Telehealth Services List on a Category 3 basis. Table 9 
lists the services we are proposing for permanent addition to the 
Medicare Telehealth Services List on a Category 1 basis.
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d. Services Proposed for Removal From the Medicare Telehealth Services 
List After 151 Days Following the End of the PHE
    As we noted in the CY 2022 PFS final rule (86 FR 65054), at the 
conclusion of the PHE for COVID-19, the associated waivers and interim 
policies will expire, payment for Medicare telehealth services will 
once again be limited by the requirements of section 1834(m) of the 
Act, and we will return to the policies established through our regular 
notice-and-comment rulemaking process, through which we established 
Medicare Telehealth Services List. Services that have been added to the 
Medicare Telehealth Services List on a Category 3 basis will remain on 
the list through the end of CY 2023. Under our current policy, all 
other services that were temporarily added to the Medicare Telehealth 
Services List on an interim basis during the PHE and have not been 
added to the Medicare Telehealth Services List on a Category 1, 2, or 3 
basis will not remain on the list after the end of the PHE (85 FR 
84506-84509). As explained in section II.D.1.e. of this proposed rule, 
Division P, Title III, Subsection A of the Consolidated Appropriations 
Act, 2022 (CAA, 2022), extends some of the flexibilities implemented 
during the PHE for COVID-19 for an additional 151 days after the end of 
the PHE, including Section 301(a) of Division P, Title III, Subtitle A 
of the CAA, 2022, which specifies that, for services on the Medicare 
Telehealth Services List as of the date of enactment (March 15, 2022) 
furnished during 151 days after the end of the PHE, the originating 
site for the telehealth service can be any site in the United States at 
which the beneficiary is located when the service is furnished, 
including the beneficiary's home. To give full effect to this 
provision, we believe it is necessary to continue to include the 
services on the Medicare Telehealth Services List through the 151-day 
period after the end of the PHE that were temporarily added to the list 
during the PHE but have not since been added on a Category 3 or other 
basis, and which are currently set to be removed from the list at the 
end of the PHE. As such, we are proposing to continue to include on the 
Medicare Telehealth Services List the services that are currently set 
to be removed from the list when the PHE ends (that is, those not 
currently added to the list on a Category 1, 2, or 3 basis) for an 
additional 151 days after the PHE ends. Table 10 lists those services 
that are temporarily available for the PHE, which we are proposing to 
retain on the Medicare Telehealth Services List for an additional 151 
days following the end of the PHE. The services listed in Table 10 will 
no longer be available on the Medicare Telehealth Services List on the 
152nd day after the end of the PHE. On the 152nd day after the end of 
the PHE, payment for Medicare telehealth services will once again be 
limited by the requirements of section 1834(m) of the Act, as 
aforementioned, and telehealth claims for these codes will be denied. 
We are proposing to align those services that had been planned to stop 
being available as Medicare telehealth at the end of the PHE with the 
151-day extensions of flexibilities enacted in the CAA, 2022 in order 
to simplify the process of when flexibilities will end and to minimize 
possible errors.
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e. Implementation of Telehealth Provisions of the Consolidation 
Appropriations Acts, 2021 and 2022
    As discussed in the CY 2021 PFS final rule (85 FR 84506), 
legislation enacted to address the PHE for COVID-19 provided the 
Secretary with new authorities under section 1135(b)(8) of the Act, as 
added by section 102 of the Coronavirus Preparedness and Response 
Supplemental Appropriations Act, 2020 (Pub. L. 116-123, March 6, 2020) 
and subsequently amended by section 6010 of the Families First 
Coronavirus Response Act (Pub. L. 116-127, March 18, 2020) and section 
3703 of the Coronavirus Aid, Relief, and Economic Security Act (CARES 
Act) (Pub. L. 116-136, March 27, 2020), to waive or modify Medicare 
telehealth payment requirements during the PHE for COVID-19. We used 
these authorities to establish several flexibilities to accommodate 
changes in the delivery of care during the PHE. Through waiver 
authority under section 1135(b)(8) of the Act, in response to the PHE 
for COVID-19, we removed the geographic and site of service originating 
site restrictions in section 1834(m)(4)(C) of the Act, as well as 
restrictions in section 1834(m)(4)(E) of the Act on the types of 
practitioners who may furnish telehealth services, for the duration of 
the PHE for COVID-19. We also used waiver authority to allow certain 
telehealth services to be furnished via audio-only communication 
technology. At the end of the PHE for COVID-19, these waivers and 
interim policies will expire, and payment for Medicare telehealth 
services will once again be limited by the requirements of section 
1834(m) of the Act.
    Section 1834(m)(7) of the Act (as added by section 2001(a) of the 
SUPPORT for Patients and Communities Act (Pub. L. 115-271, October 24, 
2018)), removes the geographic restrictions under section 
1834(m)(4)(C)(i) of the Act and authorizes the patient's home as a 
permissible originating site, for telehealth services furnished for 
purposes of treatment of a substance use disorder (SUD) or a co-
occurring mental health disorder, furnished on or after July 1, 2019, 
to an individual with a SUD diagnosis. Section 123(a) of Division CC of 
the Consolidated Appropriations Act, 2021 (CAA, 2021) (Pub. L. 116-260, 
December 27, 2020) amended section 1834(m)(7)(A) of the Act to broaden 
the scope of services for which the geographic restrictions under 
section 1834(m)(4)(C)(i) of the Act do not apply and for which the 
patient's home is a permissible originating site to include telehealth 
services furnished for the purpose of diagnosis, evaluation, or 
treatment of a mental health disorder, effective for services furnished 
on or after the end of the PHE for COVID-19. Section 123(a) of the CAA, 
2021 also added subparagraph (B) to section 1834(m)(7) of the Act to 
prohibit payment for a telehealth service furnished in the patient's 
home under paragraph (7), unless the physician or practitioner 
furnishes an item or service in-person, without the use of telehealth, 
within 6 months prior to the first time the physician or practitioner 
furnishes a telehealth service to the beneficiary, and thereafter, at 
such times as the Secretary determines appropriate. For a full 
discussion of our implementation of section 123(a) of the CAA, 2021, 
refer to our CY 2022 PFS final rule (86 FR 64996).
    In this proposed rule, we are proposing to implement provisions of 
section 1834(m) of the Act (including the amendments made by the CAA, 
2021) and provisions of the CAA, 2022 that extend certain Medicare 
telehealth flexibilities adopted during the PHE for 151 days after the 
end of the PHE.
    Sections 301, 302, 303, 304, and 305 of Division P, Title III, 
Subtitle A of the CAA, 2022 amended section 1834(m) of the Act to 
generally extend certain PHE-related telehealth policies for services 
that are on the Medicare Telehealth Services List as of the date of 
enactment (March 15, 2021). Specifically, section 301(a) of the CAA, 
2022 amended section 1834(m)(4)(C) of the Act to add a new clause 
(iii), which temporarily expands the scope of telehealth originating 
sites for those services to include any site in the United States where 
the beneficiary is located at the time of the telehealth service, 
including an individual's home, for a 151-day period beginning on the 
first day after the end of the PHE for COVID-19. Section 301(a) also 
amended section 1834(m)(7)(A) of the Act to apply the expanded scope of 
telehealth originating site policy to include any location in the 
United States in new clause (iii) of section 1834(m)(4)(C) of the Act 
during the 151-day period for telehealth services furnished for the 
purposes of diagnosis, evaluation, or treatment of a mental health 
disorder and to individuals with a SUD diagnosis for purposes of 
treatment of the SUD or a co-occurring mental health disorder for this 
151-day post-PHE extension period. In addition to this provision, 
section 301(b) of the CAA, 2022 amended section 1834(m)(2)(B) of the 
Act to add a new clause (iii) that allows payment of an originating 
site facility fee to an originating site with respect to those 
telehealth services furnished during the 151-day period only if the 
originating site is one that meets the geographic requirements in 
section 1834(m)(4)(C)(i) of the Act, and is a setting included on the 
enumerated list of originating sites under section 1834(m)(4)(C)(ii) of 
the Act (other than the patient's home).
    Section 302 of the CAA, 2022 amended section 1834(m)(4)(E) of the 
Act to temporarily expand the definition of eligible telehealth 
practitioners for the 151-day period beginning on the first day after 
the end of the PHE for COVID-19 to include qualified occupational 
therapists, qualified physical therapists, qualified speech-language 
pathologists, and qualified audiologists.
    Section 303 of the CAA, 2022 amended section 1834(m)(8) of the Act 
to temporarily continue payment for telehealth services furnished by 
FQHCs and RHCs for the 151-day period beginning on the first day after 
the end of the COVID-19 PHE using the methodology established for 
telehealth services furnished by FQHCs and RHCs during the PHE, which, 
in accordance with section 1834(m)(8)(B) of the Act, is based on 
payment rates that are similar to the national average payment rates 
for comparable telehealth services under the PFS.
    Section 304(a) of the CAA, 2022 amended section 1834(m)(7)(B)(i) of 
the Act to delay the requirement for an in-person visit with the 
physician or practitioner within 6 months prior to the initial mental 
health telehealth service, and again at subsequent intervals as the 
Secretary determines appropriate. In light of this amendment, the in-
person requirements for telehealth services furnished for purposes of 
diagnosis, evaluation, or treatment of a mental health disorder will 
again be effective on the 152nd day after the PHE ends. In addition, 
section 304(b) and (c) of the CAA, 2022 modified sections 1834(y) and 
1834(o)(4) of the Act, respectively, to similarly delay in-person visit 
requirements for mental health visits furnished by Rural Health Clinics 
and Federally Qualified Health Centers via telecommunications 
technology. Therefore, we are proposing to revise the regulatory text 
at Sec.  410.78(b)(3)(xiv) to recognize the delay of the in-person 
requirements for mental health visits furnished by RHCs and FQHCs 
through telecommunication technology under Medicare until the 152nd day 
after the PHE for COVID-19, to conform with the statute. See section 
II.B.3. of this proposed rule for our proposal to implement similar 
changes for RHC and FQHC mental health visits.

[[Page 45899]]

    Finally, section 305 of the CAA, 2022 added a new paragraph (9) to 
section 1834(m) of the Act to require the Secretary to continue to 
provide for coverage and payment of telehealth services included on the 
Medicare Telehealth Services List as of the March 15, 2022, date of 
enactment that are furnished via an audio-only telecommunications 
system during the 151-day period beginning on the first day after the 
end of the PHE for COVID-19. The new paragraph applies only to 
telehealth services specified on the Medicare Telehealth Services List 
under section 1834(m)(4)(F)(i) of the Act that are designated to as 
eligible to be furnished via audio-only technology as of the date of 
enactment of the CAA, 2022 (that is, March 15, 2022). These are the 
services for which CMS waived the requirements of section 1834(m)(1) of 
the Act and the first sentence of Sec.  410.78(a)(3) for use of 
interactive telecommunications systems to furnish telehealth services, 
to the extent they require use of video technology, during the PHE. 
Under this waiver, CMS permitted the audio-only telephone E/M services 
and certain behavioral health counseling and educational services to be 
furnished via audio-only equipment during the PHE for COVID-19. CMS is 
proposing to continue to make payment for services included on the 
Medicare Telehealth Services List as of March 15, 2022 that are 
furnished via an audio-only telecommunications system for the 151-day 
period beginning on the first day after the end of the PHE. We read 
section 305 of the CAA, 2022 to require that we continue to make 
payment for services furnished via audio-only telecommunications 
systems (each described by a HCPCS code, including their successor 
codes) for the 151-day period after the end of the PHE. These services 
include certain behavioral health, counseling, and educational 
services. A list of the services that involve audio-only interaction 
but are included on the Medicare Telehealth Services List for the 
duration of the PHE is available at the CMS website, https://www.cms.gov/Medicare/Medicare-General-Information/Telehealth/Telehealth-Codes.
    Section 309 of Division P, Title III, Subtitle A of the CAA, 2022 
authorizes the Secretary to implement the amendments described above 
made by sections 301 through 305 through program instruction or 
otherwise. Given that the end date of the PHE is not yet known and 
could occur before the rulemaking process for the CY 2023 PFS is 
complete, and that the changes made by these provisions are very 
specific and concise, we are providing notice that we intend to issue 
program instructions or other subregulatory guidance to effectuate the 
changes described above, other than the proposed revisions to Sec.  
410.78, in the near future. We believe this approach will serve to 
ensure a smooth transition after the end of the PHE for COVID-19.
f. Use of Modifiers for Medicare Telehealth Services Following the End 
of the PHE for COVID-19
    Prior to CY 2017, Medicare telehealth services furnished via 
interactive audio and video telecommunications systems were reported 
using the GT modifier. In the CY 2017 PFS Final Rule, CMS finalized 
creation of a new Place of Service (POS) code for Medicare telehealth, 
POS ``02'' (81 FR 80199-80201). When a physician or practitioner 
submits a claim for their services, including claims for telehealth 
services, they include a place of service (POS) code that is used to 
determine whether a service is paid using the facility or non-facility 
rate. Under the PFS, there are two payment rates for many physicians' 
services: the facility rate and the non-facility (or office) rate. The 
PFS non-facility rate is the single amount paid to a physician or other 
practitioner for services furnished in their office. The PFS facility 
rate is the amount generally paid to a professional when a service is 
furnished in a setting of care, like a hospital, where Medicare is 
making a separate payment to a facility entity in addition to the 
payment to the billing physician or practitioner. This separate 
payment, often referred to as a ``facility fee,'' reflects the 
facility's costs associated with the service (clinical staff, supplies, 
and equipment) and is paid in addition to what is paid to the 
professional under the PFS. POS ``02'' indicates payment at the 
facility payment rate.
    As discussed in the March 31, 2020 IFC, (refer to 85 FR 19230), we 
stated that, as physician practices suddenly transitioned a potentially 
significant portion of their services from in-person to telehealth 
visits in the context of the PHE for the COVID-19 pandemic, the 
relative resource costs of furnishing these services via telehealth may 
not significantly differ from the resource costs involved when these 
services are furnished in-person. Therefore, we instructed physicians 
and practitioners who bill for Medicare telehealth services to report 
the POS code that would have been reported had the service been 
furnished in person. This would allow our systems to make appropriate 
payment for services furnished via Medicare telehealth, which, if not 
for the PHE for the COVID-19 pandemic, would have been furnished in-
person, at the same rate they would have been paid if the services were 
furnished in-person. In order to effectuate this change, we finalized 
on an interim basis (85 FR 19233) the use of the CPT telehealth 
modifier, modifier ``95'', for the duration of the PHE for COVID-19, 
which should be applied to claim lines that describe services furnished 
via telehealth and that the practitioner should report the POS code 
where the service would have occurred had it not been furnished via 
telehealth.
    We further noted that we are maintaining the facility payment rate 
for services billed using the general telehealth POS code ``02'', 
should practitioners choose to maintain their current billing practices 
for Medicare telehealth during the PHE for the COVID-19 pandemic.
    We propose that Medicare telehealth services furnished on or before 
the 151st day after the end of the PHE, in alignment with the 
extensions of telehealth-related flexibilities in the CAA, 2022, will 
continue to be processed for payment as Medicare telehealth claims when 
accompanied with the modifier ``95''. We further propose that 
physicians and practitioners can continue to report the place of 
service code that would have been reported had the service been 
furnished in-person during the 151-day period after the end of the PHE, 
as finalized on an interim basis in the March 31 IFC (85 FR 19233). 
Medicare telehealth services performed with dates of service occurring 
on or after the 152nd day after the end of the PHE will revert to pre-
PHE rules and will no longer require modifier ``95'' to be appended to 
the claim, but the appropriate place of service (POS) indicator will 
need to be included on the claim to be processed for payment as 
Medicare telehealth claims in order to properly identify the place 
where the service was furnished. For Medicare telehealth services 
furnished on or after the 152nd day after the end of the PHE, the POS 
indicators for Medicare telehealth will be:
    <bullet> POS ``02''--which would be redefined, if finalized, as 
Telehealth Provided Other than in Patient's Home (Descriptor: The 
location where health services and health related services are provided 
or received, through telecommunication technology. Patient is not 
located in their home when receiving health services or health related 
services through telecommunication technology.); and

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    <bullet> POS ``10''--Telehealth Provided in Patient's Home 
(Descriptor: The location where health services and health related 
services are provided or received through telecommunication technology. 
Patient is located in their home (which is a location other than a 
hospital or other facility where the patient receives care in a private 
residence) when receiving health services or health related services 
through telecommunication technology.).
    We remind readers that we defined ``home'' in our CY 2022 PFS final 
rule (86 FR 65059) as: ``both in general and for this purpose, a 
beneficiary's home can include temporary lodging, such as hotels and 
homeless shelters. We clarified that for circumstances where the 
patient, for privacy or other personal reasons, chooses to travel a 
short distance from the exact home location during a telehealth 
service, the service is still considered to be furnished `in the home 
of an individual' for purposes of section 1834(m)(4)(C)(ii)(X) of the 
Act.''
    Once the flexibilities for the geographic restrictions and the site 
of service waivers for Medicare telehealth services expire (on the 
152nd day after the end of the PHE, per the CAA, 2022), POS ``02'' will 
once again be required for all Medicare telehealth claims. The 
exceptions include claims for Medicare telehealth mental health 
services, clinical assessments for patients with ESRD that are 
receiving home dialysis, and Medicare telehealth mental health services 
that are co-occurring with substance use treatment that are furnished 
with the patient in their home (that is, the originating site is in a 
private residence and not a hospital or other facility setting), in 
which case POS ``10'' could be used by the billing practitioner. On or 
after the 152nd day after the PHE has expired, payment for Medicare 
telehealth services using either of the Medicare telehealth POS codes 
will be made at the PFS facility payment rate, in accordance with 
established policy outside the circumstances of the PHE. We propose to 
align those telehealth services described as taking place in the 
beneficiary's home, using POS ``10'' for Medicare telehealth, and those 
services not provided in a patient's home, using POS ``02'' for 
Medicare telehealth, to be made at the same facility payment amount. We 
believe that the facility payment amount best reflects the practice 
expenses, both direct and indirect, involved in furnishing services via 
telehealth (please see section II.B. of this proposed rule for further 
discussion regarding practice expense).
    We further propose that, beginning January 1, 2023, a physician or 
other qualified health care practitioner billing for telehealth 
services furnished using audio-only communications technology shall 
append CPT modifier ``93'' (Synchronous Telemedicine Service Rendered 
Via Telephone or Other Real-Time Interactive Audio-Only 
Telecommunications System: Synchronous telemedicine service is defined 
as a real-time interaction between a physician or other qualified 
health care professional and a patient who is located away at a distant 
site from the physician or other qualified health care professional. 
The totality of the communication of information exchanged between the 
physician or other qualified health care professional and the patient 
during the course of the synchronous telemedicine service must be of an 
amount and nature that is sufficient to meet the key components and/or 
requirements of the same service when rendered via a face-to-face 
interaction) to Medicare telehealth claims (for those services for 
which the use of audio-only technology is permitted under Sec.  
410.78(a)(3)), to identify them as having been furnished using audio-
only technology. We note that CMS has instructed RHCs, FQHCs, and OTPs 
to append Medicare modifier ``FQ'' (Medicare telehealth service was 
furnished using audio-only communication technology) for allowable 
audio-only services furnished in those settings; however, consistent 
with our proposal for audio-only services furnished under the PFS, we 
are also proposing to require RHCs, FQHCs, and OTPs to use modifier 93 
when billing for eligible mental health services furnished via audio-
only telecommunications technology. We believe that using modifier 
``93'', which is a CPT modifier, will simplify billing, as this 
modifier is used by payers outside of Medicare. Currently, these 
modifiers can only be applied to Medicare telehealth mental health 
services and those telehealth services for the treatment of a SUD or a 
co-occurring mental health disorder when the originating site is the 
beneficiary's home.
    Supervising practitioners continue to be required to append the 
``FR'' modifier on any applicable telehealth claim when required to be 
present through an interactive real-time, audio and video 
telecommunications link, as reflected in each service's requirement.
2. Other Non-Face-to-Face Services Involving Communications Technology 
Under the PFS
a. Expiration of PHE Flexibilities for Direct Supervision Requirements
    Under Medicare Part B, certain types of services, including 
diagnostic tests, services incident to physicians' or practitioners' 
professional services, and other services, are required to be furnished 
under specific minimum levels of supervision by a physician or 
practitioner.
    For professional services furnished incident to the services of the 
billing physician or practitioner (see Sec.  410.26) and many 
diagnostic tests (see Sec.  410.32), direct supervision is required. 
Additionally, for pulmonary rehabilitation services (see Sec.  410.47) 
and for cardiac rehabilitation and intensive cardiac rehabilitation 
services (see Sec.  410.49), statutory requirements for immediate 
availability and accessibility of a physician are met if the physician 
meets the requirements for direct supervision for physician office 
services at Sec.  410.26 and for hospital outpatient services at Sec.  
410.27. Outside the circumstances of the PHE, direct supervision 
requires the immediate availability of the supervising physician or 
other practitioner, but the professional need not be present in the 
same room during the service. We have established this ``immediate 
availability'' requirement to mean in-person, physical, not virtual, 
availability (please see the April 6, 2020 IFC (85 FR 19245) and the CY 
2022 PFS final rule (86 FR 65062)).
    Through the March 31, 2020 COVID-19 IFC, we changed the definition 
of ``direct supervision'' during the PHE for COVID-19 (85 FR 19245 
through 19246) as it pertains to supervision of diagnostic tests, 
physicians' services, and some hospital outpatient services, to allow 
the supervising professional to be immediately available through 
virtual presence using real-time audio/video technology, instead of 
requiring their physical presence. In the CY 2021 PFS final rule (85 FR 
84538 through 84540), we finalized continuation of this policy through 
the later of the end of the calendar year in which the PHE for COVID-19 
ends or December 31, 2021. In the March 31, 2020 IFC (85 FR 19246) and 
in our CY 2022 PFS final rule (see 85 FR 65063), we also noted that the 
temporary exception to allow immediate availability for direct 
supervision through virtual presence facilitates the provision of 
telehealth services by clinical staff of physicians and other 
practitioners' incident to their own professional services. This is 
especially

[[Page 45901]]

relevant for services such as physical therapy, occupational therapy, 
and speech language pathology services, since those practitioners can 
only bill Medicare for telehealth services under Medicare telehealth 
waivers that are effective only during the PHE for COVID-19 (per the 
emergency waiver authority established in section 1135(b)(8) of the 
Act), and for 151 days after the final day of the PHE for COVID-19, as 
mandated by the CAA, 2022. We note that sections 1834(m)(4)(D) and (E) 
of the Act specify the types of clinicians who may furnish and bill for 
Medicare telehealth service. Outside of the PHE and the 151-day period 
after the PHE ends, such clinicians include only physicians as defined 
in section 1861(r) of the Act and practitioners described in section 
1842(b)(18)(C) of the Act. We remind readers that after December 31 of 
the year in which the PHE ends, the pre-PHE rules for direct 
supervision at Sec.  410.32(b)(3)(ii) would apply. As noted in the CY 
2022 PFS final rule (86 FR 65062), this means the temporary exception 
to allow immediate availability for direct supervision through virtual 
presence facilitates the provision of telehealth services by clinical 
staff of physicians and other practitioners incident to their own 
professional services would no longer apply, so telehealth services can 
no longer be performed by clinical staff incident to a physician's 
professional service.
    While we are not proposing to make the temporary exception to allow 
immediate availability for direct supervision through virtual presence 
permanent, as with last year's rulemaking (86 FR 39149-50), we continue 
to seek information on whether the flexibility to meet the immediate 
availability requirement for direct supervision through the use of 
real-time, audio/video technology should potentially be made permanent. 
We also seek comment regarding the possibility of permanently allowing 
immediate availability for direct supervision through virtual presence 
using real-time, audio/video technology for only a subset of services, 
as we recognize that it may be inappropriate to allow direct 
supervision without physical presence for some services due to 
potential concerns over patient safety. As discussed in last year's 
final rule (86 FR 65063), and based on gaps in the currently available 
evidence, we are in need of more information as we consider whether to 
make permanent a temporary exception to our direct supervision policy.
3. Telehealth Originating Site Facility Fee Update
    Section 1834(m)(2)(B) of the Act established the initial Medicare 
telehealth originating site facility fee for telehealth services 
furnished from October 1, 2001 through December 31, 2002, at $20.00, 
and specifies that for telehealth services furnished on or after 
January 1 of each subsequent calendar year, the telehealth originating 
site facility fee is increased by the percentage increase in the 
Medicare Economic Index (MEI) as defined in section 1842(i)(3) of the 
Act. The proposed MEI increase for CY 2023 is 3.7 percent and is based 
on the most current forecast of the percentage increase of the 2006-
based MEI for the second quarter of 2022 (4.1 percent), and the most 
recent estimate of the historical productivity adjustment for calendar 
year 2021 (0.4 percent).
    Therefore, for CY 2023, the proposed payment amount for HCPCS code 
Q3014 (Telehealth originating site facility fee) is $28.61. The final 
Medicare telehealth originating site facility fee will be revised for 
the final rule based on the historical data through the second quarter 
2022 and the most recently available total factor productivity data. 
The Medicare telehealth originating site facility fee and the MEI 
increase by the applicable time period are shown in Table 11.
BILLING CODE 4120-01-P

[[Page 45902]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.012

BILLING CODE 4120-01-C

E. Valuation of Specific Codes

1. Background: Process for Valuing New, Revised, and Potentially 
Misvalued Codes
    Establishing valuations for newly created and revised CPT codes is 
a routine part of maintaining the PFS. Since the inception of the PFS, 
it has also been a priority to revalue services regularly to make sure 
that the payment rates reflect the changing trends in the practice of 
medicine and current prices for inputs used in the PE calculations. 
Initially, this was accomplished primarily through the 5-year review 
process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 
2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 
2011, and revised MP RVUs in CY 2010, CY 2015, and CY 2020. Under the 
5-year review process, revisions in RVUs were proposed and finalized 
via rulemaking. In addition to the 5-year reviews, beginning with CY 
2009, CMS and the RUC identified a number of potentially misvalued 
codes each year using various identification screens, as discussed in 
section II.C. of this proposed rule, Potentially Misvalued Services 
under the PFS. Historically, when we received RUC recommendations, our 
process had been to establish interim final RVUs for the potentially 
misvalued codes, new codes, and any other codes for which there were 
coding changes in the final rule with comment period for a year. Then, 
during the 60-day period following the publication of the final rule 
with comment period, we solicit public comment about those valuations. 
For services furnished during the calendar year following the 
publication of interim final rates, we paid for services based upon the 
interim final values established in the final rule. In the final rule 
with comment period for the subsequent year, we consider and responded 
to public comments received on the interim final values, and typically 
make any appropriate adjustments and finalize those values.
    In the CY 2015 PFS final rule with comment period (79 FR 67547), we 
finalized a new process for establishing values for new, revised and 
potentially misvalued codes. Under the new process, we include proposed 
values for these services in the proposed rule, rather than 
establishing them as interim final in the final rule with comment 
period. Beginning with the CY 2017 PFS proposed rule (81 FR 46162), the 
new process was applicable to all codes, except for new codes that 
describe truly new services. For CY 2017, we proposed new values in the 
CY 2017 PFS proposed rule for the vast majority of new, revised, and 
potentially misvalued codes for which we received complete RUC 
recommendations by February 10, 2016. To complete the transition to 
this new process, for codes for which we established interim final 
values in the CY 2016 PFS final rule with comment period (81 FR 80170), 
we reviewed the comments received during the 60-day public comment 
period following release of the CY 2016 PFS final rule with comment 
period (80 FR 70886), and re-proposed values for those codes in the CY 
2017 PFS proposed rule.
    We considered public comments received during the 60-day public 
comment period for the proposed rule before establishing final values 
in the CY 2017 PFS final rule. As part of our established process, we 
will adopt interim final values only in the case of wholly new services 
for which there are no predecessor codes or values and for which we do 
not receive recommendations in time to propose values.
    As part of our obligation to establish RVUs for the PFS, we 
thoroughly review and consider available information including 
recommendations and supporting information from the RUC, the Health 
Care Professionals Advisory Committee (HCPAC), public commenters, 
medical literature,

[[Page 45903]]

Medicare claims data, comparative databases, comparison with other 
codes within the PFS, as well as consultation with other physicians and 
healthcare professionals within CMS and the Federal Government as part 
of our process for establishing valuations. Where we concur that the 
RUC's recommendations, or recommendations from other commenters, are 
reasonable and appropriate and are consistent with the time and 
intensity paradigm of physician work, we proposed those values as 
recommended. Additionally, we continually engage with interested 
parties, including the RUC, with regard to our approach for accurately 
valuing codes, and as we prioritize our obligation to value new, 
revised, and potentially misvalued codes. We continue to welcome 
feedback from all interested parties regarding valuation of services 
for consideration through our rulemaking process.
2. Methodology for Establishing Work RVUs
    For each code identified in this section, we conduct a review that 
includes the current work RVU (if any), RUC-recommended work RVU, 
intensity, time to furnish the preservice, intraservice, and 
postservice activities, as well as other components of the service that 
contribute to the value. Our reviews of recommended work RVUs and time 
inputs generally include, but have not been limited to, a review of 
information provided by the RUC, the HCPAC, and other public 
commenters, medical literature, and comparative databases, as well as a 
comparison with other codes within the PFS, consultation with other 
physicians and health care professionals within CMS and the Federal 
Government, as well as Medicare claims data. We also assess the 
methodology and data used to develop the recommendations submitted to 
us by the RUC and other public commenters and the rationale for the 
recommendations. In the CY 2011 PFS final rule with comment period (75 
FR 73328 through 73329), we discussed a variety of methodologies and 
approaches used to develop work RVUs, including survey data, building 
blocks, crosswalks to key reference or similar codes, and magnitude 
estimation (see the CY 2011 PFS final rule with comment period (75 FR 
73328 through 73329) for more information). When referring to a survey, 
unless otherwise noted, we mean the surveys conducted by specialty 
societies as part of the formal RUC process.
    Components that we use in the building block approach may include 
preservice, intraservice, or postservice time and post-procedure 
visits. When referring to a bundled CPT code, the building block 
components could include the CPT codes that make up the bundled code 
and the inputs associated with those codes. We use the building block 
methodology to construct, or deconstruct, the work RVU for a CPT code 
based on component pieces of the code. Magnitude estimation refers to a 
methodology for valuing work that determines the appropriate work RVU 
for a service by gauging the total amount of work for that service 
relative to the work for a similar service across the PFS without 
explicitly valuing the components of that work. In addition to these 
methodologies, we frequently utilize an incremental methodology in 
which we value a code based upon its incremental difference between 
another code and another family of codes. Section 1848(c)(1)(A) of the 
Act specifically defines the work component as the resources that 
reflect time and intensity in furnishing the service. Also, the 
published literature on valuing work has recognized the key role of 
time in overall work. For particular codes, we refine the work RVUs in 
direct proportion to the changes in the best information regarding the 
time resources involved in furnishing particular services, either 
considering the total time or the intraservice time.
    Several years ago, to aid in the development of preservice time 
recommendations for new and revised CPT codes, the RUC created 
standardized preservice time packages. The packages include preservice 
evaluation time, preservice positioning time, and preservice scrub, 
dress and wait time. Currently, there are preservice time packages for 
services typically furnished in the facility setting (for example, 
preservice time packages reflecting the different combinations of 
straightforward or difficult procedure, and straightforward or 
difficult patient). Currently, there are three preservice time packages 
for services typically furnished in the nonfacility setting.
    We developed several standard building block methodologies to value 
services appropriately when they have common billing patterns. In cases 
where a service is typically furnished to a beneficiary on the same day 
as an E/M service, we believe that there is overlap between the two 
services in some of the activities furnished during the preservice 
evaluation and postservice time. Our longstanding adjustments have 
reflected a broad assumption that at least one-third of the work time 
in both the preservice evaluation and postservice period is duplicative 
of work furnished during the E/M visit.
    Accordingly, in cases where we believe that the RUC has not 
adequately accounted for the overlapping activities in the recommended 
work RVU and/or times, we adjust the work RVU and/or times to account 
for the overlap. The work RVU for a service is the product of the time 
involved in furnishing the service multiplied by the intensity of the 
work. Preservice evaluation time and postservice time both have a long-
established intensity of work per unit of time (IWPUT) of 0.0224, which 
means that 1 minute of preservice evaluation or postservice time 
equates to 0.0224 of a work RVU.
    Therefore, in many cases when we remove 2 minutes of preservice 
time and 2 minutes of postservice time from a procedure to account for 
the overlap with the same day E/M service, we also remove a work RVU of 
0.09 (4 minutes x 0.0224 IWPUT) if we do not believe the overlap in 
time had already been accounted for in the work RVU. The RUC has 
recognized this valuation policy and, in many cases, now addresses the 
overlap in time and work when a service is typically furnished on the 
same day as an E/M service.
    The following paragraphs contain a general discussion of our 
approach to reviewing RUC recommendations and developing proposed 
values for specific codes. We also include a summary of interested 
party reactions to our approach when available. We note that many 
commenters and interested parties have expressed concerns over the 
years with our reviews of and updates to work RVUs based on changes in 
the best available information regarding the time resources involved in 
furnishing individual services. We have been particularly concerned 
with the RUC's and various specialty societies' objections to our 
approach given the significance of their recommendations to our process 
for valuing services and since much of the information we use to update 
the RVUs is derived from their survey process. We are obligated under 
the statute to consider both time and intensity in establishing work 
RVUs for PFS services. As explained in the CY 2016 PFS final rule with 
comment period (80 FR 70933), we recognize that adjusting work RVUs for 
changes in time is not always a straightforward process, so we have 
applied various methodologies to identify several potential work values 
for individual codes.
    We have observed that for many codes reviewed by the RUC, 
recommended work RVUs have appeared to be incongruous with recommended 
assumptions regarding the resource costs in time. This has been the 
case for

[[Page 45904]]

a significant portion of codes for which we recently established or 
proposed work RVUs that are based on refinements to the RUC-recommended 
values. When we have adjusted work RVUs to account for significant 
changes in time, we have started by looking at the change in the time 
in the context of the RUC-recommended work RVU. When the recommended 
work RVUs do not appear to account for significant changes in time, we 
have employed the different approaches to identify potential values 
that reconcile the recommended work RVUs with the recommended time 
values. Many of these methodologies, such as survey data, building 
block, crosswalks to key reference or similar codes, and magnitude 
estimation have long been used in developing work RVUs under the PFS. 
In addition to these, we sometimes use the relationship between the 
``old time'' values and the new time values for particular services to 
identify alternative work RVUs based on changes in time components.
    In so doing, rather than ignoring the RUC-recommended value, we 
have used the recommended values as a starting reference and then 
applied one of these several methodologies to account for the 
reductions in time that we believe were not otherwise reflected in the 
RUC-recommended value. If we believe that such changes in time are 
already accounted for in the RUC's recommendation, then we do not make 
such adjustments. Likewise, we do not arbitrarily apply time ratios to 
current work RVUs to calculate proposed work RVUs. We use the ratios to 
identify potential work RVUs and consider these work RVUs as potential 
options relative to the values developed through other options.
    We do not imply that the decrease in time as reflected in survey 
values should always equate to a one-to-one or linear decrease in newly 
valued work RVUs. Instead, we believe that, since the two components of 
work are time and intensity, absent an obvious or explicitly stated 
rationale for why the relative intensity of a given procedure has 
increased, significant decreases in time should be reflected in 
decreases to work RVUs. If the RUC's recommendation has appeared to 
disregard or dismiss the changes in time, without a persuasive 
explanation of why such a change should not be accounted for in the 
overall work of the service, then we have generally used one of the 
aforementioned methodologies to identify potential work RVUs, including 
the methodologies intended to account for the changes in the resources 
involved in furnishing the procedure.
    Several interested parties, including the RUC, have expressed 
general objections to our use of these methodologies to adjust for 
reductions in time, suggesting that our adjustments to the RUC-
recommended work RVUs are inappropriate. Other interested parties have 
expressed general concerns with our refinements to RUC-recommended 
values. In the CY 2017 PFS proposed rule (81 FR 46162), we requested 
comments regarding potential alternatives to making adjustments that 
would recognize overall estimates of work in the context of changes in 
the resource of time for particular services; however, we did not 
receive any specific potential alternatives. In the CY 2017 PFS final 
rule (81 FR 80272 through 80277), we responded in detail to several 
comments that we received regarding our approach to RUC-recommended 
work times and RVUs. As described earlier in this section, crosswalks 
to key reference or similar codes are one of the many methodological 
approaches we have employed to identify potential values that reconcile 
the RUC-recommend work RVUs with the recommended time values when the 
RUC-recommended work RVUs did not appear to account for significant 
changes in time.
3. Methodology for the Direct PE Inputs To Develop PE RVUs
a. Background
    On an annual basis, the RUC provides us with recommendations 
regarding PE inputs for new, revised, and potentially misvalued codes. 
We review the RUC-recommended direct PE inputs on a code by code basis. 
Like our review of recommended work RVUs, our review of recommended 
direct PE inputs generally includes, but is not limited to, a review of 
information provided by the RUC, HCPAC, and other public commenters, 
medical literature, and comparative databases, as well as a comparison 
with other codes within the PFS, and consultation with physicians and 
health care professionals within CMS and the Federal Government, as 
well as Medicare claims data. We also assess the methodology and data 
used to develop the recommendations submitted to us by the RUC and 
other public commenters and the rationale for the recommendations. When 
we determine that the RUC's recommendations appropriately estimate the 
direct PE inputs (clinical labor, disposable supplies, and medical 
equipment) required for the typical service, are consistent with the 
principles of relativity, and reflect our payment policies, we use 
those direct PE inputs to value a service. If not, we refine the 
recommended PE inputs to better reflect our estimate of the PE 
resources required for the service. We also confirm whether CPT codes 
should have facility and/or nonfacility direct PE inputs and refine the 
inputs accordingly.
    Our review and refinement of the RUC-recommended direct PE inputs 
includes many refinements that are common across codes, as well as 
refinements that are specific to particular services. Table 14 details 
our refinements of the RUC's direct PE recommendations at the code-
specific level. In section II.B. of this proposed rule, Determination 
of PE RVUs, we address certain proposed refinements that would be 
common across codes. We address refinements to particular codes in the 
portions of section II.B. that focus on particular codes. We note that 
for each refinement, we indicate the potential impact on direct costs 
for that service. We note that, on average, in any case where the 
impact on the direct cost for a particular refinement is $0.35 or less, 
the refinement has no impact on the PE RVUs. This calculation considers 
both the impact on the direct portion of the PE RVU, as well as the 
impact on the indirect allocator for the average service. We also note 
that many of the refinements listed in Table 13 result in changes under 
the $0.35 threshold and would be unlikely to result in a change to the 
RVUs.
    We note that the proposed direct PE inputs for CY 2023 are 
displayed in the CY 2023 direct PE input files, available on the CMS 
website under the downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. The inputs 
displayed there have been used in developing the proposed CY 2023 PE 
RVUs as displayed in Addendum B.
b. Common Refinements
(1) Changes in Work Time
    Some direct PE inputs are directly affected by revisions in work 
time. Specifically, changes in the intraservice portions of the work 
time and changes in the number or level of postoperative visits 
associated with the global periods result in corresponding changes to 
direct PE inputs. The direct PE input recommendations generally 
correspond to the work time values associated with services. We believe 
that inadvertent discrepancies between work time values and direct PE 
inputs should be refined

[[Page 45905]]

or adjusted in the establishment of proposed direct PE inputs to 
resolve the discrepancies.
(2) Equipment Time
    Prior to CY 2010, the RUC did not generally provide CMS with 
recommendations regarding equipment time inputs. In CY 2010, in the 
interest of ensuring the greatest possible degree of accuracy in 
allocating equipment minutes, we requested that the RUC provide 
equipment times along with the other direct PE recommendations, and we 
provided the RUC with general guidelines regarding appropriate 
equipment time inputs. We appreciate the RUC's willingness to provide 
us with these additional inputs as part of its PE recommendations.
    In general, the equipment time inputs correspond to the service 
period portion of the clinical labor times. We clarified this principle 
over several years of rulemaking, indicating that we consider equipment 
time as the time within the intraservice period when a clinician is 
using the piece of equipment plus any additional time that the piece of 
equipment is not available for use for another patient due to its use 
during the designated procedure. For those services for which we 
allocate cleaning time to portable equipment items, because the 
portable equipment does not need to be cleaned in the room where the 
service is furnished, we do not include that cleaning time for the 
remaining equipment items, as those items and the room are both 
available for use for other patients during that time. In addition, 
when a piece of equipment is typically used during follow-up 
postoperative visits included in the global period for a service, the 
equipment time will also reflect that use.
    We believe that certain highly technical pieces of equipment and 
equipment rooms are less likely to be used during all of the preservice 
or postservice tasks performed by clinical labor staff on the day of 
the procedure (the clinical labor service period) and are typically 
available for other patients even when one member of the clinical staff 
may be occupied with a preservice or postservice task related to the 
procedure. We also noted that we believe these same assumptions will 
apply to inexpensive equipment items that are used in conjunction with 
and located in a room with non-portable highly technical equipment 
items since any items in the room in question will be available if the 
room is not being occupied by a particular patient. For additional 
information, we refer readers to our discussion of these issues in the 
CY 2012 PFS final rule with comment period (76 FR 73182) and the CY 
2015 PFS final rule with comment period (79 FR 67639).
(3) Standard Tasks and Minutes for Clinical Labor Tasks
    In general, the preservice, intraservice, and postservice clinical 
labor minutes associated with clinical labor inputs in the direct PE 
input database reflect the sum of particular tasks described in the 
information that accompanies the RUC-recommended direct PE inputs, 
commonly called the ``PE worksheets.'' For most of these described 
tasks, there is a standardized number of minutes, depending on the type 
of procedure, its typical setting, its global period, and the other 
procedures with which it is typically reported. The RUC sometimes 
recommends a number of minutes either greater than or less than the 
time typically allotted for certain tasks. In those cases, we review 
the deviations from the standards and any rationale provided for the 
deviations. When we do not accept the RUC-recommended exceptions, we 
refine the proposed direct PE inputs to conform to the standard times 
for those tasks. In addition, in cases when a service is typically 
billed with an E/M service, we remove the preservice clinical labor 
tasks to avoid duplicative inputs and to reflect the resource costs of 
furnishing the typical service.
    We refer readers to section II.B. of this proposed rule, 
Determination of PE RVUs, for more information regarding the 
collaborative work of CMS and the RUC in improvements in standardizing 
clinical labor tasks.
(4) Recommended Items That Are Not Direct PE Inputs
    In some cases, the PE worksheets included with the RUC's 
recommendations include items that are not clinical labor, disposable 
supplies, or medical equipment or that cannot be allocated to 
individual services or patients. We addressed these kinds of 
recommendations in previous rulemaking (78 FR 74242), and we do not use 
items included in these recommendations as direct PE inputs in the 
calculation of PE RVUs.
(5) New Supply and Equipment Items
    The RUC generally recommends the use of supply and equipment items 
that already exist in the direct PE input database for new, revised, 
and potentially misvalued codes. However, some recommendations include 
supply or equipment items that are not currently in the direct PE input 
database. In these cases, the RUC has historically recommended that a 
new item be created and has facilitated our pricing of that item by 
working with the specialty societies to provide us copies of sales 
invoices. For CY 2023, we received invoices for several new supply and 
equipment items. Tables 15 and 16 detail the invoices received for new 
and existing items in the direct PE database. As discussed in section 
II.B. of this proposed rule, Determination of Practice Expense Relative 
Value Units, we encourage interested parties to review the prices 
associated with these new and existing items to determine whether these 
prices appear to be accurate. Where prices appear inaccurate, we 
encourage interested parties to submit invoices or other information to 
improve the accuracy of pricing for these items in the direct PE 
database by February 10th of the following year for consideration in 
future rulemaking, similar to our process for consideration of RUC 
recommendations.
    We remind interested parties that due to the relativity inherent in 
the development of RVUs, reductions in existing prices for any items in 
the direct PE database increase the pool of direct PE RVUs available to 
all other PFS services. Tables 15 and 16 also include the number of 
invoices received and the number of nonfacility allowed services for 
procedures that use these equipment items. We provide the nonfacility 
allowed services so that interested parties will note the impact the 
particular price might have on PE relativity, as well as to identify 
items that are used frequently, since we believe that interested 
parties are more likely to have better pricing information for items 
used more frequently. A single invoice may not be reflective of typical 
costs and we encourage interested parties to provide additional 
invoices so that we might identify and use accurate prices in the 
development of PE RVUs.
    In some cases, we do not use the price listed on the invoice that 
accompanies the recommendation because we identify publicly available 
alternative prices or information that suggests a different price is 
more accurate. In these cases, we include this in the discussion of 
these codes. In other cases, we cannot adequately price a newly 
recommended item due to inadequate information. Sometimes, no 
supporting information regarding the price of the item has been 
included in the recommendation. In other cases, the supporting 
information does not demonstrate that the item has been purchased at 
the listed price (for example, vendor price quotes instead of paid 
invoices). In cases where the information provided on the item allows 
us to identify clinically appropriate

[[Page 45906]]

proxy items, we might use existing items as proxies for the newly 
recommended items. In other cases, we include the item in the direct PE 
input database without any associated price. Although including the 
item without an associated price means that the item does not 
contribute to the calculation of the final PE RVU for particular 
services, it facilitates our ability to incorporate a price once we 
obtain information and are able to do so.
(6) Service Period Clinical Labor Time in the Facility Setting
    Generally speaking, our direct PE inputs do not include clinical 
labor minutes assigned to the service period because the cost of 
clinical labor during the service period for a procedure in the 
facility setting is not considered a resource cost to the practitioner 
since Medicare makes separate payment to the facility for these costs. 
We address code-specific refinements to clinical labor in the 
individual code sections.
(7) Procedures Subject to the Multiple Procedure Payment Reduction 
(MPPR) and the OPPS Cap
    We note that the list of services for the upcoming calendar year 
that are subject to the MPPR on diagnostic cardiovascular services, 
diagnostic imaging services, diagnostic ophthalmology services, and 
therapy services; and the list of procedures that meet the definition 
of imaging under section 1848(b)(4)(B) of the Act, and therefore, are 
subject to the OPPS cap; are displayed in the public use files for the 
PFS proposed and final rules for each year. The public use files for CY 
2023 are available on the CMS website under downloads for the CY 2023 
PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. 
For more information regarding the history of the MPPR policy, we refer 
readers to the CY 2014 PFS final rule with comment period (78 FR 74261 
through 74263).
    Effective January 1, 2007, section 5102(b)(1) of the Deficit 
Reduction Act of 2005 (Pub. L. 109-171) (DRA) amended section 
1848(b)(4) of the Act to require that, for imaging services, if-- (i) 
The technical component (TC) (including the TC portion of a global fee) 
of the service established for a year under the fee schedule without 
application of the geographic adjustment factor, exceeds (ii) The 
Medicare OPD fee schedule amount established under the prospective 
payment system (PPS) for hospital outpatient (HOPD) services under 
section 1833(t)(3)(D) of the Act for such service for such year, 
determined without regard to geographic adjustment under paragraph 
(t)(2)(D) of such section, the Secretary shall substitute the amount 
described in clause (ii), adjusted by the geographic adjustment factor 
[under the PFS], for the fee schedule amount for such TC for such year. 
As required by the section 1848(b)(4)(A) of the Act, for imaging 
services furnished on or after January 1, 2007, we cap the TC of the 
PFS payment amount for the year (prior to geographic adjustment) by the 
Outpatient Prospective Payment System (OPPS) payment amount for the 
service (prior to geographic adjustment). We then apply the PFS 
geographic adjustment to the capped payment amount. Section 
1848(b)(4)(B) of the Act defines imaging services as imaging and 
computer-assisted imaging services, including X-ray, ultrasound 
(including echocardiography), nuclear medicine (including PET), 
magnetic resonance imaging (MRI), computed tomography (CT), and 
fluoroscopy, but excluding diagnostic and screening mammography. For 
more information regarding the history of the cap on the TC of the PFS 
payment amount under the DRA (the ``OPPS cap''), we refer readers to 
the CY 2007 PFS final rule with comment period (71 FR 69659 through 
69662).
    For CY 2023, we identified new and revised codes to determine which 
services meet the definition of ``imaging services'' as defined above 
for purposes of this cap. Beginning for CY 2023, we propose to include 
the following services on the list of codes to which the OPPS cap 
applies: CPT codes 0493T (Contact near-infrared spectroscopy studies of 
lower extremity wounds (e.g., for oxyhemoglobin measurement)), 0640T 
(Noncontact near-infrared spectroscopy studies of flap or wound (e.g., 
for measurement of deoxyhemoglobin, oxyhemoglobin, and ratio of tissue 
oxygenation [StO2]); image acquisition, interpretation and report, each 
flap or wound), 0641T (Noncontact near-infrared spectroscopy studies of 
flap or wound (e.g., for measurement of deoxyhemoglobin, oxyhemoglobin, 
and ratio of tissue oxygenation [StO2]); image acquisition only, each 
flap or wound), 0642T (Noncontact near-infrared spectroscopy studies of 
flap or wound (e.g., for measurement of deoxyhemoglobin, oxyhemoglobin, 
and ratio of tissue oxygenation [StO2]); interpretation and report 
only, each flap or wound), 0651T (Magnetically controlled capsule 
endoscopy, esophagus through stomach, including intraprocedural 
positioning of capsule, with interpretation and report), 0658T 
(Electrical impedance spectroscopy of 1 or more skin lesions for 
automated melanoma risk score), 0689T (Quantitative ultrasound tissue 
characterization (non-elastographic), including interpretation and 
report, obtained without diagnostic ultrasound examination of the same 
anatomy (e.g., organ, gland, tissue, target structure)), 0690T 
(Quantitative ultrasound tissue characterization (non-elastographic), 
including interpretation and report, obtained with diagnostic 
ultrasound examination of the same anatomy (e.g., organ, gland, tissue, 
target structure) (List separately in addition to code for primary 
procedure)), 0694T (3-dimensional volumetric imaging and reconstruction 
of breast or axillary lymph node tissue, each excised specimen, 3-
dimensional automatic specimen reorientation, interpretation and 
report, real-time intraoperative), 0700T (Molecular fluorescent imaging 
of suspicious nevus; first lesion), 0701T (Molecular fluorescent 
imaging of suspicious nevus; each additional lesion (List separately in 
addition to code for primary procedure)), and 76XX0 (Ultrasound, 
nerve(s) and accompanying structures throughout their entire anatomic 
course in one extremity, comprehensive, including real-time cine 
imaging with image documentation, per extremity).
4. Valuation of Specific Codes for CY 2023
(1) Anterior Abdominal Hernia Repair (CPT Codes 157X1, 49X01, 49X02, 
49X03, 49X04, 49X05, 49X06, 49X07, 49X08, 49X09, 49X10, 49X11, 49X12, 
49X13, 49X14, and 49X15)
    In April 2021, the RUC reviewed an existing code that describes 
hernia repair, CPT code 49565 (Repair recurrent incisional or ventral 
hernia; reducible). CPT code 49565 was identified as being performed 
less than 50 percent of the time in the inpatient setting and being 
primarily performed in the outpatient setting. Interested parties 
requested referral to CPT to update the code's descriptor. In response 
to the disparate site of service and request to update the code's 
descriptor, CPT created new codes with 000-day global periods to 
describe this type of service. The codes within this family are 
differentiated by 3 characteristics: whether the hernia is initial or 
recurrent, whether it is reducible or strangulated, and the total 
length of the hernia. CPT also created two new codes that describe 
parastomal

[[Page 45907]]

hernia repair and an add-on code for removal of mesh.
    The RUC recommendations differentiate the post-operative periods 
for the codes within this family by whether there is a same-day 
discharge, overnight stay with a visit on the same date, or whether the 
patient is admitted to the hospital. We disagree with many of the RUC-
recommended work RVUs for the codes within this family that have a 
post-operative overnight stay built into their valuation. More 
specifically, we disagree with the RUC-recommended work RVUs for such 
codes because the RUC did not completely apply the 23-hour policy 
calculation (finalized in the CY 2011 PFS final rule (75 FR 73226)) in 
formulating its recommendations. Additionally, we disagree with the 
RUC-recommended work RVUs for the CPT codes in this family for which 
the RUC considered the patient to be admitted during the post-operative 
period because the RUC did not apply the 23-hour policy when 
formulating its recommendations.
    As we noted in the CY 2011 PFS final rule (75 FR 73226), the work 
RVUs for services that are typically performed in the outpatient 
setting and require a hospital stay of less than 24 hours may in some 
cases involve multiple overnight stays while the patient is still 
considered to be an outpatient for purposes of Medicare payment. 
Because such services are typically furnished in the outpatient 
setting, they should not be valued to include inpatient post-operative 
E/M visits. The level of discharge day management services included in 
the valuation of such services should similarly not reflect an 
inpatient discharge and should therefore be reduced. And finally, as 
discussed in CY 2011 rulemaking, the intraservice time from the 
inpatient level E/M postoperative visit should be reallocated to the 
immediate postservice time of the service. The 23-hour policy 
calculation, when fully applied to the calculation of a work RVU, is 
used to reduce the value of discharge day management services, remove 
the inpatient E/M visits, and reallocate the intraservice time to the 
immediate post-service period. See the CY 2011 PFS final rule (75 FR 
73226) for additional in-depth explanation of the 23-hour policy.
    For the codes with an overnight stay and an E/M visit on the same 
date built into their valuation, we believe the RUC only partially 
applied the 23-hour policy when it applied the policy to the immediate 
post service times, but not to the calculation of the work RVUs. 
Instead, we believe the 23-hour policy should be fully applied to the 
codes in this family that describe outpatient services for which there 
is an overnight stay during the post-operative period, regardless of 
the number of nights that a patient stays in the hospital. The services 
to which the 23-hour policy is usually applied would typically involve 
a patient stay in a hospital for less than 24 hours, which often means 
the patient may stay overnight in the hospital. On occasion, the 
patient may stay in the hospital longer than a single night; however, 
in both cases (one night or more than one night), the patient is 
considered to be a hospital outpatient, not an inpatient, for Medicare 
purposes. In short, we do not believe that the work that is typically 
associated with an inpatient service should be included in the work 
RVUs for the outpatient services to which the 23-hour policy applies.
    The RUC recommended a work RVU of 8.0 for CPT code 157X1 
(Implantation of absorbable mesh or other prosthesis for delayed 
closure of defect(s) (ie, external genitalia, perineum, abdominal wall) 
due to soft tissue infection or trauma). CPT code 157X1 was surveyed 
with having one subsequent hospital visit, CPT code 99232 (subsequent 
hospital care/day 25 minutes) and 25 minutes of immediate post service 
time. For purposes of calculating the recommended work RVU of 8.0, the 
RUC considered CPT code 157X1 to describe an inpatient service, while 
we consider CPT code 157X1 to describe an outpatient service for 
purposes of Medicare billing. As noted above, we do not believe that 
work that is typically associated with an inpatient service should be 
included in the work RVUs for the outpatient services to which the 23-
hour policy applies. Therefore, the valuation for this code should not 
include inpatient work in the post-operative period. See the CY 2022 
PFS final rule (86 FR 65090) for further discussion on the 23-hour 
policy as it relates to outpatient billing. We believe the 23-hour 
policy should be fully applied to CPT code 157X1, and we disagree with 
the RUC-recommended work RVU of 8.0.
    In accordance with the 23-hour policy valuation methodology we 
established in the CY 2011 PFS final rule, we are instead proposing a 
work RVU of 7.05 for CPT code 157X1 and a reallocation of the time 
associated with the intra-service portion of the inpatient hospital 
visit to the immediate postservice time of CPT code 157X1.
    The steps for the 23-hour policy calculation are as follows:
    <bullet> Step (1): CPT code 157X1 does not have a hospital 
discharge day management service; therefore, we will skip this step *.
    <bullet> Step (2): 8.0-1.39 ** = 6.61.
    <bullet> Step (3): 6.61 + (20 minutes x 0.0224) *** = 7.05 RVUs.
    * Value associated with \1/2\ hospital discharge day management 
service
    ** Value associated with an inpatient hospital visit, CPT code 
99232.
    *** Value associated with the reallocated intraservice time 
multiplied by the postservice intensity of the 23-hour stay code.
    The following CPT codes have a post-operative period that is 
considered an overnight stay with a visit on the same date: CPT codes 
49X02 (Repair of anterior abdominal hernia(s) (ie, epigastric, 
incisional, ventral, umbilical, spigelian), any approach (ie, open, 
laparoscopic, robotic), initial, including placement of mesh or other 
prosthesis, when performed, total length of defect(s); less than 3 cm, 
incarcerated or strangulated), 49X03 (Repair of anterior abdominal 
hernia(s) (ie, epigastric, incisional, ventral, umbilical, spigelian), 
any approach (ie, open, laparoscopic, robotic), initial, including 
placement of mesh or other prosthesis, when performed, total length of 
defect(s); 3 cm to 10 cm, reducible), 49X04 (Repair of anterior 
abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, 
spigelian), any approach (ie, open, laparoscopic, robotic), initial, 
including placement of mesh or other prosthesis, when performed, total 
length of defect(s); 3 cm to 10 cm, incarcerated or strangulated), 
49X05 (Repair of anterior abdominal hernia(s) (ie, epigastric, 
incisional, ventral, umbilical, spigelian), any approach (ie, open, 
laparoscopic, robotic), initial, including placement of mesh or other 
prosthesis, when performed, total length of defect(s); greater than 10 
cm, reducible), 49X08 (Repair of anterior abdominal hernia(s) (ie, 
epigastric, incisional, ventral, umbilical, spigelian), any approach 
(ie, open, laparoscopic, robotic), recurrent, including placement of 
mesh or other prosthesis, when performed, total length of defect(s); 
less than 3 cm, incarcerated or strangulated), and 49X09 (Repair of 
anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, 
umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), 
recurrent, including placement of mesh or other prosthesis, when 
performed, total length of defect(s); 3 cm to 10 cm, reducible). The 
RUC recommended a work RVU of 9.0 for CPT code 49X02, 10.80 for CPT 
code 49X03, 14.0 for CPT code 49X04, 14.88 for CPT code 49X05, 10.79 
for CPT code 49X08, and 12.0 for CPT code 49X09. CPT codes 49X02, 
49X03, 49X08, and 49X09 were surveyed with

[[Page 45908]]

one subsequent inpatient hospital visit at a level of CPT code 99231 
(subsequent hospital care/day 15 minutes). The RUC applied the 10 
minutes of intraservice time from CPT code 99231 to the immediate 
postservice time of these codes, resulting in a total immediate 
postservice time of 30 minutes for these codes. CPT codes 49X04 and 
49X05 were surveyed with a subsequent inpatient hospital visit at a 
level of CPT code 99232. The RUC applied the 20 minutes of intraservice 
time from CPT code 99232 to the immediate postservice time of both 
codes, resulting in a total immediate postservice time of 40 minutes.
    Much like our concerns regarding the RUC-recommended work RVU for 
CPT code 157X1, we do not believe that the RUC fully applied the 23-
hour policy calculation when calculating the work RVUs for these codes 
and we disagree with the RUC-recommended RVUs. While the RUC removed 
the 99231 and 99232 inpatient visits included in the post-operative 
period for these codes, the RUC did not subtract the values of these 
visits from the work RVUs before making their work RVU recommendations. 
In the CY 2011 PFS final rule (75 FR 73226), we stated that we do not 
believe that the post-procedure hospital visits for outpatient services 
should be at the inpatient level since the typical case is an 
outpatient who would be ready to be discharged from the hospital in 23 
hours or less. However, we agree with the RUC that the intra-service 
time of the inpatient hospital visit may be included in the valuation 
for 23-hour stay codes. Therefore, we believe that step 2 of the 23-
hour hour policy calculation, which involves deducting the RVUs of the 
inpatient hospital visits from the starting work RVU value and 
subsequently reallocating the time associated with the intra-service 
portion of the inpatient hospital visits to the immediate postservice 
time of the 23-hour stay code, should be fully applied when calculating 
the work RVUs for CPT codes 49X02, 49X03, 49X04, 49X05, 49X08, and 
49X09.
    Using the 23-hour policy calculation described above and in the CY 
2011 PFS final rule, we are proposing work RVUs of 8.46 for CPT code 
49X02, 10.26 for CPT code 49X03, 13.46 for CPT code 49X04, 13.94 for 
CPT code 49X05, 10.25 for CPT code 49X08, and 11.46 for CPT code 49X09.
    The following CPT codes have a post-operative period that the RUC 
considers to be admitted to a hospital: CPT code 49X06 (Repair of 
anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, 
umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), 
initial, including placement of mesh or other prosthesis, when 
performed, total length of defect(s); greater than 10 cm, incarcerated 
or strangulated), 49X10 (Repair of anterior abdominal hernia(s) (ie, 
epigastric, incisional, ventral, umbilical, spigelian), any approach 
(ie, open, laparoscopic, robotic), recurrent, including placement of 
mesh or other prosthesis, when performed, total length of defect(s); 3 
cm to 10 cm, incarcerated or strangulated), 49X11 (Repair of anterior 
abdominal hernia(s) (ie, epigastric, incisional, ventral, umbilical, 
spigelian), any approach (ie, open, laparoscopic, robotic), recurrent, 
including placement of mesh or other prosthesis, when performed, total 
length of defect(s); greater than 10 cm, reducible), 49X12 (Repair of 
anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, 
umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), 
recurrent, including placement of mesh or other prosthesis, when 
performed, total length of defect(s); greater than 10 cm, incarcerated 
or strangulated), 49X13 (Repair of parastomal hernia, any approach (ie, 
open, laparoscopic, robotic), initial or recurrent, including placement 
of mesh or other prosthesis, when performed; reducible), and 49X14 
(Repair of parastomal hernia, any approach (ie, open, laparoscopic, 
robotic), initial or recurrent, including placement of mesh or other 
prosthesis, when performed; incarcerated or strangulated). The RUC 
recommended a work RVU of 18.67 for CPT code 49X06, 15.55 RVUs for CPT 
code 49X10, 16.03 RVUs for CPT code 49X11, 22.67 RVUs for CPT code 
49X12, 13.70 RVUs for CPT code 49X13, and 17.06 RVUs for CPT code 
49X14. CPT codes 49X06 and 49X12 were surveyed and recommended with one 
subsequent inpatient hospital visit at a level of CPT code 99233 
(subsequent hospital care/day 35 minutes). The RUC recommendations 
include an immediate postservice time of 25 minutes for CPT code 49X06 
and 30 minutes for CPT code 49X12. CPT codes 49X10, 49X11, and 49X14 
were surveyed and recommended with one subsequent inpatient hospital 
visit at a level of CPT code 99232. The RUC recommendations include an 
immediate postservice time of 25 minutes for 49X10, 28 minutes for CPT 
code 49X11, and 25 minutes for CPT code 49X14. CPT code 49X13 was 
surveyed and recommended with one subsequent inpatient hospital visit 
at a level of CPT code 99231 and an immediate postservice time of 25 
minutes.
    For purposes of calculating the recommended work RVUs, the RUC 
considered these CPT codes to describe an admitted inpatient service, 
while we consider the CPT codes to describe outpatient services for 
purposes of billing. Therefore, we believe that inpatient work in the 
post-operative period should not be included in the valuation. We 
believe the 23-hour policy should be applied to these codes. Using the 
23-hour policy calculation described above and in the CY 2011 PFS final 
rule, we are proposing a work RVU of 18.67 for CPT code 49X06, 15.55 
RVUs for CPT code 49X10, 16.03 RVUs for CPT code 49X11, 22.67 RVUs for 
CPT code 49X12, 13.70 RVUs for CPT code 49X13, and 17.06 RVUs for CPT 
code 49X14. We are also proposing revised immediate postservice times 
for the reallocation of the time associated with the intraservice 
portion of the inpatient hospital visit. We are proposing immediate 
post service times of 40 minutes for CPT code 49X06, 35 minutes for CPT 
code 49X10, 38 minutes for CPT code 49X11, 45 minutes for CPT code 
49X12, 30 minutes for CPT code 49X13, and 35 minutes for CPT code 
49X14.
    The following CPT codes have a post-operative period that the RUC 
considers to be a same day discharge: CPT code 49X01 (Repair of 
anterior abdominal hernia(s) (ie, epigastric, incisional, ventral, 
umbilical, spigelian), any approach (ie, open, laparoscopic, robotic), 
initial, including placement of mesh or other prosthesis, when 
performed, total length of defect(s); less than 3 cm, reducible) and 
49X07 (Repair of anterior abdominal hernia(s) (ie, epigastric, 
incisional, ventral, umbilical, spigelian), any approach (ie, open, 
laparoscopic, robotic), recurrent, including placement of mesh or other 
prosthesis, when performed, total length of defect(s); less than 3 cm, 
reducible). The RUC-recommended a work RVU of 6.27 for CPT code 49X01 
and 7.75 for CPT code 49X07. We disagree with the RUC-recommended RVU 
for CPT code 49X01 because it falls above the median value for codes 
with similar times. We are proposing a work RVU of 5.96 RVUs based on 
the intraservice time ratio, which is the ratio of 90 minutes of 
intraservice time of a current hernia repair code--CPT code 49560 
(Repair initial incisional or ventral hernia; reducible) and the 45 
minutes of intraservice time for CPT code 49X01. The proposed work RVU 
of 5.96 is also supported by reference CPT code 93453 (Combined right 
and left heart catheterization including

[[Page 45909]]

intraprocedural injection(s) for left ventriculography, imaging 
supervision and interpretation, when performed). CPT code 93453 has a 
work RVU of 5.99, the same intraservice time as CPT code 49X01(45 
minutes), and a slightly higher total time of 113 minutes.
    For CPT code 49X07, we disagree with the RUC-recommended work RVU 
of 7.75, as it is above the median range compared to codes with similar 
times. We are proposing a work RVU of 7.42 RVUs for CPT code 49X07 
based off of the intraservice time ratio of 100 minutes of intraservice 
time for a current hernia repair code--CPT code 49565 (Repair recurrent 
incisional or ventral hernia; reducible), compared to the 60 minutes of 
intraservice time for CPT code 49X07. The proposed work RVU of 7.42 is 
also supported by reference CPT code 52353 (Cystourethroscopy, with 
ureteroscopy and/or pyeloscopy; with lithotripsy (ureteral 
catheterization is included)). CPT code 52353 has a work RVU of 7.50 
with the same intraservice time of 60 minutes and a very similar total 
time of 133 minutes.
    CPT code 49X15 (Removal of total or near-total non-infected mesh or 
other prosthesis at the time of initial or recurrent anterior abdominal 
hernia repair or parastomal hernia repair, any approach (ie, open, 
laparoscopic, robotic)) is an add-on code. The RUC recommended a work 
RVU of 5.0 for CPT code 49X15. The RUC recommendation is higher than 
the work RVUs for many other CPT add-on codes with similar times. We 
are proposing a work RVU of 2.61 RVUs for CPT code 49X15, based on the 
reverse building block methodology. The proposed work RVU of 2.61 is 
also supported by reference CPT code 15774 (Grafting of autologous fat 
harvested by liposuction technique to face, eyelids, mouth, neck, ears, 
orbits, genitalia, hands, and/or feet; each additional 25 cc injectate, 
or part thereof (List separately in addition to code for primary 
procedure)), which has a work RVU of 2.50 and the same total time of 45 
minutes.
    We reviewed the RUC-recommended direct PE inputs for all of the 
codes within this family. We disagree with the RUC's recommendations of 
66 total minutes of clinical staff time for CPT codes 49X01 and 49X07, 
60 total minutes of clinical staff time for CPT codes 49X02, 49X03, 
49X04, 49X05, 49X06, 49X08, 49X09, 49X10, 49X11, 49X12, 49X13, and 
49X14, and 20 total minutes of clinical staff time for CPT code 157X1. 
We note that the RUC recommended 090-day pre-service times for all of 
these codes despite surveying all of the services as 000-day services. 
In the CY 2022 PFS final rule (86 FR 65090), we stated we continue to 
believe that setting and maintaining clinical labor time and valuation 
standards provides greater consistency among codes that share clinical 
labor tasks and could improve relativity of values among codes. 
Therefore, we believe that the standard clinical labor packages that 
are in accordance with the surveyed global period continue to be the 
most appropriate for purposes of clinical labor valuation.
    The RUC recommendations for CPT codes 49X01 and 49X07, and CPT 
codes 49X02, 49X03, 49X04, 49X05, 49X06, 49X08, 49X09, 49X10, 49X11, 
49X12, 49X13, and 49X14, include the standard for 090-day preservice 
times for clinical labor activities, which is 60 minutes. For 49X01 and 
49X07 in particular, the RUC also recommended an additional 6 minutes 
in the post service period to conduct patient communications. We 
disagree with the RUC-recommended 090-day times as these CPT codes were 
surveyed by the RUC as 000-day services and should have times 
consistent with 000-day services. Therefore, we are proposing the 
standard clinical labor times for a 000-day extensive package for a 
total pre-service clinical staff time of 30 minutes for CPT codes 49X01 
through 49X14 with an additional standard 3 minutes of post-service 
patient communications for 49X01 and 49X07. CPT code 49X15 is an add-on 
code and does not have RUC-recommended direct PE inputs.
    For CPT code 157X1, the RUC recommendation is 20 minutes of 
clinical staff activities, which is standard for an emergent procedure 
package. We do not agree that the service described by CPT code 157X1 
should be considered an emergent procedure. Therefore, we are proposing 
the minimal clinical staff package minus pre-service education for CPT 
code 157X1, for a total of 12 clinical staff time minutes.
(2) Removal of Sutures or Staples (CPT Codes 15851, 158X1, and 158X2)
    In October 2021, the CPT Editorial Panel approved the deletion of 
CPT code 15850 and revised CPT code 15851 (Removal of sutures or 
staples requiring anesthesia (ie, general anesthesia, moderate 
sedation)), and created two new related CPT add-on codes, 158X1 and 
158X2, to describe Removal of sutures or staples requiring anesthesia 
(i.e., general anesthesia, moderate sedation). The RUC reviewed the 
three codes: 15851, 158X1 and 158X2 at the January 2022 RUC meeting.
    After reviewing CPT code 15851, we are proposing the RUC-
recommended work RVU of 1.10. CPT code 158X1 (Removal of sutures OR 
staples not requiring anesthesia (List separately in addition to E/M 
code)), and 1581X2 (Removal of sutures OR staples not requiring 
anesthesia (List separately in addition to E/M code), are valued by the 
RUC as PE-only codes. The RUC did not recommend any work inputs for 
these two add-on codes and we are not proposing any work RVU 
refinements.
    We are also proposing the RUC-recommended direct PE inputs for CPT 
codes 15851, 158X1, and 158X2 without refinement.
(3) Arthrodesis Decompression (CPT Codes 22630, 22632, 22633, 22634, 
63052, and 63053)
    In October 2020, the CPT Editorial Panel approved the revision of 
four codes describing arthrodesis and the addition of two new add-on 
codes, CPT codes 63052 (Laminectomy, facetectomy, or foraminotomy 
(unilateral or bilateral with decompression of spinal cord, cauda 
equina and/or nerve root[s] [eg, spinal or lateral recess stenosis]), 
during posterior interbody arthrodesis, lumbar; single vertebral 
segment (List separately in addition to code for primary procedure)) 
and 63053 (Laminectomy, facetectomy, or foraminotomy (unilateral or 
bilateral with decompression of spinal cord, cauda equina and/or nerve 
root[s] [eg, spinal or lateral recess stenosis]), during posterior 
interbody arthrodesis, lumbar; each additional segment (List separately 
in addition to code for primary procedure)), to report laminectomy, 
facetectomy, or foraminotomy during posterior interbody arthrodesis, 
lumbar to more appropriately identify the decompression that may be 
separately reported. In January 2021, the RUC reviewed the survey 
results for the two new codes and expressed concern that the four base 
codes had not been surveyed along with the two new add-on codes. The 
RUC recommended that the entire family be resurveyed and presented for 
review at its April 2021 meeting. The RUC suggested that until new 
values could be established, interim values be established for CPT 
codes 63052 and 63053, which CMS revised for CY 2022 based on the 
survey data and RUC review available to us at the time of the 
development of the CY 2022 PFS proposed rule. We have noted in similar 
circumstances, such as the minimally invasive glaucoma surgery (MIGS) 
procedures with cataract surgery discussed in the CY 2022 PFS final 
rule (86 FR 65097), that it is best for entire

[[Page 45910]]

code families to be surveyed at the same time. We also noted that we 
finalized a policy in the CY 2015 PFS final rule (79 FR 67602 through 
67609) to make all changes in the work and MP RVUs and the direct PE 
inputs for new, revised, and potentially misvalued services under the 
PFS by proposing and then finalizing such changes through notice and 
comment rulemaking, as opposed to initially finalizing changes on an 
interim final basis.
    For CPT codes 22630 (Arthrodesis, posterior interbody technique, 
including laminectomy and/or discectomy to prepare interspace (other 
than for decompression), single interspace; lumbar), 22633 
(Arthrodesis, combined posterior or posterolateral technique with 
posterior interbody technique including laminectomy and/or discectomy 
sufficient to prepare interspace (other than for decompression), single 
interspace; lumbar), 22634 (Arthrodesis, combined posterior or 
posterolateral technique with posterior interbody technique including 
laminectomy and/or discectomy sufficient to prepare interspace (other 
than for decompression), single interspace; each additional interspace 
and segment (List separately in addition to code for primary 
procedure)), 63052, and 63053, we disagree with the RUC-recommended 
work RVUs of 22.09, 26.80, 7.96, 5.70, and 5.00, respectively, because 
these values do not account for the surveyed changes in time, and we 
are proposing a work RVU of 20.42 for CPT code 22630, a work RVU of 
24.83 for CPT code 22633, a work RVU of 7.30 for CPT code 22634, the 
current work RVU of 4.25 for CPT code 63052 and a work RVU of 3.78 for 
CPT code 63053. For CPT code 22632 (Arthrodesis, posterior interbody 
technique, including laminectomy and/or discectomy to prepare 
interspace (other than for decompression), single interspace; each 
additional interspace (List separately in addition to code for primary 
procedure)), we agree with the RUC-recommended maintenance of the 
current work RVU of 5.22, as there were no surveyed changes in time.
    We are proposing a work RVU of 20.42 for CPT code 22630 based on 
the reverse building block methodology to account for the surveyed 8-
minute decrease in total time, 10-minute decrease in pre-service time, 
30-minute decrease in intraservice time, and 2-minute decrease in 
immediate post-service time. We believe that since the two components 
of work are time and intensity, absent an obvious or explicitly stated 
rationale for why the relative intensity of a given procedure has 
increased, it would be inappropriate to maintain the current work RVU 
given the significant decrease in intraservice time without adequate 
justification of increased intensity. There are currently three CPT 
code 99231 (Subsequent hospital care/day 15 minutes) and four CPT code 
99213 (Office or other outpatient visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination and low level of medical 
decision making. When using time for code selection, 20-29 minutes of 
total time is spent on the date of the encounter.) visits bundled in 
CPT code 22630's 090-day global period and valuation. The RUC 
recommended that the post-operative period for CPT code 22630 change to 
include two CPT code 99232 (subsequent hospital care/day 25 minutes), 
one CPT code 99231, one CPT code 99214 (Office or other outpatient 
visit for the evaluation and management of an established patient, 
which requires a medically appropriate history and/or examination and 
moderate level of medical decision making. When using time for code 
selection, 30-39 minutes of total time is spent on the date of the 
encounter.), and two CPT code 99213 visits. The currently bundled post-
operative visits total to 6.16 work RVUs, whereas the RUC-recommended 
changes to the post-operative visits total 6.98 work RVUs, resulting in 
a 0.82 work RVU increase (if no other changes occurred to CPT code 
22630). The proposed work RVU of 20.42 for CPT code 22630 maintains the 
same IWPUT of 0.067 and maintains the 0.82 work RVU difference between 
the current and RUC-recommended post-operative period. We believe this 
proposed work RVU is more accurate than the RUC-recommended work RVU 
because there was no obvious or explicitly stated rationale in the 
RUC's recommendations for the change in intensity of intraservice time, 
and there was a 30-minute decrease in intraservice time for CPT code 
22630. We believe that since the two components of work are time and 
intensity, absent an obvious or explicitly stated rationale for why the 
relative intensity of a given procedure has increased, it would be 
inappropriate to propose the RUC-recommended work RVU for CPT code 
22630.
    Similarly, we are proposing a work RVU of 24.83 for CPT code 22633, 
based on the reverse building block methodology, to account for the 
surveyed 56-minute decrease in total time, 20-minute decrease in 
intraservice time, and 33-minute decrease in post-operative time. The 
reverse building block methodology accounts for the time and intensity 
of post-operative work through long-established and agreed-upon times 
and intensities for bundled post-operative visits, and accurately 
adjusts for the changes occurring in the post-operative period. There 
is currently one post-operative CPT code 99232, two CPT code 99233 
(Subsequent hospital care/day 35 minutes), and three CPT code 99213 
visits bundled in CPT code 22633's valuation. The RUC recommended that 
the post-operative period for CPT code 22633 change to include two CPT 
code 99232, one CPT code 99231, one CPT code 99214 (Office or other 
outpatient visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination and moderate level of medical decision making. When using 
time for code selection, 30-39 minutes of total time is spent on the 
date of the encounter.), and two CPT code 99213 visits. The currently 
bundled post-operative visits total to 8.30 work RVUs, whereas the RUC-
recommended changes to the post-operative visits total 6.98 work RVUs, 
resulting in a 1.32 work RVU decrease (if no other changes occurred to 
CPT code 22633). Using the reverse building block methodology, the 
proposed work RVU of 24.83 maintains the same IWPUT of 0.080 and the 
1.32 work RVU difference between the current and RUC-recommended post-
operative period. We believe this proposed work RVU is more accurate 
than the RUC-recommended work RVU because there was no obvious or 
explicitly stated rationale in the RUC's recommendations for the change 
in intensity of intraservice time, and there was a 20-minute decrease 
in intraservice time for CPT code 22633. We believe that since the two 
components of work are time and intensity, absent an obvious or 
explicitly stated rationale for why the relative intensity of a given 
procedure has increased, it would be inappropriate to propose the RUC-
recommended work RVU decrease of 0.95, which is only about three-
quarters of the established decrease in work RVU of 1.32 and intensity 
from the changes in the post-operative period alone. We also considered 
the apparent decrease in intraservice time and the lack of an adequate 
justification for increased intensity to arrive at our proposed work 
RVU of 24.83 for CPT code 22633.
    We are proposing a work RVU of 7.30 for CPT code 22634 based on a 
comparison to its base code, CPT code 22633. We used the proposed work 
RVU of 24.83 for the parent CPT code (22633) as the numerator and the 
current work

[[Page 45911]]

RVU for CPT code 22633 of 27.75 as the denominator, and multiplied that 
fraction by the current work RVU of 8.16 for CPT code 22634 to arrive 
at a proportionate proposed work RVU of 7.30 for CPT code 22634 
((24.83/27.75) * 8.16) = 7.30). The proposed work RVU accounts for the 
decrease in intraservice time and is well bracketed by CPT code 34820 
(Open iliac artery exposure for delivery of endovascular prosthesis or 
iliac occlusion during endovascular therapy, by abdominal or 
retroperitoneal incision, unilateral (List separately in addition to 
code for primary procedure)), valued at 7.00 work RVUs with an 
intraservice time of 60 minutes, and CPT code 34833 (Open iliac artery 
exposure with creation of conduit for delivery of endovascular 
prosthesis or for establishment of cardiopulmonary bypass, by abdominal 
or retroperitoneal incision, unilateral (List separately in addition to 
code for primary procedure)), valued at 8.16 work RVUs with an 
intraservice time of 72 minutes.
    CPT codes 63052 and 63053 were new add-on codes to report 
decompression when performed in conjunction with posterior interbody 
arthrodesis at the same interspace for CY 2022. The proposed work RVU 
for CPT code 63052 would maintain the current work RVU, despite a 
surveyed change in time. In the CY 2022 PFS final rule, we finalized a 
work RVU of 4.25 for CPT code 63052 for CY 2022 based on a crosswalk to 
CPT code 22853 (Insertion of interbody biomechanical device(s) (e.g., 
synthetic cage, mesh) with integral anterior instrumentation for device 
anchoring (e.g., screws, flanges), when performed, to intervertebral 
disc space in conjunction with interbody arthrodesis, each interspace 
(List separately in addition to code for primary procedure)), which has 
a work RVU of 4.25 and an intraservice time of 45 minutes. Despite a 
surveyed 5-minute intraservice time increase for CPT code 63052, we 
believe the crosswalk to CPT code 22853 is still valid, given that only 
3 months passed between the two surveys, as it now has the same 
intraservice time as CPT code 63052, is a spinal procedure, and is an 
add-on code to the same base codes as CPT code 63052. Commenters on the 
CY 2022 PFS proposed rule supported the bracket of key reference 
service CPT code 22552 (Arthrodesis, anterior interbody, including disc 
space preparation, discectomy, osteophytectomy and decompression of 
spinal cord and/or nerve roots; cervical below C2, each additional 
interspace (List separately in addition to code for primary procedure)) 
and MPC CPT code 34812 (Open femoral artery exposure for delivery of 
endovascular prosthesis, by groin incision, unilateral (List separately 
in addition to code for primary procedure)), and therefore, we noted 
that the final work RVU of 4.25 for CY 2022 was supported by the 
commenters (86 FR 65092). CPT code 22552 has a work RVU of 6.50 and an 
intraservice time of 45 minutes, and commenters noted that CPT code 
22552 has a higher intensity as anticipated for a surgical procedure 
and in comparison with a lumbar procedure. CPT code 34812 has a work 
RVU of 4.13 and 40 minutes of intraservice time, and commenters noted 
that this code involves open femoral artery exposure by groin incision 
and closure of the wound, typically for separately reported delivery of 
an endovascular prosthesis for an asymptomatic infrarenal abdominal 
aortic aneurysm. In comparison, exposure and closure for CPT code 63052 
are performed as part of the primary arthrodesis code and the 
intraservice time includes higher intensity bony and soft tissue 
resection, and therefore, although both codes require the same time, 
the physician work and intensity of CPT code 63052 is greater than CPT 
code 34812.
    In the CY 2022 PFS final rule, we finalized a work RVU of 3.19 for 
CPT code 63053 for CY 2022 based on an intraservice time ratio between 
CPT codes 63052 and 63053 ((30 minutes/40 minutes) * 4.25 = 3.19). We 
believe this intraservice time ratio between the two CPT codes is still 
valid, given that only 3 months passed between the two surveys, and 
therefore, we are proposing a work RVU of 3.78 based on the surveyed 
time changes for CPT codes 63052 and 63053 ((40 minutes/45 minutes) * 
4.25 = 3.78) in order to maintain consistency with previous analysis of 
time and intensity of these two add-on codes. Due to the lack of an 
obvious or explicitly stated rationale in the RUC's April 
recommendations for the change in intensity between the January 2021 
and April 2021 surveys, we relied on the changes in surveyed time to 
calculate the proposed work RVUs for CPT codes 63052 and 63053.
    We are proposing the RUC-recommended PE inputs for CPT codes 22630 
and 22633.
(4) Total Disc Arthroplasty (CPT Codes 22857 and 228XX)
    In September 2021, the CPT Editorial Panel created CPT Category I 
code 228XX to describe Total disc arthroplasty (artificial disc), 
anterior approach, including discectomy to prepare interspace (other 
than for decompression); second interspace, lumbar (List separately in 
addition to code for primary procedure) and replace CPT Category III 
code 0163T (Total disc arthroplasty (artificial disc), anterior 
approach, including discectomy to prepare interspace (other than for 
decompression), each additional interspace, lumbar (List separately in 
addition to code for primary procedure)), which prompted CPT codes 
228XX and 22857 (Total disc arthroplasty (artificial disc), anterior 
approach, including discectomy to prepare interspace (other than for 
decompression); single interspace, lumbar) to be surveyed for the 
January 2022 RUC meeting. At the January 2022 RUC meeting, the 
specialty societies indicated, and the RUC agreed, that the survey 
results for both CPT codes 22857 and 228XX were erroneous and that the 
codes should be resurveyed for the April 2022 RUC meeting. Therefore, 
we are proposing to maintain the RUC-recommended work RVU of 27.13 for 
CPT code 22857 and contractor pricing for CPT code 228XX for CY 2023. 
We will revisit the valuations of CPT codes 22857 and 228XX in future 
rulemaking when we have received the April 2022 RUC recommendations, 
based on our annual review process discussed in the Background section 
of this proposed rule.
(5) Insertion of Spinal Stability Distractive Device (CPT Codes 22869 
and 22870)
    For CPT codes 22869 (Insertion of interlaminar/interspinous process 
stabilization/distraction device, without open decompression or fusion, 
including image guidance when performed, lumbar; single level) and 
22870 (Insertion of interlaminar/interspinous process stabilization/
distraction device, without open decompression or fusion, including 
image guidance when performed, lumbar; second level (List separately in 
addition to code for primary procedure)), we are proposing to maintain 
the current work RVUs of 7.03 and 2.34, respectively. We are proposing 
the RUC-recommended direct PE inputs for CPT code 22869 without 
refinement.
(6) Knee Arthroplasty (CPT Codes 27446 and 27447)
    CPT codes 27446 (Arthroplasty, knee, condyle and plateau; medial OR 
lateral compartment) and 27447 (Arthroplasty, knee, condyle and 
plateau; medial AND lateral compartments with or without patella 
resurfacing (total knee arthroplasty)) were reviewed by the RUC in 
April 2021. We previously reviewed CPT code 27447 in the CY

[[Page 45912]]

2021 PFS final rule; (see 85 FR 84609 and 84610 for our previous 
discussion). The RUC proposed a revised survey instrument to ask about 
additional pre-operative time and resources spent on pre-optimization 
patient work. The RUC agreed that the pre-service planning activities 
are being performed routinely for the typical patient but the inclusion 
of this work is not reflected in the 090-day global period structure. 
The RUC indicated that separate planning codes may be developed, or 
current codes such as the prolonged service codes may be reported for 
these activities.
    We are proposing the RUC-recommended work RVU of 17.13 for CPT code 
27446. The survey 25th percentile actually showed an increase in work 
RVU even though there was a decrease in total time. One post facility 
visit, CPT code 99232 (Subsequent hospital care/day 25 minutes), was 
removed and replaced with CPT code 99214 (Office or other outpatient 
visit for the evaluation and management of an established patient, 
which requires a medically appropriate history and/or examination and 
moderate level of medical decision making. When using time for code 
selection, 30-39 minutes of total time is spent on the date of the 
encounter) a post-operative visit in the office. Given a decrease in 
the total time spent and a lower level post-operative visit, it is 
reasonable that the work RVU went down. There was no change in the 
global period.
    For CPT code 27447, the RUC reaffirmed the same valuation that it 
recommended for the CY 2021 PFS rulemaking cycle. Since we did not 
receive any new information regarding this code, we are not proposing 
to change our previously finalized values (see 85 FR 84609 and 84610 
for our previous discussion of this code in the CY 2021 PFS final 
rule). We are proposing to maintain a work RVU of 19.60 for CPT code 
27447, the value that we previously finalized through rulemaking. We 
are proposing the RUC-recommended direct PE inputs for CPT code 27446 
and we are proposing to maintain the direct PE inputs for CPT code 
27447.
(7) Endovascular Pulmonary Arterial Revascularization (CPT Codes 338X3, 
338X4, 338X5, 338X6, and 338X7)
    At the February 2021 meeting of the CPT Editorial Panel, CPT 
approved a new family of Category I CPT codes to describe percutaneous 
endovascular repair of pulmonary artery stenosis (PAS) by stent 
replacement. CPT codes 338X3 through 338X7 were surveyed by the RUC at 
the October 2021 RUC meeting.
    We disagree with the RUC-recommended work RVU of 14.0 for CPT code 
338X3 (Percutaneous pulmonary artery revascularization by stent 
placement, initial; normal native connections, unilateral). The RUC 
recommendation is the survey median and appears to be high compared to 
codes with similar times. We are proposing the survey 25th percentile 
work RVU of 11.03 for CPT code 338X3. A work RVU of 11.03 is supported 
by a bracket of reference CPT codes, including CPT code 61650 and CPT 
code 61640. CPT code 61650 (Endovascular intracranial prolonged 
administration of pharmacologic agent(s) other than for thrombolysis, 
arterial, including catheter placement, diagnostic angiography, and 
imaging guidance; initial vascular territory) has a work RVU of 10.0 
and the same intraservice time of 90 minutes and the same total time of 
206 minutes. CPT code 61640 (Balloon dilatation of intracranial 
vasospasm, percutaneous; initial vessel) has a work RVU of 12.32 and an 
intraservice time of 90 minutes and a higher total time of 233 minutes.
    There are no direct PE inputs for CPT Code 338X3.
    We disagree with the RUC-recommended work RVU of 18.0 for CPT code 
338X4 (Percutaneous pulmonary artery revascularization by stent 
placement, initial; normal native connections, bilateral). The RUC 
recommendation is the survey median and appears to be high compared to 
codes with similar times. We are proposing the survey 25th percentile 
work RVU of 14.50. A work RVU of 14.50 is supported by a reference CPT 
code--CPT code 11005. CPT code 11005 (Debridement of skin, subcutaneous 
tissue, muscle and fascia for necrotizing soft tissue infection; 
abdominal wall, with or without fascial closure) has a work RVU of 
14.24 and the same intraservice time of 120 minutes and nearly the same 
total time of 235 minutes.
    There are no direct PE inputs for CPT Code 338X4.
    We disagree with the RUC-recommended work RVU of 17.33 for CPT code 
338X5 (Percutaneous pulmonary artery revascularization by stent 
placement, initial; abnormal connections, unilateral). The RUC 
recommendation is the survey median and appears to be high compared to 
codes with similar times. We are proposing the survey 25th percentile 
work RVU of 14.0. A work RVU of 14.0 is supported by a reference CPT 
code--CPT code 61640. CPT code 61640 (Balloon dilatation of 
intracranial vasospasm, percutaneous; initial vessel) has a work RVU of 
12.32 and the same intraservice time of 90 minutes and a higher total 
time of 233 minutes.
    There are no direct PE inputs for CPT Code 338X5.
    We disagree with the RUC-recommended work RVU 20.0 for CPT code 
338X6 (percutaneous pulmonary artery revascularization by stent 
placement, initial; abnormal connections, bilateral). The RUC 
recommendation is the survey median and appears to be high compared to 
codes with similar times. Although we disagree with the RUC-recommended 
work RVU, we concur that the relative difference in work between CPT 
codes 338X4 and 338X6 is equivalent to the RUC-recommended interval of 
2.0 RVUs. Therefore, we are proposing a work RVU of 16.50 for CPT code 
338X6, based on the recommended interval of 2.0 additional RVUs above 
our proposed work RVU of 14.50 for CPT code 338X4. A work RVU of 16.50 
is also supported by a reference code--CPT code 11005. CPT code 11005 
(Debridement of skin, subcutaneous tissue, muscle and fascia for 
necrotizing soft tissue infection; abdominal wall, with or without 
fascial closure) has a work RVU of 14.24 and the same intraservice time 
of 120 minutes and a higher total time of 265 minutes.
    There are no direct PE inputs for CPT Code 338X6.
    We disagree with the RUC-recommended RVU of 7.27 for CPT code 338X7 
(Percutaneous pulmonary artery revascularization by stent placement, 
each additional vessel or separate lesion, normal or abnormal 
connections (list separately in addition to code for primary procedure) 
(use 338X7 in conjunction with 338X3, 338X4, 338X5, 338X6)). The RUC 
recommendation is the survey median and appears to be high compared to 
codes with similar times. We are proposing the survey 25th percentile 
work RVU of 5.53. A work RVU of 5.53 is supported by a reference code--
CPT code 57267. CPT code 57267 (Insertion of mesh or other prosthesis 
for repair of pelvic floor defect, each site (anterior, posterior 
compartment), vaginal approach (List separately in addition to code for 
primary procedure) has a work RVU of 4.88 and the same time of 45 
minutes.
    There are no direct PE inputs for CPT code 338X7.
(8) Percutaneous Arteriovenous Fistula Creation (CPT Codes 368X1 and 
368X2)
    In October 2021, the CPT Editorial Panel created CPT codes 368X1 
(Percutaneous arteriovenous fistula creation, upper extremity, single 
access of both the peripheral artery and

[[Page 45913]]

peripheral vein, including fistula maturation procedures (e.g., 
transluminal balloon angioplasty, coil embolization) when performed, 
including all vascular access, imaging guidance and radiologic 
supervision and interpretation) and 368X2 (Percutaneous arteriovenous 
fistula creation, upper extremity, separate access sites of the 
peripheral artery and peripheral vein, including fistula maturation 
procedures (e.g., transluminal balloon angioplasty, coil embolization) 
when performed, including all vascular access, imaging guidance and 
radiologic supervision and interpretation) to describe the creation of 
an arteriovenous fistula in an upper extremity via a percutaneous 
approach. Previously, CPT coding did not account for percutaneous 
arteriovenous access creation, as current the CPT codes only describe 
an open surgical approach. Given that new technologies have been 
developed that allow for less invasive approaches that utilize 
percutaneous image-guided methods to approximate a target artery and 
vein using magnets or mechanical capture, we created HCPCS codes G2170 
(Percutaneous arteriovenous fistula creation (avf), direct, any site, 
by tissue approximation using thermal resistance energy, and secondary 
procedures to redirect blood flow (e.g., transluminal balloon 
angioplasty, coil embolization) when performed, and includes all 
imaging and radiologic guidance, supervision and interpretation, when 
performed) and G2171 (Percutaneous arteriovenous fistula creation 
(avf), direct, any site, using magnetic-guided arterial and venous 
catheters and radiofrequency energy, including flow-directing 
procedures (e.g., vascular coil embolization with radiologic 
supervision and interpretation, when performed) and fistulogram(s), 
angiography, venography, and/or ultrasound, with radiologic supervision 
and interpretation, when performed) in July 2020 that describe two 
approaches to percutaneous arteriovenous access creation. The RUC 
intends for CPT codes 368X1 and 368X2, which represent two percutaneous 
approaches to creating arteriovenous access for End-Stage Renal Disease 
(ERSD) patients during hemodialysis, to replace HCPCS codes G2170 and 
G2171, and has requested both G2170 and G2171 be deleted. For CY 2023, 
the RUC recommended a work RVU of 7.50 for CPT code 368X1, and a work 
RVU of 9.60 for CPT code 368X2.
    We disagree with the RUC-recommended RVUs for CPT codes 368X1 and 
368X2. We found that the recommended work RVUs were high when compared 
to other codes with similar time values. The RUC-recommended RVU of 
7.50 for 368X1 is the second highest RVU for codes with 55 to 65 
minutes of intraservice time and 94 to 114 minutes of total time, with 
RVUs ranging from 2.45 to 8.84. Similarly, the RUC-recommended RVU of 
9.60 for 368X2 is the third highest RVU for codes with 65 to 85 minutes 
of intraservice time and 109 to 129 minutes of total time, with RVUs 
ranging from 4.69 to 10.95. Therefore, we are proposing a work RVU of 
7.20 for CPT code 368X1, and a work RVU of 9.30 for CPT code 368X2.
    We disagree with the RUC-recommended work RVU of 7.50 for CPT code 
368X1 and are proposing an RVU of 7.20 that is based on the intra-
service time ratio calculation using the second reference code from the 
RUC survey, CPT code 36905 (Percutaneous transluminal mechanical 
thrombectomy and/or infusion for thrombolysis, dialysis circuit, any 
method, including all imaging and radiological supervision and 
interpretation, diagnostic angiography, fluoroscopic guidance, catheter 
placement(s), and intraprocedural pharmacological thrombolytic 
injection(s); with transluminal balloon angioplasty, peripheral 
dialysis segment, including all imaging and radiological supervision 
and interpretation necessary to perform the angioplasty). The proposed 
RVU of 7.20 is based on the intra-service time ratio using the RUC-
recommended 60 minutes intra-service time for CPT code 368X1 divided by 
75 minutes of intra-service time for CPT code 36905, then multiplying 
by the RVU of 9.00 for CPT code 36905 ((60/75) x 9.00 = 7.20). We chose 
to use the second reference code from the RUC survey, CPT code 36905, 
in this calculation because its intra-service time and total time 
values were closer to the time values proposed by the RUC for CPT code 
368X1. We note that the RUC-recommended RVU of 7.50 is one of the 
highest values within the range of reference codes we reviewed with the 
same intra-service time and similar total time. The proposed work RVU 
of 7.20 is supported by the reference CPT codes we compared to CPT code 
368X1 with the same 60 minutes of intra-service time and similar total 
time as CPT code 368X1; reference CPT code 47541 (Placement of access 
through the biliary tree and into small bowel to assist with an 
endoscopic biliary procedure (e.g., rendezvous procedure), 
percutaneous, including diagnostic cholangiography when performed, 
imaging guidance (e.g., ultrasound and/or fluoroscopy), and all 
associated radiological supervision and interpretation, new access) has 
a work RVU of 6.75, and reference CPT code 33991 (Insertion of 
ventricular assist device, percutaneous, including radiological 
supervision and interpretation; left heart, both arterial and venous 
access, with transseptal puncture) has a work RVU of 8.84. Again, we 
believe 7.20 is a more appropriate value overall than 7.50 when 
compared to the range of codes with the same intra-service time and 
similar total time.
    Although we disagree with the RUC-recommended work RVU of 9.60 for 
CPT code 368X2, we concur that the relative difference in work between 
CPT codes 368X1 and 368X2 is equivalent to the RUC-recommended interval 
of 2.10 RVUs. We believe the use of an incremental difference between 
these CPT codes is a valid methodology for setting values, especially 
in valuing services within a family of codes where it is important to 
maintain an appropriate intra-family relativity. Therefore, we are 
proposing a work RVU of 9.30 for CPT code 368X2, based on the RUC-
recommended interval of 2.10 RVUs above our proposed work RVU of 7.20 
for CPT code 368X1.
    For the direct PE inputs, we are seeking additional information on 
two equipment items and four supply items. For two of those four supply 
items, we are requesting a justification for their inclusion as direct 
PE inputs. The RUC submitted invoices for two new equipment inputs; one 
for a Wavelinq EndoAVF generator (EQ403) used for CPT code 368X2, and 
the other for an Ellipsys EndoAVF generator (EQ404) used for CPT code 
368X1. We are seeking comments and requesting information that may 
inform us why the Wavelinq generator (EQ403) is so much more expensive 
on its invoice as compared with the Ellipsys generator (EQ404) since 
the former costs $18,580 and the latter costs $3,000.
    In addition, the RUC included supply items SD149 (catheter, balloon 
inflation device) and SD152 (catheter, balloon, PTA) as direct PE 
inputs for CPT codes 368X1 and 368X2. We are seeking comments and 
requesting information that may inform us if supply items SD149 and 
SD152 are typical, and how often they are used, for CPT codes 368X1 and 
368X2. Also, the RUC included supply items SF056 (detachable coil) and 
SF057 (non-detachable embolization coil) as direct PE inputs for CPT 
code 368X2 (one each for SF056 and two each for SF057). We are seeking 
comments and requesting information that may provide us with a

[[Page 45914]]

justification for keeping supply items SF056 and SF057 as direct PE 
inputs for CPT code 368X2. We need to know if both of these supply 
items are typical and how often they are used for CPT code 368X2. If 
these supply inputs are not typical for these procedures, we believe 
that they should be removed from the direct PE inputs.
    We are proposing to delete HCPCS codes G2170 and G2171 and replace 
them with CPT codes 368X1 and 368X2 as recommended by the RUC.
(9) Energy Based Repair of Nasal Valve Collapse (CPT Codes 37X01 and 
30468)
    In September 2021, the CPT Editorial Panel created CPT code 37X01 
(Repair of nasal valve collapse with low energy, temperature-controlled 
(i.e., radiofrequency) subcutaneous/submucosal remodeling) which is 
currently reported with an unlisted code. For the January 2022 RUC 
meeting, both CPT code 37X01 and CPT code 30468 (Repair of nasal valve 
collapse with subcutaneous/submucosal lateral wall implant(s)) were 
reviewed. For CY 2023, the RUC recommended a work RVU of 2.70 for CPT 
code 37X01, and no change to the current work RVU of 2.80 for CPT code 
30468.
    The RUC reviewed the specialty society request to affirm the recent 
RUC valuations for CPT code 30468, which was surveyed and valued by the 
RUC in January 2020 for CY 2021. The RUC agreed, so for CY 2023, the 
RUC is not recommending any change to the current work RVU of 2.80 for 
CPT code 30468. In addition, the PE Subcommittee reviewed the direct 
practice expense inputs and made modifications to the pre-service 
clinical staff time to CPT code 30468 in accordance with current 
standards. There was a previous oversight in valuing the direct PE 
inputs for CPT code 30468. Therefore, 3 minutes of clinical staff time 
has been added to CPT code 30468 for clinical activity CA005 (complete 
pre-procedure phone calls and prescription).
    We are proposing to maintain the current work RVU of 2.80 for CPT 
code 30468 as recommended by the RUC. We are also proposing the RUC-
recommended direct PE inputs for CPT code 30468, which now includes 
clinical activity code CA005, without refinement.
    For CPT code 37X01, the RUC recommended a work RVU of 2.70 based on 
a direct work RVU crosswalk from CPT code 31295 (Nasal/sinus endoscopy, 
surgical, with dilation (e.g., balloon dilation); maxillary sinus 
ostium, transnasal or via canine fossa). We disagree with the RUC-
recommended work RVU of 2.70. Therefore, we are proposing a work RVU of 
2.44 for CPT code 37X01, which is the same RVU as CPT code 31297 
(Nasal/sinus endoscopy, surgical, with dilation (e.g., balloon 
dilation); sphenoid sinus ostium) and has the same 20 minutes of intra-
service time and similar total time. We note that CPT code 31295, which 
the RUC used as a direct crosswalk for the work RVU for CPT code 37X01, 
has the same 20 minutes of intra-service time and 56 minutes of total 
time as CPT code 31297. We believe the RUC should have used CPT code 
31297 as the crosswalk for CPT code 37X01. Both CPT codes 31295 and 
31297 were reviewed in 2017 and are in the same code family. The 
proposed work RVU of 2.44 is supported by the reference CPT codes we 
compared to CPT code 37X01 with the same 20 minutes of intra-service 
time and similar total time as CPT code 37X01; reference CPT code 31233 
(Nasal/sinus endoscopy, diagnostic; with maxillary sinusoscopy (via 
inferior meatus or canine fossa puncture)) with an RVU of 2.18, and CPT 
code 31295 with an RVU of 2.70. Again, we believe 2.44 is a more 
appropriate value overall than 2.70 when compared to the range of codes 
with the same intra-service time and similar total time.
    We are proposing the RUC-recommended direct PE inputs for CPT code 
37X01 without refinement.
(10) Drug Induced Sleep Endoscopy (DISE) (CPT Code 42975)
    In October 2020, the CPT Editorial Panel created CPT code 42975 
(Drug-induced sleep endoscopy, with dynamic evaluation of velum, 
pharynx, tongue base, and larynx for evaluation of sleep-disordered 
breathing, flexible, diagnostic) to report drug induced sleep endoscopy 
(DISE) flexible, diagnostic. At the January 2021 RUC Meeting, the RUC 
requested that this service be resurveyed for the April 2021 RUC 
Meeting using a standard 000-day survey template. For CY 2023, the RUC 
recommended a work RVU of 1.95 for CPT code 42975.
    We disagree with the RUC-recommended work RVU of 1.95 for CPT code 
42975 and are proposing a work RVU of 1.58. We believe the RVU should 
be lower than the RUC recommendation of 1.95 to reflect the decrease in 
total time from 68 minutes to 50 minutes. The proposed RVU of 1.58 is 
based on the total time ratio calculation using the RUC-recommended 50 
minutes total time for CPT code 42975 divided by the 48 minutes of 
total time for CPT code 43197 (Esophagoscopy, flexible, transnasal; 
diagnostic, including collection of specimen(s) by brushing or washing, 
when performed (separate procedure)), then multiplying by the RVU of 
1.52 for CPT code 43197 ((50/48) x 1.52 = 1.58). We found that CPT code 
43197 has the same intra-service time and similar total time as CPT 
code 42975. Also, CPT code 43197 is a similar endoscopic procedure as 
CPT codes 42975 and 31579 (Laryngoscopy, flexible or rigid telescopic, 
with stroboscopy). We note that CPT code 31579 is the first key 
reference code in the RUC survey. The proposed work RVU of 1.58 is 
supported by the reference CPT codes we compared to CPT code 42975 with 
the same 15 minutes of intra-service time and similar total time as CPT 
code 42975; reference CPT code 43200 (Esophagoscopy, flexible, 
transoral; diagnostic, including collection of specimen(s) by brushing 
or washing, when performed (separate procedure)) with an RVU of 1.42, 
and CPT code 62272 (Spinal puncture, therapeutic, for drainage of 
cerebrospinal fluid (by needle or catheter)) with an RVU of 1.58. 
Again, we believe the proposed RVU of 1.58 is a more appropriate value 
overall than 1.95 when compared to the range of codes with the same 
intra-service time and similar total time.
    We are proposing the RUC-recommended direct PE inputs for CPT code 
42975 without refinement.
(11) Endoscopic Bariatric Device Procedures (CPT Codes 43235, 43X21, 
and 43X22)
    In February 2021, the CPT Editorial Panel created CPT codes 43X21 
(Esophagogastroduodenoscopy, flexible, transoral; with deployment of 
intragastric bariatric balloon) and 43X22 (Esophagogastroduodenoscopy, 
flexible, transoral; with removal of intragastric bariatric balloon(s)) 
for endoscopic bariatric device procedures to the 
esophagogastroduodenoscopy (EGD) code family. CPT code 43235 
(Esophagogastroduodenoscopy, flexible, transoral; diagnostic, including 
collection of specimen(s) by brushing or washing, when performed 
(separate procedure)) is the base code for the EGD family and was 
surveyed with the new endoscopic bariatric device procedures, 43X21 and 
43X22. All three of these CPT codes were reviewed at the April 2021 RUC 
meeting. For CY 2023, the RUC recommended an RVU of 3.11 for CPT code 
43X21, an RVU of 2.80 for CPT code 43X22, and maintaining the current 
work RVU of 2.09 for CPT code 43235.
    We are proposing the RUC-recommended work RVU of 3.11 for

[[Page 45915]]

CPT code 43X21, the RUC-recommended work RVU of 2.80 for CPT code 
43X22, and maintaining the current work RVU of 2.09 for CPT code 43235 
for this code family.
    We are proposing the direct PE inputs for CPT code 43235 without 
refinement. However, we are proposing refinements to the direct PE 
inputs for CPT codes 43X21 and 43X22.
    For CPT code 43X21, we are proposing refinements to the direct PE 
inputs for clinical labor activity codes CA001 (complete pre-service 
diagnostic and referral forms) and CA011 (provide education/obtain 
consent). We are proposing to refine CA001 from 5 minutes to the 
standard 3 minutes since no explanation was provided to support 5 
minutes for this clinical labor activity. We are proposing to refine 
CA011 from 15 minutes to 10 minutes since it was not clear why this 
much time for education is needed, and we do not believe that the 
recommended 15 minutes would be typical for the procedure. Also, when 
we looked at other procedures with clinical labor activity code CA011 
we did not find many procedures with more than 12 minutes for this 
activity. Therefore, we are proposing to refine the clinical labor 
activity times for CA001 and CA011 for CPT code 43X21 as described 
above, and to accept the remaining RUC-recommended direct PE inputs 
without refinement.
    For CPT code 43X22, we are proposing a refinement to the direct PE 
input for clinical labor activity code CA016 (prepare, set-up and start 
IV, initial positioning and monitoring of patient) from 10 minutes to 
the standard 2 minutes. In the PE Summary of Recommendations for non-
facility direct PE inputs provided by the RUC, the RUC recommended 8 
minutes above the standard 2 minutes for CA016 and stated this clinical 
labor activity was identical to the 10 minutes for positioning the 
patient as CPT code 43260 (Endoscopic retrograde 
cholangiopancreatography (ERCP); diagnostic, including collection of 
specimen(s) by brushing or washing, when performed (separate 
procedure)). However, our study of this code family could not find 10 
minutes of non-facility direct PE inputs for clinical labor activity 
CA016. Also, CPT code 43260 is only performed in a facility and does 
not have any non-facility clinical labor times. Therefore, we are 
proposing to refine the clinical labor activity time for CA016 for CPT 
code 43X22 as described above, and to accept the remaining RUC-
recommended direct PE inputs without refinement. This proposed 
reduction of 8 minutes to the CA016 clinical labor activity also 
carries over to the equipment times for the suction machine (Gomco) 
(EQ235), the scope video system (monitor, processor, digital capture, 
cart, printer, LED light) (ES031), and the multi-channeled flexible 
digital scope, esophagoscopy gastroscopy duodenoscopy (EGD) (ES087) 
which we are proposing to reduce by the same 8 minutes.
(12) Delayed Creation Exit Site From Embedded Catheter (CPT Code 49436)
    CPT code 49436 (Delayed creation of exit site from embedded 
subcutaneous segment of intraperitoneal cannula or catheter) was 
finalized as potentially misvalued in the CY 2022 PFS final rule (86 FR 
64996) and the code was found to be appropriate to value for the non-
facility/office setting. The RUC only reviewed the PE inputs for this 
service at the January 2022 meeting. The RUC recommended 5 minutes for 
Clinical Activity Code CA013, line 34 in the non-facility/office 
setting on the RUC-recommended PE spreadsheet. We disagree with the 
RUC-recommended time, and are proposing the standard time of 2 minutes, 
as an adequate rationale was not provided for the additional time in 
the global space. This proposed reduction of 3 minutes to the CA013 
clinical labor activity also carries over to the equipment times, which 
we are proposing to reduce by the same 3 minutes. Otherwise, we agreed 
with the RUC-recommended clinical labor times for activity codes CA011 
and CA018, and we are proposing the remaining refinements as 
recommended.
    The RUC did not recommend any work inputs for this code and we are 
not proposing any work RVU refinements.
(13) Percutaneous Nephrolithotomy (CPT Codes 50080, 50081)
    In September 2021, the CPT Editorial Panel revised the descriptors 
to CPT codes 50080 (Percutaneous nephrolithotomy or pyelolithotomy, 
lithotripsy stone extraction, antegrade ureteroscopy, antegrade stent 
placement and nephrostomy tube placement, when performed, including 
imaging guidance; simple (e.g., stone[s] up to 2 cm in a single 
location of kidney or renal pelvis, nonbranching stones)) and 50081 
(Percutaneous nephrolithotomy or pyelolithotomy, lithotripsy stone 
extraction, antegrade ureteroscopy, antegrade stent placement and 
nephrostomy tube placement, when performed, including imaging guidance; 
complex (e.g., stone[s] <ls-thn-eq> 2 cm, branching stones, stones in 
multiple locations, ureter stones, complicated anatomy)), that in 
recent claims data were identified via the site of service anomaly 
screen, to be performed less than 50 percent of the time in the 
inpatient setting, but both codes have 090 day global periods, which 
include post-op inpatient hospital E/M services as a component of their 
value, typical of major surgery codes. The revised code descriptors 
also include image guidance and nephrostomy tube placement, which were 
not present in the old descriptors, and were reported as procedures 
that were separate from CPT codes 50081 and 50082. These codes have not 
been reviewed for nearly 30 years.
    CPT code 50080 currently has a work RVU of 15.74 with 117 minutes 
of intra-service time and 359.5 minutes of total time. The RUC 
recommended a work RVU of 13.50, 90 minutes of intra-service time, and 
244 minutes of total time for CPT code 50080, which represents a 
reduction from the current values. However, the recommended intra-
service times dropped by 76.9 percent from the current intra-service 
time and the RUC recommended work RVU is reduced only by 85.9 percent. 
Therefore, we disagree with the RUC recommended work RVU and we are 
proposing a work RVU of 12.11 for CPT code 50080 with the RUC 
recommended 90 minutes of intra-service time and 244 minutes of total 
time. We note that our proposed work RVU for CPT code 50080 falls 
between CPT code 36830 (Creation of arteriovenous fistula by other than 
direct arteriovenous anastomosis (separate procedure); nonautogenous 
graft (e.g., biological collagen, thermoplastic graft)), with a work 
RVU of 12.03 and the same intra-service time of 90 minutes, and CPT 
code 36818 (Arteriovenous anastomosis, open; by upper arm cephalic vein 
transposition), with a work RVU of 12.39 and the same intra-service 
time of 90 minutes (and both with similar total times to CPT code 
50080).
    CPT code 50081 currently has a work RVU of 23.50 with 42 minutes of 
pre-service evaluation time, 0 minutes of pre-service positioning time, 
25 minutes of pre-service scrub/dress/wait time, 195 minutes of intra-
service time, 27 minutes of immediate post-service time, and 507.5 
minutes of total time. The RUC recommended 22.00 work RVUs with 40 
minutes of pre-service evaluation time, 3 minutes positioning time, 10 
minutes scrub/dress/wait time, 140 minutes of intra-service time, 44 
minutes of immediate post-service time, for a sum of 302 minutes of 
total time. The RUC-recommended intra-service time and total time for 
CPT code 50081 are less than the current times for this code and we 
expect the work RVUs to also be less than the current work RVUs.

[[Page 45916]]

Though the RUC recommended a work RVU of 22.00 that is less than the 
current 23.50 work RVU, a substantial reduction in time should be 
better reflected in the work RVU.
    The RUC recommended 13.50 work RVUs for CPT code 50800 and 22.00 
for CPT code 50081, with an incremental difference between the two 
codes of 8.50 work RVUs (22.00-13.50 = 8.50). We are proposing a work 
RVU of 20.61 for CPT code 50081, based on the proposed CPT code 50080's 
work RVU of 12.11 plus the RUC-recommended incremental difference 8.50 
work RVUs between CPT code 50080 and CPT code 50081 (12.11 + 8.50 = 
20.61).
    We are proposing the direct PE inputs as recommended by the RUC for 
both codes in the family.
(14) Laparoscopic Simple Prostatectomy (CPT Codes 55821, 55831, 55866, 
and 558XX)
    In October 2021, the CPT Editorial Panel added CPT placeholder code 
558XX (Laparoscopy, surgical prostatectomy, simple subtotal (including 
control of postoperative bleeding, vasectomy, meatotomy, urethral 
calibration and/or dilation, and internal urethrotomy), includes 
robotic assistance, when performed) and prompted this family of 
Laparoscopic Simple Prostatectomy codes for survey and review for the 
January 2022 RUC meeting.
    The RUC recommends a work RVU of 15.18 for CPT code 55821 
(Prostatectomy (including control of postoperative bleeding, vasectomy, 
meatotomy, urethral calibration and/or dilation, and internal 
urethrotomy); suprapubic, subtotal, 1 or 2 stages) with 33 minutes of 
pre-service evaluation time, 3 minutes positioning time, 10 minutes 
scrub/dress/wait time, 120 minutes of intra-service time, and 25 
minutes of immediate post-service time, for a sum of 329 minutes of 
total time. CPT code 55821 currently has a work RVU value of 15.76 with 
102.0 minutes of intra-service time and 399.5 minutes of total time. 
After reviewing this code and relative similar codes in the PFS, we are 
proposing the RUC-recommended work RVU of 15.18 with 315 minutes of 
total time.
    The RUC recommends a work RVU of 15.60 for CPT code 55831 
(Prostatectomy (including control of postoperative bleeding, vasectomy, 
meatotomy, urethral calibration and/or dilation, and internal 
urethrotomy); retropubic, subtotal), with 40 minutes of pre-service 
evaluation time, 3 minutes positioning time, 10 minutes scrub/dress/
wait time, 120 minutes of intra-service time, 25 minutes of immediate 
post-service time, for a sum of 329 minutes of total time. CPT code 
55831 currently has a work RVU value of 17.19 with 114.0 minutes of 
intra-service time and 422.5 minutes of total time. The RUC notes an 
additional degree of difficulty with this retropubic incision approach 
(behind the pubis) compared to the suprapubic approach. After reviewing 
this code and relative similar codes in the PFS, we are proposing the 
RUC recommended work RVU of 15.60 with 322 minutes of total time.
    The RUC recommends a work RVU of 22.46 for CPT code 55866 
(Laparoscopy, surgical prostatectomy, retropubic radical, including 
nerve sparing, includes robotic assistance, when performed) with 40 
minutes of pre-service evaluation time, 15 minutes positioning time, 12 
minutes scrub/dress/wait time, 180 minutes of intra-service time, 50 
minutes of immediate post-service time, for a sum of 362 minutes of 
total time. CPT code 55866 currently has a work RVU value of 26.80 with 
180 minutes of intra-service time and 422 minutes of total time. The 
RUC notes that this procedure removes the entire prostate with robotic 
assistance, and the complexity of nerve sparing when operating with a 
cancerous prostate, increases the medical complexity and intensity of 
this procedure. After reviewing this code and relative similar codes in 
the PFS, we are proposing the RUC recommended work RVU of 22.46 with 
362 minutes of total time to CPT code 55866.
    The RUC recommends a work RVU of 19.53 for CPT code 558XX 
(Laparoscopy, surgical prostatectomy, simple subtotal (including 
control of postoperative bleeding, vasectomy, meatotomy, urethral 
calibration and/or dilation, and internal urethrotomy), includes 
robotic assistance, when performed) with 40 minutes of pre-service 
evaluation time, 8 minutes positioning time, 11 minutes scrub/dress/
wait time, 180 minutes of intra-service time, 50 minutes of immediate 
post-service time, for a sum of 354 minutes of total time. The RUC 
offers CPT code 42420 (Excision of parotid tumor or parotid gland; 
total, with dissection and preservation of facial nerve) with a work 
RVU of 19.53, 180 minutes of intra-service time and 383 minutes of 
total time)) as a crosswalk to CPT code 558XX. After reviewing this 
code and relative similar codes in the PFS, we are proposing the RUC-
recommended work RVU of 19.53 with 354 minutes of total time to CPT 
code 558XX.
    We are proposing the RUC-recommended direct PE inputs for CPT codes 
55821, 55831, 55866, and 558XX without refinement.
(15) Lumbar Laminotomy With Decompression (CPT Codes 63020, 63030, and 
63035)
    In October 2018, CPT code 63030 (Laminotomy (hemilaminectomy), with 
decompression of nerve root(s), including partial facetectomy, 
foraminotomy and/or excision of herniated intervertebral disc; 1 
interspace, lumbar) was identified by the AMA as having an anomalous 
site of service when compared to Medicare utilization data. The 
Medicare data from 2014 through 2017 indicated that CPT code 63030 was 
performed less than 50 percent of the time in the inpatient setting, 
yet included inpatient hospital evaluation and management (E/M) 
services within its global period. In January 2019, the RUC recommended 
that this code be reviewed in 2 years (January 2021) to determine if 
previous changes to differentiate percutaneous, endoscopic, and open 
spine procedures were effective to correct reporting of this service. 
In December 2020, the Relativity Assessment Workgroup noted that CPT 
code 63030 continues to be primarily reported in the outpatient 
setting, but still includes inpatient hospital visits in its valuation. 
The specialty society indicated that there is still confusion about 
this code, and therefore, the RUC recommended that CPT code 63030 be 
referred to the CPT Editorial Panel to revise the descriptor to 
mitigate the incorrect reporting in the outpatient setting, but the CPT 
Editorial Panel did not accept the code change application to 
differentiate inpatient (63030) versus outpatient (630X0) at the 
September 2021 CPT meeting. Since this is a site of service issue, CPT 
code 63030 was surveyed with the code family for the January 2022 RUC 
meeting.
    For CPT codes 63020 (Laminotomy (hemilaminectomy), with 
decompression of nerve root(s), including partial facetectomy, 
foraminotomy and/or excision of herniated intervertebral disc; 1 
interspace, cervical), 63030, and 63035 (Laminotomy (hemilaminectomy), 
with decompression of nerve root(s), including partial facetectomy, 
foraminotomy and/or excision of herniated intervertebral disc; each 
additional interspace, cervical or lumbar (List separately in addition 
to code for primary procedure)), we disagree with the RUC's recommended 
work RVUs of 15.95, 13.18, and 4.00, respectively, because they do not 
account for the surveyed changes in time for CPT codes 63020, 63030, 
and

[[Page 45917]]

63035, and the full application of the 23-hour policy to CPT code 
63030. We are proposing a work RVU of 14.91 for CPT code 63020, a work 
RVU of 12.00 for CPT code 63030, and a work RVU of 3.86 for CPT code 
63035.
    The RUC recommends 40 minutes pre-service evaluation, 20 minutes 
pre-service positioning, 15 minutes pre-service scrub/dress/wait time, 
90 minutes intraservice time, 30 minutes immediate post-service time, 
and one CPT code 99232 (subsequent hospital care/day 25 minutes), one 
CPT code 99231 (Subsequent hospital care/day 15 minutes), one CPT code 
99238 (Hospital discharge day management; 30 minutes or less), one CPT 
code 99214 (Office or other outpatient visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination and moderate level of medical 
decision making. When using time for code selection, 30-39 minutes of 
total time is spent on the date of the encounter.), and two CPT code 
99213 (Office or other outpatient visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination and low level of medical 
decision making. When using time for code selection, 20-29 minutes of 
total time is spent on the date of the encounter.) visits in the post-
operative period. This results in a 15-minute decrease in the pre-
service period, a 30-minute decrease in intraservice time, a 5-minute 
decrease in immediate post-service time, and a 17-minute increase in 
the post-operative period. The proposed work RVU of 14.91 is based on 
the total time ratio calculation using the RUC-recommended 379 minutes 
of total time divided by the current total time of 412 minutes for CPT 
code 63020, then multiplying by the current work RVU of 16.20 for CPT 
code 63020 ((379 minutes/412 minutes) * 16.20 = 14.90). We note that 
this is a direct crosswalk to CPT code 27057 (Decompression 
fasciotomy(ies), pelvic (buttock) compartment(s) (e.g., gluteus medius-
minimus, gluteus maximus, iliopsoas, and/or tensor fascia lata muscle) 
with debridement of nonviable muscle, unilateral), which has a work RVU 
of 14.91, identical intraservice and immediate post-service time of 90 
minutes and 30 minutes, respectively, and only 10 more minutes of total 
time. We believe this work RVU more adequately accounts for the 
decrease in total and intraservice time than the RUC recommended work 
RVU, and we note that we considered the reverse building block 
methodology, which would result in a work RVU of 14.30, but we felt 
that it decreased the valuation of CPT code 63020 too much, considering 
the shift in post-operative work to include a longer, more intense 
office/outpatient visit (CPT code 99214).
    We disagree with the RUC-recommended work RVU for CPT code 63030. 
More specifically, we disagree with the RUC recommended work RVU for 
CPT code 63030 because the RUC did not completely apply the 23-hour 
policy calculation (finalized in the CY 2011 PFS final rule (75 FR 
73226)) in formulating its recommendations. Additionally, we disagree 
with the RUC recommended work RVU for this code for which the RUC 
considered the patient to be admitted during the post-operative period 
because the RUC did not fully apply the 23-hour policy when formulating 
their recommendations. As we noted in the CY 2011 PFS final rule (75 FR 
73226), and as we discuss earlier in this section of this proposed rule 
(``(1) Anterior Abdominal Hernia Repair (CPT codes 157X1, 49X01, 49X02, 
49X03, 49X04, 49X05, 49X06, 49X07, 49X08, 49X09, 49X10, 49X11, 49X12, 
49X13, 49X14, and 49X15''), the work RVUs for services that are 
typically performed in the outpatient setting and require a hospital 
stay of less than 24 hours may in some cases involve multiple overnight 
stays while the patient is still considered to be an outpatient for 
purposes of Medicare payment. Because such services are typically 
furnished in the outpatient setting, they should not be valued to 
include inpatient post-operative E/M visits. The level of discharge day 
management services included in the valuation of such services should 
similarly not reflect an inpatient discharge and should therefore be 
reduced. And finally, as discussed in CY 2011 rulemaking, the 
intraservice time from the inpatient level E/M postoperative visit 
should be reallocated to the immediate postservice time of the service. 
The 23-hour policy calculation, when fully applied to the calculation 
of a work RVU, is used to reduce the value of discharge day management 
services, remove the inpatient E/M visits, and reallocate the 
intraservice time to the immediate post-service period. We refer 
readers to the 2011 PFS final rule (75 FR 73226) for an in-depth 
explanation of the 23-hour policy.
    For CPT code 63030, we believe the RUC only partially applied the 
23-hour policy when it applied the policy to the immediate post service 
time, but not to the calculation of the work RVU. Instead, we believe 
the 23-hour policy should be fully applied to this code that describes 
outpatient services for which there is an overnight stay during the 
post-operative period, regardless of the number of nights that a 
patient stays in the hospital. The services to which the 23-hour policy 
is usually applied would typically involve a patient stay in a hospital 
for less than 24 hours, which often means the patient may stay 
overnight in the hospital. On occasion, the patient may stay in the 
hospital longer than a single night; however, in both cases (one night 
or more than one night), the patient is considered to be a hospital 
outpatient, not an inpatient, for Medicare purposes. In short, we do 
not believe that the work that is typically associated with an 
inpatient service should be included in the work RVUs for the 
outpatient services to which the 23-hour policy applies, especially 
considering the previously discussed site of service anomaly for CPT 
code 63030.
    In accordance with the 23-hour policy valuation methodology we 
established in the CY 2011 PFS final rule, we are instead proposing a 
work RVU of 12.00 for CPT code 63030.The steps are as follows:
    <bullet> Step (1): 13.18 - 0.64* = 12.54.
    <bullet> Step (2): 12.54 - 0.76** = 11.78.
    <bullet> Step (3): 11.78 + (10 minutes x 0.0224)*** = 12.00 RVUs.
    *Value associated with \1/2\ hospital discharge day management 
service
    **Value associated with an inpatient hospital visit, CPT code 
99231.
    ***Value associated with the reallocated intraservice time 
multiplied by the post-service intensity of the 23-hour stay code.
    The RUC recommends the maintenance of the current work RVU of 13.18 
because there was no change in intraservice time and the 37-minute 
decrease in total time is largely due to the change in immediate post-
service time and post-operative period from the application of the 23-
hour policy. We note that the proposed work RVU of 12.00 is higher than 
the other valuations that we considered, including the total time ratio 
work RVU of 11.75 ((305 minutes/342 minutes) * 13.18 = 11.75) and the 
reverse building block work RVU of 11.45. We note that the proposed 
work RVU of 12.00 is well-bracketed by two 90-minute intraservice timed 
090-day CPT codes 28725 (Arthrodesis; subtalar), with a work RVU of 
11.22, and 58720 (Salpingo-oophorectomy, complete or partial, 
unilateral or bilateral (separate procedure)), with a work RVU of 
12.16.
    We note that, in the summary of recommendations (SOR) submitted to 
CMS by the RUC, the specialty societies assert that the surveyed total 
time would be the same as the current total

[[Page 45918]]

time if the 23-hour policy was not fully applied to the immediate post-
service time and post-operative period, with only a shift of work from 
facility to office, but we note that this is not true. The surveyed 
total time is 339 minutes, but the RUC recommended 40 minutes for the 
pre-service evaluation time rather than the specialty societies' 
surveyed 45 minutes. If the RUC had recommended the survey times, with 
the pre-service evaluation refinement, the reverse building block work 
RVU would be 12.62, still less than the RUC-recommended work RVU of 
13.18, effectively accounting for the shift from facility to office 
post-operative visits.
    For CPT code 63035, we are proposing a work RVU of 3.86 based on 
the reverse building block methodology to account for the 11-minute 
increase in intraservice time. We note that this proposed value is 
between the surveyed 25th percentile value of 3.50 and the RUC-
recommended work RVU of 4.00. We note that the proposed work RVU is 
well-bracketed by two 60-minute add-on CPT codes--CPT code 50706 and 
63231. CPT code 50706 (Balloon dilation, ureteral stricture, including 
imaging guidance (e.g., ultrasound and/or fluoroscopy) and all 
associated radiological supervision and interpretation (List separately 
in addition to code for primary procedure)), has a work RVU of 3.80, 
and CPT code 63621 (Stereotactic radiosurgery (particle beam, gamma 
ray, or linear accelerator); each additional spinal lesion (List 
separately in addition to code for primary procedure)), has a work RVU 
of 4.00.
    For the direct PE inputs, we are proposing to remove the 125 
minutes of equipment time for EQ168 (light, exam) for CPT codes 63020 
and 63030 because the RUC contested the typicality of its use to assess 
the wound and remove staples. Because it is a standard piece of 
equipment in a neurosurgeon and orthopedic exam room, and the RUC 
questioned its typicality, we are proposing 0 minutes for EQ168 for CPT 
codes 63020 and 63030.
(16) Somatic Nerve Injections (CPT Codes 64415, 64416, 64417, 64445, 
64446, 64447, 64448, 76942, 77002, and 77003)
    In May 2021, the CPT Editorial Panel revised the descriptors and 
billing instructions for CPT codes 64415 (Injection(s), anesthetic 
agent(s) and/or steroid; brachial plexus, including imaging guidance, 
when performed), 64416 (Injection(s), anesthetic agent(s) and/or 
steroid; brachial plexus, continuous infusion by catheter (including 
catheter placement), including imaging guidance, when performed), 64417 
(Injection(s), anesthetic agent(s) and/or steroid; axillary nerve, 
including imaging guidance, when performed), 64445 (Injection(s), 
anesthetic agent(s) and/or steroid; sciatic nerve, including imaging 
guidance, when performed), 64446 (Injection(s), anesthetic agent(s) 
and/or steroid; sciatic nerve, continuous infusion by catheter 
(including catheter placement), including imaging guidance, when 
performed), 64447 (Injection(s), anesthetic agent(s); femoral nerve, 
including imaging guidance, when performed), 64448 (Injection(s), 
anesthetic agent(s) and/or steroid; femoral nerve, continuous infusion 
by catheter (including catheter placement), including imaging guidance, 
when performed), 77002 (Fluoroscopic guidance for needle placement), 
77003 (Fluoroscopic guidance and localization of needle or catheter tip 
for spine or paraspinous diagnostic or therapeutic injection procedures 
(epidural or subarachnoid)) and 76942 (Ultrasonic guidance for needle 
placement, imaging supervision and interpretation). These codes were 
then surveyed by the RUC in October 2021.
    We last finalized values for CPT codes 64415, 64416, 64417, 64445, 
64446, 64447, and 64448 in the CY 2020 PFS final rule (84 FR 62744 
through 62745). In May 2018, the CPT Editorial Panel approved the 
revision of descriptors and guidelines for codes in the somatic nerve 
injection family. At its October 2018 meeting, the RUC recommended work 
RVU and PE inputs for a number of somatic nerve injection codes, 
including CPT codes 64415, 64416, 64417, 64445, 64446, 64447, and 
64448. (Note that in 2018, the codes did not include ``including 
imaging guidance, when performed'' in their descriptors.) During the 
October 2018 RUC presentation for this family of services, the 
specialty societies stated that CPT codes 64415, 64416, 64417, 64446, 
66447, and 64448 were reported with the imaging code CPT code 76942 
more than 50 percent of the time. In reviewing this family of services 
in the CY 2020 PFS final rule, our finalized work and PE values for the 
codes did not consider the simultaneous performance of injection and 
imaging (84 FR 62744). In May 2021, the CPT Editorial Panel revised the 
codes to include ``with imaging, when performed'' in the descriptors.
    When presenting its CY 2023 valuation recommendations, the RUC 
pointed out that the current values and times for CPT codes 64415, 
64416, 64417, 64445, 64446, 64447, and 6448 reflect only the work and 
time of the injection. The revised codes, however, include both 
injection and imaging. In order to make an equitable comparison between 
the RUC recommendations and the current values, the RUC suggested we 
compare the RUC recommendations to values that combined the current 
work and estimated time of the injection codes and the imaging code 
with which they are being bundled, CPT code 76942. We agreed with this 
approach and thank the RUC for providing combined work RVUs and 
estimated combined times, which we considered as part of the RUC's 
recommendations.
    As part of its recommendations, the RUC reaffirmed its prior 
recommendations for a number of codes that were previously reviewed or 
reaffirmed in the CY 2020 PFS final rule, including: CPT codes 64400 
(Injection(s), anesthetic agent(s); trigeminal nerve, each branch 
(i.e., ophthalmic, maxillary, mandibular)), 64408 (Injection(s), 
anesthetic agent(s), and/or steroid; vagus nerve), 64420 (Injection(s), 
anesthetic agent(s) and/or steroid; intercostal nerve, single level), 
64421 (Injection(s), anesthetic agent(s) and/or steroid; intercostal 
nerves, each additional level (List separately in addition to code for 
primary procedure)), 64425 (Injection(s), anesthetic agent(s) and/or 
steroid; ilioinguinal, iliohypogastric nerves), 64430 (Injection(s), 
anesthetic agent(s) and/or steroid; pudendal nerve), 64435 
(Injection(s), anesthetic agent(s) and/or steroid; paracervical 
(uterine) nerve), 64449 (Injection(s), anesthetic agent(s) and/or 
steroid; lumbar plexus, posterior approach, continuous infusion by 
catheter (including catheter placement)), and 64450 (Injection(s), 
anesthetic agent(s); other peripheral nerve or branch) (84 FR 62744 
through 62745); CPT code 64451 (Injection(s), anesthetic agent(s) and/
or steroid; nerves innervating the sacroiliac joint, with image 
guidance (ie, fluoroscopy or computed tomography) (84 FR 62740); and 
CPT code 64454 (Injection(s), anesthetic agent(s) and/or steroid; 
genicular nerve branches including imaging guidance, when performed) 
(84 FR 62749). The RUC also reaffirmed its recommendation for CPT code 
64455 (Injection(s), anesthetic agent(s) and/or steroid; plantar common 
digital nerve(s) (e.g., Morton's neuroma)), which was reviewed and 
valued in the CY 2019 PFS final rule (83 FR 58542). The codes the RUC 
wishes to reaffirm for CY 2023 have not been revised by the CPT 
Editorial Panel and were not resurveyed by the RUC since their prior 
valuation. Since we have not received new

[[Page 45919]]

information regarding these codes, we acknowledge the RUC's 
reaffirmation but are not reviewing the values of these codes at this 
time. We also note that the RUC-reaffirmed values for CPT codes 64435 
(work RVU of 0.75), 64450 (work RVU of 0.75), 64451 (work RVU of 1.52), 
and 64454 (work RVU of 1.52) are the same as the current work RVUs that 
we finalized in the CY 2020 PFS final rule. The RUC reaffirmed work RVU 
of 0.94 for CPT code 64405 is the current work RVU, which was finalized 
in the CY 2019 PFS final rule (83 FR 59542) and reaffirmed in the CY 
2020 final rule, and the RUC-reaffirmed work RVU of 1.10 for CPT code 
64418 is the current work RVU value finalized in the CY 2018 PFS final 
rule (82 FR 53054) and reaffirmed in the CY 2020 PFS final rule. The 
RUC reaffirmed a work RVU of 0.75 for CPT code 64455 which is the 
current work RVU we finalized in the CY 2019 PFS final rule (83 FR 
58542).
    For CY 2023, we are proposing the RUC-recommended work RVUs for CPT 
codes 64417 (work RVU of 1.31), 64447 (work RVU of 1.34), 64448 (work 
RVU of 1.68), 77002 (work RVU of 0.54), 77003 (work RVU of 0.60), and 
76942 (work RVU of 0.67).
    For CPT code 64415, we disagree with the RUC-recommended work RVU 
of 1.50 and are proposing a work RVU of 1.35, based on the intraservice 
time ratio calculated using the ``combined'' values for CPT code 64415 
and the imaging CPT code 76942 provided by the RUC. (The combined work 
RVU the RUC offered for comparison was 2.02 (the sum of the work RVUs 
for both codes: CPT code 64415 is 1.35 and CPT code 76942 is 0.67), and 
an estimated intraservice time of 15 minutes and total time of 43 
minutes.) This proposed work RVU of 1.35 for CPT code 64415 is 
supported by a crosswalk to CPT code 11982 (Removal, non-biodegradable 
drug delivery implant), which has a work RVU of 1.34, an identical 
service time, and a total time that is two minutes lower than CPT code 
64415. This value is further supported by a bracket of CPT codes: CPT 
code 64486 and CPT code 33285. CPT code 64486 (Transversus abdominis 
plane (TAP) block (abdominal plane block, rectus sheath block) 
unilateral; by injection(s) (includes imaging guidance, when 
performed)) has a work RVU of 1.27 and identical intraservice and total 
time values to CPT code 64415, and CPT code 33285 (insertion, 
subcutaneous cardiac rhythm monitor, including programming) has a work 
RVU of 1.53, an intraservice time of 10 minutes and a total time of 40 
minutes.
    We note that when compared to the current time file for CPT code 
64415, the RUC-recommended intraservice time decreased from 12 to 10 
minutes (16.7 percent reduction) and RUC-recommended total time 
decreased from 40 to 35 minutes (12.5 percent reduction). However, the 
RUC-recommended work RVU increased by 0.15 which is an 11.1 percent 
increase. Although we do not imply that the decrease in time as 
reflected in survey values must always equate to a one-to-one or linear 
decrease in the valuation of work RVUs, we believe that since the two 
components of work are time and intensity, absent an obvious or 
explicitly stated rationale for why the relative intensity of a given 
procedure has increased, significant decreases in time should not be 
met with significant increases to work RVUs without adequate 
justification. Additionally, while we do acknowledge that adding 
imaging does bundle some additional work into the code, we do not 
believe that the recoding of the services in this family has resulted 
in a significant increase in their intensity, only a change in the way 
in which they will be reported, and through the bundling of some of 
these frequently reported services, it is reasonable to expect that the 
new coding system will achieve efficiencies via elimination of 
duplicative assumptions of the resources involved in furnishing 
particular services. We believe the new coding assigns more accurate 
work times, and thus, reflects efficiencies in resource costs that 
existed but were not reflected in the services as they were previously 
reported. If the addition of imaging guidance had made the new CPT 
codes significantly more intense to perform, we believe that this would 
have been reflected in the surveyed work times, which in the case of 
CPT code 64415 actually decreased from the predecessor code. Thus, we 
are disinclined to ignore the impact of decreased times on the work 
RVU. We believe our proposed value of 1.35 appropriately reflects both 
the additional work and the decrease of time.
    We considered proposing a work RVU of 1.27 for CPT code 64415, 
using CPT code 64486 as a comparison code, since it has the same 
intraservice and total times as the revised CPT code 64415. However, 
CPT code 64486, with a work RVU of 1.27, has a lower work RVU than the 
current work RVU of 64415 (1.35.) We are in general agreement with the 
RUC that it is important to acknowledge that there is some additional 
work that comes with adding imaging to this procedure.
    For CPT code 64416, we disagree with the RUC-recommended work RVU 
of 1.80 and are proposing a work RVU of 1.65. While we disagree with 
the RUC's recommended work RVU, we did agree with the RUC's proposed 
increment of +0.30 between CPT codes 64415 and 64416. (The RUC 
recommendation for CPT code 64415 was 1.50, and the recommendation for 
CPT code 64416 was 1.80.) We found persuasive the RUC's observation 
that the current increment between CPT codes 64415 and 64416 is 
unusually small when compared to other sets of related codes in the 
family. Typically, the codes that add catheter placement in addition to 
the injection are 0.30-0.36 work RVUs higher than the codes for an 
injection in the same nerve group or region. Retaining such a narrow 
interval of 0.15 between CPT codes 64415 and 64416 would create a rank 
order anomaly within the family in light of adjustments to some of the 
other codes' work RVUs. Our proposed work RVU of 1.65 for CPT code 
64416 is supported by a bracket of CPT codes: CPT code 64448 and CPT 
code 36573. CPT code 64448 (Transversus abdominis plane (TAP) block 
(abdominal plane block, rectus sheath block) bilateral; by injections 
(includes imaging guidance, when performed)) has a work RVU of 1.60, 15 
minutes intraservice time and 40 minutes total time, and CPT code 36573 
(Insertion of peripherally inserted central venous catheter (PICC), 
without subcutaneous port or pump, including all imaging guidance, 
image documentation, and all associated radiological supervision and 
interpretation required to perform the insertion; age 5 years or older) 
has a work RVU of 1.70, 15 minutes intraservice time and 40 minutes 
total time.
    We note that, when compared to the current time file, the RUC-
recommended intraservice time for CPT code 64416 decreased from 20 to 
15 minutes (25 percent reduction) and the RUC-recommended total time 
decreased from 49 to 44 minutes (10.2 percent reduction). However, the 
RUC recommended a 0.32 increase in the work RVU, which is a 21.6 
percent increase. We note that the RUC-recommended work RVU of 1.80 
would give CPT code 64416 the highest work RVU of the surveyed codes, 
and would make it among the highest valued codes in the family. We do 
not believe the RUC-recommended work RVU appropriately accounts for the 
reductions in the surveyed total time for the procedure, and did not 
receive specific information explaining why, despite the decrease in 
time, the value should receive such a significant

[[Page 45920]]

increase relative to the other surveyed codes. As stated previously, 
absent an obvious or explicitly stated rationale for why the relative 
intensity of a given procedure has increased significantly, decreases 
in time should be reflected in the revised work RVUs. As noted in our 
discussion of CPT code 64415 above, if the addition of imaging guidance 
had made the new CPT codes significantly more intense to perform, we 
believe that this would have been reflected in the surveyed work times, 
which in the case of CPT code 64416, are now actually lower. We believe 
our proposed work RVU of 1.65 corrects the increment between CPT code 
64415 and 64416, while also acknowledging that, the addition of imaging 
notwithstanding, the times for CPT code 64416 have noticeably 
decreased.
    For CPT code 64445, we disagree with the RUC-recommended work RVU 
of 1.39 and are proposing a work RVU of 1.28, based on the intraservice 
time ratio calculated using the. ``combined'' values for CPT code 64445 
and the imaging CPT code 76942 provided by the RUC. (The combined work 
RVU the RUC offered for comparison was 1.67 (the sum of the work RVUs 
for both codes: CPT code 64445 is 1.00 and CPT code 76942 is 0.67), and 
an estimated intraservice time of 13 minutes and total time of 27 
minutes.) This proposed value of 1.28 is supported by a comparison to 
CPT code 64486 (Transversus abdominis plane (TAP) block (abdominal 
plane block, rectus sheath block) unilateral; by injection(s) (includes 
imaging guidance, when performed)), which has a work RVU of 1.27 and 
intraservice time of 10 minutes and total time of 35 minutes. The value 
is also supported by a low bracket of CPT code 58100 (Endometrial 
sampling (biopsy) with or without endocervical sampling (biopsy), 
without cervical dilation, any method (separate procedure)), with a 
work RVU of 1.21, identical intraservice time and almost identical 
total time, and a high bracket of CPT code 11982 (Removal, non-
biodegradable drug delivery implant), with a work RVU of 1.34, 
identical intraservice time and a higher total time of 33 minutes.
    We note that the RUC-recommended intraservice time and total time 
for CPT code 64445 are identical to the current intraservice and total 
times in the time file for CPT code 64445. However, the RUC recommended 
a 0.39 increase to the work RVU. We do not imply that the lack of 
change to the intraservice and total times means that the work RVU 
cannot be increased. We believe that since the two components of work 
are time and intensity, absent an obvious or explicitly stated 
rationale for why the relative intensity of a given procedure has 
increased, the RUC-proposed increase in the work RVU does not seem 
justified. As noted in our discussion of CPT code 64415 above, if the 
addition of imaging guidance had made the new CPT codes significantly 
more intense to perform, we believe that this would have been reflected 
in the surveyed work times, which in the case of CPT code 64445, are 
the same as the predecessor code.
    We considered proposing a work RVU of 1.10 for CPT code 64445, 
using CPT code 30901 (Control nasal hemorrhage, anterior, simple 
(limited cautery and/or packing) any method) as a comparison code, with 
a work RVU of 1.10 and identical intraservice and total times as CPT 
code 64445. However, we believed this would cause a rank order anomaly 
within the family. For example, CPT code 64418 (Injection(s), 
anesthetic agent(s) and/or steroid; suprascapular nerve) also has a 
work RVU of 1.10, but does not include imaging. Again, we generally 
agree with the RUC that it is important to acknowledge the additional 
work that comes with adding imaging to this procedure, and to ensure 
that this additional work is reflected within the relative values of 
the family, but we are still proposing a work RVU of 1.28 for CPT code 
64445.
    For CPT code 64446, we disagree with the RUC-recommended work RVU 
of 1.75 and are proposing a work RVU of 1.64. This recommended work RVU 
is 0.36 higher than the proposed work RVU for CPT code 64445 (1.28). We 
note that the current increment between the current values of 64445 and 
64446 (1.00 and 1.36, respectively) is 0.36. The RUC recommendations 
for these codes (1.39 and 1.75) preserved this increment. Since the 
same imaging activity is being added to both codes, we agree with 
preserving the relationship between the values of CPT codes 64445 and 
64446. Our proposed work RVU of 1.64 for CPT code 64446 is supported by 
a bracket of CPT codes: CPT code 64448 and 36573. CPT code 64448 
(Transversus abdominis plane (TAP) block (abdominal plane block, rectus 
sheath block) bilateral; by injections (includes imaging guidance, when 
performed)) has a work RVU of 1.60, 15 minutes intraservice time and 40 
minutes total time, and CPT code 36573 (Insertion of peripherally 
inserted central venous catheter (PICC), without subcutaneous port or 
pump, including all imaging guidance, image documentation, and all 
associated radiological supervision and interpretation required to 
perform the insertion; age 5 years or older) has a work RVU of 1.70, 15 
minutes intraservice time and 40 minutes total time. (We note that this 
is the same bracket we suggested to support the proposed value for CPT 
code 64416. As revised, the intraservice and total times for CPT codes 
64416 and 64446 are the same.)
    We note that, compared to the time file for CPT code 64446, the 
RUC-recommended intraservice time stayed the same (15 minutes) and the 
total time increased from 40 to 44 minutes (10 percent increase). The 
RUC-recommended work RVU for CPT code 64446, is 0.39 higher than the 
current RVU, a 28.7 percent increase. We believe the RUC-recommended 
work RVU increase is disproportionate to the change in time. 
Additionally, we note that the RUC-recommended times result in CPT code 
64416 and CPT code 64446 having identical intraservice and total times. 
We believe it best preserves rank order within the family to assign CPT 
code 64416 and CPT code 64446 similar work RVUs.
    We are proposing the direct PE inputs as recommended by the RUC for 
all of the codes in the Somatic Nerve Injections family.
(17) Transcutaneous Passive Implant-Temporal Bone (CPT Codes 69714, 
69716, 69717, 69719, 69726, 69727, 69XX0, 69XX1, and 69XX2)
    In October 2020, the CPT Editorial Panel deleted two codes used for 
mastoidectomy and replaced them with four new codes for magnetic 
transcutaneous attachment to external speech processor. The CPT 
Editorial Panel made additional revisions to differentiate 
implantation, removal, and replacement of the implants. The RUC 
submitted interim recommendations to CMS for six codes in this family 
following the January 2021 RUC meeting, and CMS proposed and finalized 
the recommended work RVU for all six of these codes in the CY 2022 PFS 
final rule (86 FR 65099 through 65100). For CY 2023, the CPT Editorial 
Panel established three additional new codes and the coding structure 
of the family was changed to describe the different techniques more 
appropriately for transcutaneous passive implant procedures that vary 
in time and intensity depending on the indication for the procedure, 
device chosen, and patient anatomy. The nine codes in the family were 
surveyed again for the January 2022 RUC meeting and new recommendations 
were submitted to CMS.
    We are proposing the RUC-recommended work RVU for six of the nine 
codes in the Transcutaneous Passive Implant-Temporal Bone family.

[[Page 45921]]

We are proposing a work RVU of 9.03 for CPT code 69716 (Implantation, 
osseointegrated implant, skull; with magnetic transcutaneous attachment 
to external speech processor within the mastoid and/or resulting in 
removal of less than 100 mm2 surface area of bone deep to the outer 
cranial cortex), a work RVU of 9.97 for CPT code 69XX0 (Implantation, 
osseointegrated implant, skull; with magnetic transcutaneous attachment 
to external speech processor, outside of the mastoid and resulting in 
removal of greater than or equal to 100 mm2 surface area of bone deep 
to the outer cranial cortex), a work RVU of 9.46 for CPT code 69719 
(Revision/replacement (including removal of existing device), 
osseointegrated implant, skull; with magnetic transcutaneous attachment 
to external speech processor, within the mastoid and/or involving a 
bony defect less than 100 mm2 surface area of bone deep to the outer 
cranial cortex), a work RVU of 10.25 for CPT code 69XX1 (Revision/
replacement (including removal of existing device), osseointegrated 
implant, skull; with magnetic transcutaneous attachment to external 
speech processor, outside the mastoid and involving a bony defect 
greater than or equal to 100 mm2 surface area of bone deep to the outer 
cranial cortex), a work RVU of 7.38 for CPT code 69727 (Removal, entire 
osseointegrated implant, skull; with magnetic transcutaneous attachment 
to external speech processor, within the mastoid and/or involving a 
bony defect less than 100 mm2 surface area of bone deep to the outer 
cranial cortex), and a work RVU of 8.50 for CPT code 69XX2 (Removal, 
entire osseointegrated implant, skull; with magnetic transcutaneous 
attachment to external speech processor, outside the mastoid and 
involving a bony defect greater than or equal to 100 mm2 surface area 
of bone deep to the outer cranial cortex).
    We disagree with the RUC's recommended work RVU for the other three 
codes in the family for the procedures describing percutaneous 
attachment to external speech processor. We disagree with the RUC's 
recommended work RVU of 8.00 for CPT code 69714 (Implantation, 
osseointegrated implant, skull; with percutaneous attachment to 
external speech processor) and we are instead proposing a work RVU of 
6.68 based on a crosswalk to CPT code 38305 (Drainage of lymph node 
abscess or lymphadenitis; extensive). In reviewing CPT code 69714, we 
noted that the recommended intraservice time is decreasing from 40 
minutes to 30 minutes (25 percent reduction), and the recommended total 
time is decreasing from 182 minutes to 146 minutes (20 percent 
reduction); however, the RUC-recommended work RVU is only decreasing 
from 8.69 to 8.00, which is a reduction of just over 8 percent. 
Although we did not imply that the decrease in time as reflected in 
survey values must equate to a one-to-one or linear decrease in the 
valuation of work RVUs, we believe that since the two components of 
work are time and intensity, significant decreases in time should be 
appropriately reflected in decreases to work RVUs. In the case of CPT 
code 69714, we believe that it is more accurate to propose a work RVU 
of 6.68 based on a crosswalk to CPT code 38305 to account for these 
decreases in the surveyed work time.
    We also disagree with the recommended work RVU of 8.00 because it 
results in an intensity which is anomalously high in relationship to 
the rest of the code family. At the recommended work RVU of 8.00, the 
intensity of CPT code 69714 is increasing by nearly 50 percent as 
compared with the survey conducted last year, and the resulting 
intensity of the service would be significantly higher than any of the 
other codes in the family. We do not agree that this intensity would be 
typical given that the percutaneous form of implant described by CPT 
code 69714 should have the lowest intensity of the three types 
described in this code family. The implantation procedure described by 
this code should also typically have lower intensity than the revision/
replacement procedures elsewhere in the family. We believe that the 
intensity of CPT code 69714 is more accurately described at our 
proposed work RVU of 6.68 based on a crosswalk to CPT code 38305. This 
code shares the same intraservice time of 30 minutes as CPT code 69714 
and has a higher total time of 186 minutes; we agree that CPT code 
69714 is more intense than CPT code 38305 which is offset by our 
crosswalk code having an additional office visit in its global period.
    We disagree with the RUC's recommended work RVU of 8.48 for CPT 
code 69717 (Revision/replacement (including removal of existing 
device), osseointegrated implant, skull; with percutaneous attachment 
to external speech processor) and we are instead proposing a work RVU 
of 7.91 based on a crosswalk to CPT code 46262 (Hemorrhoidectomy, 
internal and external, 2 or more columns/groups; with fistulectomy, 
including fissurectomy, when performed). In reviewing CPT code 69717, 
we noted that although the intraservice time remains essentially 
unchanged (decreasing from 45 minutes to 44 minutes), the recommended 
total time is decreasing from 187 minutes to 159 minutes (15 percent 
reduction). However, the RUC-recommended work RVU is only decreasing 
from 8.80 to 8.48, which is a reduction of less than 4 percent. 
Although we did not imply that the decrease in time as reflected in 
survey values must equate to a one-to-one or linear decrease in the 
valuation of work RVUs, we believe that since the two components of 
work are time and intensity, significant decreases in time should be 
appropriately reflected in decreases to work RVUs. In the case of CPT 
code 69717, we believe that it is more accurate to propose a work RVU 
of 7.91 based on a crosswalk to CPT code 46262 to account for these 
decreases in the surveyed work time.
    We also disagree with the recommended work RVU of 8.48 because it 
results in a higher intensity than the other two revision/replacement 
codes (CPT codes 69719 and 69XX1) in this family. CPT code 69717 
describes the percutaneous form of implant which should have the lowest 
intensity of the three revision/replacement codes in this family, 
however at the recommended work RVU of 8.48 it would have the highest 
intensity of this group. While the intensity at the recommended work 
RVU for CPT code 69717 is nowhere near the anomalous nature of the 
intensity at the recommended work RVU for CPT code 69714, we still 
believe that the intensity would be more typical at the proposed work 
RVU of 7.91. This proposed valuation restores the relationship between 
the three revision/replacement codes by placing the intensity of CPT 
code 69717 slightly lower than CPT codes 69719 and 69XX1. Therefore, we 
believe that the intensity of CPT code 69717 is more accurately 
described at our proposed work RVU of 7.91 based on a crosswalk to CPT 
code 46262. This code has nearly the same intraservice time of 45 
minutes as CPT code 69717 and has a higher total time of 179 minutes; 
we agree that CPT code 69717 is more intense than CPT code 46262 which 
is offset by our crosswalk code having an additional office visit in 
its global period.
    We disagree with the RUC's recommended work RVU of 7.50 for CPT 
code 69726 (Removal, entire osseointegrated implant, skull; with 
percutaneous attachment to external speech processor) and we are 
instead proposing a work RVU of 6.36 based on a crosswalk to CPT code 
67912 (Correction of lagophthalmos, with implantation of upper eyelid 
lid load

[[Page 45922]]

(e.g., gold weight)). In reviewing CPT code 69726, we noted that the 
recommended intraservice time is increasing from 30 minutes to 35 
minutes (17 percent increase), and the recommended total time is 
increasing from 148 minutes to 150 minutes (1 percent increase); 
however, the RUC-recommended work RVU is increasing from 5.93 to 7.50, 
which is an increase of just over 26 percent. Although we did not imply 
that the increase in time as reflected in survey values must equate to 
a one-to-one or linear increase in the valuation of work RVUs, we 
believe that since the two components of work are time and intensity, 
modest increases in time should be appropriately reflected in modest 
increases to work RVUs. In the case of CPT code 69726, we believe that 
it is more accurate to propose a work RVU of 6.36 based on a crosswalk 
to CPT code 67912 to account for these increases in the surveyed work 
time.
    We also disagree with the recommended work RVU of 7.50 because it 
results in an intensity which is anomalously high in relationship to 
the rest of the code family and creates a rank order anomaly within the 
work RVUs. CPT code 69726 describes the percutaneous form of the 
removal procedure which should have the lowest intensity of all nine 
codes in this family. However, the intensity of CPT code 69726 at the 
recommended work RVU of 7.50 would be the second-highest in the family, 
even higher than CPT code 69XX1 which describes the revision/
replacement procedure with magnetic transcutaneous attachment resulting 
in removal of greater than or equal to 100 square mm surface area of 
bone. We do not agree that this would be typical and we believe that 
the intensity would be more accurate at our proposed work RVU of 6.36. 
We also note that the recommended work RVU of 7.50 for CPT code 69726 
creates a rank order anomaly within the family as it would be higher 
than the recommended work RVU of 7.38 for CPT code 69727 which 
describes a more complex procedure and has higher surveyed work times. 
We therefore believe that the work and intensity of CPT code 69726 are 
more accurately described at our proposed work RVU of 6.36 based on a 
crosswalk to CPT code 67912. This code has nearly the same intraservice 
time of 40 minutes as CPT code 69726 and has a higher total time of 166 
minutes; we agree that CPT code 69726 is more intense than CPT code 
69726 which is offset by our crosswalk code having an additional office 
visit in its global period.
    We are proposing the direct PE inputs as recommended by the RUC for 
all nine codes in the Transcutaneous Passive Implant-Temporal Bone 
family.
(18) Contrast X-Ray of Knee Joint (CPT Code 73580)
    CPT code 73580 (Radiologic examination, knee, arthrography, 
radiological supervision and interpretation) was first identified via 
the high-volume growth screen in 2008. In 2021, the Relativity 
Assessment Workgroup (RAW) noted that code 73580 was never surveyed and 
remains CMS/Other sourced, and recommended that it be surveyed. CPT 
code 73580 was then surveyed. We are proposing the RUC-recommended work 
RVU of 0.59. We are also proposing the RUC-recommended direct PE inputs 
without refinement.
(19) 3D Rendering With Interpretation and Report (CPT Code 76377)
    We nominated this code in the CY 2020 PFS final rule as potentially 
misvalued, stating that we believe it is of the same family as CPT code 
76376 (3D rendering with interpretation and reporting of computed 
tomography, magnetic resonance imaging, ultrasound, or other 
tomographic modality with image postprocessing under concurrent 
supervision; not requiring image postprocessing on an independent 
workstation), which was reviewed at the April 2018 RUC meeting. CMS 
requested that CPT code 76377 also be reviewed to maintain relativity 
within the code family (84 FR 62625). The specialty societies maintain 
that these services are more accurately viewed as separate code 
families. Furthermore, the RUC cites changes in technique and patient 
population as compelling evidence to maintain a physician work RVU of 
0.79 despite a 5-minute recommended reduction in physician total time 
compared to the current physician time.
    We are proposing the RUC recommended work RVU of 0.79 for CPT code 
76377; however, we reiterate that we continue to believe that CPT code 
76376 and 76377 would be more appropriately viewed as belonging to the 
same code family and we request that they be surveyed together.
    We are proposing the RUC-recommended direct PE inputs without 
refinement.
(20) Neuromuscular Ultrasound (CPT Codes 76881, 76882, and 76XX0)
    Since their creation in 2011, CPT codes 76881 (Ultrasound, complete 
joint (ie, joint space and peri-articular soft-tissue structures), 
real-time with image documentation) and 76882 (Ultrasound, limited, 
joint or other nonvascular extremity structure(s) (e.g., joint space, 
peri-articular tendon[s], muscle[s], nerve[s], other soft-tissue 
structure[s], or soft-tissue mass[es]), real-time with image 
documentation) have been reviewed numerous times as New Technology/New 
Services by the Relativity Assessment Workgroup (RAW). In October 2016, 
the RAW reviewed these codes and agreed with the specialty societies 
that the dominant specialties providing the complete (CPT code 76881) 
versus the limited (CPT code 76882) ultrasound of extremity services 
were different than originally thought, causing variation in the 
typical practice expense inputs. The RAW recommended referral to the 
Practice Expense Subcommittee for review of the direct practice expense 
inputs and the CPT Editorial Panel to clarify the introductory language 
regarding the reference to one joint in the complete ultrasound. The PE 
Subcommittee reviewed the direct practice expense inputs for CPT codes 
76881 and 76882 and adjusted the clinical staff time at the January 
2017 RUC meeting, and the CPT Editorial Panel editorially revised CPT 
codes 76881 and 76882 to clarify the distinction between complete and 
limited studies and revised the introductory guidelines to clarify 
reference to one joint in the complete ultrasound procedure in June 
2017. In October 2021, the CPT Editorial Panel approved the addition of 
CPT code 76XX0 for reporting real-time, complete neuromuscular 
ultrasound of nerves and accompanying structures throughout their 
anatomic course, per extremity, and the revision of CPT code 76882 to 
add focal evaluation. CPT codes 76881 and 76882 were identified as part 
of the neuromuscular ultrasound code family with CPT code 76XX0 and 
surveyed for the January 2022 RUC meeting.
    For CPT codes 76881, 76882, and 76XX0, we disagree with the RUC-
recommended work RVUs of 0.90, 0.69, and 1.21, respectively, as they do 
not account for the surveyed time changes or appropriate comparisons 
for the new add-on code, CPT code 76XX0, and are proposing a work RVU 
of 0.54 for CPT code 76881, a work RVU of 0.59 for CPT code 76882, and 
a work RVU of 0.99 for CPT code 76XX0.
    CPT code 76881 represents a complete evaluation of a specific joint 
in an extremity. This service requires ultrasound examination of all 
the following joint elements: joint space (for example, effusion), 
peri-articular soft-tissue structures that surround the joint (that is, 
muscles, tendons, other soft-tissue structures), and any identifiable 
abnormality. In some circumstances, additional evaluations such as 
dynamic

[[Page 45923]]

imaging or stress maneuvers may be performed as part of the complete 
evaluation. The RUC recommended 5 minutes of pre-service time, 20 
minutes of intraservice time, and 5 minutes of post-service time, based 
on the survey. The RUC discussed the 5-minute increase in intraservice 
time and determined that the increase relates to the change in the 
dominant specialty provider since the creation of the code, as 
previously there was 15 minutes of intraservice time for the 
radiologist to scan and/or review the sonographer-obtained images. Now, 
the rheumatologist is performing the scanning and it takes 20 minutes 
for the typical patient. For rheumatology, physicians typically scan 
the patients with portable ultrasound devices rather than utilizing 
sonographers as originally described in the 2010 survey. The RUC noted 
that this code is reported with an office E/M visit 58.9 percent and a 
non-facility office E/M visit 66.3 percent of the time; the RUC stated 
that CPT code 76881 is imaging-specific so the physician work described 
would not overlap with the E/M service, but we disagree, as the 
descriptions of pre-service and post-service work directly overlap. The 
description of pre-service work for CPT code 76881 states ``Review 
pertinent clinical information. Review any prior applicable imaging 
studies.'' Pre-service work for CPT code 99214 (Office or other 
outpatient visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination and moderate level of medical decision making. When using 
time for code selection, 30-39 minutes of total time is spent on the 
date of the encounter.), the most common E/M code reported with CPT 
code 76811, includes ``Review interval correspondence, referral notes, 
medical records, and diagnostic data generated since the last visit.'' 
Post-service work of CPT code 76881 is described as ``Discuss 
significant findings with the referring physician. Review and sign 
final report,'' whereas the post-service work for CPT code 99214 
includes ``Arrange diagnostic testing and referral if necessary. 
Document the encounter in the medical record, spending time to further 
refine the differential diagnosis, workup, or treatment plan as 
necessary. Coordinate care by discussing the case with other physicians 
and members of the health care team and write letters of referral if 
necessary. Perform electronic data capture and reporting to comply with 
quality payment program and other electronic mandates. Review and 
analyze interval testing results and refine the differential diagnosis, 
workup, and treatment plan based on these results. Order additional 
testing based on these results. Communicate results and plan 
modifications with patient and/or family.'' We believe there is 
distinct overlap in pre-service and post-service work between the E/M 
visit and CPT code 76881, and therefore, we are proposing 0 minutes for 
the pre-service and post-service time rather than the RUC-recommended 5 
minutes of pre-service and post-service time. The proposed work RVU of 
0.54 is the reverse building block valuation based on the removal of 
the 5 minutes of pre-service and post-service time, with a long-
standing intensity of 0.0224 (10 minutes * 0.0224 work/minute = 0.224 
work RVUs). The proposed work RVU accounts for the 0.224 work RVU 
decrease as a result of the removal of pre-service and post-service 
time, and the increase of 5 minutes of intraservice time, while 
maintaining the same IWPUT of 0.027, as there was no discussed change 
in intensity. The specialty societies and the RUC asserted that there 
was an increase of 5 minutes as a result of the intraservice work 
changing due to a change in dominant specialty providing the service 
(from radiology to rheumatology), but did not present a change in 
intensity. We note that the specialty societies used CPT code 76700 
(Ultrasound, abdominal, real time with image documentation; complete) 
with a work RVU = 0.81, 11 minutes of intra-service time, and 21 
minutes total time, as a reference code because it has identical pre- 
and post-service time but less intra-service time than the surveyed 
code and is a clinically similar ultrasound code. We note that this is 
not an appropriate reference code as it is billed alone 72.8 percent of 
the time, and therefore, the valuation of CPT code 76700 accounts for 
pre- and post-service work that would not overlap with an E/M visit 
like the pre- and post-service work does for CPT code 76881.
    CPT code 76882 represents a limited evaluation of a joint or focal 
evaluation of a structure(s) in an extremity other than a joint (for 
example, soft-tissue mass, fluid collection, or nerve[s]). This 
evaluation includes assessment of a specific anatomic structure(s) (for 
example, joint space only [effusion] or tendon, muscle, and/or other 
soft-tissue structure[s] that surround the joint) that does not assess 
all the elements included in CPT code 76881, although it does include 
all surrounding anatomy and any associated pathology or contralateral 
comparison as indicated. The RUC discussed the four-minute increase in 
intraservice time and determined that the increase relates to the 
change in dominant supplier of this service since the creation of the 
code, as there is currently 11 minutes of intraservice time that 
included scanning performed only by the podiatrist, and now the 
radiologist works with the sonographer to obtain and interpret the 
images in addition to the physician performing additional scanning as 
needed. Because radiologists no longer use portable ultrasound devices 
as originally described in the 2010 survey or in the 2017 PE update, 
the RUC and specialty societies assert that the physician work (time) 
has changed due to supervision of the sonographer in addition to the 
radiologist performing the scanning. The specialty societies and RUC 
also note that ultrasound technology has evolved immensely since 2010, 
including proliferation of high-frequency ultrasound probes dedicated 
to musculoskeletal imaging, as well as producing images with higher 
fidelity and more detail, whereby the number and quality of images that 
can be reviewed and the pathology to evaluate have greatly increased 
since 2010. Therefore, the typical patient requires 15 minutes of 
intraservice time. While we agree with the RUC that 15 minutes of 
intraservice time is warranted for CPT code 76882, we note there was no 
information indicating a change in intensity, and therefore, for CPT 
code 76882, we are proposing the reverse building block work RVU of 
0.59 to account for the 4-minute increase in intraservice time and the 
maintenance of the current IWPUT of 0.024.
    We note that commenters may raise concern about a potential rank 
order anomaly with the proposed work RVUs of 0.54 and 0.59 for CPT 
codes 76881 and 76882, respectively, but we note that the IWPUT of each 
code adequately reflects the increased intensity of intraservice work 
for the complete ultrasound (CPT code 76881; IWPUT = 0.027) versus the 
limited/focal ultrasound (CPT code 76882; IWPUT = 0.024), and the 
lesser work RVU of 0.54 for CPT code 76881 stems from the removal of 
the overlapping pre- and post-service time with the E/M visits that are 
typically performed. The RUC noted that consistency of intensity 
measures is demonstrated across the range of codes ascending from the 
limited code (CPT code 76881) to the new, most complex code (CPT code 
76XX0). By proposing work RVUs that maintain the current IWPUTs, we 
maintain relativity both among the neuromuscular ultrasound family, as 
well as the larger family of ultrasound

[[Page 45924]]

imaging codes. We also note that the difference between the RUC-
recommend IWPUTs and our proposed IWPUTs for CPT codes 76881 and 76882 
is the same, where CPT code 76882 has an IWPUT that is 0.003 less than 
the IWPUT of CPT code 76881.
    CPT code 76XX0 will be available for CY 2023 to report real-time, 
complete neuromuscular ultrasound of nerves and accompanying structures 
throughout their anatomic course, per extremity. This code will examine 
a nerve throughout its length, within one extremity, including 
evaluation of multiple areas for potential nerve compression, 
measurement of cross-sectional areas, evaluation of echogenicity, 
vascularity, mobility including dynamic maneuvers when indicated, 
evaluation for any associated muscular denervation, with comparison to 
unaffected muscles or nerves within that extremity as needed. CPT code 
76XX0 also requires permanently recorded images and cine loop and a 
written report containing a description of each of the elements 
evaluated. The RUC recommended 7 minutes of pre-service time, 25 
minutes of intra-service time and 7 minutes of post-service time as 
supported by the survey. The RUC clarified that this service would not 
typically be reported with an office E/M visit. The RUC arrived at a 
recommended work RVU of 1.21 by comparing the pre-, intra-, and post-
service times to those of CPT code 76881, which CMS is proposing to 
modify due to overlapping work in the pre- and post-service time with 
E/M visits. When we compared the proposed times of 0 minutes of pre-
service time, 20 minutes of intraservice time, and 0 minutes of post-
service time, and a work RVU of 0.54 for CPT code 76881, and the 
proposed times of 7 minutes of pre-service time, 25 minutes of 
intraservice time, and 7 minutes of post-service time for CPT code 
76XX0, we arrived at a reverse building block work RVU of 0.99.
    For the direct PE inputs, we are proposing to remove the 2 minutes 
of clinical labor time for CA006 (Confirm availability of prior images/
studies), the 1 minute of clinical labor time for the CA007 (Review 
patient clinical extant information and questionnaire), and the 2 
minutes for CA011 (Provide education/obtain consent) for CPT code 76881 
because these RUC recommendations describe clinical labor activities 
that overlap with the E/M visit that is typically billed with CPT code 
76881. We are proposing the direct PE inputs as recommended by the RUC 
for CPT codes 76882 and 76XX0.
(21) Immunization Administration (CPT Codes 90460, 90461, 90471, 90472, 
90473, and 90474)
    Especially in the context of the current PHE for COVID-19, it is 
evident that consistent beneficiary access to vaccinations is vital to 
public health. As discussed in the CY 2021 PFS proposed rule (85 CFR 
50162), many interested parties raised concerns about the reductions in 
payment rates for the preventive vaccine administration services that 
had occurred over the past several years. The codes for immunization 
administration services include CPT codes 90460, 90471, and 90473, as 
well as the three Healthcare Common Procedural Coding System (HCPCS) 
codes that describe the services to administer the Part B preventive 
vaccinations other than the COVID-19 vaccine: G0008 (influenza), G0009 
(pneumococcal), and G0010 (HBV). Until CY 2019, we generally had 
established payment rates for these immunization administration 
services based on a direct crosswalk to the PFS payment rate for CPT 
code 96372 (Therapeutic, prophylactic, or diagnostic injection (specify 
substance or drug); subcutaneous or intramuscular). Because we proposed 
and finalized reductions in valuation for the crosswalk code for CY 
2018, and because the reductions in overall valuation for that code 
have been subject to the multi-year phase-in of significant reductions 
in RVUs, the payment rate for these vaccine administration codes has 
been concurrently reduced. Further, because the reduction in RVUs for 
the crosswalk code, CPT code 96372, was significant enough to be 
required to be phased in over several years under section 1848(c)(7) of 
the Act, the reductions in overall valuation for the vaccine 
administration codes were likewise subject to reductions over several 
years. As we noted in Table 21 of the CY 2022 PFS proposed rule (86 FR 
39222), the national payment rate for administering these preventive 
vaccines has declined more than 30 percent since 2015.
    We have attempted to address the reduction in payment rates for the 
Part B preventive vaccine administration HCPCS G-codes in the last 
three PFS rulemaking cycles. In the CY 2020 PFS final rule, we 
acknowledged that it is in the public interest to ensure appropriate 
resource costs are reflected in the valuation of the immunization 
administration services that are used to deliver these vaccines, and 
noted that we planned to review the valuations for these services in 
future rulemaking. For CY 2020, we maintained the CY 2019 national 
payment amount for immunization administration services described by 
HCPCS codes G0008, G0009 and G0010 (84 FR 62798).
    In the CY 2021 PFS proposed rule, we proposed to crosswalk CPT 
codes 90460, 90471, and 90473, as well as HCPCS codes G0008, G0009 and 
G0010 to CPT code 36000 (Introduction of needle or intracatheter, vein) 
(85 FR 50163). In the proposed rule, we noted that CPT code 36000 is a 
service with a similar clinical vignette, and that the additional 
clinical labor, supply, and equipment resources associated with 
furnishing CPT code 36000 were similar to costs associated with these 
vaccine administration codes. We also noted that this crosswalk would 
have resulted in a payment rate for vaccine administration services 
that is approximately the same as the CY 2017 rate that was in place 
prior to the revaluation of CPT code 96372 (the original crosswalk 
code). In the CY 2021 PFS final rule, we did not finalize the proposed 
policy, and instead finalized a policy to maintain the CY 2019 payment 
amount for CPT codes 90460-90474, as well as HCPCS codes G0008, G0009 
and G0010 (85 FR 84628). In the final rule, we also noted that we 
continued to seek additional information that specifically identifies 
the resource costs and inputs that should be considered to establish 
payment for vaccine administration services on a long-term basis.
    For the CY 2022 rulemaking cycle, we requested feedback from 
interested parties that would support the development of an accurate 
and stable payment rate for administration of the preventive vaccines 
described in section 1861(s)(10) of the Act (influenza, pneumococcal, 
HBV, and COVID-19) for physicians, NPPs, mass immunizers and certain 
other providers and suppliers. We invited commenters to submit their 
detailed feedback to a series of questions and requests that we 
believed would assist us in establishing payment rates for these 
services that could be appropriate for use on a long-term basis; we 
direct readers to the full discussion of this topic in the CY 2022 PFS 
final rule (86 FR 65179 through 65193). For CY 2022, we finalized a 
uniform payment rate of $30 for the administration of an influenza, 
pneumococcal or HBV vaccine covered under the Medicare Part B 
preventive vaccine benefit at section 1861(s)(10) of the Act. We 
explained that since the administration of the preventive vaccines 
described under section 1861(s)(10) of the Act is not included within 
the statutory definition of physicians' services, the payment rates we 
established for these services in the

[[Page 45925]]

CY 2022 PFS final rule are independent of the PFS, and will be updated 
as necessary independently of the valuation of any specific codes under 
the PFS (86 FR 65186). We discuss the current payment policy for 
administration of preventive vaccines and our proposals for CY 2023 in 
section III.H. of this proposed rule.
    We note that as we consider payment policies to ensure adequate 
access to the Part B preventive vaccines, including consideration of 
resource costs, the RUC surveyed and reviewed CPT codes 90460-90474 at 
the April 2021 meeting and submitted recommendations to CMS for our 
consideration in the CY 2023 rulemaking cycle.
    We are proposing the RUC-recommended work RVU for all six codes in 
the Immunization Administration family. We are proposing a work RVU of 
0.24 for CPT code 90460 (Immunization administration through 18 years 
of age via any route of administration, with counseling by physician or 
other qualified health care professional; first or only component of 
each vaccine or toxoid administered), a work RVU of 0.18 for CPT code 
90461 (Immunization administration through 18 years of age via any 
route of administration, with counseling by physician or other 
qualified health care professional; each additional vaccine or toxoid 
component administered), a work RVU of 0.17 for CPT code 90471 
(Immunization administration (includes percutaneous, intradermal, 
subcutaneous, or intramuscular injections); 1 vaccine (single or 
combination vaccine/toxoid)), a work RVU of 0.15 for CPT code 90472 
(Immunization administration (includes percutaneous, intradermal, 
subcutaneous, or intramuscular injections); each additional vaccine 
(single or combination vaccine/toxoid)), a work RVU of 0.17 for CPT 
code 90473 (Immunization administration by intranasal or oral route; 1 
vaccine (single or combination vaccine/toxoid)), and a work RVU of 0.15 
for CPT code 90474 (Immunization administration by intranasal or oral 
route; each additional vaccine (single or combination vaccine/toxoid)).
    For the direct PE inputs, we are proposing to remove 1 minute of 
clinical labor time for the CA008 (Perform regulatory mandated quality 
assurance activity (pre-service)) activity for CPT codes 90460 and 
90471-90474. The RUC recommendations describe these activities as 
``Checking historical and current temperatures for vaccine 
refrigerator; recording temperatures; reporting temperatures; vaccine 
inventorying; ordering vaccines; completing required Vaccines for 
Children (VFC) paperwork; receiving vaccines; inspecting/logging 
vaccines and putting them in the vaccine refrigerator; creating lot 
numbers in HER.'' Checking refrigerator temperatures, vaccine 
inventorying, and filling out vaccine paperwork are administrative 
tasks which are not individually allocable to a particular patient for 
a particular service. We are removing this 1 minute of clinical labor 
time as these administrative tasks are forms of indirect PE. We are 
also refining the equipment times for CPT codes 90460 and 90471-90474 
to conform to our established policies for non-highly technical 
equipment.
    In consideration of the information provided in the recommendation 
for these services, we are proposing the RUC's recommended work RVUs 
and direct PE inputs (with minor refinements) for these vaccine 
administration services. However, we continue to seek additional 
information from commenters that specifically identifies the resource 
costs and inputs that should be considered to establish payment for 
these vaccine administration services on a long-term basis, consistent 
with our policy objectives for ensuring maximum access to immunization 
services.
(22) Orthoptic Training (CPT Codes 92065 and 920XX)
    In October 2019, the RUC identified CPT code 92065 (Orthoptic and/
or pleoptic training, with continuing medical direction and evaluation; 
performed by a physician or other qualified health care professional) 
as needing review because it was Harvard Valued (that is, the value of 
the code had not been reviewed since the implementation of the 
Resource-Based Relative Value Scale (RBRVS)) and its utilization 
surpassed 30,000 in each of several recent years. At its January 2020 
meeting, during review of CPT code 92065, the RUC noted that the use of 
``and/or'' in the descriptor defined different patient populations and 
treatment techniques and recommended that the code be reviewed by the 
CPT Editorial Panel (CPT) in order to create two separate codes. 
Additionally, based upon review and analysis of survey data, specialty 
societies decided to submit a new code change application for the 
February 2021 CPT meeting.
    During the February 2021 meeting, CPT noted that the services of 
CPT code 92065 are delivered in two different ways: directly by the 
practitioner and by a technician under the supervision of the 
practitioner. In response to this observation, CPT suggested that two 
codes be created to identify who furnishes the orthoptic service. 
Identifying in the code descriptor who furnishes the services would 
ensure more accurate valuation of both the work and the practice 
expense associated with the service. The CPT formally revised code 
92065 and created new CPT code 920XX to describe orthoptic services 
furnished under the supervision of a physician or qualified health care 
professional.
    During its April 2021 meeting, the RUC revalued the work associated 
with the services of CPT code 92065 (Orthoptic training; performed by a 
physician or other qualified health care professional) and valued the 
PE inputs for new CPT code 920XX (Orthoptic training; performed by a 
physician or other qualified health care professional under supervision 
of a physician or other qualified health care professional). CPT code 
920XX is valued as a PE-only code.
    After reviewing CPT code 92065, we are proposing to accept the RUC-
recommended work RVU of 0.71. We also are proposing to accept the RUC-
recommended direct PE inputs for CPT code 92065. We are proposing to 
accept the RUC-recommended direct PE inputs for CPT code 920XX as well.
(23) Dark Adaptation Eye Exam (CPT Code 92284)
    CPT code 92284 (Dark adaptation examination with interpretation and 
report) was identified in July 2020 as Harvard Valued with a 
utilization of over 30,000 claims. In January 2021, the RUC recommended 
that the code be surveyed for the April 2021 RUC meeting. The RUC 
reviewed the survey results for the procedure and noted that the 25th 
percentile work value of 0.45 was greater than the code's current 
value. The RUC recommended a work RVU of 0.14, based on a direct work 
RVU crosswalk from CPT code 76514 (Ophthalmic ultrasound, diagnostic; 
corneal pachymetry, unilateral or bilateral (determination of corneal 
thickness)). We disagree with the RUC-recommended work RVU of 0.14 for 
CPT code 92284. We found that the recommended work RVU did not 
adequately reflect reductions in physician time, since this diagnostic 
screening is usually completed during an E/M visit and largely consists 
of interpreting machine generated results. Instead, we are proposing a 
work RVU of 0.00 for CPT code 92284, which is comparable to other 
ophthalmic screening tests; such as 99172 (Visual function screening, 
automated or semi-automated bilateral quantitative determination of 
visual acuity, ocular

[[Page 45926]]

alignment, color vision by pseudoisochromatic plates, and field of 
vision (may include all or some screening of the determination[s] for 
contrast sensitivity, vision under glare)) and 99173 (Screening test of 
visual acuity, quantitative, bilateral). Alternatively, we considered 
using a total-time methodology with a work RVU of 0.03 and a reverse 
building block methodology with a work RVU of 0.06. We are seeking 
comments and requesting information that may inform why CPT code 92284 
should include additional valuation as this procedure is included in an 
E/M visit.
    For the direct PE inputs, we are proposing to refine the equipment 
time for the lens set (EQ165) from 24 minutes to 15 minutes and 
motorized table (EF030) from 24 minutes to 15 minutes. The reduction in 
time for both equipment types is proposed to match the RUC-recommended 
15 minutes in Clinical Activity Code CA021. We are seeking public 
comment to provide further rationale for the additional 9 minutes 
recommended.
(24) Anterior Segment Imaging (CPT Code 92287)
    For CPT code 99287 (Anterior segment imaging with interpretation 
and report; with fluorescein angiography), we are proposing the RUC-
recommended work RVU of 0.40.
    We are proposing the RUC-recommended direct PE inputs for CPT code 
92287 without refinement.
(25) External Extended ECG Monitoring (CPT Codes 93241, 93242, 93243, 
93244, 93245, 93246, 93247, and 93248)
    In the CY 2021 PFS proposed rule (85 FR 50164), we proposed to 
adopt the RUC's work RVU recommendations for CPT codes 93241 (External 
electrocardiographic recording for more than 48 hours up to 7 days by 
continuous rhythm recording and storage; includes recording, scanning 
analysis with report, review and interpretation), 93242 (External 
electrocardiographic recording for more than 48 hours up to 7 days by 
continuous rhythm recording and storage; recording (includes connection 
and initial recording)), 93243 (External electrocardiographic recording 
for more than 48 hours up to 7 days by continuous rhythm recording and 
storage; scanning analysis with report), 93244 (External 
electrocardiographic recording for more than 48 hours up to 7 days by 
continuous rhythm recording and storage; review and interpretation), 
93245 (External electrocardiographic recording for more than 7 days up 
to 15 days by continuous rhythm recording and storage; includes 
recording, scanning analysis with report, review and interpretation), 
93246 (External electrocardiographic recording for more than 7 days up 
to 15 days by continuous rhythm recording and storage; recording 
(includes connection and initial recording)), 93247 (External 
electrocardiographic recording for more than 7 days up to 15 days by 
continuous rhythm recording and storage; scanning analysis with 
report), and 93248 (External electrocardiographic recording for more 
than 7 days up to 15 days by continuous rhythm recording and storage; 
review and interpretation).
    We noted that the recommendations for this family of codes 
contained one new supply item, the ``extended external ECG patch, 
medical magnetic tape recorder'' (SD339). We did not receive a 
traditional invoice to establish a price for this supply item. Instead, 
we received pricing information from two sources: a weighted median of 
claims data with the cost of the other direct PE inputs removed, and a 
top-down approach calculating the cost of the supply per service based 
on summing the total costs of the health care provider and dividing by 
the total number of tests furnished. The former methodology yielded a 
supply price of approximately $440 while the latter methodology 
produced an estimated supply price of $416.85. Interested parties also 
submitted a series of invoices from the clinical study marketplace with 
a price of $595, which we rejected as we typically require an invoice 
representative of commercial market pricing to establish a national 
price for a new supply or equipment item.
    After consideration of the information, we proposed to employ a 
crosswalk to an existing supply for use as a proxy price until we 
received pricing information to use for the ``extended external ECG 
patch, medical magnetic tape recorder'' item. We proposed to use the 
``kit, percutaneous neuro test stimulation'' (SA022) supply as our 
proxy item at a price of $413.24. We believed the kit to be the closest 
match from a pricing perspective to employ as a proxy until we would be 
able to arrive at an invoice that is representative of commercial 
market pricing. We welcomed the submission of invoices or other 
additional information for use in pricing the ``extended external ECG 
patch, medical magnetic tape recorder'' supply. In response to our 
proposal, we received conflicting information from commenters and in 
the CY 2021 PFS final rule (85 FR 84631), we ultimately finalized 
contractor pricing for CY 2021 for the four codes that included this 
supply input (CPT codes 93241, 93243, 93245, and 93247) to allow 
additional time to receive more pricing information.
    We noted that interested parties have continued to engage with CMS 
and the MACs on payment for this service. We remained concerned that we 
continued to hear that the supply costs as initially considered in our 
CY 2021 PFS proposal were much higher than they should be. At the same 
time, we also heard that the resource costs, as reflected in the 
contractor-based payments, do not adequately cover the incurred cost 
for the SD339 supply that is used to furnish these services. In 
consideration of continued access to these services for Medicare 
beneficiaries, we once again solicited public comments and information 
in the CY 2022 PFS proposed rule (86 FR 39179) to support CMS' future 
rulemaking to establish a uniform national payment that appropriately 
reflects the PE inputs that are used to furnish these services. During 
the comment period, we received invoices and additional information for 
use in pricing the SD339 supply from the commenters.
    Based on this information, we finalized an updated price of $200.15 
for the extended external ECG patch, medical magnetic tape recorder'' 
(SD339) supply in the CY 2022 PFS final rule based on the average of 
the ten invoices we received (86 FR 65125). We believed that the 
invoice data for this supply item, which ranged from a minimum price of 
$179.80 to a maximum price of $241.99, suggested that our updated price 
of $200.15 was more accurate than the suggested crosswalk to the SD214 
supply at a price of $325.98. We believed that considering a potential 
impact to payment for other services under the PFS, a proposal to 
establish national payment for these services based on this new pricing 
information should take into account broader feedback from interested 
parties. Therefore, we did not finalize national pricing at this time 
and finalized our proposal to maintain contractor pricing for CPT codes 
93241, 93243, 93245, and 93247 for CY 2022.
    For CY 2023, we received a series of additional invoices for the 
SD339 supply from two impacted parties. Each of the invoices priced the 
supply item at either $265.00 or $226.38; we are therefore proposing to 
average together these prices and establish a proposed price of $245.69 
for the SD339 supply. We believe that this represents the most typical 
price for the supply based on the invoice data that has been provided 
over the past 2 years. We are also proposing

[[Page 45927]]

national pricing for CPT codes 93241, 93243, 93245, and 93247 for CY 
2023 now that the SD339 supply has an established price. The proposed 
CY 2023 RVUs for these CPT codes are displayed in Addendum B on the CMS 
website under downloads for the CY 2023 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
(26) Cardiac Ablation (CPT Codes 93653, 93654, 93655, 93656, and 93657)
    The technologies and clinical practices associated with Cardiac 
Ablation Services have changed enough over the past decade (since 2011 
when they were first developed) that the specialty societies 
recommended referring theses codes to the CPT Editorial Panel to have 
the code descriptors for Cardiac Ablation Services updated to create 
new and more complete descriptors reflecting the fact that many of 
these services are commonly performed together and should be 
incorporated and bundled. From the survey results presented to CMS last 
year, the RUC advisory committee believes that many of the survey 
respondents may not have realized that the code descriptors had been 
substantially revised and that they may not have read the updated code 
descriptors thoroughly enough to understand that services that are 
separately billed, were now combined into the existing codes (since CPT 
did not issue new codes for the revised descriptors). Since then, the 
RUC has re-surveyed these Cardiac Ablation codes in April 2021 for re-
review. In the interim, the work RVUs for the newly bundled CPT codes 
were maintained at their current values until the new recommendations 
were presented for CY 2023.
    The RUC re-surveyed and reviewed CPT code 93653 (Comprehensive 
electrophysiologic evaluation with insertion and repositioning of 
multiple electrode catheters, induction or attempted induction of an 
arrhythmia with right atrial pacing and recording, and catheter 
ablation of arrhythmogenic focus, including intracardiac 
electrophysiologic 3-dimensional mapping, right ventricular pacing and 
recording, left atrial pacing and recording from coronary sinus or left 
atrium, and His bundle recording, when performed; treatment of 
supraventricular tachycardia by ablation of fast or slow 
atrioventricular pathway, accessory atrioventricular connection, cavo-
tricuspid isthmus or other single atrial focus or source of atrial re-
entry), and recommends a work RVU of 15.00 with 31 minutes of pre-
service evaluation time, 3 minutes positioning time, 15 minutes scrub/
dress/wait time, 120 minutes of intra-service time, 30 minutes of 
immediate post-service time, for a sum of 199 minutes of total time. 
CPT code 93653 currently has a work RVU value of 14.75 with 23 minutes 
of pre-service evaluation time, 1 minutes positioning time, 5 minutes 
scrub/dress/wait time, 180 minutes of intra-service time, 30 minutes of 
immediate post-service time, for a sum of 239 minutes of total time. 
The time and the physician's work of CPT add-on code 93613 
(Intracardiac electrophysiologic 3-dimensional mapping (List separately 
in addition to code for primary procedure) with a work RVU of 5.23 and 
90 minutes of total time, and CPT add-on code 93621 (Comprehensive 
electrophysiologic evaluation including insertion and repositioning of 
multiple electrode catheters with induction or attempted induction of 
arrhythmia; with left atrial pacing and recording from coronary sinus 
or left atrium (List separately in addition to code for primary 
procedure)) with a work RVU of 1.50 and 20 minutes of total time are 
bundled within CPT code 93653. When all three codes are separately 
considered, they currently sum up to 21.48 work RVUs, much greater than 
the 15.00 work RVUs that the RUC has recommended. These codes also add 
up to much more physician total time than the RUC-recommended 199 
minutes.
    After reviewing this code and relative similar codes in the PFS, we 
propose a comparator CPT code 37229 (Revascularization, endovascular, 
open or percutaneous, tibial, peroneal artery, unilateral, initial 
vessel; with atherectomy, includes angioplasty within the same vessel, 
when performed) with a work RVU of 13.80 and a similar intra-service 
time of 120 minutes and similar pre-service evaluation, pre-service 
positioning, pre-service scrub/dress/wait times, and immediate post-
service times, for a sum of 188 minutes of total time for a 000 day 
global period, compared to the RUC-recommended 199 minutes of total 
time for CPT code 93653. We propose a work RVU of 13.80 for the bundled 
CPT code 93563.
    The RUC re-surveyed and reviewed CPT code 93654 (Comprehensive 
electrophysiologic evaluation with insertion and repositioning of 
multiple electrode catheters, induction or attempted induction of an 
arrhythmia with right atrial pacing and recording, and catheter 
ablation of arrhythmogenic focus, including intracardiac 
electrophysiologic 3-dimensional mapping, right ventricular pacing and 
recording, left atrial pacing and recording from coronary sinus or left 
atrium, and His bundle recording, when performed; with treatment of 
ventricular tachycardia or focus of ventricular ectopy including left 
ventricular pacing and recording, when performed), and recommends a 
work RVU of 18.10 with 40 minutes of pre-service evaluation time, 3 
minutes positioning time, 15 minutes scrub/dress/wait time, 200 minutes 
of intra-service time, 33 minutes of immediate post-service time, for a 
sum of 291 minutes of total time. CPT code 93654 currently has a work 
RVU value of 19.75 with 23 minutes of pre-service evaluation time, 1 
minutes positioning time, 5 minutes scrub/dress/wait time, 240 minutes 
of intra-service time, 40 minutes of immediate post-service time, for a 
sum of 309 minutes of total time. CPT code 93654 is currently and 
continues to be a bundled code. The RUC recommended intra-service times 
and total times for CPT code 93654 are less than the current times for 
this code, and the RUC-recommended work RVUs are also less than the 
current work RVUs. Though the RUC recommended a work RVU of 18.10, it 
is still a relatively high value compared to the existing 19.75 value. 
The RUC recommended a work RVU of 15.00 for CPT code 93653, and 18.10 
for CPT code 93654, with a relative increment between them of 3.10 work 
RVUs. We are proposing to maintain the relative increment RVU 
difference of 3.10 between CPT code 93653 and CPT code 93654, so 
because we are proposing a work RVU of 13.80 for CPT code 93653, we are 
proposing a work RVU of 16.90 (13.80 plus 3.10) for CPT code 93654, 
with 200 minutes of intra-service time and 291 minutes of total time.
    CPT add-on code 93655 (Intracardiac catheter ablation of a discrete 
mechanism of arrhythmia which is distinct from the primary ablated 
mechanism, including repeat diagnostic maneuvers, to treat a 
spontaneous or induced arrhythmia (List separately in addition to code 
for primary procedure)) has a current work RVU of 5.50 with a physician 
intra-service time of 60 minutes as finalized last year, from a 
previous value of 7.50 work RVUs with 90 minutes of physician intra-
service time. The RUC recommended the re-surveyed intraservice time of 
60 minutes and 7.00 work RVUs. The primary change to CPT code 93655 is 
the reduction of the intraservice time of about 67 percent, which we 
use as a guide to determine a work RVU. We compare CPT add-on code 
22854

[[Page 45928]]

(Insertion of intervertebral biomechanical device(s) (e.g., synthetic 
cage, mesh) with integral anterior instrumentation for device anchoring 
(e.g., screws, flanges), when performed, to vertebral corpectomy(ies) 
(vertebral body resection, partial or complete) defect, in conjunction 
with interbody arthrodesis, each contiguous defect (List separately in 
addition to code for primary procedure)), also with 60 minutes of 
intraservice and total time and a work RVU of 5.50 to CPT add-on code 
93655 and we believe that this is a more accurate valuation than the 
RUC's work RVU comparison to CPT add-on code 93592 (Percutaneous 
transcatheter closure of paravalvular leak; each additional occlusion 
device (List separately in addition to code for primary procedure)) 
with a work RVU of 8.00 and an intra-service and total time of 60 
minutes, and to CPT add-on code 34820 (Open iliac artery exposure for 
delivery of endovascular prosthesis or iliac occlusion during 
endovascular therapy, by abdominal or retroperitoneal incision, 
unilateral (List separately in addition to code for primary procedure)) 
with a work RVU of 7.00 and an intra-service and total time of 60 
minutes. After reviewing this code and relative similar codes in the 
PFS, we propose to maintain the current work RVU for CPT code 93655 of 
5.50 with a physician intra-service time of 60 minutes, as finalized 
last year (86 FR 65108).
    The RUC re-surveyed and reviewed CPT code 93656 (Comprehensive 
electrophysiologic evaluation including transseptal catheterizations, 
insertion and repositioning of multiple electrode catheters with 
intracardiac catheter ablation of atrial fibrillation by pulmonary vein 
isolation, including intracardiac electrophysiologic 3-dimensional 
mapping, intracardiac echocardiography including imaging supervision 
and interpretation, induction or attempted induction of an arrhythmia 
including left or right atrial pacing/recording, right ventricular 
pacing/recording, and His bundle recording, when performed), and 
recommends a work RVU of 17.00 with 35 minutes of pre-service 
evaluation time, 3 minutes positioning time, 15 minutes scrub/dress/
wait time, 180 minutes of intra-service time, 30 minutes of immediate 
post-service time, for a sum of 263 minutes of total time. CPT code 
93656 currently has a work RVU of 19.77 with 23 minutes of pre-service 
evaluation time, 1 minute positioning time, 5 minutes scrub/dress/wait 
time, 240 minutes of intra-service time, 40 minutes of immediate post-
service time, for a sum of 309 minutes of total time. CPT code 93656 
has bundled within it, the time and the physician's work of CPT add-on 
code 93613 (Intracardiac electrophysiologic 3-dimensional mapping (List 
separately in addition to code for primary procedure) with a work RVU 
of 5.23 and 90 minutes of total time and CPT add-on code 93662 
(Intracardiac echocardiography during therapeutic/diagnostic 
intervention, including imaging supervision and interpretation (List 
separately in addition to code for primary procedure)) with a work RVU 
of 1.44 and 25 minutes of total time. When all three codes are 
separately considered, they sum up to 26.44 work RVUs, which is much 
greater than the 17.00 work RVUs that is recommended and has much more 
physician total time than the RUC recommended 263 total time minutes.
    The RUC recommended intra-service times and total times for CPT 
code 93656 that are less than the current times for this code and we 
expect the work RVUs to also be less than the current work RVUs. Though 
the RUC recommended a work RVU of 17.00, it is still a high value 
compared to the existing 19.77. The RUC recommended the work RVU for 
CPT code 93653 as 15.00, and for CPT code 93656 as 17.00, with a 
relative increment between them of 2.00 work RVUs. As a better 
valuation for CPT code 93656, CMS proposes the proposed CPT code 
93653's 13.80 work RVU plus the relative increment RVU difference of 
2.00 that the RUC is maintaining between CPT code 93653 and CPT code 
93656 (15.00 subtracted from 17.00 equals 2.00). This would value CPT 
code 93656 at 15.80 (13.80 plus 2.00) work RVUs for 180 minutes of 
intra-service time and 263 minutes of total time, which we propose for 
CY 2023.
    CPT add-on code 93657 (Additional linear or focal intracardiac 
catheter ablation of the left or right atrium for treatment of atrial 
fibrillation remaining after completion of pulmonary vein isolation 
(List separately in addition to code for primary procedure)) has a 
current work RVU of 5.50 with a physician intra-service time of 60 
minutes as finalized last year (86 FR 65108). The previous work RVU was 
7.50 with 90 minutes of physician intraservice time. The RUC 
recommended the re-surveyed intra-service time of 60 minutes and 7.00 
work RVUs. The primary change to CPT add-on code 93657 is the reduction 
of the intra-service time from before the re-survey and the current 
RUC-recommended time, from 90 minutes to 60 minutes, which is a 
reduction of about 67 percent, and which we used as a guide to 
determine an appropriate work RVU. We compare CPT add-on code 22854 
(Insertion of intervertebral biomechanical device(s) (e.g., synthetic 
cage, mesh) with integral anterior instrumentation for device anchoring 
(e.g., screws, flanges), when performed, to vertebral corpectomy(ies) 
(vertebral body resection, partial or complete) defect, in conjunction 
with interbody arthrodesis, each contiguous defect (List separately in 
addition to code for primary procedure)), also with 60 minutes of 
intra-service and total time, and a work RVU of 5.50, to CPT add-on 
code 93657, and believe that this is a more accurate comparison for 
valuation than the RUC's work RVU comparison to CPT add-on code 93592 
(Percutaneous transcatheter closure of paravalvular leak; each 
additional occlusion device (List separately in addition to code for 
primary procedure)) with a work RVU of 8.00 and an intra-service and 
total time of 60 minutes, and to CPT add-on code 34820 (Open iliac 
artery exposure for delivery of endovascular prosthesis or iliac 
occlusion during endovascular therapy, by abdominal or retroperitoneal 
incision, unilateral (List separately in addition to code for primary 
procedure)) with a work RVU of 7.00 and an intra-service and total time 
of 60 minutes. After reviewing this code and relative similar codes in 
the PFS, we are proposing to re-affirm the current work RVU of 5.50 
with a physician intraservice time of 60 minutes for CPT add-on code 
93657, as finalized last year (86 FR 65108).
    The RUC did not recommend, and we are not proposing, direct PE 
inputs for CPT codes 93653-93657.
(27) Pulmonary Angiography (CPT Codes 93XX0, 93XX1, 93XX2, 93XX3, 
93563, 93564, 93565, 93566, 93567, and 93568)
    In May 2021, the CPT Editorial Panel revised CPT code 93568 
(Injection procedure during cardiac catheterization including imaging 
supervision, interpretation, and report; for nonselective pulmonary 
arterial angiography (List separately in addition to code for primary 
procedure) which resulted in the creation of four new related CPT add-
on codes. CPT add-on codes 93563 to 93567 were surveyed with the four 
new codes, as part of the same code family.
    The RUC surveyed and reviewed CPT code 93563 (Injection procedure 
during cardiac catheterization including imaging supervision, 
interpretation, and report; for selective coronary angiography during 
congenital heart

[[Page 45929]]

catheterization (List separately in addition to code for primary 
procedure)), and recommends a work RVU of 1.11 for 15 minutes of intra-
service and total time for this add-on service. The current work RVU is 
1.11 for 25 minutes of intra-service and total time, so there is a 
reduction of 10 minutes in physician time. With the reduction of 
physician time, it is typical that there would be some reduction in the 
work RVUs. After reviewing this code and relative similar codes in the 
PFS, we believe a better comparator add-on code would be CPT code 64494 
(Injection(s), diagnostic or therapeutic agent, paravertebral facet 
(zygapophyseal) joint (or nerves innervating that joint) with image 
guidance (fluoroscopy or CT), lumbar or sacral; second level (List 
separately in addition to code for primary procedure)), with a work RVU 
of 1.00 for 15 minutes of intra-service and total time. CPT code 64494 
is a good comparator in terms of both the new physician time and due to 
the proportional work RVU, as compared to CPT code 93563. Therefore, we 
are proposing a work RVU of 1.00 and 15 minutes of intra-service and 
total time for add-on CPT code 93563.
    The RUC surveyed and reviewed CPT code 93564 (Injection procedure 
during cardiac catheterization including imaging supervision, 
interpretation, and report; for selective opacification of 
aortocoronary venous or arterial bypass graft(s) (e.g., aortocoronary 
saphenous vein, free radial artery, or free mammary artery graft) to 
one or more coronary arteries and in situ arterial conduits (e.g., 
internal mammary), whether native or used for bypass to one or more 
coronary arteries during congenital heart catheterization (List 
separately in addition to code for primary procedure)), and recommends 
a work RVU of 1.13 for 18 minutes of intra-service and total time for 
this add-on service. The current work RVU is 1.13 for 25 minutes of 
intra-service and total time, so there is a reduction of 7 minutes in 
physician time. With the reduction of physician time, it is typical 
that there would be some reduction in the work RVUs. After reviewing 
this code and relative similar codes in the PFS, we believe a better 
comparator add-on code would be CPT code 31632 (Bronchoscopy, rigid or 
flexible, including fluoroscopic guidance, when performed; with 
transbronchial lung biopsy(s), each additional lobe (List separately in 
addition to code for primary procedure)) with a work RVU of 1.03 for 18 
minutes of intra-service and total time. CPT code 31632 is a good 
comparator in terms of both the new physician time and due to the 
proportional work RVU, as compared to CPT code 93564. Therefore, we are 
proposing a work RVU of 1.03 and 18 minutes of intra-service and total 
time for add-on CPT code 93564.
    The RUC surveyed and reviewed CPT code 93565 (Injection procedure 
during cardiac catheterization including imaging supervision, 
interpretation, and report; for selective left ventricular or left 
atrial angiography (List separately in addition to code for primary 
procedure)), and recommends a work RVU of 0.86 for 10 minutes of intra-
service and total time for this add-on service. The current work RVU is 
0.86 for 20 minutes of intra-service and total time, so there is a 
reduction of 10 minutes in physician time. With the reduction of 
physician time, it is typical that there would be some reduction in the 
work RVUs. After reviewing this code and relative similar codes in the 
PFS, we believe a better comparator add-on code would be CPT code 64421 
(Injection(s), anesthetic agent(s) and/or steroid; intercostal nerve, 
each additional level (List separately in addition to code for primary 
procedure)) with a work RVU of 0.50 for 10 minutes of intra-service and 
total time. CPT code 64421 is a good comparator code in terms of both 
the new physician time and due to the proportional work RVU as compared 
to CPT code 93565. Therefore, we are proposing a work RVU of 0.50 and 
10 minutes of intra-service and total time for add-on CPT code 93565.
    The RUC surveyed and reviewed CPT code 93566 (Injection procedure 
during cardiac catheterization including imaging supervision, 
interpretation, and report; for selective right ventricular or right 
atrial angiography (List separately in addition to code for primary 
procedure)) and recommends a work RVU of 0.86 for 10 minutes of intra-
service and total time for this add-on service. The current work RVU is 
0.86 for 20 minutes of intra-service and total time, so there is a 
reduction of 10 minutes in physician time. With the reduction of 
physician time, it is typical that there would be some reduction in the 
work RVUs. After reviewing this code and relative similar codes in the 
PFS, we believe a better comparator add-on code would be CPT code 64421 
(Injection(s), anesthetic agent(s) and/or steroid; intercostal nerve, 
each additional level (List separately in addition to code for primary 
procedure)) with a work RVU of 0.50 for 10 minutes of intra-service and 
total time. CPT code 64421 is a good comparator code in terms of both 
the new physician time and due to the proportional work RVU, as 
compared to CPT code 93566. Therefore, we are proposing a work RVU of 
0.50 and 10 minutes of intra-service and total time.
    The RUC surveyed and reviewed CPT code 93567 (Injection procedure 
during cardiac catheterization including imaging supervision, 
interpretation, and report; for supravalvular aortography (List 
separately in addition to code for primary procedure)), and recommends 
a work RVU of 0.97 for 10 minutes of intra-service and total time for 
this add-on service. The current work RVU is 0.97 for 15 minutes of 
intra-service and total time, so there is a reduction of 5 minutes in 
physician time. With the reduction of physician time, it is typical 
that there would be some reduction in the work RVUs. After reviewing 
this code and relative similar codes in the PFS, we believe a better 
comparator add-on code would be CPT code 74248 (Radiologic small 
intestine follow-through study, including multiple serial images (List 
separately in addition to code for primary procedure for upper GI 
radiologic examination)) with a work RVU of 0.70 for 10 minutes of 
intra-service and total time. CPT code 74248 is a good comparator code 
in terms of both the new physician time and due to the proportional 
work RVU, as compared to CPT code 93567. Therefore, we are proposing a 
work RVU of 0.70 and 10 minutes of intra-service and total time.
    The RUC surveyed and reviewed CPT code 93568 (Injection procedure 
during cardiac catheterization including imaging supervision, 
interpretation, and report; for nonselective pulmonary arterial 
angiography (List separately in addition to code for primary 
procedure)), and recommends a work RVU of 0.88 for 13 minutes of intra-
service and total time for this add-on service. The current work RVU is 
0.88 for 20 minutes of intra-service and total time, so there is a 
reduction of 7 minutes in physician time. With the reduction of 
physician time, it is typical that there would be some reduction in the 
work RVUs. After reviewing this code and relative similar codes in the 
PFS, we agree with the RUC recommendation and are proposing a work RVU 
of 0.88 with 13 minutes of intra-service and total time for add-on CPT 
code 93568.
    For the first of the related four new add-on codes to this family, 
temporarily designated as CPT placeholder code 93XX0 (Injection 
procedure during cardiac catheterization including imaging supervision, 
interpretation, and report; for selective pulmonary arterial 
angiography, unilateral (List separately

[[Page 45930]]

in addition to code for primary procedure)), the RUC recommends a work 
RVU of 1.05 for 11 minutes of intra-service and total time for this 
add-on service. The RUC noted that the typical patient for this service 
is pediatric. After reviewing this code and relative similar codes in 
the PFS, we believe a better comparator add-on code would be CPT code 
78434 (Absolute quantitation of myocardial blood flow (AQMBF), positron 
emission tomography (PET), rest and pharmacologic stress (List 
separately in addition to code for primary procedure)) with a work RVU 
of 0.63 for 11 minutes of intra-service and total time. CPT code 78434 
is a good comparator code in terms of both the physician time, and due 
to the proportional work RVU, as compared to CPT code 93XX0. Therefore, 
we are proposing a work RVU of 0.63 and 11 minutes of intra-service and 
total time for add-on CPT code 93XX0.
    For the second of the related four new add-on codes to this family, 
temporarily designated as CPT placeholder code 93XX1 (Injection 
procedure during cardiac catheterization including imaging supervision, 
interpretation, and report; for selective pulmonary arterial 
angiography, bilateral (List separately in addition to code for primary 
procedure)), the RUC recommends a work RVU of 1.75 for 18 minutes of 
intra-service and total time for this add-on service. The RUC noted 
that the typical patient for this service is pediatric and that this 
service is bilateral. After reviewing this code and relative similar 
codes in the PFS, we believe a better comparator add-on code would be 
HCPCS code G0289 (Arthroscopy, knee, surgical, for removal of loose 
body, foreign body, debridement/shaving of articular cartilage 
(chondroplasty) at the time of other surgical knee arthroscopy in a 
different compartment of the same knee (List separately in addition to 
code for primary procedure)) with a work RVU of 1.48 for 20.5 minutes 
of intra-service and total time and that this service is bilateral. 
G0289 has 2.5 minutes of additional physician intra-service time, so we 
adjust the comparator work RVU from 1.48 to 1.30. Therefore, we are 
proposing 1.30 work RVUs for 18 minutes of intra-service and total time 
for add-on CPT code 93XX1.
    For the third of the related four new add-on codes to this family, 
temporarily designated as CPT placeholder code 93XX2 (Injection 
procedure during cardiac catheterization including imaging supervision, 
interpretation, and report; for selective pulmonary venous angiography 
of each distinct pulmonary vein during cardiac catheterization. (List 
separately in addition to code for primary procedure)), the RUC 
recommends a work RVU of 1.84 for 20 minutes of intra-service and total 
time for this add-on service. The RUC noted that the typical patient 
for this service is pediatric. After reviewing this code and relative 
similar codes in the PFS, we believe a better comparator add-on code 
would be CPT code 93598 (Measurement of output of blood from heart, 
performed during cardiac catheterization for evaluation of congenital 
heart defects (List separately in addition to code for primary 
procedure)) with a work RVU of 1.44 for 20 minutes of intra-service and 
total time. CPT code 93598 is a good comparator code in terms of both 
the physician time, and due to the proportional work RVU, as compared 
to CPT code 93XX2.
    Therefore, we are proposing 1.44 work RVUs for 20 minutes of intra-
service and total time for add-on CPT code 93XX2.
    For the last of the related four new add-on codes to this family, 
temporarily designated as CPT placeholder code 93XX3 (Injection 
procedure during cardiac catheterization including imaging supervision, 
interpretation, and report; for selective pulmonary angiography of 
major aortopulmonary collateral arteries (MAPCAs) arising off the aorta 
or its systemic branches, each distinct vessel)), the RUC recommends a 
work RVU of 1.92 for 20 minutes of intra-service and total time for 
this add-on service. The RUC describes this service and the physician's 
work as very time-intensive and complicated, and the typical patient 
for this service is pediatric. We agree with the RUC recommendations 
and are proposing a work RVU of 1.92 with 20 minutes of intra-service 
and total time for add-on CPT code 93XX3.
    The RUC did not recommend, and we are not proposing, direct PE 
inputs for CPT codes 93563-93XX3.
(28) Quantitative Pupillometry Services (CPT Code 959XX)
    The CPT Editorial Panel approved a new Category I CPT code to 
replace the sunset Category III (CPT code 0341T Quantitative 
pupillometry with interpretation and report, unilateral or bilateral) 
and 92499 (Unlisted ophthalmological service or procedure for reporting 
this service).
    We are not proposing the RUC-recommended work RVU of 0.25 for CPT 
code 959XX, as we believe this is an overestimation based on a 
comparison to other codes with similar time values, particularly the 
key reference code CPT code 92081 (Visual field examination, unilateral 
or bilateral, with interpretation and report; limited examination 
(e.g., tangent screen, Autoplot, arc perimeter, or single stimulus 
level automated test, such as Octopus 3 or 7 equivalent). In the 
interest of maintaining relativity with similarly timed codes, we are 
instead proposing a work RVU of 0.18 with a crosswalk to CPT code 92504 
(Binocular microscopy (separate diagnostic procedure)). We note that 
this value falls between the work RVUs of 0.17 for CPT code 94010 
(Spirometry, including graphic record, total and timed vital capacity, 
expiratory flow rate measurement(s), with or without maximal voluntary 
ventilation) and 0.20 for CPT code 77081 (Dual-energy X-ray 
absorptiometry (DXA), bone density study, 1 or more sites; appendicular 
skeleton (peripheral) (e.g., radius, wrist, heel)); both codes have 
identical intraservice times and similar total times.
    We are proposing the RUC-recommended direct PE inputs without 
refinement.
(29) Caregiver Behavior Management Training (CPT Codes 96X70 and 96X71)
    CPT code 96X70 (Multiple-family group behavior management/
modification training for guardians/caregivers of patients with a 
mental or physical health diagnosis, administered by physician or other 
qualified health care professional (without the patient present), face-
to-face with multiple sets of guardians/caregivers; initial 60 minutes) 
and its add-on code, CPT code 96X71 (Multiple-family group behavior 
management/modification training for guardians/caregivers of patients 
with a mental or physical health diagnosis, administered by physician 
or other qualified health care professional (without the patient 
present), face-to-face with multiple sets of guardians/caregivers; each 
additional 15 minutes (List separately in addition to code for primary 
service)), are new codes created by the CPT Editorial Panel during its 
February 2021 meeting. The two codes are to be used to report the total 
duration of face-to-face time spent by the physician or other qualified 
health professional providing group training to guardians or caregivers 
of patients. Although the patient does not attend the group trainings, 
the goals and outcomes of the sessions focus on interventions aimed at 
improving the patient's daily life. According to the CPT Summary of 
Recommendations, during the face-to-face time service time, caregivers 
are taught how to structure the patient's environment to support and 
reinforce

[[Page 45931]]

desired patient behaviors, to reduce the negative impacts of the 
patient's diagnosis on patient's daily life, and to develop highly 
structured technical skills to manage patient behavior.
    As a means of identifying work values for CPT codes 96X70 and 
96X71, three specialty societies sent surveys to a random sample of a 
subset of their members. Based upon survey results and after 
discussion, the RUC recommended a work RVU of 0.43 per identified 
patient service for CPT code 96X70. The RUC noted that this 
recommendation is based upon a median group size of six caregivers and 
includes 10 minutes pre-time, 60 minutes intra-time, and 20 minutes 
post-time for a total time of 90 minutes. For CPT code 96X71, the 15-
minute add-on code, the RUC recommended a work RVU of 0.12, which is 
also based upon a median group size of six.
    After reviewing the caregiver training codes, we have determined 
that CPT codes 96X70 and 96X71 are not payable under the PFS. Under 
section 1862(a)(1)(A) of the Act, Medicare payment is generally limited 
to those items and services that are reasonable and necessary for the 
diagnosis or treatment of illness or injury or that improve the 
functioning of a malformed body member. In past rulemaking, we have 
explained that we read section 1862(a)(1)(A) of the Act to limit 
Medicare coverage and payment to items and services that are reasonable 
and necessary for the diagnosis and treatment of an individual Medicare 
beneficiary's illness or injury or that improve the functioning of an 
individual Medicare beneficiary's malformed body member. For example, 
in the CY 2013 PFS final rule (77 FR 68979), when discussing payment 
for the non-face-to-face care management services that are part of E/M 
services, we stated that Medicare does not pay for services that are 
furnished to parties other than the beneficiary. We listed as an 
example, communication with caregivers. Because the codes for caregiver 
behavior management training describe services furnished exclusively to 
caregivers rather than to the individual Medicare beneficiary, we did 
not review the RUC-recommended valuation of these codes for purposes of 
PFS payment. However, recognizing our focus on ensuring equitable 
access to reasonable and necessary medical services, we are seeking 
comment about the services described by these two codes. First, we are 
seeking comment on the ways in which a patient may benefit when a 
caregiver learns strategies to modify the patient's behavior. We are 
also seeking comment on how current Medicare policies regarding these 
caregiver training services may impact Medicare beneficiary health. 
Finally, we are seeking comment about how the services described by 
these codes might be bundled into Medicare covered services as incident 
to services or as practitioner work that is part of some care 
management codes.
(30) Cognitive Behavioral Therapy Monitoring (CPT Code 989X6).
    See the Remote Therapeutic Monitoring (RTM) section II.I. of this 
proposed rule for a review of new device code, CPT code 989X6.
(31) Code Descriptor Changes for Annual Alcohol Misuse and Annual 
Depression Screenings (HCPCS Codes G0442 and G0444)
    Interested parties have raised concerns with the portion of the 
code descriptors that require a certain number of minutes to bill for 
the HCPCS codes G0442 (Annual alcohol misuse screening, 15 minutes) and 
G0444 (Annual depression screening, 15 minutes). Over the past several 
years, AAFP and the ACP have requested that CMS revise the code 
descriptors to state ``up to 15 minutes'' instead of the current ``15 
minutes,'' allowing practitioners to efficiently furnish the service. 
As currently described, claims for the service are said to be denied by 
MACs in instances where records suggest that a full 15 minutes was not 
reached by the practitioner when furnishing the service. Both codes are 
high in volume for 2019 and 2020, with over 700,000 reported services 
in our Medicare claims data.
    Medicare Part B coverage for such screenings originated from a 
national coverage determination (NCD) from 2011 and 2012. We believe 
that these screenings may not require a full 15 minutes to perform for 
the typical patient, so we believe that it would be appropriate to 
propose to revise the descriptors to specify that screening times of 5 
to 15 minutes would be the typical range to furnish these services. 
This will establish a lower time limit for both HCPCS codes G0442 and 
G0444. Therefore, we propose to modify the descriptor for HCPCS code 
G0442 to read ``Annual alcohol misuse screening, 5 to 15 minutes'' and 
for HCPCS code G0444 to read ``Annual depression screening, 5 to 15 
minutes.''
(32) Insertion, and Removal and Insertion of New 180-Day Implantable 
Interstitial Glucose Sensor System (HCPCS Codes G0308 and G0309)
    For the CY 2021 PFS final rule (85 FR 84645), we established 
national pricing for 3 Category III CPT codes that describe continuous 
glucose monitoring. Category III CPT codes 0446T (Creation of 
subcutaneous pocket with insertion of implantable interstitial glucose 
sensor, including system activation and patient training), 0447T 
(removal of implantable interstitial glucose sensor from subcutaneous 
pocket via incision), and 0448T (removal of implantable interstitial 
glucose sensor with creation of subcutaneous pocket at different 
anatomic site and insertion of new implantable sensor, including system 
activation) describe the services related to the insertion, removal, 
and removal and insertion of an implantable interstitial glucose sensor 
from a subcutaneous pocket. The implantable interstitial glucose 
sensors are part of systems that can allow real-time glucose 
monitoring, provide glucose trend information, and signal alerts for 
detection and prediction of episodes of low blood glucose 
(hypoglycemia) and high blood glucose (hyperglycemia). The direct PE 
inputs for CPT code 0446T include a 90-day supply item, SD334 
(implantable interstitial glucose sensor), and a 90-day smart 
transmitter proxy equipment item, EQ392 (heart failure patient 
physiologic monitoring equipment package). The direct PE inputs for CPT 
code 0448T include only the 90-day SD334 interstitial glucose sensor.
    For CY 2022, based on requests from interested parties for CMS to 
allow beneficiaries critical access to a newly approved 180-day 
continuous glucose monitoring system, CMS established two new HCPCS 
codes to describe the new 180-day monitoring service. Specifically, CMS 
established HCPCS code G0308 (Creation of subcutaneous pocket with 
insertion of 180-day implantable interstitial glucose sensor, including 
system activation and patient training) and G0309 (removal of 
implantable interstitial glucose sensor with creation of subcutaneous 
pocket at different anatomic site and insertion of new 180-day 
implantable sensor, including system activation). The newly approved 
180-day continuous glucose monitoring system extends the monitoring 
period from the previous 90 days to allow for a longer monitoring 
period between replacement of the sensor. We believe it is important 
for beneficiaries to have continued access to this service during the 
transition from a 90- to 180-day monitoring period where the 90-day 
sensor may become obsolete. Therefore, HCPCS codes G0308 and G0309 are 
contractor priced and effective July 1, 2022. We are seeking 
information and invoices from

[[Page 45932]]

interested parties on the costs of the 180-day interstitial glucose 
supply and 180-day smart transmitter equipment direct PE inputs for 
HCPCS codes G0308 and G0309 to ensure proper payment for these 
physician's services, for consideration of national payment amounts for 
CY 2023. We note that the 90-day supply item, SD334, is currently 
priced at $1,500 based on information we received from interested 
parties. The 90-day smart transmitter, EQ392, is currently priced at 
$1,000 and assigned a time value of 25,290 minutes derived from 60 
minutes per hour times 24 hours per day times 90 days per billing 
quarter divided by 1 minute of equipment use of every 5 minutes of 
time. HCPCS code G0308 includes the smart transmitter and interstitial 
glucose sensor and HCPCS code G0309 includes the interstitial glucose 
sensor only.
(33) Chronic Pain Management and Treatment (CPM) Bundles (HCPCS GYYY1, 
and GYYY2)
(a) Background and Proposal
    In the CY 2022 PFS proposed rule (86 FR 39104, 39179-39181), we 
explored refinements to the PFS that would appropriately value chronic 
pain management and treatment (CPM) by soliciting comment on CPM for 
the purpose of future rulemaking. In our solicitation, we described 
Federal efforts for more than a decade to effectively address pain 
management as a response to the nation's overdose crisis,\9\ such as 
the National Pain Strategy \10\ and the HHS Pain Management Best 
Practices Inter-Agency Task Force (PMTF) Report.\11\ As we noted in our 
CY 2022 comment solicitation, several sections of the Support for 
Patients and Communities Act of 2018 \12\ (SUPPORT Act) describe 
actions the Department of Health and Human Services has been directed 
to take to improve pain care, such as section 2003, which amended 
Medicare's Annual Wellness Visit \13\ to include a review of factors 
for evaluation related to pain for patients using opioid medications; 
section 6086, the Dr. Todd Graham Pain Management Study; \14\ and 
section 6032, which required CMS to furnish a Report to Congress and 
develop a related Action Plan to review coverage and payment policies 
in Medicare and Medicaid related to the treatment of opioid use 
disorder and for non-opioid therapies to help manage acute and chronic 
pain.\15\ In the section 6032 Report and the Action Plan, CMS included 
a recommendation to explore the possibility of establishing a new 
bundled payment under the Medicare Physician Fee Schedule for 
integrated multimodal pain care that could include certain elements 
such as diagnosis, a person-centered plan of care, care coordination, 
medication management, and other aspects of pain care.
---------------------------------------------------------------------------

    \9\ https://www.hhs.gov/overdose-prevention/.
    \10\ https://www.iprcc.nih.gov/sites/default/files/documents/NationalPainStrategy_508C.pdf.
    \11\ https://www.hhs.gov/sites/default/files/pmtf-final-report-2019-05-23.pdf.
    \12\ https://www.congress.gov/115/plaws/publ271/PLAW-115publ271.pdf.
    \13\ https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/preventive-services/medicare-wellness-visits.html.
    \14\ https://effectivehealthcare.ahrq.gov/products/improving-pain-management/rapid-evidence.
    \15\ https://www.cms.gov/sites/default/files/2022-4/SUPPORT%206032%20Action%20Plan_Final_061521_Clean.pdf.
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    As described in Goal 3 of CMS's 2022 Behavioral Health Strategy 
\16\ (Strategy), CMS intends to improve the care experience for 
individuals with acute and chronic pain, expand access to evidence-
based treatments for acute and chronic pain, and increase coordination 
between primary and specialty care through payment episodes, 
incentives, and payment models. In late 2019, the CMS Office of Burden 
Reduction & Health Informatics launched the ``Chronic Pain Stakeholder 
Engagement'', which focused on understanding access to covered 
treatment and services for people living with pain.\17\ CMS recently 
released information gathered from interested parties through this 
Engagement using qualitative research methods and the human-centered 
design process, to uncover provider burden, and identify opportunities 
to improve access to covered services by illustrating the experiences 
of people living with, and treating, chronic pain. The intent of this 
project was to highlight the most prominent barriers people with pain 
face in accessing care, and the factors influencing clinicians that can 
affect people with chronic pain, the quality of their care, and their 
quality of life.
---------------------------------------------------------------------------

    \16\ https://www.cms.gov/cms-behavioral-health-strategy.
    \17\ https://www.cms.gov/About-CMS/OBRHI.
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    In the context of the Biden-Harris' Administration's commitment to 
equity,\18\ and the inclusion of equity as a pillar of CMS's Strategic 
Vision,\19\ disparities exist in pain treatment due to bias in 
treatment, language barriers, and socioeconomic status. We are also 
aware that pain is a factor in suicidality and suicide, prioritized in 
the Surgeon General's Call to Action to Implement the National Strategy 
for Suicide Prevention \20\ and in HHS's work to implement ``988,\21\'' 
the new national dialing code for suicide and crisis assistance to be 
implemented nationally this year.
---------------------------------------------------------------------------

    \18\ https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/.
    \19\ https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
    \20\ https://www.hhs.gov/sites/default/files/sprc-call-to-action.pdf.
    \21\ https://www.samhsa.gov/find-help/988.
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    In coordination with all of these initiatives, we also have 
continued to explore refinements to the PFS that would appropriately 
value CPM. In the CY 2022 PFS proposed rule, we sought comment on 
whether we should approach CPM through a standalone code or E/M add-on 
coding, and about the specific activities that are involved in CPM, how 
we might value such a code or service, the settings where this care is 
provided, the types of practitioners that furnish this care, and 
whether the service or any components of it could or should be 
furnished as ``incident to'' \22\ services under the direction of the 
billing practitioner by other members of the care team (86 FR 39182). 
We received just under two thousand comments on this comment 
solicitation, including comments from national health care 
organizations including provider associations, federations, and 
societies that represent health care professionals; organizations that 
educate, connect, and advocate for people with pain; State-based health 
care organizations, medical societies and associations; cancer care 
centers; health care companies; device manufacturers; pain care 
providers; and people living with pain. Almost all commenters were 
supportive of our efforts to carefully consider an approach to coding 
and payment for care for CPM. Many commenters supported the creation of 
separate coding and payment for CPM under the PFS. We summarized these 
comments, expressed appreciation for the commenters' attention to 
informing our approach to payment and coding for comprehensive CPM 
services, and thanked the commenters for their comments in the CY 2022 
PFS final rule (86 FR 65129).
---------------------------------------------------------------------------

    \22\ https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/se0441.pdf.
---------------------------------------------------------------------------

    Generally, commenters agreed that efforts are needed to effectively 
support the complex needs of beneficiaries with chronic pain. 
Commenters emphasized that there are numerous conditions giving rise to 
chronic pain and that people presenting with chronic pain respond 
variably to various treatment modalities, and often require longer 
office visit times, and longer follow-up coordinating care with social 
workers

[[Page 45933]]

and case managers, mental and behavioral health support, communications 
with emergency department physicians and nurses, and numerous 
medication adjustments. One commenter stated that beneficiaries with 
complex chronic pain conditions may require a lot of time for correct 
dosing of medications and counseling, and that such time is not 
captured effectively using existing E/M codes. This commenter also 
believed that separate coding and payment for chronic pain management 
could help with better understanding of the treatment of chronic pain 
than when the service is reported with existing visit codes and would 
allow for valuation based on the resources involved in furnishing these 
specific services to people with chronic pain, enhancing the likelihood 
of appropriate payment, especially for non-face-to-face time involved 
with the service.
    A few commenters expressed preference for using existing E/M codes 
and the creation of codes to be used in conjunction with E/M codes. One 
commenter suggested that CMS either clarify or modify existing codes so 
they can support services for patients with chronic pain or significant 
acute pain, as well as beneficiaries with a chronic disease and a 
behavioral health condition, stating that using the existing codes 
would avoid any concerns about overpayment for patients with both a 
chronic disease and pain, while also making it more feasible for small 
practices to employ care management staff and provide customized care 
management services for all the patients who need them.
    One commenter who was agreeable with various approaches to payment 
suggested that the guidelines for Cognitive Assessment and Care Plan 
Services code 99483 include ``chronic pain syndromes'' in the 
``assessment of factors that could be contributing to cognitive 
impairment'' and that these codes could be reported by physicians who 
consult with a pain specialist about their patient's pain. This 
commenter also suggested that Transitional Care Management could also 
potentially include pain management following inpatient care to help 
prevent acute pain from progressing to chronic pain. Other commenters 
also likened CPM services to chronic care management services. We 
believe that chronic care management codes, which, except for Principal 
Care Management, specify that the chronic condition being managed is 
expected to last at least one year or until death, would not properly 
describe the condition of many beneficiaries with chronic pain. For 
example, the 11th revision of the World Health Organization's 
International Classification of Diseases and Related Health Problems 
define chronic pain as persistent or recurring pain lasting longer than 
three months.\23\
---------------------------------------------------------------------------

    \23\ https://icd.who.int/en.
---------------------------------------------------------------------------

    Commenters included feedback about other specific activities 
involved in the management of patients with chronic pain in addition to 
those we specified in the comment solicitation. Commenters also 
identified codes that CMS might examine as models for payment, either 
as stand-alone timed codes or monthly bundles. Commenters suggested 
which practitioners should be able to bill such CPM codes, which 
practitioners should be able to furnish CPM services incident to the 
services of a physician or other practitioner, and expressed views on 
adding CPM services to the Medicare Telehealth Services List and 
obtaining beneficiary consent for CPM services.
    We agree with commenters who believe that E/M codes may not reflect 
all the services and resources required to furnish comprehensive, 
chronic pain management to beneficiaries living with pain. While we 
agree in principle that it might be appropriate to establish bundled 
all-inclusive coding with monthly payment for a broader set of CPM 
services, we do not have data at the present time on the full scope of 
services and resource inputs involved in care for patients with chronic 
pain to support development of a proposed monthly bundled all-inclusive 
rate. We do believe that E/M codes do not appropriately reflect the 
time and other potential resources involved in furnishing comprehensive 
CPM for beneficiaries with chronic pain. Beginning in the CY 2014 PFS 
final rule (78 FR 74414 through 74427), we recognized that the 
resources involved in furnishing comprehensive care to patients with 
multiple chronic conditions are greater than those required to support 
care in a typical E/M service. In response, we finalized a separately 
payable HCPCS code GXXX1 (Chronic Care Management (CCM) services 
furnished to patients with multiple (2 or more) chronic condition 
expected to last at least 12 months, or until the death of the patient; 
20 minutes or more per in 30 days of chronic care management services 
provided by clinical staff and directed by a physician or other 
qualified health care practitioner). The following year, in the CY 2015 
PFS final rule (79 FR 67715 through 67730), we refined aspects of the 
existing CCM policies and adopted separate payment for CCM services 
under CPT code 99490 (Chronic care management services (CCM), at least 
20 minutes of clinical staff time directed by a physician or other 
qualified health professional, per calendar month, with the following 
required elements: Multiple (two or more) chronic conditions expected 
to last at least 12 months, or until the death of the patient; Chronic 
conditions place the patient at significant risk of death, acute 
exacerbation/decompensation, or functional decline; Comprehensive care 
plan established, implemented, revised, or monitored). In the CY 2017 
PFS final rule (81 FR 80244), we adopted CPT codes 99487 (Complex 
chronic care management (CCCM) services with the following required 
elements: Multiple (two or more) chronic conditions expected to last at 
least 12 months, or until the death of the patient, chronic conditions 
place the patient at significant risk of death, acute exacerbation/
decompensation, or functional decline, comprehensive care plan 
established, implemented, revised, or monitored, moderate or high 
complexity medical decision making; first 60 minutes of clinical staff 
time directed by a physician or other qualified health care 
professional, per calendar month) and 99489 (CCCM services with the 
following required elements: Multiple (two or more) chronic conditions 
expected to last at least 12 months, or until the death of the patient, 
chronic conditions place the patient at significant risk of death, 
acute exacerbation/decompensation, or functional decline, comprehensive 
care plan established, implemented, revised, or monitored, moderate or 
high complexity medical decision making; each additional 30 minutes of 
clinical staff time directed by a physician or other qualified health 
care professional, per calendar month (List separately in addition to 
code for primary procedure)). Then, in the CY 2019 PFS final rule (83 
FR 59577), we adopted a new CPT code, 99491 (CCM services, provided 
personally by a physician or other qualified health care professional, 
at least 30 minutes of physician or other qualified health care 
professional time, per calendar month, with the following required 
elements: Multiple (two or more) chronic conditions expected to last at 
least 12 months, or until the death of the patient; chronic conditions 
place the patient at significant risk of death, acute exacerbation/
decompensation, or functional decline; comprehensive care plan 
established, implemented, revised, or monitored), to describe at least 
30 minutes of CCM services performed personally by a

[[Page 45934]]

physician or NPP. In the CY 2020 PFS final rule (84 FR 62690), we 
established payment for an add-on code to CPT code 99490 by creating 
HCPCS code G2058 (CCM services, each additional 20 minutes of clinical 
staff time directed by a physician or other qualified healthcare 
professional, per calendar month). We also created two new HCPCS G 
codes, G2064 and G2065 (84 FR 62692 through 62694), representing 
comprehensive services for a single high-risk disease (that is, 
principal care management). In the CY 2021 PFS final rule (85 FR 
84639), we finalized a RUC-recommended replacement code for HCPCS code 
G2058 with the identical descriptor, CPT code 99439, and assigned the 
same valuation as for G2058. For CY 2022, the RUC resurveyed the CCM 
code family, including CCCM and Principal Care Management (PCM), and 
added five new CPT codes: 99437 (CCM services each additional 30 
minutes by a physician or other qualified health care professional, per 
calendar month (List separately in addition to code for primary 
procedure)), 99424 (PCM services for a single high-risk disease first 
30 minutes provided personally by a physician or other qualified health 
care professional, per calendar month), 99425 (PCM services for a 
single high risk disease each additional 30 minutes provided personally 
by a physician or other qualified health care professional, per 
calendar month (List separately in addition to code for primary 
procedure), 99426 (PCM, for a single high-risk disease first 30 minutes 
of clinical staff time directed by physician or other qualified health 
care professional, per calendar month), and 99427 (PCM services, for a 
single high-risk disease each additional 30 minutes of clinical staff 
time directed by a physician or other qualified health care 
professional, per calendar month (List separately in addition to code 
for primary procedure)).
    The CCM/CCCM/PCM code family now includes five sets of codes, each 
set with a base code and an add-on code. The sets vary by the degree of 
complexity of care (that is, CCM, CCCM, or PCM), who directly performs 
the services (that is, clinical staff, or the physician or NPP), and 
the time spent furnishing the services. The RUC-recommended values for 
work RVUs and direct PE inputs for these codes in CY 2022 were derived 
from a recent RUC specialty society survey. We proposed to accept the 
RUC-recommended values, considered public comments, and finalized the 
proposed values for the 10 CCM/CCCM/PCM codes.
    In consideration of the supportive comments we received last year 
in response to our comment solicitation, clinical expertise within CMS, 
and internal input from CMS staff and from our HHS operating division 
partners, we are proposing to create separate coding and payment for 
CPM services beginning January 1, 2023. We recognize that there is 
currently no existing CPT code that specifically describes the work of 
the clinician who performs comprehensive, holistic CPM. We also believe 
the resources involved in furnishing CPM services to beneficiaries with 
chronic pain are not appropriately recognized under current coding and 
payment mechanisms. As noted above, we do not believe that E/M codes 
and values appropriately reflect time involved in furnishing CPM for 
beneficiaries with chronic pain. CMS has authority under section 1848 
of the Act to establish codes that describe services furnished by 
clinicians and suppliers that bill for physicians' services, and to 
establish payment amounts for those services that reflect the relative 
value of the resources involved in furnishing them. We also expect that 
creating separate coding and payment for CPM will help facilitate the 
development of data regarding the prevalence and impact of chronic pain 
in the Medicare population, where conditions including osteoarthritis, 
cancer, and other similar conditions that cause pain over extended 
periods of time are common.\24\ Such information can assist us in 
identifying potential coding and valuation refinements to ensure 
appropriate payment for these services. We also believe that the 
comprehensive care management involved in CPM services may potentially 
prevent or reduce the need for acute services, such as those due to 
falls \25\ and emergency department care \26\ associated with chronic 
pain, and also have the potential to reduce the need for treatment for 
concurrent behavioral health disorders, including substance use 
disorders. There is some evidence that addressing chronic pain early in 
its course may result in averting the development of ``high-impact'' 
chronic pain \27\ in some individuals; these people report more severe 
pain, more difficulty with self-care, and higher health care use than 
others with chronic pain.
---------------------------------------------------------------------------

    \24\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Chronic-Conditions/CC_Main.
    \25\ https://www.cdc.gov/falls/facts.html.
    \26\ https://effectivehealthcare.ahrq.gov/products/improving-pain-management/rapid-evidence.
    \27\ https://www.sciencedirect.com/science/article/pii/S1526590018303584?via%3Dihub.
---------------------------------------------------------------------------

    There are various definitions for chronic pain from, for example, 
the Centers for Disease Control and Prevention \28\ and the National 
Institutes of Health,\29\ and in the Institute of Medicine's (IOM) 
``Relieving Pain in America: A Blueprint for Transforming Prevention, 
Care, Education, and Research'',\30\ and in the World Health 
Organization International Classification of Disease Edition 11,--most 
define chronic pain consistently, with some variation, as pain that 
persists longer than three months. The CDC, for example, has defined 
chronic pain within its 2016 opioid prescribing Guideline as ``pain 
that typically lasts >3 months or past the time of normal tissue 
healing, and can be the result of an underlying medical disease or 
condition, injury, medical treatment, inflammation, or an unknown 
cause.'' For clarity and operational use, we propose to define chronic 
pain as ``persistent or recurrent pain lasting longer than three 
months.'' We welcome comments from the public regarding whether this is 
an appropriate definition of chronic pain, or whether we should 
consider some other interval or description to define chronic pain. We 
are also interested in hearing from commenters about how the chronic 
nature of the person's pain should be documented in the medical record.
---------------------------------------------------------------------------

    \28\ https://www.cdc.gov/mmwr/volumes/65/rr/pdfs/rr6501e1.pdf.
    \29\ https://www.nccih.nih.gov/research/research-results/prevalence-and-profile-of-high-impact-chronic-pain.
    \30\ https://www.ncbi.nlm.nih.gov/books/NBK92525/#ch1.s3.
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    A monthly payment approach may also be more financially 
straightforward from the standpoint of beneficiaries receiving 
treatment for chronic pain, particularly with respect to applicable 
coinsurance, which is generally 20 percent of the payment amount, after 
the annual Part B deductible amount is met.\31\
---------------------------------------------------------------------------

    \31\ https://www.medicare.gov/what-medicare-covers/what-part-b-covers.
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    Beginning for CY 2023, we are proposing to create two HCPCS G-codes 
to describe monthly CPM services. The codes and descriptors for the 
proposed G-codes are:
    <bullet> HCPCS code GYYY1: Chronic pain management and treatment, 
monthly bundle including, diagnosis; assessment and monitoring; 
administration of a validated pain rating scale or tool; the 
development, implementation, revision, and maintenance of a person-
centered care plan that includes strengths, goals, clinical needs, and 
desired outcomes;

[[Page 45935]]

overall treatment management; facilitation and coordination of any 
necessary behavioral health treatment; medication management; pain and 
health literacy counseling; any necessary chronic pain related crisis 
care; and ongoing communication and care coordination between relevant 
practitioners furnishing care (e.g., physical therapy and occupational 
therapy, and community-based care), as appropriate. Required initial 
face-to-face visit at least 30 minutes provided by a physician or other 
qualified health professional; first 30 minutes personally provided by 
physician or other qualified health care professional, per calendar 
month. (When using GYYY1, 30 minutes must be met or exceeded.)
    <bullet> HCPCS code GYYY2: Each additional 15 minutes of chronic 
pain management and treatment by a physician or other qualified health 
care professional, per calendar month (List separately in addition to 
code for GYYY1). (When using GYYY2, 15 minutes must be met or 
exceeded.)
    We are interested in hearing from commenters regarding our proposed 
inclusion of ``administration of a validated pain assessment rating 
scale or tool,'' as an element of the proposed CPM services, and 
including it within the descriptor of the proposed HCPCS code GYYY1. We 
also solicit comment on whether a repository or list of such tools 
would be helpful to practitioners delivering CPM services.
    We are proposing to include, as an element of the CPM codes, the 
development of and/or revisions to a person-centered care plan that 
includes goals, clinical needs, and desired outcomes, as outlined above 
and maintained by the practitioner furnishing CPM services.
    We are proposing to include health literacy counseling as an 
element of the CPM codes because we believe it will enable 
beneficiaries with chronic pain to make well-informed decisions about 
their care, increases pain knowledge, and strengthens self-management 
skills. Health literacy is the degree to which individuals have the 
ability to find, understand, and use information and services to inform 
health-related decisions and actions for themselves and others.\32\ 
Adequate health literacy may improve the person's capability to take 
responsibility for their health, including pain-related health issues 
such as adherence to treatment regimens and medication administration, 
and have a positive influence on health outcomes, and health 
disparities. CMS' Network of Quality Improvement and Innovation 
Contractors have used health literacy counseling to improve health 
counseling,\33\ and health literacy counseling has been used to treat 
arthritis.\34\ We are interested in hearing from commenters about how 
pain and health literacy counseling is or may be effectively used as a 
service element to help beneficiaries with chronic pain make well-
informed decisions about their own care, weigh risks and benefits, make 
decisions, and take actions that are best for them and their health.
---------------------------------------------------------------------------

    \32\ https://health.gov/healthypeople/priority-areas/health-
literacy-healthy-people-
2030#:~:text=Health%20literacy%20is%20a%20central,well-
being%20of%20all.%E2%80%9D.
    \33\ https://qi.ipro.org/health-equity/health-literacy/.
    \34\ https://www.ahrq.gov/health-literacy/improve/precautions/1stedition/tool3.html.
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    For HCPCS code GYYY1, we propose to include an initial face-to-face 
visit of at least 30 minutes, provided by a physician or other 
qualified health professional, to a beneficiary who has chronic pain, 
as defined above, or is being diagnosed with chronic pain that has 
lasted more than 3 months at the time of the initial visit. After 
consultation with our medical officers, we believe the management of a 
new patient with chronic pain would involve an initial face-to-face 
visit of at least 30 minutes due to the complexity involved with the 
initial assessment. We believe follow-up or subsequent visits could be 
non-face to face. HCPCS code GYYY2 describes an additional 15 minutes 
of CPM and treatment by a physician or other qualified health care 
professional, per calendar month (listed separately in addition to 
GYYY1). We are seeking comment on the appropriateness of the proposed 
30-minute duration per calendar month for GYYY1, and also on the 
proposed duration and frequency for GYYY2. We are also seeking comment 
on whether we should consider specifying a longer duration of time for 
GYYY1 (for example, one hour--or 45 minutes). Similarly, we seek 
comment on whether we should consider specifying a longer duration of 
time for GYYY2 (for example, 20-minute increments). We also welcome 
comment on our proposal to permit billing of CPM services for 
beneficiaries who have already been diagnosed with chronic pain, and 
for those who are being diagnosed with chronic pain during the visit.
    We welcome comments regarding how best the initial visit and 
subsequent visits should be conducted (for example, in-person, via 
telehealth, or the use of a telecommunications system, and any 
implications for additional or different coding). We will also consider 
whether to add the CPM codes to the Medicare Telehealth Services List, 
based on our review of any information provided through the public 
comments and our analysis of how these new services may be 
appropriately furnished to Medicare beneficiaries. We are also asking 
for comment regarding whether there are components of the proposed CPM 
services that do not necessarily require face-to-face interaction with 
the billing practitioner, such as care that could be provided by 
auxiliary staff incident to the billing practitioner's services. For 
any components that could be furnished incident to the services of the 
billing practitioner, we request comment on whether these could be 
appropriately furnished under the general supervision of the billing 
physician or non-physician practitioner (NPP), for example, 
administration of a pain rating scale or tool, or elements of care 
coordination, as we have provided for certain care management services.
    We believe that most CPM services would be billed by primary care 
practitioners who are focused on long-term management of their patients 
with chronic pain. As calls for improved pain management have increased 
in recent years, this has resulted in better education and training of 
primary care practitioners and heightened awareness of the need for 
pain care nationally. We believe the codes we are proposing for CPM 
services will create appropriate payment for physicians and other 
practitioners (beyond primary care practitioners) that reflects the 
time and resources involved in attending comprehensively to the needs 
of beneficiaries with chronic pain. As the IOM ``Blueprint'' report 
noted, even people who need consultation with a pain specialist should 
benefit from the sustained involvement of a primary care practitioner 
who is able to help coordinate care across the full spectrum of health 
care providers, as such coordination ``helps prevent people from 
seeking relief from multiple providers and treatment approaches that 
may leave them frustrated and angry and worse off both physically and 
mentally, and from falling into a downward spiral of disability, 
withdrawal, and hopelessness.'' \35\ The Blueprint stated that this 
type of fragmentation hinders the development of a strong, mutually 
trusting relationship with a single health professional who takes 
responsibility, and that this established relationship is one of the 
keys to successful pain treatment. We anticipate that if these

[[Page 45936]]

proposed codes are finalized, primary care practitioners will employ a 
variety of person-centered pain management strategies, such as those 
suggested in the PMTF Report and illustrated in CMS' CPM graphic \36\ 
including medications, therapies, exercise, behavioral health 
approaches, complementary and integrative health, and community-based 
care based on the complexity, goals, and characteristics of each person 
they serve with chronic pain and according to the person-centered plan 
of care. It is also important to note that, in many parts of the 
country, people have access only to their primary care practitioner for 
chronic pain care.\37\ We understand, however, the need or desire that 
some individuals with chronic pain have to be seen on an ongoing basis 
for CPM by a pain specialist who has received special training and/or 
certification to meet the needs of the most complex and challenging 
patients with chronic pain.
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    \35\ https://www.ncbi.nlm.nih.gov/books/NBK91497/.
    \36\ PLACEHOLDER FOR OBRHI GRAPHIC.
    \37\ https://www.hhs.gov/sites/default/files/pmtf-final-report-2019-05-23.pdf.
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    Therefore, we are proposing to permit billing by another 
practitioner after HCPCS code GYYY1 has already been billed in the same 
calendar month by a different practitioner. In these situations, we 
anticipate that there could be occasional instances where care of an 
individual with chronic pain is transferred to a pain specialist or 
other specialist during the same month they received the CPM services 
from a primary care practitioner, for ongoing care. In these or other 
situations (such as when the beneficiary elects to choose a different 
physician or practitioner to furnish CPM services), we would anticipate 
GYYY1 and potentially GYYY2 could be billed by another practitioner 
during the same month, for the same beneficiary. We believe that it 
would be unlikely for GYYY1 to be billed more than twice per month 
under such circumstances and are proposing placing a limit on the 
number of times the code could be billed per beneficiary per calendar 
month, at a maximum of twice per calendar month. We seek comment on our 
proposal to permit billing by another practitioner after the GYYY1 has 
already been billed in the same month by a different practitioner, and 
on the number of times the code could be appropriately billed per 
month, per beneficiary.
    We propose to require that the beneficiary's verbal consent to 
receive CPM services at the initiating visit be documented in the 
beneficiary's medical record, as not all Medicare beneficiaries with 
chronic pain eligible to receive these separately billable CPM services 
may understand or want to receive these services, and the beneficiary 
should be aware that they are receiving them. At the initial visit, the 
beneficiary with chronic pain should be educated regarding what the CPM 
services are, how often they may generally expect to receive the 
services, and have an explanation of any cost sharing that may apply in 
their particular situation. Practitioners have informed us that 
beneficiary cost sharing is a significant barrier to provision of 
similar care management services, such as CCM services, and we are 
seeking comment on how best to effectively educate both practitioners 
and beneficiaries with chronic pain about the existence of, and the 
benefits and value of, the proposed CPM services. We are seeking 
comment regarding whether the initiating visit is the appropriate time 
for billing practitioners to obtain beneficiary verbal consent, if 
consent should be given at each visit, and also if beneficiary consent 
should be sought by the practitioners with whom CPM billing 
practitioners coordinate other Medicare services under the CPM plan of 
care, or even more broadly.
    We believe there might be some potential for duplicative payment 
for services allocated to the same patient concurrent with certain 
other Medicare care management services, such as CCM or behavioral 
health integration (BHI) services; however, we believe the proposed CPM 
codes have features that would mitigate such circumstances, such as the 
elements of the service that specifically address the beneficiary's 
pain--for example, the administration of a validated pain rating scale 
or tool. We welcome comments regarding what, if any, Medicare services 
we should consider that could not be billed by the same practitioner 
for the same patient concurrent with any other Medicare services, to 
avoid duplication of payment, and help limit financial burden to the 
Medicare beneficiary with chronic pain. We note that we would expect to 
refine these codes as needed through future rulemaking as we receive 
more information how the codes are being used, and how they are 
implemented in practice.
    To the extent that components of the proposed CPM codes are also 
components of other care management services, we reiterate our policy 
against double-counting time and require that the time used in 
reporting CPM services may not represent time spent in any other 
reported service. We propose that the CPM codes could be billed in the 
same month as a care management service, such as CCM, or BHI. We 
believe there are circumstances in which it is reasonable and necessary 
to provide both services in a given month, based on the needs of the 
Medicare beneficiary with chronic pain, for example, when the 
beneficiary has both chronic pain, and a mental disorder(s), or 
multiple chronic conditions. We are also proposing that the CPM codes 
would be able to be billed for the same Medicare patient in the same 
month as another bundled service such as HCPCS Codes G2086-G2088, which 
describe bundled payments under the PFS for opioid use disorders. We 
note that patient consent would need to be obtained for both of the 
bundled services such as, for example, CPM and BHI, and all other 
requirements to report CPM and to report the other service or services 
would need to be met. We invite comments on these billing proposals and 
their appropriateness in the context of CPM.
    Finally, we are asking commenters whether we should consider 
creating additional coding and payment to address acute pain. We are 
interested in information regarding a definition for acute pain, 
standalone or E/M coding, the specific activities that could be 
furnished, how we might value and price such a code or service, the 
settings where care should be provided, the types of practitioners that 
should furnish acute pain care, if the service or any components should 
be furnished as ``incident to'' services under the direction of the 
billing practitioner or by other members of the care team, and other 
information that might help us in proposing such a code or codes.
(b) Valuation of Chronic Pain Management Services
    Consistent with the valuation methodology for other services under 
the PFS, proposed HCPCS codes GYYY1 and GYYY2 would be valued based on 
what we believe to be a typical case, and we understand that, based on 
variability in patient needs, some patients will require more 
resources, and some fewer. The proposed CPM codes would separately pay 
for a specified set of CPM elements furnished during a month, including 
the administration of validated rating scales, establishment and review 
of a person-centered care plan that includes goals, clinical needs, and 
desired outcomes, and other elements as described in the proposed code 
descriptors. To value CPM, we compared the proposed services to codes 
that involve care management. In doing so, we concluded that the CPM 
services were similar in work (time and intensity) to that of PCM in 
that both the

[[Page 45937]]

PCM codes and proposed CPM codes reflect services that have similar 
complexities, possible comorbidities, require cognitive time on the 
part of the practitioner, and may involve coordination of care across 
multiple practitioners.
    For HCPCS code GYYY1, we developed proposed inputs using a 
crosswalk to CPT code 99424 (Principal care management services, for a 
single high-risk disease, with the following required elements: One 
complex chronic condition expected to last at least 3 months, and that 
places the patient at significant risk of hospitalization, acute 
exacerbation/decompensation, functional decline, or death; the 
condition requires development, monitoring, or revision of disease-
specific care plan; the condition requires frequent adjustments in the 
medication regimen and/or the management of the condition is unusually 
complex due to comorbidities; ongoing communication and care 
coordination between relevant practitioners furnishing care; first 30 
minutes provided personally by a physician or other qualified health 
care professional, per calendar month.), which is assigned a work RVU 
of 1.45. Additionally, for GYYY1 we are proposing to use a crosswalk to 
the direct PE inputs associated with CPT code 99424. We believe that 
the work and practice expense described by this crosswalk code is 
analogous to the services described in GYYY1, because GYYY1 includes 
similar care plan, medication management, unusually complex clinical 
management; care coordination between relevant practitioners furnishing 
care; and time for care provided personally by a physician or other 
qualified health care professional, as described in CPT code 99424.
    We are proposing to value GYYY2 at a work RVU of 0.50, using a 
crosswalk to CPT code 99425 (each additional 30 minutes provided 
personally by a physician or other qualified health care professional, 
per calendar month) (List separately in addition to code for GYYY1), 
which is assigned a work RVU of 1.00. However, the required minimum 
number of minutes described in GYYY2 is half of the number of minutes 
in CPT code 99425. For HCPCS code GYYY2, we are proposing to use a 
crosswalk to half of the direct PE inputs associated with CPT code 
99425. We believe that the work and practice expense described by this 
crosswalk code is analogous to the services described in GYYY2, because 
GYYY2 includes similar activities as described in CPT code 99425.
    We are proposing that GYYY1 can only be billed when the full 30 
minutes of service time has been met or exceeded. Additionally, we are 
proposing that the add-on code (GYYY2) can only be billed when the full 
15 minutes of service time is met or exceeded.
    Our proposed valuation of CPM services includes services that are 
personally performed by a physician (or other appropriate billing 
practitioner, such as a nurse practitioner (NP) or physician assistant 
(PA)) described by certain E/M visit codes that apply to a new patient 
in various settings. Accordingly, we are proposing that GYYY1/GYYY2 
must be furnished by the physician (or other appropriate billing 
practitioner) and could not be billed on the same date of service as 
CPT codes 99202-99215 (Office/outpatient visits new), since these codes 
reflect face-to-face services furnished by the physician or other 
billing practitioner for related, separately billable services that are 
being furnished to a patient the practitioner has not previously seen. 
We believe it would be unlikely the practitioner is prepared to address 
the complex pain needs of a new patient on the same day he or she is 
seen for a general visit, or a visit where the person is being seen for 
some other illness or condition. We do not believe that the services 
included in GYYY1/GYYY2 would significantly overlap with CCM services; 
Transitional Care Management (TCM) services; or BHI services, which 
have various clinical purposes separate from CPM. We do believe there 
is likely overlap in the Medicare beneficiary population eligible to 
receive CCM, TCM, BHI, and the proposed CPM services, but we believe 
there are distinctions in the nature and extent of the assessments, 
care coordination, medication management, and care planning for CPM to 
allow concurrent billing for services that are medically reasonable and 
necessary, and that it is particularly important to allow for the 
provision of needed services, including behavioral health services to 
beneficiaries with chronic pain. We are soliciting comment on whether 
we have appropriately identified the codes Medicare should not pay if 
furnished during the same day as the proposed CPM codes, and if there 
are circumstances where multiple care planning codes could be furnished 
without overlap or other situations, such as where the practitioner is 
seeing a new patient.
    We note that the proposed CPM codes would be limited to 
beneficiaries in office or other outpatient or domiciliary settings. We 
will consider for future rulemaking separately identifying and paying 
for CPM services furnished to beneficiaries in any appropriate setting 
of care, in recognition of the prevalence and burden of pain across all 
settings of care, and the associated time and service complexity to 
provide care for chronic pain. We appreciate comments on other settings 
where CPM services could be provided.
(c) Request for Comment
    We believe there could be circumstances in which a beneficiary 
receiving CPM services needs referrals or recommendations, based on a 
clinician's assessment, for services or interventions that are not 
included as elements of the CPM services, such as for community-based 
care or physical and occupational therapy. We welcome comments on the 
care coordination that may occur between relevant practitioners 
furnishing services, such as complementary and integrative care, and on 
the community-based care element included in the descriptors for 
proposed GYYY1 and GYYY2.
    Commenters may also wish to weigh in on how documentation of the 
performance of the elements of CPM services might best be addressed in 
medical recordkeeping. We are seeking general comment on whether there 
are any elements of CPM services outlined in this proposal that the 
public and interested parties believe are not typically furnished in 
connection with comprehensive chronic pain management, or any proposed 
elements of the CPM services that should be removed or altered. We also 
seek comment on whether there are elements of CPM services that we have 
not identified and should be added to the code descriptors.
    Additionally, we are seeking comment on which, if any, CPM elements 
could be furnished as ``incident to'' services, and whether to add 
GYYY1 and GYYY2 to the list of services for which we allow general 
supervision as described in our regulation at Sec.  410.26(b)(5). We 
welcome comments from the public for future rulemaking regarding what 
elements of the CPM services could be furnished under general 
supervision, or direct supervision. For example, facilitation and 
coordination of any necessary behavioral health treatment, chronic pain 
related crisis care, and ongoing communication and care coordination 
between relevant practitioners furnishing care might be appropriate 
activities to be considered under general supervision.
    The proposed CPM codes may involve arrangements where the physician 
or

[[Page 45938]]

other health professional might work in collaboration with other health 
care providers or members of a care team, such as a psychologist, 
dental practitioner, or social worker, where these individuals might 
furnish certain elements of the service bundle under the direction of 
the physician or qualified health practitioner, such as assessments, 
person-centered care planning, referrals to community-based care, and 
other activities, as appropriate. We are requesting comments on if, and 
how, we should structure the proposed CPM code and payment for these 
services to account for these types of arrangements that could include 
team-based care.
(34) Proposed Revisions to the ``Incident to'' Physicians' Services 
Regulation for Behavioral Health Services
    In the CY 2014 PFS final rule with comment period (78 FR 74425 
through 74427), we created an exception to our ``incident to'' 
regulation at Sec.  410.26(b)(5) under which ``incident to'' services 
generally must be furnished under direct supervision. Specifically, we 
finalized a policy to require general, rather than direct, supervision 
when chronic care management services are furnished incident to the 
billing physician's or NPP's services outside of the practice's normal 
business hours by clinical staff. In the CY 2017 PFS final rule (81 FR 
80255), we finalized a revision to our regulation under Sec.  
410.26(b)(5) to require a general, rather than direct, level of 
supervision for designated care management services, and established 
that we would designate care management services through notice and 
comment rulemaking.
    We understand that circumstances related to the PHE for COVID-19 
have likely contributed to an increase in the demand for behavioral 
health services while also exacerbating existing barriers to 
beneficiaries' access to needed behavioral health services. For 
example, the American Psychological Association (APA) conducted a 
survey in 2020 and a follow-up survey in 2021 to better understand the 
impact of the COVID-19 pandemic on mental health treatment and the work 
of practicing psychologists. In the 2021 follow-up survey, many 
psychologists reported increases in the demand for treatment of anxiety 
and depression. They reported the greatest increases in treating 
anxiety disorders (84 percent, up from 74 percent), depressive 
disorders (72 percent, up from 60 percent), and trauma- and stress-
related disorders (62 percent, up from 50 percent). Other diagnoses 
with large increases included sleep-wake disorders, obsessive-
compulsive and related disorders, and substance-related and addictive 
disorders.\38\
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    \38\ https://www.apa.org/pubs/reports/practitioner/covid-19-2021.
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    Additionally, according to HRSA's National Center for Health 
Workforce Analysis, by 2025, shortages are projected nationally for a 
variety of behavioral health practitioners, including psychiatrists; 
clinical, counseling, and school psychologists; mental health and 
substance use social workers; school counselors; and marriage and 
family therapists.\39\ Currently, there is no separate benefit category 
under the statute that recognizes the professional services of licensed 
professional counselors (LPCs) and Licensed Marriage and Family 
Therapists (LMFTs). Therefore, payment for the services of LPCs and 
LMFTs can only be made under the PFS indirectly when an LPC or LMFT 
performs services as auxiliary personnel incident to, the services, and 
under the direct supervision, of the billing physician or other 
practitioner. According to the American Counseling Association, there 
are more than 140,000 licensed professional counselors (LPCs) in the 
U.S., and the Medicare program's reimbursement for mental health 
treatment services delivered by this professional group could address 
provider shortages.\40\ Additionally, according to the U.S. Bureau of 
Labor Statistics, there were approximately 54,800 Marriage and Family 
Therapists (MFTs) as of May 2021.\41\
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    \39\ https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/data-research/behavioral-health-2013-2025.pdf.
    \40\ https://www.counseling.org/government-affairs/federal-issues/medicare-reimbursement.
    \41\ https://www.bls.gov/oes/current/oes211013.htm.
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    In the 2022 CMS Behavioral Health Strategy,\42\ CMS included a goal 
to improve access to and quality of mental health care services. In 
light of the current needs among Medicare beneficiaries for improved 
access to behavioral health services, and the existing workforce 
shortages impeding access to needed treatment for behavioral health, we 
have considered regulatory revisions that may help to reduce existing 
barriers and make greater use of the services of LPCs and LMFTs. We 
note that CMS does not have authority to create a statutory benefit 
category for practitioner types. Therefore, we are proposing to amend 
the direct supervision requirement under our ``incident to'' regulation 
at Sec.  410.26 to allow behavioral health services to be furnished 
under the general supervision of a physician or NPP when these services 
or supplies are provided by auxiliary personnel incident to the 
services of a physician or NPP. We are limiting the scope of this 
proposal to behavioral health services at this time due to increased 
needs for behavioral health treatment and workforce shortages in this 
field. We believe that this proposed change will facilitate utilization 
and extend the reach of behavioral health services. We believe that any 
risk associated with this proposed change would be minimal, since the 
auxiliary personnel providing the services would need to meet all of 
the applicable requirements to provide incident to services, including 
any applicable licensure requirements imposed by the State in which the 
services are being furnished, as described in Sec.  410.26(a)(1).
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    \42\ https://www.cms.gov/cms-behavioral-health-strategy.
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(35) New Coding and Payment for General Behavioral Health Integration 
(BHI) Billed by Clinical Psychologists (CPs) and Clinical Social 
Workers (CSWs)
    In the CY 2017 PFS final rule (81 FR 80230), we established G-codes 
to describe monthly services furnished using the Psychiatric 
Collaborative Care Model (CoCM), an evidence-based approach to 
behavioral health integration that enhances ``usual'' primary care by 
adding care management support and regular psychiatric inter-specialty 
consultation. These G-codes were replaced by CPT codes 99492-99494, 
which we established for payment under the PFS in the CY 2018 PFS final 
rule (82 FR 53077 through 53078). Additionally, we created a fourth G-
code to describe services furnished using other models of BHI in the 
primary care setting, which was replaced by CPT code 99484 in the CY 
2018 PFS final rule (82 FR 53077 through 53078).
    We stated in the CY 2017 PFS final rule (81 FR 80236) that we 
recognized that the psychiatric CoCM is prescriptive and that much of 
its demonstrated success may be attributable to adherence to a set of 
elements and guidelines of care. We finalized a code set to pay 
accurately for care furnished using this specific model of care, given 
its widespread adoption and recognized effectiveness. However, we 
stated we recognized that there are primary care practices that are 
incurring, or may incur, resource costs inherent to treatment of 
patients with similar conditions based on BHI models of care other than 
the psychiatric CoCM that may benefit beneficiaries with behavioral 
health conditions, and

[[Page 45939]]

therefore finalized a General BHI code which may be used to report a 
range of models of BHI services, and that we expected this code to be 
refined over time as we receive more information about other BHI models 
in use.
    In the CY 2018 PFS final rule (82 FR 53078), we stated that we had 
received inquiries from interested parties about whether professionals 
who were not eligible to report the approved initiating visit codes for 
BHI services to Medicare might nonetheless serve as a primary hub for 
BHI services. For example, interested parties have suggested that a CP 
might serve as the primary practitioner that integrates medical care 
and psychiatric expertise. For purposes of future rulemaking, we sought 
comment on the circumstances under which this model of care is 
happening and whether additional coding would be needed to accurately 
describe and value other models of care. A few commenters suggested 
that CMS create separate codes to describe behavioral health care 
management services that could be billed by CPs and NPPs who are not 
authorized to bill Medicare for E/M services. One commenter suggested 
that CMS include psychiatric diagnostic evaluation services that can be 
furnished and billed by CPs as eligible initiating visits. Commenters 
also described other models of care that are in use, including the 
STAR-VA model and a model used in outpatient health care settings where 
a clinical social worker (CSW) not only furnishes psychiatric care but 
also assists with psychosocial aspects of medical care.
    In the CY 2017 PFS final rule (81 FR 80239), we stated that we had 
received a few comments suggesting that in addition to the qualifying 
E/M services (or an AWV or IPPE), the initiating visit services for BHI 
should include in-depth psychological evaluations delivered by a CP 
including CPT codes 90791, 96116 or 96118, which include care plan 
development. In this final rule, we established that the same services 
that qualify as the initiating visit for CCM would also qualify as 
initiating services for BHI, which do not include in-depth 
psychological evaluation by a CP and which were not, in their entirety, 
within the scope of CPs' practice, and therefore, CPs would not be able 
to report the General BHI code directly (although a psychiatrist may be 
able to do so) (81 FR 80239).
    In the 2022 CMS Behavioral Health Strategy,\43\ CMS included a goal 
to improve access to and quality of mental health care services, and 
included an objective to ``increase detection, effective management 
and/or recovery of mental health conditions through coordination and 
integration between primary and specialty care providers.'' As 
previously noted in this proposed rule, we understand that 
circumstances related to the COVID-19 PHE have likely contributed to an 
increase in the demand for behavioral health services while also 
exacerbating existing barriers in beneficiaries' access to needed 
behavioral health services. In light of the feedback we have received 
and considering the increased needs for mental health services, we are 
proposing to create a new G code describing General BHI performed by 
CPs or CSWs to account for monthly care integration where the mental 
health services furnished by a CP or CSW are serving as the focal point 
of care integration. The proposed new code is GBHI1 (Care management 
services for behavioral health conditions, at least 20 minutes of 
clinical psychologist or clinical social worker time, per calendar 
month, with the following required elements: initial assessment or 
follow-up monitoring, including the use of applicable validated rating 
scales; behavioral health care planning in relation to behavioral/
psychiatric health problems, including revision for patients who are 
not progressing or whose status changes; facilitating and coordinating 
treatment such as psychotherapy, coordination with and/or referral to 
physicians and practitioners who are authorized by Medicare law to 
prescribe medications and furnish E/M services, counseling and/or 
psychiatric consultation; and continuity of care with a designated 
member of the care team.) We are proposing to value this service under 
the proposed HCPCS code GBHI1 based on a direct crosswalk to the work 
values and direct PE inputs for CPT code 99484 (Care management 
services for behavioral health conditions, at least 20 minutes of 
clinical staff time, directed by a physician or other qualified health 
care professional, per calendar month, with the following required 
elements: initial assessment or follow-up monitoring, including the use 
of applicable validated rating scales; behavioral health care planning 
in relation to behavioral/psychiatric health problems, including 
revision for patients who are not progressing or whose status changes; 
facilitating and coordinating treatment such as psychotherapy, 
pharmacotherapy, counseling and/or psychiatric consultation; and 
continuity of care with a designated member of the care team), because 
the services described by GBHI1 closely mirror those described by CPT 
code 99484. Therefore, we believe that this crosswalk is an appropriate 
valuation of the level, time, and intensity of the proposed service 
described by HCPCS code GBHI1. CPs are authorized under their statutory 
benefit category at section 1861(ii) of the Act to furnish ``qualified 
psychologist services'' to include ``such services and such services 
and supplies furnished as an incident to his service furnished by a 
clinical psychologist (as defined by the Secretary) which the 
psychologist is legally authorized to perform under State law (or the 
State regulatory mechanism provided by State law) as would otherwise be 
covered if furnished by a physician or as an incident to a physician's 
service.'' Additionally, the statutory benefit category for CSWs at 
Section 1861(hh)(2) of the Act defines ``clinical social worker 
services'' as ``services performed by a clinical social worker (as 
defined in paragraph (1)) for the diagnosis and treatment of mental 
illnesses (other than services furnished to an inpatient of a hospital 
and other than services furnished to an inpatient of a skilled nursing 
facility which the facility is required to provide as a requirement for 
participation) which the clinical social worker is legally authorized 
to perform under State law (or the State regulatory mechanism provided 
by State law) of the State in which such services are performed as 
would otherwise be covered if furnished by a physician or as an 
incident to a physician's professional service.'' Based on the 
authorizations under the CP and CSW statutory benefit categories, CPs 
are authorized to furnish and bill for services that are provided by 
clinical staff incident to their professional services when the 
``incident to'' requirements specified in Sec.  410.26 of our 
regulations are met, and would be authorized to do the same when 
furnishing services described by proposed HCPCS code GBHI1, whereas 
CSWs would only be able to bill Medicare for services they furnish 
directly and personally. The proposed work value for HCPCS code GBHI1 
is 0.61 (based on a direct crosswalk to CPT code 99484). We are seeking 
comment on whether this proposed value accurately reflects the resource 
costs involved in furnishing these models of care, or whether 
additional coding may be needed, for example, separate coding for CPs 
and CSWs. We are also seeking comment on the proposed requirements for 
billing GBHI1, including any applicable ``incident to'' requirements,

[[Page 45940]]

and the role and responsibilities of CSWs and CPs.
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    \43\ https://www.cms.gov/cms-behavioral-health-strategy.
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    In the CY 2017 PFS final rule (81 FR 80239), we finalized the 
requirement of an initiating visit for the BHI codes for new patients 
or beneficiaries not seen within a year of commencement of BHI 
services. We stated that the initiating visit would establish the 
beneficiary's relationship with the billing practitioner (most aspects 
of the BHI services would be furnished incident to the billing 
practitioner's professional services), ensure the billing practitioner 
assesses the beneficiary prior to initiating care management processes, 
and provide an opportunity to obtain beneficiary consent. We noted that 
the existing eligible initiating visit codes are not, in their 
entirety, within the scope of the CP's practice. Given that, we are 
proposing to allow a psychiatric diagnostic evaluation (CPT code 90791) 
to serve as the initiating visit for GBHI1. We welcome comment on 
whether we should consider additional codes to qualify as the 
initiating visit.
    In the CY 2017 PFS final rule (81 FR 80235), we established that 
CCM and BHI services could be billed during the same month for the same 
beneficiary if all the requirements to bill each service are separately 
met. We are also proposing that HCPCS code GBHI1 could be billed during 
the same month as CCM and TCM services, provided that all requirements 
to report each service are met and time and effort are not counted more 
than once. The patient consent requirements would apply to each service 
independently.
    In the CY 2017 PFS final rule (81 FR 80235), we established that 
the BHI services may be furnished incident to the billing 
professional's services under general supervision because we do not 
believe it is clinically necessary that the professionals on the team 
who provide services other than the treating practitioner (namely, the 
behavioral health care manager and the psychiatric consultant) to have 
the billing practitioner immediately available to them at all times, as 
would be required under a higher level of supervision. We believe this 
is also the case for the service described by GBHI1. Therefore, 
consistent with other care management codes paid under the PFS, we are 
proposing to add HCPCS code GBHI1 to the list of designated care 
management services for which we allow general supervision.
(36) Request for Information: Medicare Part B Payment for Services 
Involving Community Health Workers (CHWs)
    The American Public Health Association (APHA) defines a community 
health worker as a ``frontline public health worker who is a trusted 
member of and/or has an unusually close understanding of the community 
served. This trusting relationship enables the worker to serve as a 
liaison/link/intermediary between health/social services and the 
community to facilitate access to services and improve the quality and 
cultural competence of service delivery.'' Community Health Workers are 
classified as a workforce category by the Department of Labor. The 
Community Health Worker Core Consensus Project (C3) lists the following 
ten roles of CHWs: \44\
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    \44\ St John, J.A., Mayfield-Johnson, S.L., & Hern[aacute]ndez-
Gordon, W.D. (2021). Introduction: Why Community Health Workers 
(CHWs)? In Promoting the Health of the Community (pp. 3-10). 
Springer, Cham.
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    <bullet> Cultural mediation among individuals, communities, and 
health and social service systems.
    <bullet> Providing culturally appropriate health education and 
information.
    <bullet> Care coordination, case management, and system navigation.
    <bullet> Providing coaching and social support.
    <bullet> Advocating for individuals and communities.
    <bullet> Building individual and community capacity.
    <bullet> Providing direct service.
    <bullet> Implementing individual and community assessments.
    <bullet> Conducting outreach.
    <bullet> Participating in evaluation and research.
    Findings from randomized controlled trials indicate that particular 
CHW interventions reduce chronic disease disparities in low income, 
racial and ethnic minority communities, such as type 2 diabetes, 
hypertension, HIV/AIDS, and obesity.<SUP>45 46 47 48 49</SUP> CMS is 
also interested in better addressing the social needs of beneficiaries; 
for example, in the FY 2023 IPPS/LTCH NPRM, CMS proposed new measures 
under the Hospital Inpatient Quality Reporting Program pertaining to 
assessing social determinants of health. The CHW skillset may position 
this workforce to address these social needs. In light of the 
significant benefits that services involving CHWs can potentially offer 
the health of Medicare beneficiaries, including a reduction in health 
disparities, CMS is interested in learning more about how services 
involving CHWs are furnished in association with the specific Medicare 
benefits established by the statute.
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    \45\ Kangovi S, Mitra N, Grande D, Huo H, Smith RA, Long JA. 
Community Health Worker Support for Disadvantaged Patients With 
Multiple Chronic Diseases: A Randomized Clinical Trial. Am J Public 
Health. 2017;107(10):1660-1667. doi:10.2105/AJPH.2017.303985.
    \46\ Cooper L.A., Roter D.L., Carson K.A., et al. A randomized 
trial to improve patient-centered care and hypertension control in 
underserved primary care patients. J Gen Intern Med. 
2011;26(11):1297-1304.
    \47\ Spencer MS, Rosland AM, Kieffer EC, Sinco BR, Valerio M, 
Palmisano G, et al. Effectiveness of a community health worker 
intervention among African American and Latino adults with type 2 
diabetes: a randomized controlled trial. Am J Public Health. 2011 
Dec;101(12):2253-60.
    \48\ Brown LD, Vasquez D, Lopez DI, Portillo EM. Addressing 
Hispanic Obesity Disparities Using a Community Health Worker Model 
Grounded in Motivational Interviewing. Am J Health Promot. 
2022;36(2):259-268.
    \49\ Kenya, S., Jones, J., Arheart, K. et al. Using Community 
Health Workers to Improve Clinical Outcomes Among People Living with 
HIV: A Randomized Controlled Trial. AIDS Behav 17, 2927-2934 (2013).
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    Over the past several years, we have worked to develop payment 
mechanisms under the PFS to improve the accuracy of valuation and 
payment for the services furnished by physicians and other health care 
professionals, especially in the context of evolving models of care. 
For example, physicians and other eligible practitioners are able to 
report care management services and behavioral health integration 
services based on tasks personally provided by clinical staff under 
their supervision. Some of the elements of the comprehensive care plans 
referenced in the description of care management services include 
medication management, community/social services ordered, and 
coordination with other agencies, which are also some of the services 
personally provided by CHWs.
    Section 1862(a)(1)(A) of the Act generally excludes from coverage 
services that are not reasonable and necessary for the diagnosis or 
treatment of illness or injury or to improve the functioning of a 
malformed body member. We are interested in learning whether and how 
CHWs, as auxiliary personnel of physicians and hospitals, may provide 
reasonable and necessary services to Medicare beneficiaries under the 
appropriate supervision of health care professionals that are 
responsible more broadly for medical care, including behavioral health 
care. We are also looking to understand whether and how services 
involving CHWs are accounted for under the existing CCM codes or other 
care management or behavioral health integration services, including 
whether the employment and supervision arrangements ordinarily adopted 
within the industry would meet the requirements that allow for billing 
by supervising professionals or providers, including RHCs and FQHCs. 
For example, do CHWs tend to be

[[Page 45941]]

employees of physicians or of the same entities that employ physicians? 
Are physicians or other medical professionals supervising their 
interaction with patients in a manner consistent with direct 
supervision--for example, immediate availability in the same location?
    We note that CHWs are employed in a number of sectors, including 
local government, community-based organizations, and social services 
sectors. Therefore, the health care providers working with CHWs may 
have established nontraditional relationships with these organizations 
outside of the health sector. We are interested in learning how 
payments between health care provider organizations, and community-
based organizations, local governments, and social service 
organizations, account for the costs of services provided by CHWs, and 
how health care provider organizations ensure that the funding amount 
is sufficient to cover the costs of the full range of CHW services. We 
are also seeking comment on whether and to what extent CHW services are 
provided in association with preventive services, including those 
covered by Medicare.
    Physicians and certain other health care practitioners are 
authorized to bill Medicare for services furnished incident to their 
professional services by auxiliary personnel. Our regulation at Sec.  
410.26 requires that auxiliary personnel who perform services incident 
to the services of the billing physician or other practitioner must be 
acting under the supervision of the billing practitioner, and must meet 
any applicable requirements, including licensure, imposed by the State 
in which the services are furnished. We understand that there is wide 
variation in State standards for CHWs. In addition, the training that 
CHWs receive is typically provided by employers but varies widely in 
terms of its breadth and scope.\50\ We are trying to understand how 
CHWs might also be recognized as auxiliary personnel in the Medicare 
context, and are therefore interested in learning how States may have 
determined whether and under what circumstances CHWs have the necessary 
qualifications to perform services that would improve the health of 
Medicare beneficiaries and others being treated by supervising 
professionals or providers.
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    \50\ Fasting, D., Mayfield-Johnson, S.L., St. John, J.A., & 
Hern[aacute]ndez-Gordon, W.D. (2021). In Promoting the Health of the 
Community (pp. 43-52). Springer, Cham.
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(37) Proposed Recognition of the Nurse Portfolio Credentialing 
Commission (NPCC)
    The Medicare program established qualifications under regulations 
at Sec.  410.75 for NPs and, under 42 CFR 410.76 for clinical nurse 
specialists (CNS). Both the NP and CNS qualification regulations 
require that NPs and CNSs be certified as a NP or a CNS by a recognized 
national certifying body that has established standards for NPs and/or 
CNSs, and that a listed certifying body must be approved by the 
Secretary. An identical list of Medicare recognized and approved 
national certifying bodies for NPs and CNSs is included under Chapter 
15, section 200 and 210 of the Medicare Benefit Policy Manual, pub. 
100-02.
    The organizations listed under program manual instructions as 
recognized national certifying bodies for NPs and CNSs are as follows:
    <bullet> American Academy of Nurse Practitioners;
    <bullet> American Nurses Credentialing Center;
    <bullet> National Certification Corporation for Obstetric, 
Gynecologic and Neonatal Nursing Specialties;
    <bullet> Pediatric Nursing Certification Board (previously named 
the National Certification Board of Pediatric Nurse Practitioners and 
Nurses);
    <bullet> Oncology Nurses Certification Corporation;
    <bullet> AACN Certification Corporation; and
    <bullet> National Board on Certification of Hospice and Palliative 
Nurses.
    The Nurse Portfolio Credentialing Center (NPCC) has requested to 
have its organization added to the lists of recognized national 
certifying bodies for NPs and CNSs who specialize in clinical genetics/
genomics and are awarded the Advanced Clinical Genomics Nurse (ACGN) 
credential. The NPCC's request to CMS describes the NPCC as a non-
profit organization, established in 2018 by genetics/genomics nurse 
leaders as the only organization that now offers new credentials to 
advanced practice registered nurses (APRNs) who specialize in genetics/
genomics, a nursing specialty recognized by the American Nurses 
Association.
    Additionally, the NPCC's letter states that its organization 
evolved directly from the American Nurses Credentialing Center (a 
listed, CMS-recognized national certifying body) and the Genetic 
Nursing Credentialing Commission, which are the organizations that 
awarded new genetics/genomics nursing credentials from 2001 to 2018. 
However, as of 2019, the American Nurses Credentialing Center (ANCC) 
stopped offering new credentialing to genetics nurses and instead 
offers only renewal credentialing to nurses who specialize in genetics. 
Since 2019, the NPCC has awarded the ACGN credential to 32 APRNs from 
17 States.
    Now, with the NPCC being the only organization that offers new 
credentialing to nurses in genetics, the NPCC is concerned that the 
absence of its organization from the current list of recognized 
national certifying bodies appropriate for NPs and CNSs presents a 
barrier and a disadvantage for newly credentialed APRNs. Specifically, 
the NPCC is concerned that newly NPCC credentialed NPs and CNSs seeking 
enrollment under Medicare would be denied on the basis that they do not 
meet Medicare's certification requirement unless the NPCC is listed as 
a recognized national certifying body appropriate for NPs and CNSs who 
specialize in genetics/genomics. The website for the NPCC is available 
at https://www.nurseportfolio.org.
    When considering previous requests to add other organizations to 
the list of recognized national certifying bodies for NPs and CNSs, we 
stated that it is not our intention to be overly restrictive in our 
program requirements and consequently prevent qualified NPs and CNSs 
who specialize in areas of medicine other than those certified by the 
ANCC from participating in the Medicare program as NPs or CNSs and from 
rendering care to patients in need of specialized services (see 71 FR 
69707). Accordingly, we are proposing to add the NPCC organization to 
the list of recognized national certifying bodies in manual 
instructions for NPs at section 200 and CNSs at section 210 of the 
Medicare Benefit Policy Manual, pub. 100-02. We request public comments 
on this proposal.
(38) Request for Information: Medicare Potentially Underutilized 
Services
    Medicare provides payment for many kinds of services that support 
beneficiaries in promoting health and well-being and that may also, in 
some cases, reduce unnecessary spending within the health care system 
by decreasing the need for more expensive kinds of care. Some examples 
of these services may include patient educational services, like 
Diabetes Self-Management Training or preventive services, like the 
Annual Wellness Visit.
    We are seeking comments on ways to identify specific services and 
to recognize possible barriers to improved access to these kinds of 
high value, potentially underutilized services by

[[Page 45942]]

Medicare beneficiaries. We are also seeking comment regarding how we 
might best mitigate some of these obstacles, including for example, 
through examining conditions of payment or payment rates for these 
services or by prioritizing beneficiary and provider education 
investments.
    ``High value'' health services have been described as those 
``services that provide the best possible health outcomes at the lowest 
possible cost.'' \51\ The American College of Physicians states that 
high value services seek ``to improve health, avoid harms, and 
eliminate wasteful practices.'' \52\ However, we believe that some high 
value Medicare services may be potentially underutilized by 
beneficiaries. In some cases, limited use of these kinds of services 
occurs disproportionately in underserved communities.
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    \51\ ``Michigan Program on Value Enhancement.'' Institute for 
Healthcare Policy & Innovation (28 Apr. 2022). https://ihpi.umich.edu/featured-work/michigan-program-value-enhancement.
    \52\ High value care. ACP. (n.d.). (May 9, 2022). https://www.acponline.org/clinical-information/high-value-care.
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    Disparities in health and healthcare persist despite decades of 
research and widespread efforts to improve health outcomes in the 
United States.\53\ Certain populations, including groups experiencing 
racial disparity, people with disabilities, individuals dually eligible 
for Medicare and Medicaid, and those living in rural and underserved 
areas are more likely to experience challenges accessing healthcare 
services, lower quality of care, and below average health outcomes when 
compared to the general population.<SUP>54 55 56</SUP> Many known 
factors impede efficient and equitable healthcare, including workforce 
challenges, transportation issues, healthcare costs, language barriers, 
a lack of health literacy, and confusion about health insurance 
coverage and processes.\57\ Additional factors include social 
determinants of health and community-level burdens that contribute to 
the exacerbation of health disparities. For example, disparities in 
cancer screening and treatment across racial and ethnic groups have 
been well documented. Research demonstrates that minority populations 
are less likely to receive cancer screening tests than their white 
counterparts and, consequently, are more likely to be diagnosed with 
late-stage cancer.\58\ Additionally, racial and ethnic minorities with 
positive test results are more likely to experience delays in receiving 
the diagnostic tests that would serve to confirm cancer diagnoses.\59\ 
CMS is committed to building solutions that will help close gaps in 
healthcare quality, access, and outcomes.\60\
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    \53\ Office of Minority Health. (2021, January, page 3). Paving 
the Way to Equity: A Progress Report. Centers for Medicaid and 
Medicare Services. https://www.cms.gov/files/document/paving-way-equity-cms-omh-progress-report.pdf.
    \54\ Agency for Health Care Research and Quality (AHRQ). (2021, 
June). 2019 National Healthcare Quality and Disparities Report. 
AHRQ. https://www.ahrq.gov/research/findings/nhqrdr/nhqdr19/index.html.
    \55\ Executive Order No. 13985, 86 FR 7009 (2021, January 20). 
https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/. For the 
purposes of this RFI, we are using the definitions of equity and 
underserved communities established in Executive Order 13985, ``The 
term `equity' means the consistent and systematic fair, just, and 
impartial treatment of all individuals, including individuals who 
belong to underserved communities that have been denied such 
treatment, such as Black, Latino, and Indigenous and Native American 
persons, Asian Americans and Pacific Islanders and other persons of 
color; members of religious minorities; lesbian, gay, bisexual, 
transgender, and queer (LGBTQ+) persons; persons with disabilities; 
persons who live in rural areas; and persons otherwise adversely 
affected by persistent poverty or inequality.'' The term 
``underserved communities'' refers to populations sharing a 
particular characteristic, as well as geographic communities, that 
have been systematically denied a full opportunity to participate in 
aspects of economic, social, and civic life.
    \56\ Office of the Assistant Secretary for Planning and 
Evaluation, U.S. Department of Health & Human. Services. Second 
Report to Congress on Social Risk Factors and Performance in 
Medicare's Value-Based. Purchasing Program. 2020. https://aspe.hhs.gov/reports/second-report-congress-social-risk-medicares-value-based-purchasing-programs.
    \57\ Lahr, M., Henning-Smith, C., Rahman, A., Hernandez, A. 
(2021, January). Barriers to Health Care Access for Rural Medicare 
Beneficiaries: Recommendations from Rural Health Clinics. University 
of Minnesota Rural Health Research Center. https://rhrc.umn.edu/wp-content/uploads/2021/01/UMN-RHC-Access-to-Care-PB_1.20.pdf.
    \58\ Agency for Healthcare Research and Quality [AHRQ], 2004; 
National Institutes of Health/National Cancer Institute [NIH/NCI], 
2001). Racial and ethnic minorities with positive test results are 
more likely to experience delays in receiving the diagnostic tests 
needed to confirm cancer diagnoses (Battaglia et al., 2007; Ries et 
al., 2003.
    \59\ Battaglia et al., 2007; Ries et al., 2003.
    \60\ Office of Minority Health. (2021, January). Paving the Way 
to Equity: A Progress Report. Centers for Medicaid and Medicare 
Services. https://www.cms.gov/files/document/paving-way-equity-cms-omh-progress-report.pdf.
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    We are working to advance health equity by designing, implementing, 
and operationalizing policies and programs that support health for all 
the people served by our programs, eliminating avoidable differences in 
health outcomes experienced by people who are disadvantaged or 
underserved, and providing the care and support that our beneficiaries 
need to thrive.\61\ Health equity as defined by CMS \62\ means the 
attainment of the highest level of health for all people, where 
everyone has a fair and just opportunity to attain their optimal health 
regardless of race, ethnicity, disability, sexual orientation, gender 
identity, socioeconomic status, geography, preferred language, or other 
factors that affect access to care and health outcomes. More 
information regarding CMS's Strategic Plan for health equity is 
available in the CMS Strategic Plan Pillar: Health Equity Fact Sheet: 
https://www.cms.gov/sites/default/files/2022-04/Health%20Equity%20Pillar%20Fact%20Sheet_1.pdf.
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    \61\ https://www.cms.gov/pillar/health-equity.
    \62\ https://www.cms.gov/sites/default/files/2022-04/Health%20Equity%20Pillar%20Fact%20Sheet_1.pdf.
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    In light of the concerns regarding the potential underutilization 
of high value health services, particularly among potentially 
underserved communities, we are committed to promoting these high value 
services within the Medicare program. In concert with the CMS strategy 
to advance health equity in addressing health disparities that underlie 
our health system, we seek to engage with interested parties and 
solicit comment regarding ways to identify and improve access to high 
value, potentially underutilized services by Medicare beneficiaries.
    We are seeking comment on how to best define and identify high 
value, potentially underutilized health services. We are also looking 
to understand what existing services within current Medicare benefits 
may represent high value, potentially underutilized services, such as:
    <bullet> Preventive Services;
    <bullet> Annual Wellness Visits;
    <bullet> Diabetes Management Training;
    <bullet> Screening for Diabetes;
    <bullet> Referral to appropriate education/prevention/training 
services
    <bullet> Immunizations/vaccinations
    <bullet> Cancer screenings
    <bullet> Cardiac rehabilitation services
    <bullet> Intensive Behavioral Therapy for obesity
    <bullet> Opioid treatment programs
    <bullet> Complex/Chronic Care Management
    <bullet> Cognitive Assessment & Care
    <bullet> Behavioral Health Integration Services
    Other examples of Medicare preventive services are available at the 
following website: https://www.cms.gov/Medicare/Prevention/PrevntionGenInfo/medicare-preventive-services/MPS-QuickReferenceChart-1.html.
    We invite the public to submit information about specific obstacles 
to

[[Page 45943]]

accessing these services and how specific potential policy, payment or 
procedural changes could reduce potential obstacles and facilitate 
better access to high value health services. Specifically, we are 
soliciting new and innovative ideas that may help broaden perspectives 
about potential solutions. Ideas may include, but are not limited to:
    <bullet> Educational or marketing strategies (informed by 
beneficiary input) to promote awareness of available programs and 
resources that advance the utilization of ``high value'' services;
    <bullet> Aligning of Medicare and other payer coding, payment and 
documentation requirements, and processes related to ``high value'' 
services;
    <bullet> Recommendations from States and other interested parties 
regarding how to best raise awareness of underutilized services, with 
special consideration for the dual-eligible population;
    <bullet> Enabling of operational flexibility, feedback mechanisms, 
and data sharing that would enhance the utilization of ``high value'' 
services; and
    <bullet> New recommendations regarding when and how CMS issues 
regulations and policies related to ``high value'' services and how CMS 
can advance rules and policies for beneficiaries, clinicians, and 
providers.
    We are interested in learning about how CMS might best promote high 
value care and health equity, address concerns regarding health 
disparities, and increase access to high value services, which could 
improve the health of Medicare beneficiaries. Comments received in 
response to this RFI may be used to identify potential opportunities 
for improvement to and refinement of existing Medicare FFS and MA 
programs.
(39) Change in Procedure Status for Family Psychotherapy
    The CPT codes that describe family psychotherapy are payable under 
Medicare, but are currently assigned a restricted status indicator in 
the Medicare Physician Fee Schedule payment files. The codes describing 
family psychotherapy with the patient present are CPT code 90847 
(Family psychotherapy (conjoint psychotherapy) (with patient present), 
50 minutes) and CPT code 90849 (Multiple-family group psychotherapy). 
We note that CPT code 90846 (Family psychotherapy (without the patient 
present), 50 minutes) describes family psychotherapy without the 
patient present. In past rulemaking, we have discussed that Medicare 
coverage is limited to items and services that are for the diagnosis 
and treatment of the individual beneficiary. For example, in the CY 
2013 PFS final rule (77 FR 68979), we stated that Medicare does not pay 
for services that are furnished to parties other than the beneficiary 
and which Medicare does not cover, for example, communication with 
caregivers.
    During the COVID-19 pandemic, the number of adults reporting 
adverse behavioral health conditions has increased sharply, with higher 
rates of depression, substance use, and self-reported suicidal thoughts 
observed in racial and ethnic minority groups.\63\ We are seeking to 
ensure that appropriate care is furnished to Medicare beneficiaries and 
note that CPT codes 90847 and 90849 are payable under Medicare. 
Accordingly, we are proposing to update our payment files to remove the 
restricted (``R'') procedure status indicator for CPT codes 90847 and 
90849 and assigning these codes an active (``A'') procedure status 
indicator.
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    \63\ https://www.cdc.gov/mmwr/volumes/69/wr/mm6932a1.htm.
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    We note that there are national coverage determinations (NCDs) 
addressing family psychotherapy described by CPT codes 90847 and 90849 
describing the settings of care in which these services are covered, 
documentation requirements and other guidelines.\64\ The Medicare 
National Coverage Determinations (NCD) Manual, Pub. 100-03, section 
70.1, titled ``Consultations with a Beneficiary's Family and 
Associates'' states that ``family counseling services are covered only 
where the primary purpose of such counseling is the treatment of the 
patient's condition.'' \65\ The change to the ``A'' status indicator 
for these subject CPT codes does not alter the policy under the 
applicable coverage determinations for these codes.
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    \64\ https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleid=57065&ver=10&keyword=&keywordType=starts&areaId=all&docType=6,3,5,1,F,P&contractOption=all&hcpcsOption=code&hcpcsStartCode=90847&hcpcsEndCode=90847&sortBy=title&bc=1.
    \65\ https://www.cms.gov/medicare-coverage-database/view/ncd.aspx?NCDId=16&ncdver=1.
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(40) Comment Solicitation on Intensive Outpatient Mental Health 
Treatment, Including Substance Use Disorder (SUD) Treatment, Furnished 
by Intensive Outpatient Programs (IOPs)
    There are a range of services described by existing coding under 
the PFS that can be billed for treatment of mental health conditions, 
including SUDs, such as individual, group, and family psychotherapy. 
Over the past several years, in collaboration with interested parties 
and the public, we have increased the coding and payment mechanisms for 
substance use treatment services paid under the PFS. For example, in 
the CY 2020 PFS final rule (84 FR 62673), we finalized the creation of 
new coding and payment describing a bundled episode of care for the 
treatment of Opioid Use Disorder (OUD) (HCPCS codes G2086-G2088). In 
the CY 2021 PFS final rule, we finalized expanding the bundled payments 
described by HCPCS codes G2086-G2088 to be inclusive of all SUDs (85 FR 
84642 through 84643).
    Additionally, in the CY 2020 PFS final rule (84 FR 62630 through 
62677), we implemented coverage requirements and established new codes 
describing bundled payments for episodes of care for the treatment of 
OUD furnished by Opioid Treatment Programs (OTPs). Medicare also covers 
services furnished by inpatient psychiatric facilities and partial 
hospitalization programs (PHP). PHP services can be furnished by a 
hospital outpatient department or a Medicare-certified Community Mental 
Health Center (CMHC). PHPs are structured to provide intensive 
psychiatric care through active treatment that utilizes a combination 
of the clinically recognized items and services described in Sec.  
1861(ff) of the Social Security Act (the Act). According to the 
Medicare Benefit Policy Manual, Chapter 6, Section 70.3, the treatment 
program of a PHP closely resembles that of a highly structured, short-
term hospital inpatient program and is at a level more intense than 
outpatient day treatment or psychosocial rehabilitation. PHPs work best 
as part of a community continuum of mental health services which range 
from the most restrictive inpatient hospital setting to less 
restrictive outpatient care and support.
    We understand that in some cases, people that do not require a 
level of care for mental health needs that meets the standards for PHP 
services, nonetheless require intensive services on an outpatient 
basis. We are interested in whether or not the current coding and 
payment mechanisms under the PFS adequately account for intensive 
outpatient services that are part of a continuum of care in the 
treatment. For example, according to SAMHSA's Advisory on Clinical 
Issues in Intensive Outpatient Treatment for Substance Use Disorders, 
IOP programs for substance use disorders (SUDs) offer services to 
clients seeking primary treatment; step-down care from inpatient, 
residential, and withdrawal management settings; or step-up treatment 
from individual or group outpatient treatment. IOP treatment includes a 
prearranged schedule of core services for example,

[[Page 45944]]

individual counseling, group therapy, family psychoeducation, and case 
management) for a minimum of 9 hours per week for adults or 6 hours per 
week for adolescents. The 2019 National Survey of Substance Abuse 
Treatment Services reports that 46 percent of SUD treatment facilities 
offer IOP treatment.\66\
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    \66\ https://store.samhsa.gov/sites/default/files/SAMHSA_Digital_Download/pep20-02-01-021.pdf.
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    We are seeking comment on whether there is a gap in coding under 
the PFS or other Medicare payment systems that may be limiting access 
to needed levels of care for treatment of mental health or substance 
use disorder treatment, including and especially SUDs, for Medicare 
beneficiaries. We are particularly interested in the extent to which 
any potential gaps would best be addressed by the creation of new 
codes, revision of particular billing rules for some kinds of care in 
specific settings, or whether the valuation of particular codes 
(existing or new) needs to be addressed in order to better reflect the 
relative resource costs involved in furnishing intensive outpatient 
mental health services. We are also interested in additional, detailed 
information about IOP services, such as the settings of care in which 
these programs typically furnish services, the range of services 
typically offered, the range of practitioner types that typically 
furnish those services, and any other relevant information, especially 
to the extent it would inform our ability to ensure that Medicare 
beneficiaries have access to this care.
(41) Comment Solicitation on Payment for Behavioral Health Services 
Under the PFS
    As discussed throughout this proposed rule, CMS is committed to 
ensuring that beneficiaries have access to needed services for mental 
and behavioral health. Through the CMS Behavioral Health Strategy, CMS 
seeks to remove barriers to care and services, and to adopt a data-
informed approach to evaluate our behavioral health programs and 
policies. CMS strives to support a person's whole emotional and mental 
well-being and promote person-centered behavioral health care.\67\
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    \67\ https://www.cms.gov/cms-behavioral-health-strategy.
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    As part of our review of our payment policies and systems, we 
understand that the PFS ratesetting methodology and application of 
budget neutrality may impact certain services more significantly than 
others based on factors such as how frequently codes are revalued and 
the ratio of physician work to practice expense (PE). In the CY 2018 
PFS final rule (82 FR 52999), we discussed that some interested parties 
had suggested that for codes in which direct PE inputs for a service 
are very low, the methodology for allocating indirect PE does not allow 
for a site of service differential that accurately reflects the 
relative indirect costs involved in furnishing services in non-facility 
settings. We stated that primary therapy and counseling services 
available to Medicare beneficiaries for treatment of behavioral health 
conditions, including substance use disorders, are among the services 
most affected by our methodology.
    We are soliciting comment on how we can best ensure beneficiary 
access to behavioral health services, including any potential 
adjustments to the PFS ratesetting methodology, for example, any 
adjustments to systematically address the impact on behavioral health 
services paid under the PFS.
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BILLING CODE 4120-01-C

F. Evaluation and Management (E/M) Visits

1. Background
    Over the past several years, CMS has engaged in a multi-year effort 
with the American Medical Association (AMA) and other interested 
parties to update coding and payment for evaluation and management (E/
M) visits, so that they better reflect the current practice of 
medicine, are less administratively complex, and are paid more 
accurately under the PFS. This work is critical to help reduce 
practitioner burnout in general, especially in light of the COVID-19 
pandemic. In a step-wise approach, the AMA CPT Editorial Panel revised 
the office/outpatient (O/O) E/M visit code family first. Effective 
January 1, 2021, the CPT Editorial Panel redefined the O/O E/M visits, 
such that visit level is selected based on the amount of practitioner 
time spent performing the visit or the level of medical decision-making 
(MDM) as redefined in the CPT E/M Guidelines. Additionally, effective 
January 1, 2021, history of present illness (History) and a physical 
exam are no longer required elements of these services or used to 
select the O/O E/M visit level. (See 85 FR 84549). Also, effective 
January 1, 2021, the CPT Editorial Panel revised the O/O E/M visit 
descriptor times and the CPT E/M Guidelines.
    We generally adopted these revised codes and changes in CPT code 
selection and documentation guidance for payment purposes under the PFS 
effective January 1, 2021 (84 FR 62844 through 62859). While we 
accepted the revised CPT codes and approach for the O/O E/M visits, we 
did not accept the revisions for prolonged O/O services, because we 
were concerned that they could have resulted in overpayment, were 
administratively complex, and would have impacted our ability to tell 
how much total time was spent with the

[[Page 45987]]

patient (see 84 FR 62849 through 62850). We created G2212 for reporting 
of prolonged O/O E/M services. Finally, the AMA RUC resurveyed the O/O 
E/M visits, and we generally accepted the RUC recommendations, which 
reflected increased service times (84 FR 62851 through 62854). This 
resulted in increased values for the O/O E/M codes beginning in CY 
2021. Also, we created add-on code G2211 (office/outpatient E/M visit 
complexity) that can be reported in conjunction with O/O E/M visits to 
better account for resources associated with primary care or care 
services that are part of ongoing care related to a patient's single, 
serious, or complex chronic condition(s). (84 FR 62854 through 62856). 
The Consolidated Appropriations Act, 2021 imposed a moratorium on 
Medicare payment for these services by prohibiting CMS from making 
payment under the physician fee schedule for HCPCS code G2211 before 
January 1, 2024. See our fact sheet available at Physician Fee Schedule 
(PFS) Payment for Office/Outpatient Evaluation and Management (E/M) 
Visits--Fact Sheet \68\ (cms.gov).
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    \68\ https://www.cms.gov/files/document/physician-fee-schedule-pfs-payment-officeoutpatient-evaluation-and-management-em-visits-fact-sheet.pdf.
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    For CY 2023, the AMA CPT Editorial Panel has revised the rest of 
the E/M visit code families (except critical care services) to match 
the general framework of the O/O E/M visits, including inpatient and 
observation visits, emergency department (ED) visits, nursing facility 
visits, domiciliary or rest home visits, home visits, and cognitive 
impairment assessment. Hereafter in this proposed rule, we refer to 
these other E/M visit code families as ``Other E/M'' visits or CPT 
codes, as relevant. Effective January 1, 2023, the CPT Editorial Panel 
has redefined the Other E/M visits so that they parallel the O/O E/M 
visits, where visit level will be selected based on the amount of 
practitioner time spent with the patient or the level of MDM as 
redefined in the CPT E/M Guidelines. History and physical exam will 
only be considered when and to the extent that they are medically 
appropriate, and will no longer impact the Other E/M visit level. The 
CPT Editorial Panel also revised the service times within the 
descriptors, the associated prolonged service codes, and the CPT E/M 
Guidelines for the Other E/M CPT codes. We note that the CPT Editorial 
Panel also consolidated a considerable number of the Other E/M CPT 
codes, with inpatient and observation visits being combined into a 
single code set, and home and domiciliary visits being combined into a 
single code set. Currently there are approximately 75 Other E/M CPT 
codes, and in 2023 there will be approximately 50 Other E/M CPT codes. 
The CPT Editorial Panel created one new CPT code for prolonged 
inpatient services by physicians and other qualified healthcare 
professionals on the date of the E/M visit. Finally, the RUC has 
resurveyed the Other E/M visits and associated prolonged service codes, 
and provided revaluation recommendations to CMS.
    In total, E/M visits comprise approximately 40 percent of all 
allowed charges under the PFS. The subset of Other E/M visits comprises 
approximately 20 percent of all allowed charges. Accordingly, our final 
policies for the Other E/M visits will have a significant impact on 
relative resource valuation under the PFS, which could potentially 
impact patient care more broadly. In this section of our proposed rule, 
we propose policies addressing coding and revaluation of Other E/M 
visits beginning for CY 2023. We also propose a technical correction to 
the placement of our regulation text for split (or shared) visits, and, 
as we further consider feedback from interested parties, we propose to 
delay implementation of our policy to define the substantive portion of 
a split (or shared) visit at Sec.  415.140 based on the amount of time 
spent by the billing practitioner until January 1, 2024. Finally, we 
provide clarification and propose a technical correction regarding how 
time is reported for split (or shared) critical care visits.
2. Overview of Policy Proposals
    We are proposing to generally adopt the revised CPT E/M Guidelines 
for Other E/M visits, which are available online at www.ama-assn.org/cpt-evaluation-management. We propose to adopt the general CPT 
framework for Other E/M visits, such that practitioner time or MDM 
would be used to select the E/M visit level. This includes the listing 
of qualifying activities by the physician or NPP that count toward the 
time spent when time is used required to select the visit level. 
History and physical exam would be considered, as medically 
appropriate, and would no longer be used to select visit level. We 
would not adopt the general CPT rule \69\ where a billable unit of time 
is considered to have been attained when the midpoint is passed (for 
example, we would not consider a service with a time descriptor of 30 
minutes to have been satisfied if only 15 minutes of time had been 
spent furnishing that service). We similarly interpreted this rule for 
O/O E/M visits, when time is used to select visit level. For example, 
we required the full time within the CPT code descriptors to be met in 
order to select an O/O E/M visit level using time, rather than half of 
the descriptor time (84 FR 62848 through 62851). Also, we do not 
interpret the CPT E/M Guidelines as adopting this general CPT rule 
regarding the midpoint of time.
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    \69\ Introduction to 2022 CPT Codebook, p.xviii.
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    We are proposing to adopt the revised CPT codes and descriptors for 
Other E/M visits, except where specified otherwise. Under our proposed 
policies, we would adopt the new CPT codes and descriptors for Other E/
M visits except for prolonged services, for which we propose Medicare-
specific coding. For administrative simplicity and payment accuracy 
purposes, and to enable us to determine how much time was spent with 
the patient using claims data, prolonged Other E/M services would be 
reported under one of three proposed G codes (one for each family for 
which prolonged services apply, namely inpatient/observation visits, 
nursing facility visits, and home or residence visits). This would be 
consistent with our previously finalized approach to prolonged O/O E/M 
services.
    We are proposing to adopt the CPT E/M Guidelines regarding MDM for 
E/M services. The CPT Editorial Panel revised the CPT E/M guidelines 
for levels of MDM, and we are proposing to adopt them as revised.
    In addition, as we note in the Medicare Claims Processing Manual 
((pub 100-04) chapter 26, section 10.8), our longstanding taxonomy for 
PFS services will continue to apply, where, for payment purposes, 
physicians and NPPs are not classified as having the same specialty, 
and the PFS does not recognize subspecialties. However, we are 
continuing to consider whether we could better align this payment 
taxonomy with clinical practice, where we might consider NPPs as 
working in the same specialty as the physicians with whom they work, 
and/or recognize subspecialties.
    Regarding valuation of the Other E/M CPT codes, the RUC recommended 
direct work RVU comparisons for many Other E/M CPT codes to those 
currently assigned to O/O E/M CPT codes. In some cases, there were 
assumptions that patient needs were inherently more complex or work was 
more intense for E/M visits furnished in non-office settings (for 
example, inpatient, ED, and home settings) when compared to the office 
settings. This direct comparison to the O/O visit codes may not be 
appropriate or accurate, given that

[[Page 45988]]

practitioners furnishing visits in the office setting face particular 
uncertainties in their estimates of illness and treatment courses, and 
the office settings have fewer resources close at hand. For example, 
compared to fully-staffed institutional settings, office settings 
generally have smaller, ancillary staff complements (such as 
pharmacists, registered nurses, social workers, and other 
paraprofessionals) who provide specialized advice and services, spend 
time coordinating with other practitioners for review and evaluation of 
medical records and test results, educate patients, manage medications, 
and assess and help address social determinants of health. 
Additionally, those practicing in institutional settings generally have 
ready availability of diagnostic equipment (for example, imaging and 
other advanced services), allowing for more immediate access to 
clinical information and reducing the amount of time needed to manage a 
given case. This access is critical for positive health outcomes, to 
treat or prevent acute exacerbations of chronic conditions and timely 
manage patients to prevent deterioration and improve outcomes. The 
challenge of coordinating and gathering these types of care and 
information in the office setting may add additional time and 
complexity to the case management. Further, some of the Other E/M CPT 
code families are being merged into lower complexity settings, such as 
CPT codes for observation services migrating into the inpatient visit 
CPT codes.
    The values we established for the revised O/O E/M CPT codes in the 
CY 2021 PFS final rule were finalized in concert with a policy that 
would have provided separate payment for the new add-on code G2211. 
This add-on code describes the complexity inherent to E/M visits 
associated with primary care and other similar types of care 
(specifically, E/M visits associated with medical care services that 
serve as the continuing focal point for all needed health care services 
and/or with medical care services that are part of ongoing care related 
to a patient's single, serious condition or a complex condition, 
regardless of the specialty of the billing professional) (see 85 FR 
84569 through 84572). Section 113 of the Consolidated Appropriations 
Act, 2021 delayed Medicare payment for G2211 until at least January 1, 
2024 (see the following Fact Sheet available on our website at 
Physician Fee Schedule \70\ (PFS) Payment for Office/Outpatient 
Evaluation and Management (E/M) Visits--Fact Sheet (cms.gov). To the 
extent we are proposing to adopt the RUC-recommended values for Other 
E/M visits beginning for CY 2023, we do not agree with the RUC that the 
current visit payment structure among and between care settings fully 
accounts for the complexity of certain kinds of visits, especially for 
those in the office setting, nor do they fully reflect appropriate 
relative values, since separate payment is not yet made for G2211.
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    \70\ https://www.cms.gov/files/document/physician-fee-schedule-pfs-payment-officeoutpatient-evaluation-and-management-em-visits-fact-sheet.pdf.
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3. Hospital Inpatient or Observation Care (CPT Codes 99218-99236)
a. Coding Changes and Visit Selection for Hospital Inpatient or 
Observation Care Services
    The CPT Editorial Panel deleted seven observation care codes and 
revised nine codes effective January 1, 2023, to create a single set of 
codes for inpatient and observation care. (Note that the CPT Editorial 
Panel also made changes to codes for inpatient and observation 
discharge, which will be discussed in section II.F.4. of this proposed 
rule.) The CPT Editorial Panel also changed the code descriptors to 
allow level of service to be based on total time or MDM, as well as 
updating documentation requirements.
    The CPT Editorial Panel deleted the six codes that were used to 
report observation care visits: three initial observation care codes, 
CPT codes 99218 (Initial observation care, per day, for the evaluation 
and management of a patient which requires these 3 key components: A 
detailed or comprehensive history; a detailed or comprehensive 
examination; and medical decision making that is straightforward or of 
low complexity). Counseling and/or coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and/or family's needs. Usually, the problem(s) requiring admission to 
outpatient hospital ``observation status'' are of low severity. 
Typically, 30 minutes are spent at the bedside and on the patient's 
hospital floor or unit), 99219 (Initial observation care, per day, for 
the evaluation and management of a patient, which requires these 3 key 
components: A comprehensive history; a comprehensive examination; and 
medical decision making of moderate complexity). Counseling and/or 
coordination of care with other physicians, other qualified health care 
professionals, or agencies are provided consistent with the nature of 
the problem(s) and the patient's and/or family's needs. Usually, the 
problem(s) requiring admission to outpatient hospital ``observation 
status'' are of moderate severity. Typically, 50 minutes are spent at 
the bedside and on the patient's hospital floor or unit), and 99220 
(Initial observation care, per day, for the evaluation and management 
of a patient, which requires these 3 key components: A comprehensive 
history; a comprehensive examination; and medical decision making of 
high complexity. Counseling and/or coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and/or family's needs. Usually, the problem(s) requiring admission to 
outpatient hospital ``observation status'' are of high severity. 
Typically, 70 minutes are spent at the bedside and on the patient's 
hospital floor or unit); and three subsequent observation care codes, 
CPT codes 99224 (Subsequent observation care, per day, for the 
evaluation and management of a patient, which requires at least 2 of 
these 3 key components: Problem focused interval history; problem 
focused examination; medical decision making that is straightforward or 
of low complexity. Counseling and/or coordination of care with other 
physicians, other qualified health care professionals, or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and/or family's needs. Usually, the patient is stable, recovering, or 
improving. Typically, 15 minutes are spent at the bedside and on the 
patient's hospital floor or unit), 99225 (Subsequent observation care, 
per day, for the evaluation and management of a patient, which requires 
at least 2 of these 3 key components: An expanded problem focused 
interval history; an expanded problem focused examination; medical 
decision making of moderate complexity. Counseling and/or coordination 
of care with other physicians, other qualified health care 
professionals, or agencies are provided consistent with the nature of 
the problem(s) and the patient's and/or family's needs. Usually, the 
patient is responding inadequately to therapy or has developed a minor 
complication. Typically, 25 minutes are spent at the bedside and on the 
patient's hospital floor or unit), and 99226 (Subsequent observation 
care, per day, for the evaluation and management of a patient, which 
requires at least 2 of

[[Page 45989]]

these 3 key components: A detailed interval history; a detailed 
examination; medical decision making of high complexity. Counseling 
and/or coordination of care with other physicians, other qualified 
health care professionals, or agencies are provided consistent with the 
nature of the problem(s) and the patient's and/or family's needs. 
Usually, the patient is unstable or has developed a significant 
complication or a significant new problem. Typically, 35 minutes are 
spent at the bedside and on the patient's hospital floor or unit).
    The CPT Editorial Panel also revised the six hospital inpatient 
care codes. The revisions allow these codes to be reported for hospital 
inpatient or observation care services and allow the codes to be 
selected by the billing practitioner based on either MDM or time. In 
addition, the CPT Editorial Panel changed the name of the ``Hospital 
Inpatient Care'' code family to ``Hospital and Observation Care,'' and 
the new code family includes three initial hospital or observation care 
codes: CPT codes 99221 (Initial hospital inpatient or observation care, 
per day, for the evaluation and management of a patient, which requires 
a medically appropriate history and/or examination and straightforward 
or low-level medical decision-making. When using total time on the date 
of the encounter for code selection, 40 minutes must be met or 
exceeded), 99222 (Initial hospital inpatient or observation care, per 
day, for the evaluation and management of a patient, which requires a 
medically appropriate history and/or examination and moderate level of 
medical decision making. When using total time on the date of the 
encounter for code selection, 55 minutes must be met or exceeded), and 
99223 (Initial hospital inpatient or observation care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and high level of medical 
decision making When using total time on the date of the encounter for 
code selection, 75 minutes must be met or exceeded); and three 
subsequent inpatient or observation care codes, CPT codes 99231 
(Subsequent hospital inpatient or observation care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and straightforward or low level 
of medical decision making. When using total time on the date of the 
encounter for code selection, 25 minutes must be met or exceeded), 
99232 (Subsequent hospital inpatient or observation care, per day, for 
the evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and moderate level of medical 
decision making. When using total time on the date of the encounter for 
code selection, 35 minutes must be met or exceeded), and 99233 
(Subsequent hospital inpatient or observation care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and high level of medical 
decision making. When using total time on the date of the encounter for 
code selection, 50 minutes must be met or exceeded).
    The CPT Editorial Panel also revised the three codes under 
``Observation or Inpatient Care Services (including Admission and 
Discharge)'' (frequently referred to as ``same-day discharge'' codes). 
Billing practitioners could already use these codes to bill for 
patients in inpatient or observation status, but the CPT Editorial 
Panel revised the codes to allow the billing practitioner to select the 
code level based either on MDM or time. The same-day discharge codes 
were renamed as ``Hospital Inpatient or Observation Care (Admission and 
Discharge)'': CPT codes 99234 (Hospital inpatient or observation care, 
for the evaluation and management of a patient including admission and 
discharge on the same date, which requires a medically appropriate 
history and/or examination and straightforward or low level of medical 
decision making. When using total time on the date of the encounter for 
code selection, 45 minutes must be met or exceeded), 99235 (Hospital 
inpatient or observation care, for the evaluation and management of a 
patient including admission and discharge on the same date, which 
requires a medically appropriate history and/or examination and 
moderate level of medical decision making. When using total time on the 
date of the encounter for code selection, 70 minutes must be met or 
exceeded), and 99236 (Hospital inpatient or observation care, for the 
evaluation and management of a patient including admission and 
discharge on the same date, which requires a medically appropriate 
history and/or examination and high level of medical decision making. 
When using total time on the date of the encounter for code selection, 
85 minutes must be met or exceeded).
    We propose to adopt the revised CPT codes 99221 through 99223 and 
99231 through 99236. We highlight that the CPT code descriptors specify 
that, when selecting the code level based on time, the indicated 
increment of time must be ``met or exceeded.'' We propose that, when a 
physician or practitioner selects CPT codes 99221 through 99223 and 
99231 through 99236 based on time, the number of minutes specified in 
the descriptor for the relevant CPT code must be ``met or exceeded.'' 
We note that we are not proposing to adopt the CPT Codebook 
instructions regarding the application of prolonged codes to CPT codes 
99223, 99233, and 99236; refer to additional discussion under 
``Prolonged Codes for Hospital Inpatient or Observation Care'' in this 
section.
    We also note that the descriptors for CPT codes 99221 through 99223 
and 99231 through 99236 specify that the time counted toward the code 
is ``per day.'' We propose to adopt the 2023 CPT Codebook instruction 
that ``per day,'' also referred to as ``date of encounter,'' means the 
``calendar date.'' (2023 CPT Codebook citation forthcoming.) We also 
propose to adopt the 2023 CPT Codebook instruction that when using MDM 
or time for code selection, a continuous service that spans the 
transition of 2 calendar dates is a single service and is reported on 
one date, which is the date the encounter begins. If the service is 
continuous before and through midnight, all the time may be applied to 
the reported date of the service, that is, the calendar date the 
encounter began. (2023 CPT Codebook citation forthcoming.) We note that 
nothing in this proposal is intended to conflict with our proposed 
retention of the ``8 to 24 hour rule,'' discussed in the next section.
    Finally, we propose to retain our policy that a billing 
practitioner shall bill only one of the hospital inpatient or 
observation care codes for an initial visit, a subsequent visit, or 
inpatient or observation care (including admission and discharge), as 
appropriate, once per calendar date. We propose that the practitioner 
would select a code that reflects all of the practitioner's services 
provided during the date of the service, as provided in the Medicare 
Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.9.B. We discuss 
additional policies relating to a single billing practitioner providing 
services to a single beneficiary on the same day in section II.F.3.d. 
of this proposed rule.
b. Proposed ``8 to 24 Hour Rule'' for Hospital Inpatient or Observation 
Care
    We propose to retain what is known as the ``8 to 24-hour rule'' 
regarding payment of discharge CPT codes 99238 (Hospital inpatient or 
observation discharge day management; 30 minutes or less) and 99239 
(more than 30 minutes). (CPT codes 99238 and 99239 are discussed in 
further detail in section

[[Page 45990]]

II.F.4. of this proposed rule.) The ``8 to 24 hour rule'' is described 
in further detail in the Medicare Claims Processing Manual (IOM 100-04, 
Chapter 12, 30.6.8.B and 30.6.9.1.C.). As we discussed in the CY 2001 
PFS final rule (65 FR 65376), the ``8 to 24 hour rule'' was designed to 
avoid unintended incentives to keep a patient in the hospital past 
midnight during a stay lasting less than 24 hours. When this policy was 
memorialized in the CY 2001 PFS final rule, it was applied to both the 
initial inpatient hospital care codes (CPT codes 99221 through 99223) 
and the initial observation care codes (CPT codes 99218 through 99220) 
which CPT has deleted for 2023. The policy we propose to retain is as 
follows:
    <bullet> If the beneficiary receives less than 8 hours of hospital 
inpatient or observation services, the practitioner may not bill for 
hospital inpatient and observation discharge day management services 
(to be described by CPT codes 99238 and 99239). If a patient receives 
less than 8 hours of hospital inpatient or observation services, we 
propose that the practitioner would bill only initial inpatient or 
observation care (described by CPT codes 99221, 99222, or 99223, as 
appropriate).
    <bullet> If a beneficiary receives hospital inpatient or 
observation services for a minimum of 8 hours but less than 24 hours, 
we propose that the practitioner would bill CPT codes 99234, 99235, or 
99236, as appropriate. (These codes, commonly referred to as ``same-day 
discharge'' codes, describe hospital inpatient or observation care that 
includes both admission and discharge as part of a single service.)
    <bullet> If a beneficiary is admitted for hospital inpatient or 
observation care and is then discharged after more than 24 hours, we 
propose that the practitioner would bill an initial hospital inpatient 
or observation care code (CPT codes 99221 through 99223) for the date 
of admission, and a hospital discharge day management service (CPT code 
99238 or 99239) on the date of discharge.
    We believe it remains necessary to retain our 8 to 24 hour policy 
to avoid overpayments or create incentives to unnecessarily extend 
beneficiaries' hospital stays past midnight. Hospital inpatient and 
observation care codes (CPT codes 99221 through 99223 and 99234 through 
99239) are billed ``per day,'' and have been valued to account for all 
services a practitioner furnishes during the day-long billing period. 
In an environment such as a hospital, where admissions can occur 24 
hours a day, relying solely on the calendar date of an admission or 
observation stay, to determine a billing day can be misleading, which 
is why we propose to retain the existing 8 to 24 hour policy.
    For example, Patient A was admitted by Physician A at 11:00 p.m. on 
April 1st and discharged at 6:00 a.m. on April 2nd. Patient B was 
admitted by Physician B at 8:00 a.m. on April 1st and discharged at 
9:00 p.m. on April 2nd. Both Patient A and Patient B were in the 
hospital on the same two calendar dates (April 1 and April 2), but 
Patient A's stay was only 7 hours and Patient B's stay was 25 hours. 
Allowing both Physician A and Physician B to bill similarly (that is, 
both an initial hospital visit for April 1 and a discharge day 
management code for April 2nd) would be inappropriate. Both initial 
hospital visits and discharge day management codes are billed ``per 
day'' (and are valued as being ``per day''). Allowing a physician to 
bill for two ``per day'' services, delivered to the same patient in the 
same setting in less than an 8-hour period results in duplicative 
payment. This also may create an incentive for patients to be kept in 
the hospital past midnight, just to get to a second calendar date in 
which a practitioner is able to bill for two services rather than one.
    We also note that CPT codes 99234, 99235, and 99236 are valued to 
include physician time spent admitting, caring for, and discharging the 
patient. These codes are billed for stays longer than 8 hours to 
acknowledge the increased resources inherent to caring for a patient 
during a longer hospital stay.
    For another illustration of why relying solely on the calendar date 
of admission to determine the billing date is misguided, Patient A is 
admitted at 11 a.m. on April 1st and discharged at 11 p.m. on April 
1st. Patient B is admitted at 11 p.m. on April 1st and discharged at 11 
a.m. on April 2nd. Both patients are in the hospital for 12 hours. The 
practitioner treating Patient A would bill for a same-day discharge 
service, CPT code 99234 through 99236. It would not be appropriate to 
allow the practitioner treating Patient B to bill separately for an 
initial visit (CPT codes 99221 through 99223) and a separate discharge 
day management service (CPT codes 99238 or 99239) simply because 
Patient B's visit happened to span two calendar days and Patient A's 
did not. Under the proposed 8 to 24-hour rule, the practitioner 
treating Patient B would also bill for a same-day discharge service, 
CPT code 99234 through 99236.
    We believe that by tying billing to the length of hospital stay 
rather than the calendar date, the 8 to 24-hour rule avoids confusion 
and the potential for overpayment of multiple E/M visits improperly 
billed for the same period of service.
c. Proposed Definition of Initial and Subsequent Hospital Inpatient or 
Observation Visit
    According to the 2023 CPT Codebook (citation forthcoming), an 
``initial'' service may be reported when ``the patient has not received 
any professional services from the physician or other qualified health 
care professional or another physician or other qualified health care 
professional of the exact same specialty and subspecialty who belongs 
to the same group practice during the stay. When advanced practice 
nurses and physician assistants are working with physicians they are in 
the exact same specialty and subspecialty as the physician.'' The 
revised CPT codes 99231 through 99233 describe subsequent hospital 
inpatient or observation care services similarly. According to the 2023 
CPT Codebook (citation forthcoming), a ``subsequent'' service is 
reported when the patient has received any professional services from 
the physician or other qualified health care professional or another 
physician or other qualified health care professional of the exact same 
specialty and subspecialty who belongs to the same group practice 
during the stay.
    As we do not recognize subspecialties, we propose slightly amended 
definitions of ``initial'' and ``subsequent'' service:
    <bullet> An initial service would be defined as one that occurs 
when the patient has not received any professional services from the 
physician or other qualified health care professional or another 
physician or other qualified health care professional of the same 
specialty who belongs to the same group practice during the stay.
    <bullet> A subsequent service would be defined as one that occurs 
when the patient has received any professional services from the 
physician or other qualified health care professional or another 
physician or other qualified health care professional of the same 
specialty who belongs to the same group practice during the stay.
    These are the same definitions that we propose for ``initial'' and 
``subsequent'' in the context of nursing facility visits below. We are 
also proposing that for both initial and subsequent visits, when 
advanced practice nurses and physician assistants are working with 
physicians, they are always classified in a different specialty than 
the physician (see section II.F.2. of this proposed rule).

[[Page 45991]]

d. Transitions Between Settings of Care and Multiple Same-Day Visits 
for Hospital Patients Furnished by a Single Practitioner
    We propose to retain our current policy that for the purposes of 
reporting an initial hospital inpatient or observation care service, a 
transition from observation status to inpatient status does not 
constitute a new stay. (Refer to Medicare Claims Processing Manual, IOM 
100-04, Chapter 12, 30.6.8.D.) For instance, if a practitioner places a 
beneficiary in observation status on one date of service (and bills an 
initial observation visit to be described under CPT code 99221 through 
99223), and then determines later in the stay that the beneficiary 
should be admitted to the hospital as an inpatient, the practitioner 
would not bill a second initial visit for the hospital inpatient stay. 
Rather, the practitioner would bill the work done on the inpatient 
admission day as a subsequent visit (CPT codes 99231, 99232, or 99233). 
This policy aligns with language in the 2023 CPT Codebook instructions 
(citation forthcoming.)
    We also propose to retain our policy that if a patient is seen in a 
physician's office on one date and receives care at a hospital (for 
inpatient or observation care) on the next date from the same 
physician, both visits are payable to that physician, even if less than 
24 hours has elapsed between the visit and the hospital inpatient or 
observation care. (Refer to Medicare Claims Processing Manual, IOM 100-
04, Chapter 12, 30.6.9.1.B.) We also propose, however, to retain our 
current policy that when a patient is admitted to outpatient 
observation or as a hospital inpatient via another site of service 
(such as, hospital ED, physician's office, nursing facility), all 
services provided by the physician in conjunction with that admission 
are considered part of the initial hospital inpatient or observation 
care when performed on the same date as the admission. (Refer to the 
Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.9.1.A.) 
This policy differs somewhat from the instructions provided in the 2023 
CPT Codebook (citation forthcoming.)
    We believe it is important to retain both policies, as they promote 
appropriate payment in situations in which the beneficiary visits the 
practitioner in a non-hospital setting before the practitioner 
determines that hospital admission is necessary. The codes for initial 
hospital inpatient or observation visits (CPT codes 99221 through 
99223) are billed ``per day'' and include all work furnished by the 
practitioner on the day of admission. The initial hospital inpatient 
and observation care codes do not include work furnished by the 
practitioner prior to the date of admission. Thus, under our proposal, 
for example, if a practitioner sees a beneficiary in an office setting 
at 5 p.m. on April 1st and the practitioner then oversees the 
beneficiary's admission to the hospital at 7 a.m. on April 2nd, these 
would be separately billable payments because initial hospital 
inpatient or observation care codes (CPT code 99221 through 99223) 
billed for April 2nd would not retroactively cover the work furnished 
on April 1st. However, if the practitioner sees the beneficiary in the 
office setting at 7 a.m. on April 1st and then oversees the 
beneficiary's admission at 9 p.m. on April 1st, all time the 
practitioner spent furnishing services to that beneficiary would be 
reportable under the initial hospital inpatient or observation care 
code (CPT code 99221 through 99223).
    We also propose to retain our current billing policy in the 
Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.1.A. 
that a physician may bill only for an initial hospital or observation 
care service if the physician sees a patient in the ED and decides to 
either place the patient in observation status or admit the patient as 
a hospital inpatient. For discussion of additional policy proposals 
regarding patients seen in both the ED and the hospital, refer to the 
next section, ``Emergency Department Services.''
    We propose to preserve our current billing policies for patients in 
swing beds, which are as follows: If the inpatient care is being billed 
by the hospital as inpatient hospital care, the hospital care codes 
(CPT codes 99221 through 99223 and 99231 through 99239) apply. (Refer 
to Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 
30.6.9.D.) If the inpatient care is being billed by the hospital as 
nursing facility care, then the nursing facility codes (CPT codes 99304 
through 99316) apply. Refer to the section below on Nursing Facility 
Care Services for additional discussion of billing hospital inpatient 
or observation care and nursing facility care.
e. Impact of Changes to Hospital Inpatient or Observation Codes on 
Billing and Claims Processing Policies
    We propose that starting in CY 2023, hospital inpatient and 
observation care by physicians will be billed using the same CPT codes, 
CPT codes 99221 through 99223, 99231 through 99233, and 99238 and 
99239. (We note that currently, both hospital inpatient and observation 
care are already billed under CPT codes 99234 through 99236 for same-
day discharge.) Therefore, though the current observation care codes 
(CPT codes 99218 through 99220 and 99224 through 99226) are being 
deleted, practitioners will still be able to furnish and bill for 
observation services. We solicit feedback from the public on potential 
challenges to billing or claims processing policies for hospital 
inpatient or observation care as reflected in the Medicare Claims 
Processing Manual (Medicare Claims Processing Manual, IOM 100-04, 
Chapter 12), including possible impact on: billing for patients during 
a global period (Medicare Claims Processing Manual, IOM 100-04, Chapter 
12, Sections 30.6.8.E and 30.6.9.2.A.); documentation requirements 
(Medicare Claims Processing Manual, IOM 100-04, Chapter 12, Sections 
30.6.8.C and 30.6.9.1.D.); modifiers associated with hospital inpatient 
or observation care claims (Medicare Claims Processing Manual, IOM 100-
04, Chapter 12, Section 30.6.9.1.F); and any other issues not otherwise 
discussed in this proposed rule that may need to be addressed through 
additional guidance.
f. Prolonged Services for Hospital Inpatient or Observation Care
    As part of its E/M revisions, the CPT Editorial Panel made several 
changes to prolonged codes that previously could be billed with 
inpatient or observation codes. In February 2021, the CPT Editorial 
Panel deleted Prolonged Service with Direct Patient Contact (Except 
with Office or Other Outpatient Services), including CPT code 99356 
(Prolonged service in the inpatient or observation setting, requiring 
unit/floor time beyond the usual service; first hour; List separately 
in addition to code for inpatient or observation Evaluation and 
Management service) and CPT code 99357 (each additional 30 minutes), 
effective January 1, 2023. Prior CPT Codebook instructions indicated 
that CPT codes 99356 and 99357 could be applied to hospital inpatient 
or observation care (CPT codes 99218 through 99236). (Refer, for 
example, to instructions on pages 41-42 of the 2022 CPT Codebook.)
    To replace deleted CPT codes 99356 and 99357, the CPT Editorial 
Panel created CPT code 993X0 (Prolonged inpatient or observation 
evaluation and management service(s) time with or without direct 
patient contact beyond the required time of the primary service when 
the primary service level has been selected using total time, each 15 
minutes of total time.) (List separately in addition to the code of the 
inpatient and

[[Page 45992]]

observation Evaluation and Management services). Additional guidance 
from the 2023 CPT Codebook states, ``Code 993X0 is used to report 
prolonged total time (that is, combined time with and without direct 
patient contact) provided by the physician or other qualified health 
care professional on the date of an inpatient service (that is, 99223, 
99233, 99236, 99255, 99306, 99310). Prolonged total time is time that 
is 15 minutes beyond the time required to report the highest-level 
primary service.'' (2023 CPT Codebook citation forthcoming.)
    We do not propose to adopt CPT code 993X0, as we believe that the 
billing instructions for CPT code 993X0 will lead to administrative 
complexity, potentially duplicative payments, and limit our ability to 
determine how much time was spent with the patient using claims data; 
these reasons are discussed in further detail below. We are instead 
proposing to create a single G-code that describes a prolonged service, 
and that applies to CPT codes 99223, 99233, and 99236. This G-code 
would be GXXX1:
    <bullet> GXXX1 Prolonged hospital inpatient or observation care 
evaluation and management service(s) beyond the total time for the 
primary service (when the primary service has been selected using time 
on the date of the primary service); each additional 15 minutes by the 
physician or qualified healthcare professional, with or without direct 
patient contact (list separately in addition to CPT codes 99223, 99233, 
and 99236 for hospital inpatient or observation care evaluation and 
management services). (Do not report GXXX1 on the same date of service 
as other prolonged services for evaluation and management 99358, 99359, 
993X0, 99415, 99416). (Do not report GXXX1 for any time unit less than 
15 minutes).
    We are proposing that the GXXX1 prolonged code can only be applied 
to the highest-level hospital inpatient or observation care visit codes 
(CPT codes 99223, 99233, and 99236), and can only be used when 
selecting the E/M visit level based on time. In other words, we propose 
that a prolonged code would only be applied once the greatest amount of 
time for initial, subsequent, or same-day discharge visits has been 
exceeded. We note that this proposed policy mirrors the policy the CPT 
Editorial Panel will apply to CPT code 993X0 (although we are not 
proposing to use CPT code 993X0).
    We are proposing to use GXXX1 instead of CPT code 993X0 because we 
disagree with the CPT instructions regarding the point in time at which 
the prolonged code should apply. According to the 2023 CPT Codebook, 
CPT code 993X0, which represents a 15-minute interval, would apply to: 
CPT code 99223 when a practitioner reaches 90 minutes; CPT code 99233 
when 65 minutes is reached; and CPT code 99236 when 100 minutes is 
reached. Each of these times represent only 15 minutes more than the 
codes' descriptor times. We disagree with this instruction, and we 
believe that a prolonged code is only applicable after both the total 
time described in the base E/M code descriptor is complete and the full 
15-minutes described by the prolonged code are complete as well. We do 
not believe that the CPT instructions for CPT code 993X0 align with our 
payment policy.
    Additionally, we note that CPT code 99236, per the RUC-recommended 
times, includes not only 85 minutes of intraservice time (performed on 
the date of encounter) but an additional 12 minutes of post-service 
time. The RUC based this recommendation on a survey timeframe which was 
within 3 days of the date of encounter. We are concerned that the CPT 
instructions for CPT code 993X0, as it applies to CPT code 99236, would 
result in duplicative payment, since the 12-minute post-service time 
was factored into the proposed valuation of CPT code 99236. It would be 
inappropriate to pay for a prolonged code based on post-service time 
that is already accounted for in the base code. We believe that the 
instruction for when to apply CPT code 993X0 to base code CPT code 
99236 does not accurately account for this post-service time.
    We propose that the prolonged service period described by GXXX1 can 
begin 15 minutes after the total times (as established in the Physician 
Time File) for CPT codes 99223, 99233, and 99236 have been met. 
Additionally, we propose that the proposed GXXX1 prolonged code would 
be for a 15-minute increment, and the entire 15-minute increment must 
be completed in order to bill GXXX1. Note that for administrative 
simplicity, we propose to round the time when the prolonged service 
period begins to the nearest 5 minutes. For the times below, CPT code 
99223, which has a RUC-proposed total time of 74 minutes, would be 
treated as though it has 75 total minutes. CPT code 99233, which has a 
RUC-proposed total time of 52 minutes, would be treated as though it 
has 50 total minutes; and CPT code 99236, which has a RUC-proposed 
total time of 97 minutes will be treated as though it has 95 total 
minutes. The rounding here is solely for the purpose of calculating a 
proposed prolonged period, and would not affect the total times for 
these CPT codes in the Time File.
    Thus, a practitioner could bill GXXX1 for base code CPT code 99223 
when 105 minutes is reached for an initial visit on the date of 
encounter. For the purposes of applying the proposed prolonged code, 
the CPT code 99223 total time is rounded to 75 minutes on the date of 
encounter. The prolonged service period would begin at 90 minutes, 15 
minutes beyond 75 minutes. A practitioner would bill GXXX1 once the 15-
minute increment for GXXX1 is completed, at minute 105.
    A practitioner could bill GXXX1 for the base code CPT code 99233 
when 80 minutes is reached for a subsequent visit on the date of 
encounter. For the purposes of applying the prolonged code, the CPT 
code 99233 total time is rounded to 50 minutes on the date of 
encounter. The prolonged service period would begin at 65 minutes, 15 
minutes beyond 50 minutes. A practitioner would bill GXXX1 once the 15-
mimute increment for GXXX1 is completed, at minute 80.
    A practitioner could bill GXXX1 for base code CPT code 99236 at 125 
minutes for same-day discharge. For the purposes of applying the 
prolonged code, the CPT code 99236 total time is rounded to 95 minutes 
completed within 3 calendar days of the encounter. The prolonged 
service period would begin at 110 minutes, 15 minutes beyond 95 
minutes. A practitioner could bill GXXX1 once the 15-minute increment 
for GXXX1 is completed, at minute 125.
    Refer to summary Table 18 in the section ``Prolonged Services 
Valuation'' (section II.F.11.e. of this proposed rule) for a chart 
showing the proposed billing timeframe for GXXX1.
    We are also proposing that the proposed GXXX1 would apply to both 
face-to-face and non-face-to-face time spent on the patient's care 
within the survey timeframe. For CPT codes 99223 and 99233, this would 
be time spent on the date of encounter. For CPT code 99236, this would 
be time spent within 3 calendar days of the encounter. Because we are 
proposing that prolonged services without direct patient contact would 
be reportable under GXXX1, we are also proposing that CPT codes 99358 
(Prolonged evaluation and management services before and/or after 
direct patient care, first hour) and 99359 (each additional 30 minutes) 
cannot be billed for base codes CPT codes 99221 through 99223 and 99231 
through 99236. Direct patient care, as currently described by CPT codes 
99358 and 99359, will be reportable under GXXX1. Allowing both GXXX1 
and CPT codes 99358 and 99359 would cause confusion and invite

[[Page 45993]]

duplicative billing for prolonged direct patient care. This is 
consistent with our final policy for O/O E/M visits, which requires the 
use of prolonged code G2212 (Prolonged office or other outpatient 
evaluation and management service(s) beyond the maximum required time 
of the primary procedure which has been selected using total time on 
the date of the primary service; each additional 15 minutes by the 
physician or qualified healthcare professional, with or without direct 
patient contact) for prolonged O/O E/M services. We continue to be 
concerned about program integrity, duplicative payments for time 
counted in both E/M base codes and prolonged E/M services codes, the 
administrative complexity of having multiple prolonged service codes, 
and our ability to tell how much time was spent with the patient using 
claims data (see our previous discussion of these issues in our CY 2020 
PFS final rule at 84 FR 62849 through 62850). If we proposed to adopt 
the CPT codes for prolonged inpatient and observation E/M visits, we 
would not be able to identify the time spent with patients in the 
claims data alone, because we might not know which primary service is 
the companion code to the prolonged service code(s) due to the wide 
service timespan (for prolonged services without direct patient 
contact) and non-specific care settings within the prolonged CPT code 
descriptors.
g. Valuation of Hospital Inpatient or Observation Care Services
    The revised hospital inpatient or observation care codes (CPT codes 
99221 through 99223 and 99231 through 99236) were surveyed for the 
October 2021 RUC meeting. The survey times captured the total time on 
the date of encounter by calendar date. In October 2021, the RUC 
referred these services to be resurveyed because the survey did not 
include a request for distinct time before and after floor/unit time, 
and therefore could not be compared to previous RUC surveys of these 
services. The RUC reviewed the resurveyed inpatient and observation 
services for the January 2022 RUC meeting.
    We propose to accept the RUC recommendations for work RVUs and 
times for CPT codes 99221 (work RVU 1.63, intraservice time 40 minutes, 
total time 40 minutes); 99222 (work RVU 2.60, intraservice time 55 
minutes, total time 55 minutes); 99223 (work RVU of 3.50, intraservice 
time 74 minutes, total time 74 minutes); 99231 (work RVU 1.00, 
intraservice time 25 minutes, total time 25 minutes), 99232 (work RVU 
1.59, intraservice time 36 minutes, total time 36 minutes); 99233 (work 
RVU 2.40, intraservice time 52 minutes, total time 52 minutes); 99234 
(work RVU 2.00, intraservice time 45 minutes, total time 50 minutes); 
99235 (work RVU 3.24, intraservice time 68 minutes, total time 76 
minutes); and 99236 (work RVU 4.30, intraservice time 85 minutes, total 
time 97 minutes).
    There are no PE inputs for these codes.
4. Hospital or Observation Discharge Day Management (CPT Codes 99217, 
99238 and 99239)
a. Coding Changes to Hospital Inpatient or Observation Discharge Day 
Management Services
    Effective January 1, 2023, the CPT Editorial Panel deleted the 
observation discharge code, CPT code 99217 (Observation care discharge 
day management) and revised the two hospital discharge day management 
codes, CPT codes 99238 (Hospital inpatient or observation discharge day 
management; 30 minutes or less) and CPT code 99239 (more than 30 
minutes) so that CPT codes 99238 and 99239 may be billable for 
discharge of hospital inpatient or observation patients.
    We propose to adopt the revised CPT codes 99238 and 99239. We also 
propose to retain our current hospital inpatient policy outlined in the 
Medicare Claims Processing Manual, Chapter 12, 30.6.9.2.A and 
30.6.9.2.E, and expand it to include observation care. Specifically, we 
are proposing that CPT codes 99238 and 99239 are to be billed by the 
practitioner who is personally responsible for discharge service (or, 
in the case of the death of the patient, the physician who personally 
performs the death pronouncement); services furnished by other 
practitioners, including: instructions to the patient, communication 
with the family/caregiver, and coordination of post discharge services 
would be reported as subsequent hospital inpatient or observation care 
with CPT codes 99231, 99232, and 99233. (Refer to the Medicare Claims 
Processing Manual, IOM 100-04, Chapter 12, Manual, IOM 100-04, Chapter 
12, 30.6.9.2.A and 30.6.9.2.E.) This policy aligns with instructions in 
the 2023 CPT Codebook (citation forthcoming).
    We propose to retain our related policy that the same physician may 
not bill a hospital discharge CPT code 99238 or 99239 on the same day 
as a subsequent visit CPT codes 99231 through 99233. (Refer to Medicare 
Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.9.2.C.)
b. Prolonged Services and Hospital Inpatient or Observation Discharge 
Day Management
    As we discussed in section II.F.3. of this proposed rule, as part 
of its E/M revisions, effective January 1, 2023, the CPT Editorial 
Panel deleted CPT code 99356 (Prolonged service in the inpatient or 
observation setting, requiring unit/floor time beyond the usual 
service; first hour) and CPT code 99357 (each additional 30 minutes) 
and replaced them with CPT code 993X0 (Prolonged inpatient or 
observation evaluation and management service(s) time with or without 
direct patient contact beyond the required time of the primary service 
when the primary service level has been selected using total time, each 
15 minutes of total time). CPT codes 99356 and 99357 were not 
previously billable with discharge day management CPT codes 99238 or 
99239. (Refer to, for example, instructions on pages 41-42 of the 2022 
CPT Codebook.) Additionally, according to 2023 CPT Codebook 
instructions, the CPT code 993X0 is not billable with CPT codes 99238 
and 99239. (2023 CPT Codebook citation forthcoming.)
    We propose that a practitioner would not be able to bill prolonged 
services for hospital discharge (CPT code 99238 or 99239). This means 
that CPT codes 993X0, 99358 (Prolonged evaluation and management 
services before and/or after direct patient care, first hour) and 99359 
(each additional 30 minutes), and the proposed GXXX1 code (discussed in 
section II.F.3. of this proposed rule) would not be payable where the 
discharge day management code is CPT codes 99238 or 99239. We believe 
the code descriptors for CPT codes 99238 and 99239 do not allow for 
additional payment of prolonged services. The descriptor for CPT code 
99238 provides for hospital discharge day management, ``30 minutes or 
less.'' If a practitioner spends more than 30 minutes on a hospital 
discharge service for a patient, the practitioner would be able to bill 
CPT code 99239, which is defined in the code descriptor as ``30 minutes 
or more.'' Thus, a prolonged code (including CPT codes 993X0, 99358, 
99359, and our proposed GXXX1) would not be appropriate for CPT code 
99238, because CPT code 99239 accounts for services that exceed 30 
minutes.
    The descriptor for CPT code 99239 states that the code is for ``30 
minutes or more'' of hospital discharge day management services. When 
the RUC surveyed this code, the surveyed timeframe was within 3 
calendar days of the encounter. In other words, the

[[Page 45994]]

descriptor time is 30 minutes or more, completed within 3 calendar days 
of the encounter. Neither the descriptor nor the CPT billing 
instructions provide an upper limit on how many minutes can be reported 
within the 3-day timeframe for CPT code 99239. All face-to-face and 
non-face-to-face activities performed by the practitioner during the 
date of encounter and within 3 calendar days from the date of encounter 
may be counted toward CPT code 99239, as applicable. Prolonged codes 
CPT codes 993X0, 99358, 99359 and our proposed GXXX1 code are intended 
to pay for time not included in the base E/M codes during the surveyed 
timeframe; as it appears that CPT code 99239 already includes all 
services furnished during the surveyed timeframe, we do not believe it 
is appropriate to allow any prolonged codes to be billed with CPT code 
99239 as a base code.
c. Valuation of Hospital Inpatient or Observation Discharge Day 
Management
    The revised discharge day management codes (CPT codes 99238 through 
99239) were surveyed for the January 2022 RUC meeting. We propose to 
accept the RUC recommendations for CPT codes 99238 (work RVU 1.50, 
intraservice time 28 minutes, total time 38 minutes); and 99239 (work 
RVU 2.15, intraservice time 45 minutes, 64 minutes total time).
    We are proposing the RUC-recommended direct PE inputs for CPT codes 
99238 and 99239 without refinement.
5. Emergency Department Visits (CPT Codes 99281-99285)
a. Coding
    We have revalued the ED visit codes under the PFS four times: in 
1997, 2007, 2020, and most recently in 2021 as part of the update for 
O/O E/M visits. In the past, consistent with AMA RUC recommendations, 
we revalued these services such that the values of levels 1 through 3 
of the ED visits were equal to levels 1 through 3 new patient O/O E/M 
visits, and the levels 4 and 5 ED visits were valued higher than the 
levels 4 and 5 new patient O/O E/M visits to reflect higher typical 
intensity. In addition, in the CY 2018 PFS final rule (82 FR 53018), we 
finalized a proposal to nominate all five ED visit codes as potentially 
misvalued, based on information suggesting that the work RVUs for ED 
visits may not appropriately reflect the full resources involved in 
furnishing these services. Specifically, some impacted parties 
expressed concerns that the work RVUs for these services have been 
undervalued given the increased acuity of the patient population and 
the heterogeneity of the sites, such as freestanding and off-campus 
EDs, where ED visits are furnished. Accordingly, the RUC resurveyed and 
reviewed these five codes for the April 2018 RUC meeting, and provided 
a recommendation to CMS for consideration in CY 2020 rulemaking. In the 
CY 2020 PFS final rule (84 FR 62796), we finalized the RUC-recommended 
increases to the work RVUs of 0.48 for CPT code 99281, a work RVU of 
0.93 for CPT code 99282, a work RVU of 1.42 for 99283, a work RVU of 
2.60 for 99284, and a work RVU of 3.80 for CPT code 99285. The RUC did 
not recommend, and we did not finalize, any change in direct PE inputs 
for the codes in this family. We note that the RUC submitted these 
recommended values to CMS prior to the submission of the RUC-
recommended revaluation of the O/O E/M visit code family.
    In response to our finalizing of the RUC-recommended values for the 
ED visits, and to our comment solicitation in the CY 2020 PFS proposed 
rule regarding whether we should revalue certain services commensurate 
with increases to the O/O E/M visits (84 FR 62859 through 62860), a 
commenter submitted a public comment stating that relativity between 
the ED visits and O/O E/M visits should be maintained, and submitted a 
specific recommendation for CPT codes 99283-99285 that was higher than 
the RUC-recommended values. The commenter stated we should preserve the 
relationship between the ED and O/O E/M visit code sets that was 
established in prior years and that they believe would have likely been 
maintained had the O/O E/M visits been reviewed prior to the ED visits. 
In order to avoid the rank order anomaly whereby an ED visit would be 
valued lower than the analogous O/O E/M visit, we proposed and 
eventually finalized the values recommended by this commenter in the CY 
2021 PFS final rule (85 FR 84562). This final policy increased the work 
RVU from 1.42 to 1.60 for CPT code 99283, from 2.60 to 2.74 for CPT 
code 99284, and from 3.80 to 4.00 for CPT code 99285.
    Following the implementation of the revisions to the O/O E/M visits 
for the CPT 2021 code set, the CPT/RUC Workgroup on E/M standardized 
the rest of the E/M sections in the CPT code set. In February 2021, the 
CPT Editorial Panel revised the five ED visit codes to align with the 
principles included in the E/M office visit services by documenting and 
selecting level of service based on medical decision making, effective 
January 1, 2023. The descriptor for CPT code 99281 was revised such 
that the code may not require the presence of a physician or other 
qualified health care professional. The CPT Editorial Panel also 
revised the MDM level in the descriptor for CPT code 99282 from ``low'' 
to ``straightforward'' complexity, and from ``moderate'' to ``low'' 
complexity for CPT code 99283. These five codes were resurveyed and 
reviewed at the April 2021 RUC meeting with recommendations submitted 
to CMS for the CY 2023 PFS rulemaking cycle.
b. Sites of Service and Multiple Same-Day E/M Visits for Emergency 
Department Patients
    As we discussed in the previous section (Hospital Inpatient or 
Observation Care (CPT codes 99218-99236)) the CPT Editorial Panel has 
revised CPT codes 99221 through 99223 to include both inpatient 
hospital and observation care services. (Note our proposal in that 
section regarding billing policy for transitions between ED and 
hospital inpatient or observation care.) We also propose to modify our 
policy regarding when to bill ED codes CPT codes or hospital inpatient 
care (CPT codes 99221 through 99223), as further described in the 
Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.11.E., 
to clarify that these policies apply to observation care billed under 
CPT codes 99221 through 99223 as well. We are proposing that if a 
physician advises their own patient to go to an ED of a hospital for 
inpatient care or observation and the physician subsequently is asked 
by the ED physician to come to the hospital to evaluate the patient and 
to advise the ED physician as to whether the patient should be admitted 
to the hospital, placed in observation status, or sent home, the 
physicians should bill as follows:
    <bullet> If the patient is admitted to the hospital or placed in 
observation status by the patient's personal physician, then the 
patient's personal physician should bill only the appropriate level of 
the initial hospital inpatient or observation care (CPT codes 99221-
99223), because all E/M services provided by that physician in 
conjunction with that admission are considered part of the initial 
hospital inpatient or observation care when performed on the same date 
as the admission. The ED physician who saw the patient in the ED should 
bill the appropriate level of the ED codes.
    <bullet> If the ED physician, based on the advice of the patient's 
personal physician who came to the ED to see the patient, sends the 
patient home, then the ED physician shall bill the

[[Page 45995]]

appropriate level of ED service. The patient's personal physician shall 
also bill the level of ED code that describes the service they provided 
in the ED. If the patient's personal physician does not come to the 
hospital to see the patient, but only advises the ED physician by 
telephone, then the patient's personal physician may not bill the ED 
codes.
    Similarly, we propose that if the ED physician requests that 
another physician evaluate a given patient, the other physician should 
bill an ED visit code. We are also proposing that if the patient is 
admitted by the second physician performing the evaluation, that 
physician shall bill an initial hospital inpatient or observation care 
code (CPT codes 99221 through 99223, as appropriate), and not an ED 
visit code. This policy appears in the Medicare Claims Processing 
Manual, (Pub. 100-04) Chapter 12, 30.6.11.F., and we are clarifying 
that this policy applies to both hospital inpatient and observation 
care billed under CPT codes 99221 through 99223.
    Finally, we note that the 2023 CPT Codebook provides instructions 
that critical care and ED services may be billed on the same day under 
certain circumstances. We refer readers to the CY 2022 PFS final rule 
(86 FR 65163), where we finalized our policy that critical care and ED 
visits may be billed on the same day if performed by the same 
physician, or by physicians in the same group and specialty if there is 
documentation that the E/M service was provided prior to the critical 
care service at a time when the patient did not require critical care, 
that the service is medically necessary, and that the service is 
separate and distinct, with no duplicative elements from the critical 
care service provided later in the day, and that practitioners may bill 
for both services. Practitioners must use modifier -25 on the claim 
when reporting these critical care services. This policy is also in the 
Medicare Claims Processing Manual, IOM 100-04, Chapter 12, 30.6.12.6.
    Refer to the next section, ``Nursing Facility Services'' for 
discussion of policies regarding patients seen in the ED and the 
nursing facility on the same day.
c. Valuation
    We are proposing the RUC-recommended work RVU for four of the five 
codes in the ED Visits family. We are proposing a work RVU of 0.25 for 
CPT code 99281 (Emergency department visit for the evaluation and 
management of a patient, that may not require the presence of a 
physician or other qualified health care professional), a work RVU of 
0.93 for CPT code 99282 (Emergency department visit for the evaluation 
and management of a patient, which requires a medically appropriate 
history and/or examination and straightforward medical decision 
making), a work RVU of 1.60 for CPT code 99283 (Emergency department 
visit for the evaluation and management of a patient, which requires a 
medically appropriate history and/or examination and low level of 
medical decision making), and a work RVU of 4.00 for CPT code 99285 
(Emergency department visit for the evaluation and management of a 
patient, which requires a medically appropriate history and/or 
examination and high level of medical decision making).
    We disagree with the RUC-recommended work RVU of 2.60 for CPT code 
99284 (Emergency department visit for the evaluation and management of 
a patient, which requires a medically appropriate history and/or 
examination and moderate level of medical decision making) and we are 
proposing to maintain the current work RVU of 2.74. The survey 
conducted for CPT code 99284 maintained unchanged a work time of 40 
minutes, and the level of medical decision making in the code's 
descriptor also remains unchanged at ``moderate'' complexity. 
Therefore, we continue to believe that the levels 4 and 5 ED visits are 
more accurately valued higher than the levels 4 and 5 new patient O/O 
E/M visits to reflect their higher typical intensity. This has been the 
historic relationship between these codes, and we previously finalized 
a proposal in the CY 2021 PFS final rule, increasing the work RVU from 
2.60 to 2.74 for CPT code 99284. Given that there has been no change in 
the surveyed work time or level of MDM for this service, we continue to 
believe that the work RVU of 2.74 that we finalized in the CY 2021 rule 
cycle remains the most accurate valuation for CPT code 99284 (85 FR 
84562).
    The RUC did not recommend and we are not proposing any direct PE 
inputs for these five ED visit codes.
d. Prolonged Services
    We are proposing that the prolonged services described by HCPCS 
codes GXXX1-GXXX3 would not be reportable in conjunction with ED visit 
codes, because the ED visit codes are not reported based on the amount 
of time spent with the patient. This proposal is reflected in summary 
Table 18 in section II.F.11.e. of this proposed rule.
6. Nursing Facility Visits (CPT Codes 99304-99318)
a. Coding Overview
    The codes in the Nursing Facility (NF) services family are used to 
report E/M services primarily to patients in nursing facilities and 
skilled nursing facilities. Following the implementation of the 
revisions to the O/O E/M visits (CPT codes 99201 through 99215) for the 
CPT 2021 code set, the CPT/RUC Workgroup on E/M met to standardize the 
rest of the E/M sections in the CPT code set. We have received 
valuation recommendations from the AMA RUC for the Nursing Facility 
Visit codes (CPT codes 99304 through 99318) following completion of its 
survey and revaluation process for these codes. In April 2021, the RUC 
provided us the results of its review, and recommendations for work 
RVUs, practice expense inputs, and physician time (number of minutes) 
for the revised Nursing Facility Visits E/M code set. Therefore, we are 
proposing changes in coding and values for the revised Nursing Facility 
Visits E/M code set. This code set is effective beginning in CY 2023, 
and the proposed values, if finalized, would go into effect with those 
codes as of January 1, 2023. In February 2021, the CPT Editorial Panel 
deleted CPT code 99318, the annual nursing facility assessment code and 
revised the remaining nursing facility code to better align with the 
principles included in the E/M office visit services by documenting and 
selecting level of service based on total time or MDM. The remaining 
codes, initial and subsequent daily visits and nursing facility 
discharge day management codes were revised. Similar to what was done 
for the office visit codes, for CY 2023, we are proposing when total 
time on the date of encounter is used to select the appropriate level 
of a nursing facility visit service code, both the face-to-face and 
non-face-to-face time personally spent by the physician (or other 
qualified health care professional that is reporting the office visit) 
assessing and managing the patient are summed to select the appropriate 
code to bill. Additionally, the codes have new descriptor times, 
assigned for when time is used to select visit level. (We note that we 
are not adopting the CPT Codebook instructions regarding the 
application of prolonged codes to CPT codes 99306 and 99310; see 
additional discussion under the subsection ``Prolonged Codes for NF 
Care'' in this section.) Initial nursing facility care (CPT codes 99304 
through 99306) may be used once per admission, per practitioner, 
regardless of the length of

[[Page 45996]]

stay in the SNF/NF. (2023 CPT Codebook citation forthcoming.)
    These nursing facility visits are noted by the RUC to be typically 
performed in the skilled nursing facility which requires a higher level 
of care than the nursing facility. The survey time captured includes 
pre-service time 1 day before the date of encounter, intra-service time 
is all the time on the date of encounter, and post-service time is 3 
days after the date of encounter. The RUC's recommendations for this 
code family are consistent with the 25th percentile of the survey 
results and is based on a comparison of the survey codes with the 
selected the O/O CPT codes as a crosswalk to the key reference 
services.
    While we have thoroughly reviewed the times and descriptors for all 
the codes in this family, and we are proposing to accept the RUC 
recommendations as explained below, we would like to note our concerns 
regarding instances of inconsistencies and errors where the time 
described in certain CPT code descriptors does not correctly relate to 
the time that would be used to select visit level for the Nursing 
Facility visit, for example CPT code 99306 and 99310 have the same 
times noted in the descriptors where one is an initial visit and one is 
a subsequent visit. In general, the specialty societies and the RUC 
have advocated for increasing the work RVUs for the Nursing Facility 
visits, as compared to their previous values, regardless of some of the 
survey times, on the basis that values for these Nursing Facility visit 
codes should be valued the same as the values for the comparable O/O E/
M visits. We considered the survey results, especially reductions in 
pre, intra, and post service time and note that the comparison to O/O 
E/M visits is not accurate. These code families are incomparable for a 
few reasons, including, but not limited to: (1) the two families have a 
different number/stratification of levels for the visits, thus a one-
to-one crosswalk is not possible; (2) times in the code descriptors 
detailing the typical time spent at the patient's bedside or hospital 
unit vary significantly; and (3) the patient populations differ 
substantially when considering typical patients who require nursing 
facility services versus those in the general beneficiary community. 
Additional reasons are laid out in our overview section above. We do 
not believe that a comparison of these two code families can 
technically be made on a code-by-code basis. However, given the recent 
changes to the O/O E/M visit values that we finalized in the CY 2020 
PFS final rule (84 FR 62846), and our interest in maintaining 
continuity in the overall code set, we are proposing to accept the RUC 
recommendations for the work time values and work RVUs for these 
Nursing Facility visit codes and are seeking public comment on our 
concerns for some of the codes as noted below in this section.
    We are proposing to adopt a number of billing policies reflected in 
our current Medicare Claims Processing Manual, Chapter 12, section 
30.6.13:
    <bullet> We are proposing that the initial comprehensive assessment 
required under 42 CFR 483.30(c)(4) shall be billed as an initial NF 
care visit (CPT code 99304 through 99306). We propose that a 
practitioner may bill the most appropriate initial nursing facility 
care code (CPT codes 99304 through 99306) or subsequent nursing 
facility care code (CPT codes 99307 through 99310), if the practitioner 
furnishes services that meet the code descriptor requirements, even if 
the service is furnished prior to the initial comprehensive assessment 
required under Sec.  483.30.
    A practitioner who bills an initial NF visit (CPT codes 99304 
through 99306) for the initial comprehensive assessment required under 
Sec.  483.30(c)(4) may bill subsequent NF visits (CPT codes 99307 
through 99310), if the practitioner furnishes medically necessary face-
to-face and non-face-to-face care that meets the requirements in the NF 
services code descriptors (CPT codes 99307 through 99310) to the 
beneficiary prior to the completion of the initial comprehensive 
assessment required under Sec.  483.30. We are proposing to allow for 
an initial or subsequent NF visit to be furnished and billed by the 
appropriate practitioner (physician, physician assistant, nurse 
practitioner, or clinical nurse specialist as specified in Sec.  483.30 
for the type of visit furnished) regardless of whether the initial 
comprehensive assessment was performed.
    <bullet> We propose to retain our policy to not pay a physician for 
an ED visit or an office visit and a comprehensive nursing facility 
assessment on the same calendar day, because it would be duplicative 
care. If the practitioner saw the patient in the nursing facility once 
on a given date, they have performed a lot of the work that is included 
in the other visit E/M visits, for example an ED visit. The services 
furnished on the same date and provided in sites other than the nursing 
facility are already bundled into the initial nursing facility care 
code when performed on the same date as the nursing facility admission 
by the same physician.
    We note that the Medicare Claims Processing Manual also states that 
ED visits provided on the same day as a comprehensive nursing facility 
assessment are not paid, regardless of whether the ED and nursing 
facility visits are by the same or different practitioners. We are 
proposing to retain this policy as well. We note that the 2023 CPT 
Codebook does not limit the number of visits that can be billed 
(citation forthcoming.) We are proposing that more than one ED and 
nursing facility visit could not be billed if both visits are furnished 
by the same practitioner on the same date of service.
    <bullet> We propose to adopt the 2023 CPT Codebook guidance that, 
for reporting initial nursing facility care, transitions between 
skilled nursing facility level of care and nursing facility level of 
care do not constitute a new stay. (2023 CPT Codebook citation 
forthcoming.)
    <bullet> We propose that an initial service is one that occurs when 
the patient has not received any professional services from the 
physician or other qualified health care professional or another 
physician or other qualified health care professional of the exact same 
specialty who belongs to the same group during the stay. We propose 
that a subsequent service is one that occurs when the patient has 
received any professional services from the physician or other 
qualified health care professional or another physician or other 
qualified health care professional of the exact same specialty who 
belongs to the same group during the stay. This is the same definition 
that we propose for ``initial'' and ``subsequent'' in the context of 
inpatient and observation services above. According to CPT 
instructions, an ``initial'' service may be reported when the patient 
has not received any professional services from the physician or other 
qualified health care professional or another physician or other 
qualified health care professional of the exact same specialty and 
subspecialty who belongs to the same group practice during the stay. As 
we do not recognize subspecialties, we propose to apply these slightly 
amended definitions of ``initial'' and ``subsequent'' service.
b. Valuation
    For CPT codes 99304 through 99310, we are proposing to adopt the 
RUC-recommended work RVUs for all of the nursing facility codes given 
the new times surveyed by the RUC and specialty societies. 
Specifically, we are proposing a work RVU of 1.50 for CPT code 99304 
(Initial nursing facility care, per day, for the evaluation and 
management of a patient, which

[[Page 45997]]

requires a medically appropriate history and/or examination and 
straightforward or low level of medical decision making. When using 
total time on the date of the encounter for code selection, 25 minutes 
must be met or exceeded.), a work RVU of 2.50 for CPT code 99305 
(Initial nursing facility care, per day, for the evaluation and 
management of a patient, which requires a medically appropriate history 
and/or examination and moderate level of medical decision making. When 
using total time on the date of the encounter for code selection, 35 
minutes must be met or exceeded.), a work RVU of 3.50 for CPT code 
99306 (Initial nursing facility care, per day, for the evaluation and 
management of a patient, which requires a medically appropriate history 
and/or examination and high level of medical decision making. When 
using total time on the date of the encounter for code selection, 45 
minutes must be met or exceeded.), a work RVU of 0.70 for CPT code 
99307 (Subsequent nursing facility care, per day, for the evaluation 
and management of a patient, which requires a medically appropriate 
history and/or examination and straightforward medical decision making. 
When using total time on the date of the encounter for code selection, 
10 minutes must be met or exceeded.), a work RVU of 1.30 for CPT code 
99308 (Subsequent nursing facility care, per day, for the evaluation 
and management of a patient, which requires a medically appropriate 
history and/or examination and low level of medical decision making. 
When using total time on the date of the encounter for code selection, 
15 minutes must be met or exceeded.), a work RVU of 1.92 for CPT code 
99309 (Subsequent nursing facility care, per day, for the evaluation 
and management of a patient, which requires a medically appropriate 
history and/or examination and moderate level of medical decision 
making. When using total time on the date of the encounter for code 
selection, 30 minutes must be met or exceeded.), and a work RVU of 2.80 
for CPT code 99310 (Subsequent nursing facility care, per day, for the 
evaluation and management of a patient, which requires a medically 
appropriate history and/or examination and high level of medical 
decision making. When using total time on the date of the encounter for 
code selection, 45 minutes must be met or exceeded.). We are proposing 
the RUC-recommended direct PE inputs for all the codes in the family, 
CPT codes 99305 through 99310.
    While we are proposing to accept the RUC recommendations for CPT 
code 99306, we considered maintaining the current work RVU of 3.06, 
since there was no change in the overall time. To support their 
recommendation, the RUC cited the survey key reference service, CPT 
code 99205 (Office or other outpatient visit for the evaluation and 
management of a new patient, which requires a medically appropriate 
history and/or examination and high level of medical decision making. 
When using time for code selection, 60-74 minutes of total time is 
spent on the date of the encounter), which has a much higher time noted 
in the descriptor and does not seem to be a valid comparison or support 
the increase in value to the RUC survey 25th percentile. There was no 
change in time for this service, and the code the RUC used for 
comparison has a higher total time. Therefore, we request comment on 
the accuracy of the time noted in the descriptor for CPT code 99306. We 
note that it is not clear to us why CPT code 99306 would have the same 
descriptor time and medical decision making as CPT code 99310, which is 
a subsequent visit, thus appearing like they are the same service. We 
are seeking clarification, especially with regard to the vast 
similarities of these two descriptors noted for these services.
    For CPT code 99308, we are proposing to accept the RUC 
recommendations; however, we considered maintaining the current work 
RVU of 1.16 given there was a decrease in the total time for the 
service and no change in the descriptor time. We are soliciting comment 
regarding the RUC recommendations that the total time be rounded down 
to 15 minutes instead of rounding up to twenty minutes, when using 
total time on the date of the encounter for code selection (minutes 
must be met or exceeded), and are seeking clarification on this 
difference. In light of the changes made to the O/O E/M visits, 
however, we are proposing the RUC-recommended work RVU of 1.30 for CPT 
code 99308, but would appreciate comments regarding rounding.
    For CPT code 99309, we are proposing a work RVU of 1.92. When 
compared to CPT code 99214 (Office or other outpatient visit for the 
evaluation and management of an established patient, which requires a 
medically appropriate history and/or examination and moderate level of 
medical decision making. When using time for code selection, 30-39 
minutes of total time is spent on the date of the encounter), we are 
acknowledging the increase in time required to bill CPT code 99309. We 
note that the descriptor time for CPT code 99309 went up since these 
codes were last revalued. We are focusing on the time in the 
descriptor, and if there is a change in the level of MDM. In light of 
recent changes made to the O/O E/M visits, however, we are proposing 
the RUC-recommended work RVU of 1.92 for CPT code 99309.
    Although we are proposing to adopt all the RUC-recommended work 
RVUs and times for this code family as explained above, we are seeking 
comment regarding the discrepancies in times, which have implications 
both for valuation of individual codes (and for PFS ratesetting in 
general), since the intraservice times and total times are used as 
references for valuing many other services under the PFS. After 
reviewing the RUC recommendations, in conjunction with the revised code 
descriptors and documentation guidelines for CPT codes 99304 through 
99310, we are proposing to accept the RUC-recommended work and time 
values for the revised nursing facility visit codes with the PE 
refinements noted by the RUC for CY 2023.
c. Prolonged Services
    We are proposing that prolonged nursing facility services by a 
physician or NPP would be reportable under GXXX2, which would be used 
when the total time (in the time file) is exceeded by 15 or more 
minutes to account for the additional time spent. The long descriptor 
would be GXXX2 (Prolonged nursing facility evaluation and management 
service(s) beyond the total time for the primary service (when the 
primary service has been selected using time on the date of the primary 
service); each additional 15 minutes by the physician or qualified 
healthcare professional, with or without direct patient contact (list 
separately in addition to CPT codes 99306, 99310 for nursing facility 
evaluation and management services). (Do not report GXXX2 on the same 
date of service as other prolonged services for evaluation and 
management 99358, 99359, 993X0). (Do not report GXXX2 for any time unit 
less than 15 minutes)). We propose that the practitioner would include 
any prolonged service time spent within the surveyed timeframe, which 
includes the day before the visit, the day of the visit, and up to and 
including 3 days after the visit (please see summary Table 18 in 
section II.F.11.e. of this proposed rule). We are proposing that 
prolonged physician or NPP NF services would be reportable when the 
total time (in the physician time file) is exceeded by 15 or more 
minutes which would be once 95 minutes are spent for initial NF visits, 
and once 85 minutes are spent for subsequent NF visits, and for each 
additional 15 minutes furnished thereafter. Consistent with CPT coding

[[Page 45998]]

guidance as indicated below, there would not be any frequency 
limitation; therefore, we are proposing that physicians and NPPs would 
be able to bill GXXX2 for each additional 15-minute increment of time 
beyond the total time for CPT codes 99306 and 99310.
    Since GXXX2 includes time without direct patient contact, there 
would no longer be a need to use CPT codes 99358 and 99359 (prolonged 
E/M visit without direct patient contact) in conjunction with NF 
visits. Therefore, we are proposing to change the payment status for 
CPT codes 99358 and 99359 to ``I'' (Not valid for Medicare purposes. 
Medicare uses another code for reporting of, and payment for, these 
services). This is consistent with our final policy for O/O E/M visits, 
where prolonged time can no longer be reported using CPT codes 99358 
and 99359. We continue to be concerned about program integrity, 
counting time that was not included in the surveyed timeframe, and the 
administrative complexity of having multiple prolonged service codes 
associated with a given primary service (see our previous discussion of 
these issues in our CY 2020 PFS final rule at 84 FR 62849 through 
62850). As we stated in that rule, many other codes are available to 
report prolonged E/M work associated with an E/M visits that occurs 
outside of the timeframe included in the visit, such as CCM, TCM, PCM, 
behavioral health integration (BHI), and other care management service 
codes. We designed these codes to be used to report time spent outside 
the direct patient contact (but still in management/consideration of 
that given patient's case) on dates other than the E/M visit. While 
these care management codes are not identical to the prolonged visit 
codes, they can be used to report a number of similar activities. 
Additional information about those codes can be found on our PFS Care 
Management website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management. We also direct the 
reader to section II.E of this proposed rule, where we propose 
additional care management service codes for pain management and BHI.
    When prolonged nursing facility services are furnished by a 
physician or NPP, they would be reportable under GXXX2. We believe that 
allowing practitioners to report CPT code 993X0 after the minimum time 
requirement for the highest level subsequent visit is met and then 
exceeded by at least 15 minutes would result in double counting time. 
As a specific example, CPT code 99310 requires that 45 minutes must be 
met or exceeded up to 60 minutes. If the reporting practitioner spent 
55 minutes of time, those 55 minutes would be billed and are included 
in the services described by CPT code 99310. After 60 minutes has been 
met, any additional time should be counted toward the 15 minutes 
required to report the add on CPT code for the prolonged service. 
Similar to the policy we finalized in the CY 2020 PFS final rule for 
the O/O E/M visits (84 FR 62849), which states that when the time of 
the reporting physician or NPP is used to select O/O E/M visit level, 
HCPCS code G2212 could be reported when the maximum time for the level 
5 O/O E/M visit is exceeded by at least 15 minutes on the date of 
service.
    In addition, we note that the CPT code descriptor for CPT code 
993X0 does not include nursing facility. Further, the timeframes do not 
align for CPT codes 993X0, 99358, and 99359. The survey time for CPT 
code 993X0 is for time on the date of service, and when the nursing 
facility visit codes were resurveyed by the RUC, the survey time 
included the day before, the day of, and up to and including 3 days 
post the date of service. We are proposing Medicare-specific coding in 
order to avoid duplicative counting of time, administratively simplify 
prolonged service coding, and better enable us to determine how much 
total time was spent with the patient. If we proposed to merely accept 
the CPT prolonged service coding changes, we would not be able to 
identify the time spent with patients in the claims data alone. This is 
because we might not know which primary service is the companion code 
to the prolonged service code(s) due to the wide service timespan (for 
prolonged services without direct patient contact) and non-specific 
care settings within the prolonged CPT code descriptors. Consistent 
with CPT's approach, we are proposing that practitioners and NPPs would 
only be able to report the prolonged services code for NF (GXXX2) in 
conjunction with the highest level codes in the family (CPT code 99306 
and 99310). This would also be consistent with our policy for O/O E/M 
visits (see (84 FR 62849).
7. Nursing Facility Discharge Management (CPT Codes 99315-99316)
a. Coding
    CPT codes 99315 (Nursing facility discharge day management; 30 
minutes or less) and 99316 (Nursing facility discharge day management; 
more than 30 minutes) were identified for RUC review in October 2021 
and were then postponed so that they could be reviewed at the same time 
as the inpatient hospital and observation care codes, in January 2022. 
Due to changes in physician work, changes in technology, patient 
population, and length of stay, the RUC determined that the nursing 
facility discharge services could be reviewed separately from the 
inpatient hospital discharge day services.
    The nursing facility discharge day management codes are used to 
report the total duration of time spent by a physician or other 
qualified health care professional for the final nursing facility 
discharge of a patient. The codes include, as appropriate, final 
examination of the patient and discussion of the NF stay, even if the 
time spent on that date is not continuous. Instructions are given for 
continuing care to all relevant caregivers, as well as for preparation 
of discharge records, prescriptions, and referral forms. These services 
require a face-to-face encounter, which may be performed on a calendar 
date prior to the actual discharge date. The time of the face-to-face 
encounter performed on a date prior to the discharge date is counted 
toward CPT code 99315 and CPT code 99316 and not reported separately.
    We propose to retain our policy that CPT codes 99315 and 99316 (as 
appropriate) shall be reported for a face-to-face visit with the 
patient provided by the physician or the qualified NPP, which is 
required in order to report the SNF/NF discharge day management 
service. The NF discharge day management visit shall be reported for 
the date of the actual visit by the physician or qualified NPP, even if 
the patient is discharged from the facility on a different calendar 
date. (Refer to Medicare Claims Processing Manual, IOM 100-04, Chapter 
12, 30.6.13.I.) Additionally, we are proposing that a physician or 
qualified NPP may report CPT codes 99315 or 99316 for a patient who has 
expired only if the physician or qualified NPP personally performed the 
death pronouncement.
b. Valuation
    We are proposing the RUC-recommended work RVU of 1.50 for CPT code 
99315. We considered maintaining the current work RVU of 1.28 for CPT 
code 99315, based on the total time ratio between the current time of 
40 minutes and the recommended time established by the survey of 40 
minutes. Utilizing our total time ratio methodology this ratio equals 
100 percent, and 100 percent of the current

[[Page 45999]]

work RVU of 1.28, which indicates there is no change to the physician 
service and no change in the physician total time. We believe that 
since the two components of work are time and intensity, significant 
decreases in time should be reflected in decreases to work RVUs. In 
this case, there was no change in total time. However, maintaining CPT 
code 99315 at the current value of a work RVU of 1.28 would cause a 
rank order anomaly with CPT code 99308. Also, given the remaining NF 
codes were revised to align with the principles included in the O/O E/M 
visit services by documenting and selecting level of service based on 
total time or MDM, we concluded that the increase of the work RVU to 
1.50 for CPT code 99315 would be appropriate.
    We are proposing the RUC-recommended work RVU of 2.50 for CPT code 
99316. We considered proposing a work RVU of 2.22 based on the total 
time ratio between the current time of 54 minutes and the recommended 
time established by the survey of 63 minutes. When we reviewed CPT code 
99316, we found that the recommended work RVU was higher than nearly 
all of the other global XXX codes with similar time values, and we do 
not believe that this code would have an anomalously high intensity. As 
we stated earlier, in light of changes made to the O/O E/M visits and 
the changes to include documenting and selecting level of service based 
on total time or MDM, we are proposing the RUC-recommended work RVU of 
2.50 for CPT code 99316. We are proposing the RUC-recommended direct PE 
inputs for CPT code 99315 and the RUC-recommended direct PE inputs for 
CPT code 99316.
c. Prolonged Services
    CPT code 99315 and CPT code 99316, the two codes for nursing 
facility discharge management, are set up as a base code with an add-on 
code with no ceiling of time. Since time on any day can be included 
when billing CPT code 99315 or 99316, there is no need for a prolonged 
service code for either of these two codes. Allowing for a prolonged 
service code for either of these two codes could result in double 
counting a physician or NPP's time spent during a nursing facility 
discharge, which would not be appropriate. Additionally, CPT code 993X0 
does not include Nursing Facility in the descriptor. Therefore, we are 
proposing that prolonged services would not be reportable in 
conjunction with CPT codes 99315 and 99316 (NF discharge day 
management).
8. Annual Nursing Facility Assessment (CPT Code 99318)
a. Coding
    CPT code 99318 (Evaluation and management of a patient involving an 
annual nursing facility assessment, which requires these 3 key 
components: A detailed interval history; A comprehensive examination; 
and Medical decision making that is of low to moderate complexity. 
Counseling and/or coordination of care with other physicians, other 
qualified health care professionals, or agencies are provided 
consistent with the nature of the problem(s) and the patient's and/or 
family's needs. Usually, the patient is stable, recovering, or 
improving. Typically, 30 minutes are spent at the bedside and on the 
patient's facility floor or unit) was recommended for deletion by CPT 
for 2023. In February 2021, the CPT Editorial Panel deleted CPT code 
99318 and revised seven nursing facility codes to align with the 
principles included in the O/O E/M visits by documenting and selecting 
level of service based on total time or MDM.
    We are proposing to accept CPT's deletion of CPT code 99318. Our 
longstanding manual guidance states that an annual nursing facility 
assessment visit code may substitute as meeting one of the required 
physician visits, as specified in 42 CFR 483.30 (c)(1), if the code 
requirements for CPT code 99318 are fully met (Medicare Claims 
Processing Manual (Pub. 100-04) chapter 12, section 30.6.13 (B)). Due 
to the longstanding nature of the manual section, we believe some 
provisions may be outdated, and it is possible to satisfy this 
requirement through other codes. We are seeking comment on whether 
there is a need to keep this code for Medicare purposes. As we consider 
accepting the CPT's deletion of CPT code 99318, we are concerned that 
the absence of a similar code could cause an unwarranted increase in 
valuation of other services under the PFS, and CMS would not have a 
means of tracking how often these visits are occurring. While CPT code 
99308, CPT code 99309, and CPT code 99310 could be used to report the 
required annual visit, if we were to accept deletion of CPT code 99318, 
we believe most of the utilization for that former code would instead 
be reported under CPT code 99309, with a RUC-recommended work RVU of 
1.92 which is described in the valuation section below.
b. Valuation
    After considering the utilization and the need for the service 
described by CPT code 99318, we are proposing to accept the CPT's 
deletion of CPT code 99318. Given the proposed deletion for CPT code 
99318, the RUC recommends that 10 percent of the CPT code 99318 
utilization would go to CPT code 99308, with a work RVU of 1.16; 85 
percent of the utilization would go to CPT code 99309, with a work RVU 
of 1.55; and 5 percent of the utilization would go to CPT code 99310, 
with a work RVU of 2.35.
9. Home or Residence Services (CPT Codes 99341, 99342, 99344, 99345, 
99347-99350)
a. Coding
    In February 2021, the CPT Editorial Panel deleted the nine CPT 
codes in the Domiciliary, Rest Home (for example, Boarding Home), or 
Custodial Care Services code family (CPT codes 99324-99328, and 99334-
99337), and one CPT code in the Home Services family (CPT code 99343), 
to merge these services with the eight remaining home visit services. 
The eight remaining home services CPT codes (99341, 99342, 99344, 
99345, and 99347-99350) were revised to describe Home or Residence 
Services to align with the principles of the O/O E/M visit codes by 
allowing physicians and NPPs to document and select the level of 
service based on total practitioner time or MDM level. For CY 2023, the 
home and domiciliary E/M code family will be revised by the CPT to 
include services provided in assisted living facilities, group homes, 
custodial care facilities, and residential substance abuse treatment 
facilities, as well as a patient's home. These changes include 
combining the domiciliary and rest home CPT codes with the home visit 
CPT codes, resulting in a single family of CPT codes that describe 
these types of services. In addition, CPT revised the descriptors to 
allow reporting that is based on time or MDM level--in alignment with 
the O/O E/M visit CPT codes. The RUC survey time includes pre-service 
time 3 days before the date of encounter, intraservice time on the date 
of encounter, and post-service time that includes 7 days after the date 
of encounter. These eight CPT codes were reviewed at the October 2021 
RUC meeting with recommendations submitted to CMS for the CY 2023 rule 
cycle. The RUC recommended the survey 25th percentile value for all CPT 
codes in the Home or Residence Services code family, except for CPT 
code 99350, for which the RUC recommended the median value.

[[Page 46000]]

b. Valuation
    We are proposing the RUC-recommended work RVU for all eight CPT 
codes in the Home or Residence Services CPT code family. We are 
proposing a work RVU of 1.00 for CPT code 99341 (Home or residence 
visit for the evaluation and management of a new patient, which 
requires a medically appropriate history and/or examination and 
straightforward medical decision making), a work RVU of 1.65 for CPT 
code 99342 (Home or residence visit for the evaluation and management 
of a new patient, which requires a medically appropriate history and/or 
examination and low level of medical decision making), a work RVU of 
2.87 for CPT code 99344 (Home or residence visit for the evaluation and 
management of a new patient, which requires a medically appropriate 
history and/or examination and moderate level of medical decision 
making), a work RVU of 3.88 for CPT code 99345 (Home or residence visit 
for the evaluation and management of a new patient, which requires a 
medically appropriate history and/or examination and high level of 
medical decision making), a work RVU of 0.90 for CPT code 99347 (Home 
or residence visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination straightforward medical decision making), a work RVU of 
1.50 for CPT code 99348 (Home or residence visit for the evaluation and 
management of an established patient, which requires a medically 
appropriate history and/or examination and low level of medical 
decision making), a work RVU of 2.44 for CPT code 99349 (Home or 
residence visit for the evaluation and management of an established 
patient, which requires a medically appropriate history and/or 
examination and moderate level of medical decision making), and a work 
RVU of 3.60 for CPT code 99350 (Home or residence visit for the 
evaluation and management of an established patient, which requires a 
medically appropriate history and/or examination and high level of 
medical decision making).
    We are proposing the RUC-recommended direct PE inputs for CPT codes 
99345, and 99347-99350 without refinement. For CPT codes 99341 and 
99342, we are refining the direct PE inputs by removing supply item 
SK062 (patient education booklet). For CPT code 99344, we are refining 
the direct PE inputs by removing supply items SK062 (patient education 
booklet), SJ053 (swab-pad, alcohol), and SJ061 (tongue depressor). Per 
the PE Summary of Recommendations provided by the RUC, CPT codes 99341, 
99342, 99344, and 99347 would typically have procedures performed on 
the same date of service. For those CPT codes, the RUC stated that they 
removed supplies that would be duplicative, such as gloves, alcohol 
wipes, booklet, and tongue depressor. However, we found that not all of 
these duplicative supplies had been removed from CPT codes 99341, 
99342, and 99344 by the RUC. Therefore, we are proposing to remove 
these duplicative supplies from CPT codes 99341, 99342, and 99344, and 
accept the remaining RUC-recommended direct PE inputs without 
refinement.
c. Prolonged Services for Home or Residence Services
    We are proposing that prolonged home or residence services by a 
physician or NPP would be reportable under GXXX3 (Prolonged home or 
residence evaluation and management service(s) beyond the total time 
for the primary service (when the primary service has been selected 
using time on the date of the primary service); each additional 15 
minutes by the physician or qualified healthcare professional, with or 
without direct patient contact (list separately in addition to CPT 
codes 99345, 99350 for home or residence evaluation and management 
services). (Do not report GXXX3 on the same date of service as other 
prolonged services for evaluation and management 99358, 99359, 99417). 
(Do not report GXXX3 for any time unit less than 15 minutes)). Code 
GXXX3 would be reportable when the total time (in the time file) is 
exceeded by 15 or more minutes. Prolonged services (whether on the same 
date or another date within the surveyed timeframe) would be reportable 
as an add-on code to CPT codes 99345 or 99350 once the practitioner 
spends 15+ minutes beyond the total time finalized for the primary 
service (in time file). We would allow the physician or NPP to include 
any prolonged service time spent within the surveyed timeframe for the 
home or residence services code family, which includes pre-service time 
3 days before the date of encounter, intraservice time on the date of 
encounter, and post-service time that includes 7 days after the date of 
encounter. This means that for CPT code 99345, assuming we finalize the 
RUC-recommended total time of 126 minutes, prolonged services would be 
reportable once 141 or more minutes are spent by a physician or NPP 
providing home or residence services. Likewise, for CPT code 99350, 
assuming we finalize the RUC-recommended total time of 97 minutes, 
prolonged services would be reportable once 112 or more minutes are 
spent by a physician or NPP providing home or residence services. See 
Table 18 in section II.F.11.e. of this proposed rule for a table 
summarizing this information.
    Since we are proposing that prolonged services with or without 
direct patient contact would be reportable under GXXX3, we are also 
proposing that CPT codes 99358 (Prolonged evaluation and management 
service before and/or after direct patient care; first hour), 99359 
(Prolonged evaluation and management service before and/or after direct 
patient care; each additional 30 minutes (List separately in addition 
to code for prolonged service)), and 99417 (Prolonged outpatient 
evaluation and management service(s) time with or without direct 
patient contact beyond the required time of the primary service when 
the primary service level has been selected using total time, each 15 
minutes of total time (List separately in addition to the code of the 
outpatient Evaluation and Management services)) cannot be billed for 
CPT codes 99345 and 99350. We are proposing to change the status 
indicator for CPT codes 99358 and 99359 to ``I,'' which indicates that 
these codes are not valid for Medicare purposes, and that Medicare uses 
another code for reporting of, and payment for, these services.
    We continue to be concerned about program integrity, duplicative 
time, counting time that was not included in the surveyed timeframe, 
the administrative complexity of having multiple prolonged service 
codes, and our ability to determine how much time was spent with the 
patient using claims data. If we proposed to merely accept the CPT 
coding for prolonged home or residence E/M visits, we would not be able 
to identify the time spent with patients in the claims data alone. This 
is because we might not know which primary service is the companion 
code to the prolonged service code(s) due to the wide service timespan 
(for prolonged services without direct patient contact) and non-
specific care settings within the prolonged CPT code descriptors. See 
our previous discussion of these issues in our CY 2020 PFS final rule 
at 84 FR 62849 through 62850. As we stated in that rule, many other 
codes are available to report prolonged E/M work associated with an E/M 
visits that occurs outside of the timeframe included in the visit, such 
as CCM, TCM, PCM, behavioral health integration (BHI), and other care 
management service codes. We designed these codes to be used to report 
time spent outside the direct patient contact on dates other than the 
E/M visit. While

[[Page 46001]]

these care management codes are not identical to the prolonged visit 
codes, they can be used to report a number of similar activities. 
Additional information about those codes can be found on our PFS Care 
Management web page on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management. We 
also direct the reader to section II.E. of this proposed rule where we 
propose additional care management service codes for pain management 
and BHI.
10. Cognitive Assessment and Care Planning (CPT Code 99483)
a. Coding and Valuation
    In February 2021, the CPT Editorial Panel revised CPT code 99483 to 
replace ``50 minutes'' from its descriptor with a revised time value 
determined by the RUC survey to align with the principles underlying 
the O/O E/M CPT codes. The 2023 descriptor time for CPT code 99483 will 
be 60 minutes typical time instead of 50 minutes typical time.
    Due to the increase in the valuation for O/O E/M visits in the CY 
2021 PFS final rule (85 FR 84556), we finalized a proposal to increase 
the value of CPT code 99483 from 3.44 to 3.80 work RVUs as a service 
that is analogous to the O/O E/M visits, because CPT code 99483 
includes a high-level O/O E/M visit. We stated that 99483 includes an 
evaluation of a patient's cognitive functioning and requires collecting 
pertinent history and current cognitive status, all of which require 
MDM of moderate or high complexity. To not create a rank order anomaly 
with CPT code 99205 (Office or other outpatient visit for the 
evaluation and management of a new patient, which requires a medically 
appropriate history and/or examination and high level of medical 
decision making. When using time for code selection, 60-74 minutes of 
total time is spent on the date of the encounter) we increased 99483 by 
using the ratio of the increase between the CY 2020 and CY 2021 values 
for 99205 to commensurate with the increase to CPT code 99205.
    We are not proposing the RUC-recommended work RVU of 3.50, because 
we continue to believe that this service is appropriately valued more 
highly than the analogous O/O E/M visit code, CPT code 99205. Given 
what we view as the appropriate rank order among these services, we do 
not believe a reduction in work RVU, especially with a ten-minute 
increase in physician time, is warranted. In the interest of supporting 
access to this service, we are instead proposing a slight increase from 
the current 3.80 to 3.84 to account for the increase in physician time 
with use of a total time ratio: we divide the RUC-recommended total 
time of 86 by the current total time of 85 and then multiply the 
product by the current work RVU of 3.80 to arrive at 3.84. We are 
proposing the RUC-recommended PE inputs without refinement.
b. Prolonged Services
    We are proposing that prolonged services would not be reportable in 
conjunction with CPT code 99483, because it has a typical time in its 
descriptor, which is not necessarily the actual time spent. 
Accordingly, we would not know when the prolonged services exceeded the 
service time.
11. Prolonged Services Valuation
a. Prolonged Services With Direct Patient Contact (CPT Codes 99354-
99357)
    The CPT Editorial Panel is deleting CPT codes 99354-99357 
(prolonged services with direct patient contact (except with office or 
other outpatient services)). These codes are currently used to report 
prolonged E/M visit time involving direct patient contact, by 
physicians or NPPs, beyond the usual service, in settings other than O/
O settings. We are proposing to accept this deletion, since this work 
would be reported instead under the Medicare-specific codes that we are 
proposing for prolonged physician/NPP time, discussed in each family's 
section above.
b. Prolonged Services on a Different Date Than the E/M (CPT Codes 
99358-99359)
    We note that the RUC resurveyed and provided recommendations to 
revalue these codes. However, we are proposing to assign an inactive 
status to these codes for purposes of PFS payment as discussed above.
c. Prolonged Services Clinical Staff Services (CPT Codes 99415 and 
99416)
    CPT code 99415 was created to describe the first hour of prolonged 
clinical staff services provided in addition to an office E/M visit, 
while CPT code 99416 was created to describe each additional 30 minutes 
beyond that first hour of prolonged clinical staff service time that 
was provided in addition to the O/O E/M visit. For these codes, we are 
proposing the RUC-recommended direct PE inputs without refinement.
d. Valuation of Prolonged Other E/M Services (HCPCS Codes GXXX1, GXXX2 
and GXXX3)
    As discussed above in the Overview section, we do not agree that 
there is inherently greater complexity of patient need or intensity of 
work for E/M visits furnished in non-office settings (for example, 
inpatient, ED, and home settings) compared to the office settings. 
Therefore, we believe it would be more accurate to make payment based 
on the same time increment of physician work in these various settings. 
We are proposing that the three prolonged visit HCPCS G codes GXXX1-
GXXX3 (discussed above under each applicable family) be valued 
identically across settings, based on the RUC recommended value for CPT 
code 99417. Therefore, we are proposing a work RVU of 0.61 for these 
codes with a crosswalk to CPT code 99417. We are likewise proposing 
direct PE inputs for these three codes that are identical to the RUC-
recommended PE inputs for CPT code 99417. For the purposes of 
ratesetting, our utilization for these services will include the 
assumption that one third of the services currently reported with 99356 
will be reported with each of HCPCS codes GXXX1, GXXX2, and GXXX3, and 
one third of the services currently reported with 99357 will be 
reported with each of HCPCS codes GXXX1, GXXX2, and GXXX3. We will 
continue to use HCPCS code G2212 previously finalized in lieu of CPT 
code 99417.
e. Summary of Proposed Time Thresholds To Report Other E/M Prolonged 
Services
    Table 18 summarizes the proposed rules for reporting Other E/M 
prolonged services by physicians or NPPs (See each family section above 
for detailed proposal information).

[[Page 46002]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.055

12. Consultations (CPT Codes 99241-99255)
    The RUC revised code descriptors, deleted two codes, and revalued 
the RVUs of the consultation codes during its October 2021 and January 
2022 RUC meetings. We did not review the RUC recommendations for the 
eight revised consultation codes (CPT codes 99242, 99243, 99244, 99245, 
99252, 99253, 99254, and 99255). We note that CMS stopped paying for 
the consultation codes beginning in CY 2010. We refer readers to 74 FR 
61767 through 61775 where we discuss our payment policy for these 
services.
13. Payment for Multiple Same-Day Visits
    Our manuals include many longstanding policies regarding when more 
than one Other E/M visit can be billed by the same practitioner for the 
same patient on the same date of service, particularly when a patient 
is being transferred among multiple care settings (see the Medicare 
Claims Processing Manual (Pub. 100-04), Chapter 12, which is available 
on our website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c12.pdf). In contrast, CPT reporting 
instructions do not place any limitations on the number of visits that 
can be billed. We are proposing our longstanding manual policies for 
same-day visits (at Pub. 100-04, chapter 12, et al, per topic section), 
and refer the reader to the sections above regarding its application to 
each individual Other E/M family.
14. Split (or Shared) Services
    The split (or shared) ``substantive portion'' policy for services 
furnished in facility settings was reflected in subregulatory guidance 
until it was withdrawn in May of 2021, in response to a petition under 
the Good Guidance regulation. In the CY 2022 PFS final rule (86 FR 
65150 through 65159) we finalized a policy for E/M visits furnished in 
a facility setting, to allow payment to a physician for a split (or 
shared) visit (including prolonged visits), where a physician and NPP 
provide the service together (not necessarily concurrently) and the 
billing physician personally performs a substantive portion of the 
visit. Commenters were generally supportive of our proposals with some 
divide with regard to our proposed definition of substantive portion. 
Some commenters preferred the use of MDM or one of the three key visit 
components as opposed to time for purposes of defining what is the 
substantive portion of the service.
a. Background
    A split (or shared) visit refers to an E/M visit performed by both 
a physician and an NPP in the same group practice. In the non-facility 
(for example, office) setting, the rules for ``incident to'' billing 
apply under this circumstance. However, ``incident to'' services are 
not available for services furnished in a facility setting. 
Longstanding CMS policy has been that, for split (or shared) visits in 
the facility (for example, hospital) setting, the physician can bill 
for the services if they perform a substantive portion of the 
encounter. Section 1833(a)(1)(N) of the Act specifies that payment is 
made for services furnished and billed by a physician at 100 percent of 
the PFS rate, while under section 1833(a)(1)(O)(i) of the Act, NPPs are 
paid for the services they furnish and bill for at a reduced PFS rate 
(85 percent of the PFS).
    We defined substantive portion in the CY 2022 PFS final rule (86 FR 
65152 through 65156) and provided for billing of split (or shared) 
visits in certain settings (86 FR 65156 through 65157) and for certain 
patient types (new and established) (86 FR 65156). After consideration 
of the public comments on the CY 2022 PFS proposed rule, we finalized a 
phased in approach to this policy (86 FR 65153). For CY 2022, we 
finalized the definition substantive portion as one of the following: 
history, or exam, or MDM, or more than half of total time. In the CY 
2022 PFS final rule (86 FR 65152 and 65153), we finalized

[[Page 46003]]

that for CY 2023, the definition of substantive portion as being more 
than half of total time.
    As part of our ongoing engagement with interested parties, we are 
hearing continued concern about the implementation of our phased in 
approach with regard to using only more than half of the total time to 
define the substantive portion of the visit, and continue to receive 
requests that we continue to recognize MDM as the substantive portion. 
Many of these concerns relate to practice patterns where the physician 
does not spend half or more of the time with the patient, as well as 
possible adjustments needed to the practice's internal processes or 
information systems to track visits based on time, rather than MDM. 
After consideration, we are proposing to delay implementation of our 
definition of the substantive portion as more than half of the total 
time until January 1, 2024. We continue to believe it is appropriate to 
define the substantive portion of a split (or shared) service as more 
than half of the total time, and propose that this policy will be 
effective beginning January 1, 2024. While we continue to believe that 
the definition of substantive portion we finalized in the CY 2022 PFS 
final rule is appropriate, delaying implementation of this aspect of 
our policy would also allow for the changes in the coding and payment 
policies for Other E/M visits to take effect for CY 2023, and allows 
for a one-year transition for providers to get accustomed to the new 
changes and adopt their workflow in practice. Additionally, this delay 
allows interested parties another opportunity to comment on this 
policy, and gives us time to consider more recent feedback and evaluate 
whether there is a need for additional rulemaking on this aspect of our 
policy. To reflect the proposed delay, we are proposing to amend our 
regulations text at 42 CFR 415.140 to revise the definition of 
substantive portion, and note the current definition of substantive 
portion applies for visits other than critical care visits furnished in 
CY 2022 and CY 2023.
    We are amending Sec.  415.140 by adding to paragraph (a) ``and 
2023'' after the phrase ``For visits other than critical care visits 
furnished in calendar year 2022''. Therefore, the proposed paragraph 
would specify, for visits other than critical care visits furnished in 
calendar year 2022 and 2023, substantive portion means one of the three 
key components (history, exam or MDM) or more than half of the total 
time spent by the physician and NPP performing the split (or shared) 
visit.
15. Technical Correction to the Conditions for Payment: Split (or 
Shared) Visits
    In the CY 2022 PFS final rule (86 FR 64996), we finalized our 
definition of split (or shared) visits as proposed, and codified it in 
a new section of our regulations at Sec.  415.140. We established 
regulation text for this definition of split (or shared) visits. We 
subsequently discovered an inadvertent typographical error in the 
instructions we used to codify the new regulation at Sec.  415.140. 
Specifically, we added the regulation text for Sec.  415.140 under 
Subpart D, Physician Services in Teaching Settings, rather than Subpart 
C, Part B Carrier Payments for Physician Services to Beneficiaries in 
Providers. Because this regulation was inadvertently included with 
policies relating to teaching physician services, and is more 
appropriately placed with other policies relating to payment for 
physicians' services to beneficiaries in providers, we propose to 
revise our regulation to correct this error. As such, we propose to 
amend part 415 subpart D by removing the regulation at Sec.  415.140 
and relocating that section to subpart C, such that subpart D will then 
begin at Sec.  415.150.
16. Technical Correction for Split (or Shared) Critical Care Services
    In the CY 2022 PFS final rule, starting at 86 FR 65159, we 
finalized a number of billing policies for critical care CPT codes 
99291 (Critical care, evaluation and management of the critically ill 
or critically injured patient; first 30-74 minutes) and 99292 (each 
additional 30 minutes). At 86 FR 65162, we stated in error, ``Similar 
to our proposal for split (or shared) prolonged visits, the billing 
practitioner would first report CPT code 99291 and, if 75 or more 
cumulative total minutes were spent providing critical care, the 
billing practitioner could report one or more units of CPT code 
99292.'' We intended to state that CPT code 99292 could be billed after 
104, not 75, or more cumulative total minutes were spent providing 
critical care. As correctly stated elsewhere in the CY 2022 PFS final 
rule (regarding critical care furnished by single physicians at 86 FR 
65160, and regarding concurrent care furnished by multiple 
practitioners in the same group and the same specialty to the same 
patient at 86 FR 65162), our policy is that CPT code 99291 is 
reportable for the first 30-74 minutes of critical care services 
furnished to a patient on a given date. CPT code 99292 is reportable 
for additional, complete 30-minute time increments furnished to the 
same patient (74 + 30 = 104 minutes). We clarify that our policy is the 
same for critical care whether the patient is receiving care from one 
physician, multiple practitioners in the same group and specialty who 
are providing concurrent care, or physicians and NPPs who are billing 
critical care as a split (or shared) visit.

G. Geographic Practice Cost Indices (GPCIs)

1. Background
    Section 1848(e)(1)(A) of the Act requires us to develop separate 
Geographic Practice Cost Indices (GPCIs) to measure relative cost 
differences among localities compared to the national average for each 
of the three fee schedule components (that is, work, practice expense 
(PE), and malpractice (MP)). We discuss the localities established 
under the PFS below in this section. Although the statute requires that 
the PE and MP GPCIs reflect full relative cost differences, section 
1848(e)(1)(A)(iii) of the Act requires that the work GPCIs reflect only 
one-quarter of the relative cost differences compared to the national 
average. In addition, section 1848(e)(1)(G) of the Act sets a permanent 
1.5 work GPCI floor for services furnished in Alaska beginning January 
1, 2009, and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE 
GPCI floor for services furnished in Frontier States (as defined in 
section 1848(e)(1)(I) of the Act) beginning January 1, 2011. 
Additionally, section 1848(e)(1)(E) of the Act provides for a 1.0 floor 
for the work GPCIs, which has been extended by many successive 
amendments to the statute. The 1.0 floor for the work GPCI under 
section 1848(e)(1)(E) of the Act was most recently extended by section 
101 of the Consolidated Appropriations Act of 2021 (Pub. L. 116-260, 
enacted December 27, 2020) through CY 2023 (that is, for services 
furnished no later than December 31, 2023). Therefore, the proposed CY 
2023 work GPCIs and summarized GAFs reflect the 1.0 work floor. 
Additionally, as required by sections 1848(e)(1)(G) and (I) of the Act, 
the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for 
Frontier States are permanent, and therefore, reflected in the CY 2023 
proposed GPCIs.
    Section 1848(e)(1)(C) of the Act requires us to review and, if 
necessary, adjust the GPCIs at least every 3 years. Section 
1848(e)(1)(C) of the Act requires that, if more than 1 year has elapsed 
since the date of the last previous GPCI adjustment, the adjustment to 
be applied in the first year of the next

[[Page 46004]]

adjustment shall be \1/2\ of the adjustment that otherwise would be 
made. Therefore, since more than 1 year has passed since the previous 
GPCI update was implemented in CY 2020 and 2021, we are proposing to 
phase in \1/2\ of the proposed GPCI adjustment in CY 2023 and the 
remaining \1/2\ of the adjustment for CY 2024.
    We have completed our review of the GPCIs and are proposing new 
GPCIs beginning for CY 2023 in this proposed rule. We also calculate a 
geographic adjustment factor (GAF) for each PFS locality. The GAFs are 
a weighted composite of each PFS locality's proposed work, PE and MP 
expense GPCIs using the national GPCI cost share weights. While we do 
not actually use GAFs in computing the fee schedule payment for a 
specific service, they are a useful metric for purposes of comparing 
overall costs and payments across fee schedule areas. The actual effect 
of GPCIs on payment for any actual service would deviate from the GAF 
to the extent that the proportions of work, PE and MP RVUs for the 
service differ from those reflected in the GAF.
    As noted above, section 101 of the Consolidated Appropriations Act 
of 2021 extended the 1.0 work GPCI floor for services furnished through 
December 31, 2023. Therefore, the proposed CY 2023 work GPCIs and 
summarized GAFs reflect the 1.0 work floor. Additionally, as required 
by sections 1848(e)(1)(G) and (I) of the Act, the 1.5 work GPCI floor 
for Alaska and the 1.0 PE GPCI floor for Frontier States are permanent, 
and therefore, reflected in the CY 2023 proposed GPCIs. See Addenda D 
and E to this proposed rule for the CY 2023 proposed GPCIs and 
summarized GAFs. These Addenda are available on the CMS website under 
the supporting documents section of the CY 2023 PFS proposed rule at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
2. Payment Locality Background
    Prior to 1992, Medicare payments for physicians' services were made 
under the reasonable charge system. Payments under this system largely 
reflected the charging patterns of physicians, which resulted in large 
differences in payment for physicians' services among types of 
services, physician specialties and geographic payment areas.
    Local Medicare carriers initially established 210 payment 
localities, to reflect local physician charging patterns and economic 
conditions. These localities changed little between the inception of 
Medicare in 1967 and the beginning of the PFS in 1992. In 1994, we 
undertook a study that culminated in a comprehensive locality revision 
(based on locality resource cost differences as reflected by the GPCIs) 
that we implemented in 1997. The development of the current locality 
structure is described in detail in the CY 1997 PFS final rule (61 FR 
34615) and the subsequent final rule with comment period (61 FR 59494). 
The revised locality structure reduced the number of localities from 
210 to 89, and increased the number of Statewide localities from 22 to 
34.
    Section 220(h) of the Protecting Access to Medicare Act (PAMA) 
(Pub. L. 113-93, enacted April 1, 2014) required modifications to the 
payment localities in California for payment purposes beginning with 
2017. As a result, in the CY 2017 PFS final rule (81 FR 80265 through 
80268) we established 23 additional localities, increasing the total 
number of PFS localities from 89 to 112. The current 112 payment 
localities include 34 Statewide areas (that is, only one locality for 
the entire State) and 75 localities in the other 16 States, with 10 
States having two localities, two States having three localities, one 
State having four localities, and three States having five or more 
localities. The remainder of the 112 PFS payment localities are 
comprised as follows: the combined District of Columbia, Maryland, and 
Virginia suburbs; Puerto Rico; and the Virgin Islands. We note that the 
localities generally represent a grouping of one or more constituent 
counties.
    The current 112 fee schedule areas, also referred to as payment 
localities, are defined alternatively by State boundaries (Statewide 
areas for example, Wisconsin), metropolitan areas (for example, 
Metropolitan St. Louis, MO), portions of a metropolitan area (for 
example, Manhattan), or rest-of-State areas that exclude metropolitan 
areas (for example, Rest of Missouri). This locality configuration is 
used to calculate the GPCIs that are in turn used to calculate 
geographically adjusted payments for physicians' services under the 
PFS.
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73261), changes to the PFS locality structure would generally result in 
changes that are budget neutral within a State. For many years, before 
making any locality changes, we have sought consensus from among the 
professionals whose payments would be affected. We refer readers to the 
CY 2014 PFS final rule with comment period (78 FR 74384 through 74386) 
for further discussion regarding additional information about locality 
configuration considerations.
3. GPCI Update
    As required by the statute, we developed GPCIs to measure relative 
cost differences among payment localities compared to the national 
average for each of the three fee schedule components (that is, work, 
PE, and MP). The changes to the proposed CY 2023 GPCIs for each 
locality reflect the updated resource cost data in each area to better 
adjust PFS payments for geographic cost differences compared to 
national average costs. We note that the changes in the proposed GPCIs 
reflect the statutory floors and limitations on variation discussed 
above that may advantage some rural localities. We describe the data 
sources and methodologies we use to calculate each of the three GPCIs 
below in this section. Additional information on the CY 2023 GPCI 
update is available in an interim report, ``Interim Report for the CY 
2023 Update of GPCIs and MP RVUs for the Medicare PFS,'' on our website 
located under the supporting documents section for the CY 2023 PFS 
proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
a. Work GPCIs
    The work GPCIs are designed to reflect the relative cost of 
physician labor by Medicare PFS locality. As required by statute, the 
work GPCI reflects one quarter of the relative wage differences for 
each locality compared to the national average.
    To calculate the work GPCIs, we use wage data for seven 
professional specialty occupation categories, adjusted to reflect one-
quarter of the relative cost differences for each locality compared to 
the national average, as a proxy for physicians' wages. Physicians' 
wages are not included in the occupation categories used in calculating 
the work GPCI because Medicare payments are a key determinant of 
physicians' earnings. Including physician wage data in calculating the 
work GPCIs would potentially introduce some circularity to the 
adjustment since Medicare payments typically contribute to or influence 
physician wages. That is, including physicians' wages in the physician 
work GPCIs would, in effect, make the indices, to some extent, 
dependent upon Medicare payments.
    The work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based 
on professional earnings data from the 2000 Census. However, for the CY 
2011 GPCI update (75 FR 73252), the 2000 data were outdated and wage 
and earnings data were not available from the more

[[Page 46005]]

recent Census because the ``long form'' was discontinued. Therefore, we 
used the median hourly earnings from the 2006 through 2008 Bureau of 
Labor Statistics (BLS) Occupational Employment Statistics (OES) wage 
data as a replacement for the 2000 Census data. The BLS OES data meet 
several criteria that we consider to be important for selecting a data 
source for purposes of calculating the GPCIs. For example, the BLS OES 
wage and employment data are derived from a large sample size of 
approximately 200,000 establishments of varying sizes nationwide from 
every metropolitan area and can be easily accessible to the public at 
no cost. Additionally, the BLS OES is updated regularly, and includes a 
comprehensive set of occupations and industries (for example, 800 
occupations in 450 industries). For the CY 2014 GPCI update, we used 
updated BLS OES data (2009 through 2011) as a replacement for the 2006 
through 2008 data to compute the work GPCIs; for the CY 2017 GPCI 
update, we used updated BLS OES data (2011 through 2014) as a 
replacement for the 2009 through 2011 data to compute the work GPCIs; 
and for the CY 2020 GPCI update, we used updated BLS data (2014 through 
2017) as a replacement for the 2011 through 2014 data to compute the 
work GPCIs.
    Because of its reliability, public availability, level of detail, 
and national scope, we believe the BLS OES data continue to be the most 
appropriate source of wage and employment data for use in calculating 
the work GPCIs (and as discussed below, the employee wage component and 
purchased services component of the PE GPCI). Therefore, for the CY 
2023 GPCI update, we used updated BLS OES data (2017 through 2020) as a 
replacement for the 2014 through 2017 data to compute the proposed work 
GPCIs.
b. Practice Expense (PE) GPCIs
    The PE GPCIs are designed to measure the relative cost difference 
in the mix of goods and services comprising PEs (not including MP 
expenses) among the PFS localities as compared to the national average 
of these costs. Whereas the physician work GPCIs (and as discussed 
later in this section, the MP GPCIs) are comprised of a single index, 
the PE GPCIs are comprised of four component indices (employee wages; 
purchased services; office rent; and equipment, supplies and other 
miscellaneous expenses). The employee wage index component measures 
geographic variation in the cost of the kinds of skilled and unskilled 
labor that would be directly employed by a physician practice. Although 
the employee wage index adjusts for geographic variation in the cost of 
labor employed directly by physician practices, it does not account for 
geographic variation in the cost of services that typically would be 
purchased from other entities, such as law firms, accounting firms, 
information technology consultants, building service managers, or any 
other third-party vendor. The purchased services index component of the 
PE GPCI (which is a separate index from employee wages) measures 
geographic variation in the cost of contracted services that physician 
practices would typically buy. For more information on the development 
of the purchased service index, we refer readers to the CY 2012 PFS 
final rule with comment period (76 FR 73084 through 73085). The office 
rent index component of the PE GPCI measures relative geographic 
variation in the cost of typical physician office rents. For the 
medical equipment, supplies, and miscellaneous expenses component, we 
believe there is a national market for these items such that there is 
not significant geographic variation in costs. Therefore, the 
equipment, supplies and other miscellaneous expense cost index 
component of the PE GPCI is given a value of 1.000 for each PFS 
locality.
    For the previous update to the GPCIs (implemented in CY 2020), we 
used 2014 through 2017 BLS OES data to calculate the employee wage and 
purchased services indices for the PE GPCI. As discussed previously in 
this section, because of its reliability, public availability, level of 
detail, and national scope, we continue to believe the BLS OES is the 
most appropriate data source for collecting wage and employment data. 
Therefore, in calculating the proposed CY 2023 GPCI update, we used 
updated BLS OES data (2017 through 2020) as a replacement for the 2014 
through 2017 data for purposes of calculating the employee wage 
component and purchased service index component of the PE GPCI.
    In calculating the proposed CY 2023 GPCI update for the office rent 
index component of the PE GPCI, we used the 2015 through 2019 American 
Community Survey (ACS) 5-year estimates as a replacement for the 2013 
through 2017 ACS data. The 2016 through 2020 5-year estimates were 
supposed to be released in December 2021, but the release date was 
delayed to March 17, 2022. Therefore, the recent 2015 through 2019 5-
year estimates, which preceded any COVID-19 impacts, were used in the 
CY 2023 GPCI update, rather than the 2016 through 2020 ACS data, which 
were not publicly released in time for the development of this proposed 
rule. The Census Bureau noted that COVID-19 impacted data collection 
for the 2020 ACS, and the resulting challenges have the potential to 
affect the quality of the data. In particular, the Census Bureau noted 
that there were lower response rates, and nonresponse bias was found in 
the data collected for 2020.\71\ We will analyze the ACS data collected 
in 2020 and subsequent years that occurred during the COVID-19 
pandemic, and consider using those data for the next GPCI update after 
we better understand their integrity and validity for our purposes. 
Because the office rent index is based on 5-year estimates, we expect 
minimal impact from the non-response bias in the CY 2020 data on the 
next GPCI update, but we will examine the subsequent years' ACS data 
that could be similarly impacted by conditions during the COVID-19 
pandemic. Because the 2020 ACS data were not released in time for us to 
use them in the development of this proposed rule, and the public would 
not have an opportunity to comment on the use of those data if we were 
to adjust our proposed GPCIs in the final rule to reflect the 2020 ACS 
data, we will not consider using the 2020 ACS data for the CY 2023 
final GPCIs.
---------------------------------------------------------------------------

    \71\ https://www.census.gov/library/working-papers/2021/acs/2021_CensusBureau_01.html.
---------------------------------------------------------------------------

c. Malpractice Expense (MP) GPCIs
    The MP GPCIs measure the relative cost differences among PFS 
localities for the purchase of professional liability insurance (PLI). 
To ensure that premium data are homogenous and comparable across 
geographic areas, data were collected for policies with uniform 
coverage limits of $1 million per occurrence and $3 million aggregate 
($1 million/$3 million). The MP GPCIs are calculated based on insurer 
rate filings of premium data for $1 million/$3 million mature claims-
made policies (policies for claims made rather than losses occurring 
during the policy term). For the CY 2020 GPCI update, we used premium 
data presumed in effect as of December 10, 2017. The proposed CY 2023 
MP GPCI update reflects premium data presumed in effect no later than 
December 31, 2020. We note that we finalized a few technical 
refinements to the MP GPCI methodology in CY 2017, and refer readers to 
the CY 2017 PFS final rule (81 FR 80270) for additional discussion of 
those.
d. GPCI Cost Share Weights
    For the CY 2023 GPCIs, we are proposing to continue to use the 
current 2006-based MEI cost share weights for

[[Page 46006]]

determining the proposed PE GPCI values. Specifically, we use the cost 
share weights to weight the four components of the PE GPCI: employee 
compensation, office rent, purchased services, and medical equipment, 
supplies, and other miscellaneous expenses, as shown in Table 22. We 
refer readers to the CY 2014 PFS final rule with comment period (78 FR 
74382 through 74383), for further discussion regarding the 2006-based 
MEI cost share weights revised in CY 2014 that we also finalized for 
use in the CY 2017 and CY 2020 GPCI updates.
    We note that we are proposing to rebase and revise the MEI cost 
share weights for CY 2023, and we refer readers to the detailed 
discussion in section II.M. of this proposed rule, but we are proposing 
to maintain the use of the current 2006-based MEI cost share weights 
for the CY 2023 GPCIs, thus delaying the implementation of the rebased 
and revised MEI cost share weights for this purpose. We refer readers 
to our discussion about using the proposed rebased and revised MEI cost 
share weights for purposes of proportioning the work, PE, and MP RVU 
pools in PFS ratesetting and for the purposes of updating the GPCIs for 
CY 2023 in sections II.B. and VII. of this proposed rule. In those 
sections, we discuss our considerations for updating the MEI cost share 
weights for the RVUs and the GPCIs and the potential redistributive 
impact that making such a change would have on PFS payments. We have 
historically updated the GPCI cost share weights to make them 
consistent with the most recent update to the MEI, which was most 
recently done for CY 2014 (78 FR 74382 through 74383). However, in 
light of the overall impacts of making this change and in the interest 
of maintaining stability in payments, we are proposing to maintain the 
use of the current 2006-based MEI cost share weights for the CY 2023 
proposed PE GPCIs. We believe that doing so will allow interested 
parties the opportunity to review and comment on the proposed rebased 
and revised MEI cost share weights discussed in section II.M. of this 
proposed rule and their potential impacts before we actually use such 
rebased and revised MEI cost share weights for purposes of 
proportioning the work, PE, and MP RVU pools in PFS ratesetting and 
updating the GPCIs. This approach would maintain consistency in the 
data used to update both the GPCI and PFS ratesetting inputs for CY 
2023; delaying implementation of the rebased and revised MEI cost share 
weights is consistent with our efforts to balance payment stability and 
predictability with incorporating new data through more routine 
updates. We refer readers to section VII. of this proposed rule for 
additional discussion on this issue and impacts as it relates to PFS 
ratesetting and the GPCI update for CY 2023. We also refer readers to 
the comment solicitation in section II.B. of this proposed rule, where 
we discuss our ongoing efforts to update data inputs for PE to aid 
stability, transparency, efficiency, and data adequacy. In addition, we 
direct readers to the CY 2011 PFS final rule (75 FR 73256) where we 
similarly delayed implementation of updated MEI cost share weights in 
response to commenters' concerns about ongoing analysis that would 
inform future GPCI changes and the reallocation of labor-related costs 
from the medical equipment and supplies and miscellaneous component to 
the employee compensation component of the PE GPCI.
    In the CY 2011 PFS final rule (75 FR 73256), we acknowledged that 
we typically update the GPCI cost share weights concurrently with the 
most recent MEI rebasing and revision, but in consideration of the 
commenters' concerns in response to the proposed rule, we did not use 
the revised cost share weights for the CY 2011 GPCIs and instead 
finalized the implementation of the rebased and revised MEI cost share 
weights through subsequent rulemaking. We invite comments on the delay 
in implementation of the MEI cost share weights for purposes of the CY 
2023 GPCIs and PFS ratesetting, given the impacts discussed in section 
VII. of this proposed rule. We are also soliciting comments on how best 
to proceed with implementation of the rebased and revised MEI cost 
share weights in the future. More specifically, we are seeking comment 
on how best to incorporate the MEI cost share weights into the PE GPCI 
if we were to implement them outside the statutorily required triennial 
update in which we phase in all aspects of the GPCI update through the 
previously discussed 2-year (\1/2\ in each year) phase-in required by 
section 1848(e)(1)(C) of the Act. Section 1848(e)(1)(C) of the Act 
requires that, if more than one year has elapsed since the date of the 
last GPCI adjustment, the adjustment to be applied in the first year of 
the next adjustment shall be \1/2\ of the adjustment that otherwise 
would be made. Therefore, specifically, we are soliciting comment on 
potentially incorporating the rebased and revised MEI cost share 
weights into the CY 2024 GPCIs. Notably, we would not be required by 
statute to phase in the adjustment over 2 years as specified in section 
1848(e)(1)(C) of the Act because, in CY 2024, no more than one year 
would have elapsed since the last GPCI adjustment. Therefore, we are 
also seeking comment on whether it would be appropriate to use a multi-
year transition to incorporate the rebased and revised MEI cost share 
weights for purposes of the PE GPCI and PFS ratesetting as we have done 
in the past when incorporating other new data into the PFS payment 
methodology (for example, the clinical labor update), or if, because 
the MEI cost share weights only impact the composition of the PE GPCI, 
such a transition would not be warranted. If we were to instead apply 
the rebased and revised MEI cost share weights for purposes of the PE 
GPCI and PFS ratesetting for CY 2025 or later, we would be required 
under section 1848(e)(1)(C) of the Act to phase in the GPCI adjustments 
over 2 years. We are seeking comments on whether, in that case, it 
would be appropriate to similarly apply a transition to implement the 
MEI cost share weights for purposes of PFS ratesetting as well, and 
refer readers to section II.B and VII. of this proposed rule for more 
discussion regarding the alternatives considered and impacts of a 
phase-in of the rebased and revised MEI cost share weights in PFS 
ratesetting. The proposed CY 2023 GPCI cost share weights are displayed 
in Table 19. We note that the proposed rebased and revised cost share 
weights discussed in detail in section II.M. of this proposed rule are 
also displayed in Table 19 for awareness and for comment solicitations 
regarding potential future rulemaking and GPCI updates.

[[Page 46007]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.056

e. PE GPCI Floor for Frontier States
    Section 10324(c) of the Affordable Care Act added a new 
subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0 
PE GPCI floor for physicians' services furnished in Frontier States 
effective January 1, 2011. In accordance with section 1848(e)(1)(I) of 
the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for 
physicians' services furnished in States determined to be Frontier 
States. In general, a Frontier State is one in which at least 50 
percent of the counties are ``frontier counties,'' which are those that 
have a population per square mile of less than 6. For more information 
on the criteria used to define a Frontier State, we refer readers to 
the FY 2011 Inpatient Prospective Payment System (IPPS) final rule (75 
FR 50160 through 50161). There are no changes in the States identified 
as Frontier States for the CY 2023 PFS proposed rule. The qualifying 
States are: Montana; Wyoming; North Dakota; South Dakota; and Nevada. 
In accordance with statute, we will apply a 1.0 PE GPCI floor for these 
States in CY 2023.
f. Methodology for Calculating GPCIs in the U.S. Territories
    Prior to CY 2017, for all the island territories other than Puerto 
Rico, the lack of comprehensive data about unique costs for island 
territories had minimal impact on GPCIs because we used either the 
Hawaii GPCIs (for the Pacific territories: Guam; American Samoa; and 
Northern Mariana Islands) or used the unadjusted national averages (for 
the Virgin Islands). In an effort to provide greater consistency in the 
calculation of GPCIs given the lack of comprehensive data regarding the 
validity of applying the proxy data used in the States in accurately 
accounting for variability of costs for these island territories, in 
the CY 2017 PFS final rule (81 FR 80268 through 80270), we finalized a 
policy to treat the Caribbean Island territories (the Virgin Islands 
and Puerto Rico) in a consistent manner. We do so by assigning the 
national average of 1.0 to each GPCI index for both Puerto Rico and the 
Virgin Islands. We refer readers to the CY 2017 PFS final rule for a 
comprehensive discussion of this policy.
g. California Update to the Fee Schedule Areas Used for Payment Under 
Section 220(h) of the Protecting Access to Medicare Act
    Section 220(h) of the PAMA added a new section 1848(e)(6) to the 
Act that modified the fee schedule areas used for payment purposes in 
California beginning in CY 2017. Prior to CY 2017, the fee schedule 
areas used for payment in California were based on the revised locality 
structure that was implemented in 1997 as previously discussed. 
Beginning in CY 2017, section 1848(e)(6)(A)(i) of the Act required that 
the fee schedule areas used for payment in California must be 
Metropolitan Statistical Areas (MSAs) as defined by the Office of 
Management and Budget (OMB) as of December 31 of the previous year; and 
section 1848(e)(6)(A)(ii) of the Act required that all areas not 
located in an MSA must be treated as a single rest-of-State fee 
schedule area. The resulting modifications to California's locality 
structure increased its number of fee schedule areas from 9 under the 
current locality structure to 27 under the MSA-based locality 
structure; although for the purposes of payment, the actual number of 
fee schedule areas under the MSA-based locality structure is 32. We 
refer readers to the CY 2017 PFS final rule (81 FR 80267) for a 
detailed discussion of this operational decision.
    Section 1848(e)(6)(D) of the Act defined transition areas as the 
counties in fee schedule areas for 2013 that were in the rest-of-State 
locality, and locality 3, which was comprised of Marin County, Napa 
County, and Solano County. Section 1848(e)(6)(B) of the Act specified 
that the GPCI values used for payment in a transition area are to be 
phased in over 6 years, from 2017 through 2022, using a weighted sum of 
the GPCIs calculated under the new MSA-based locality structure and the 
GPCIs calculated under the PFS locality structure that was in place 
prior to CY 2017. That is, the GPCI values applicable for these areas 
during this transition period were a blend of what the GPCI values 
would have been for California under the locality structure that was in 
place prior to CY 2017, and what the GPCI values would be for 
California under the MSA-based locality structure. For example, in CY 
2020, which represented the fourth year of the transition period, the 
applicable GPCI values for counties that were previously in the rest-
of-State locality or locality 3 and are now in MSAs were a blend of \2/
3\ of the GPCI value calculated for the year under the MSA-based 
locality structure, and \1/3\ of the GPCI value calculated for the year 
under the locality structure that was in place prior to CY 2017. The 
proportions continued to shift by \1/6\ in each subsequent year so 
that, by CY 2021, the applicable GPCI values for counties within 
transition areas were a blend of \5/6\ of the GPCI value for the year 
under the MSA-based locality structure, and \1/6\ of the GPCI value for 
the year under the locality structure that was in place prior to CY 
2017. Beginning in CY 2022, the applicable GPCI values for counties in 
transition areas were the values calculated solely under the new MSA-
based locality structure; therefore, the phase-in for

[[Page 46008]]

transition areas is complete. Additionally, section 1848(e)(6)(C) of 
the Act establishes a hold harmless requirement for transition areas 
beginning with CY 2017; whereby, the applicable GPCI values for a year 
under the new MSA-based locality structure may not be less than what 
they would have been for the year under the locality structure that was 
in place prior to CY 2017. There are 58 counties in California, 50 of 
which were in transition areas as defined in section 1848(e)(6)(D) of 
the Act. The eight counties that were not within transition areas are: 
Orange; Los Angeles; Alameda; Contra Costa; San Francisco; San Mateo; 
Santa Clara; and Ventura counties. We note that while the phase-in for 
transition areas is no longer applicable, the hold harmless requirement 
is not time-limited, and therefore, is still in effect.
    For the purposes of calculating budget neutrality and consistent 
with the PFS budget neutrality requirements as specified under section 
1848(c)(2)(B)(ii)(II) of the Act, we finalized the policy to start by 
calculating the national GPCIs as if the fee schedule areas that were 
in place prior to CY 2017 are still applicable nationwide; then, for 
the purposes of payment in California, we override the GPCI values with 
the values that are applicable for California consistent with the 
requirements of section 1848(e)(6) of the Act. This approach to 
applying the hold harmless requirement is consistent with the 
implementation of the GPCI floor provisions that have previously been 
implemented--that is, as an after-the-fact adjustment that is made for 
purposes of payment after both the GPCIs and PFS budget neutrality have 
already been calculated.
    Additionally, section 1848(e)(1)(C) of the Act requires that, if 
more than 1 year has elapsed since the date of the last GPCI 
adjustment, the adjustment to be applied in the first year of the next 
adjustment shall be \1/2\ of the adjustment that otherwise would be 
made. For a comprehensive discussion of this provision, transition 
areas, and operational considerations, we refer readers to the CY 2017 
PFS final rule (81 FR 80265 through 80268).
    (1) Proposed refinement to number of unique fee schedule areas in 
California.
    In the CY 2020 final rule (84 FR 62622), a commenter indicated that 
some of the distinct fee schedule areas that were used during the 
period between CY 2017 and CY 2018 are no longer necessary. 
Specifically, with regard to the Los Angeles-Long Beach-Anaheim MSA, 
which contains 2 counties (across two unique locality numbers, 18 and 
26) that are not transition areas, we acknowledge that we only needed 
more than one unique locality number for that MSA for payment purposes 
in CY 2017, which was the first year of the implementation of the MSA-
based payment locality structure. Neither of the counties in the Los 
Angeles-Long Beach-Anaheim MSA (Orange County and Los Angeles County) 
are transition areas under section 1848(e)(6)(D) of the Act. Therefore, 
the counties were not subject to the aforementioned GPCI value 
incremental phase-in (which is no longer applicable) or the hold-
harmless provision at section 1848(e)(6)(C) of the Act. Similarly, the 
San Francisco-Oakland-Berkeley MSA contains four counties--San 
Francisco, San Mateo, Alameda, and Contra Costa counties--across three 
unique locality numbers, 05, 06, and 07. These counties are not 
transition areas and will receive the same GPCI values, for payment 
purposes, going forward. In response to the comment, we acknowledged 
that we did not propose any changes to the number of fee schedule areas 
in California, but would consider the feasibility of a technical 
refinement to consolidate into fewer unique locality numbers, and if we 
determined that consolidation was operationally feasible, we would 
propose the technical refinement in future rulemaking. This refinement 
would ultimately change the number of distinct fee schedule areas for 
payment purposes in California from 32 to 29. In light of the 
foregoing, for CY 2023 we are proposing to identify the Los Angeles-
Long Beach-Anaheim MSA, containing Orange County and Los Angeles 
County, by one unique locality number, 18, as opposed to two, thus 
retiring locality number 26, as it is no longer needed. Similarly, we 
are proposing to identify the San Francisco-Oakland-Berkeley MSA 
containing San Francisco, San Mateo, Alameda, and Contra Costa counties 
by one unique locality number, 05, as opposed to four, thus retiring 
locality numbers 06 and 07, as they are no longer needed. Additionally, 
we would modify the MSA names as follows: the San Francisco-Oakland-
Berkeley (San Francisco Cnty) locality (locality 05) would become San 
Francisco-Oakland-Berkeley (San Francisco/San Mateo/Alameda/Contra 
Costa Cnty), and Los Angeles-Long Beach-Anaheim (Los Angeles Cnty) 
locality (locality 18) would become Los Angeles-Long Beach-Anaheim (Los 
Angeles/Orange Cnty). We note that because Marin County is in a 
transition area and subject to the hold harmless provision at section 
1848(e)(6)(C) of the Act, we need to retain a unique locality number 
for San Francisco-Oakland-Berkeley (Marin Cnty), locality 52. We are 
seeking comment on the proposed technical refinements to consolidate 
unique fee schedule areas and their locality numbers in California 
where the unique localities are not operationally necessary. We note 
that these changes, if finalized, would not have any payment 
implications under the PFS.
h. Refinements to the GPCI Methodology
    In the process of calculating GPCIs for the purposes of this 
proposed rule, we identified four technical refinements to the 
methodology that we are proposing because they would yield improvements 
over the current method; these refinements are applicable to the work 
and MP GPCIs, the employee wage index component of the PE GPCI, and the 
GAFs.
    We conducted a thorough review of the BLS OES occupation codes 
within each of the seven occupation groups used in past updates to 
track and document the changes over time. As new BLS OES data are 
released, the availability of specific occupation codes is subject to 
change, and it is possible that new codes can be added, changed, or 
removed over time; therefore, we believe it is important to 
periodically review and update the occupation groups and codes based on 
our review during the GPCI updates. We reviewed the occupation codes 
and groups used to capture geographic variation in professional wages 
to assess other potential codes and groups that could be used in 
addition to the current selections to calculate the work GPCI, with 
significant consideration given to the extent to which the data exist 
in the file (data existence) and how well the occupation codes are 
represented in the data (data sufficiency). Based on our review, we are 
proposing the addition of two new occupation groups (and their 
corresponding occupation codes), Management Occupations and Business 
and Financial Operation Occupations, to the preexisting seven 
occupation groups for CY 2023, as shown in Table 20.
BILLING CODE 4120-01-P

[[Page 46009]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.057

    We are also proposing to add four occupation codes to the Computer, 
Mathematical, Life, and Physical Science group, and three occupation 
codes to the Social Science, Community and Social Service, and Legal 
group, for

[[Page 46010]]

CY 2023, as shown in Table 21. The practical effect of the proposed 
inclusion of these occupation groups and codes on the work GPCI would 
be minimal because the statute at section 1848(e)(1)(A)(iii) of the Act 
requires that the work GPCI reflect only one quarter of cost 
differences, but their inclusion adds meaningful data regarding the 
geographic variation in professional wages for CY 2023.
[GRAPHIC] [TIFF OMITTED] TP29JY22.058

BILLING CODE 4120-01-C
    We are proposing to modify the list of occupation codes used within 
the first PE GPCI component, Employee Wages, to conform more closely to 
the clinical labor categories used in PFS ratesetting. Specifically, 
six occupation codes listed as sources for clinical labor rates used to 
establish practice expense RVUs in PFS ratesetting that were previously 
inadvertently excluded in the Employee Wage Index calculation are now 
included in the proposed CY 2023 Employee Wage Index (29-1126, 29-1124, 
19-3031, 29-1031, 29-1181, 29-1127). Lastly, we are proposing a 
technical refinement to the method used to calculate each locality's 
GAF. The GAFs are calculated as the weighted average of the three GPCIs 
(work, PE, and MP), essentially representing the net geographic 
adjustment that would be made to a theoretical standard service. 
Instead of the 2006-based MEI cost share weights, which were used to 
calculate GAFs in previous updates to the GPCIs, we calculated the CY 
2023 GAFs using weights that reflect the share of total RVUs that each 
component (work, PE, and MP) accounts for, based on Medicare 
utilization data from CY 2020. The GAFs are not used for payment under 
the PFS but are a useful measure to illustrate the overall effect of 
geographic adjustments under the PFS across Medicare fee schedule 
areas. We believe that using the share of RVUs reflected in recent 
Medicare utilization data as weights when calculating the CY 2023 GAFs 
results in GAFs that more accurately reflect the composite effect of 
geographic adjustment on payment, year over year, as compared to the 
GAFs calculated using the 2006-based MEI cost share weights. This 
change also allows the use of current Medicare utilization data that 
are available each year as opposed to the MEI cost share weights that 
are not updated as frequently. The proposed weights used to calculate 
the CY 2023 GAFs are displayed in Table 22.
[GRAPHIC] [TIFF OMITTED] TP29JY22.059

    These four proposed methodological refinements, including changes 
to: (1) the occupation group; (2) occupation codes; (3) occupation 
codes used for the Employee Wage Index; and (4) the GAF weighting 
adjustment, will yield improved mathematical precision in the proposed 
CY 2023 GPCIs and GAFs by providing for a more accurate, full

[[Page 46011]]

landscape of occupations that should be accounted for in the work and 
PE GPCIs, and by aligning the GAF equation weights to use routinely 
available data Additional information on the GPCI methodology and the 
proposed refinements are available in the interim report, ``Interim 
Report for the CY 2023 Update of GPCIs and MP RVUs for the Medicare 
PFS'' on our website located under the supporting documents section of 
the CY 2023 PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
i. Alternatives Considered Related to the Use of the American Community 
Survey (ACS) Data for Office Rent Index
    Commenters often express concern about the use of residential rents 
as a proxy for physician office space costs for purposes of updating 
the PE GPCIs, and state that CMS should collect commercial rent data 
and use it either as the basis for measuring geographic differences in 
physician office rents, or if this is not feasible, use it to validate 
the residential rents as a proxy for physician office rents. In the 
past, commenters have requested that CMS provide a specific explanation 
of the barriers to obtaining better commercial rent data and that we 
reevaluate existing databases to find or develop a nationwide measure 
of commercial office rents for use in calculating PE GPCIs. For each 
GPCI update, we have noted that our efforts are ongoing to identify a 
publicly-available, robust, nationally representative commercial rent 
data source that could be made available to CMS for this purpose. We 
have welcomed opportunities to discuss such data sources with impacted 
parties and to incorporate such data, as appropriate in the GPCI 
calculation process, through our annual rulemaking process.
    Because Medicare is a national program, and section 1848(e)(1)(A) 
of the Act requires us to establish GPCIs to measure relative cost 
differences among localities compared to the national average, we 
believe it is important to use the best data source that is available 
on a nationwide basis, that is regularly updated, and retains 
consistency area-to-area, year-to-year. The ACS is administered by the 
United States Census Bureau, which is a leading source of national, 
robust, high quality, publicly available data. We agree that a data 
source for commercial office rents that provided for adequate 
representation of urban and rural areas nationally would be preferable 
to a residential rent data source as a proxy for commercial rents. We 
have previously discussed in the CY 2005, CY 2008, CY 2011, and CY 2017 
(69 FR 66262, 72 FR 66376, 75 FR 73257, and 81 FR 80265, respectively) 
final rules that we recognize that apartment rents may not be a perfect 
proxy for physician office rent.
    We have conducted searches for commercial rent data sources for 
consideration as an alternative to the ACS data in the past and have 
not found or received public comments with suggestions of reliable data 
sources that meet our needs. For CY 2023, we have conducted another 
search for reliable commercial rent data sources that are publicly 
available for the CY 2023 update and did not find any reliable data 
sources that would meet our needs. The principal characteristic of any 
substitute data source for the ACS data would be that it captures 
geographic variation in the office space cost for physician practices. 
We primarily investigated sources that report data on commercial real 
estate, but we also considered a few residential rent data sources and 
one data source that reports on a type of property that would be unable 
to house a physician practice--U.S. Post Office (P.O.) box rentals. 
Because the underlying property in which the P.O. boxes are located is 
commercial in nature, the rental rates may reflect the underlying 
geographic variation in facility cost. Because this source has other 
features that are important for creating a geographic index, we have 
included it for consideration. Although impacted parties may prefer a 
database focused on the types of properties that physicians would use 
for offices (that is, a commercial rent database), the identified 
potential data alternatives discussed below failed to meet one or more 
of five criteria that we believe are critical to the creation of an 
appropriate geographic index.
    We used the following five criteria to analyze the potential data 
sources for this search: (1) applicability to planned use; (2) 
standardization of the measure; (3) potential bias; (4) geographic 
scope, distribution, and granularity of the data; and (5) availability, 
continuity, and price of the data. Our review revealed challenges with 
the commercial real estate market data in several of these criteria. 
Under the first criterion, there are two sub-criteria that present 
problems with the type of real estate data reported when we considered 
their use for creating a geographic index: (1A) leases versus sales of 
commercial real estate, and (1B) comparables versus listings versus 
assessments of commercial real estate. For the first sub-criterion, the 
commercial and residential real estate markets can be subdivided into 
markets for leases and sales. Terms for commercial leased properties 
are often varied and not readily available. Commercial sales, 
especially of office condominiums, may be more readily available and 
require less adjustment for use in a geographic index. The availability 
of different arrangements--leasing versus owning--may vary 
geographically, affecting the underlying stability and 
representativeness of an index based on either. Under the second sub-
criterion, an important distinction is whether the data in the 
alternative data source represents closed transactions (known as 
``comparables'' or ``comps'') or asking prices (known as ``listings''), 
regardless of whether the source is reporting data for leased or sales 
of commercial property. Because asking prices are often aspirational, 
professional real estate appraisers rely on comparable transactions in 
order to estimate a price for sale or lease. Therefore, comparables 
provide the most reliable substitute dataset for consideration for use 
in creating a geographic index. Assessments are the estimated values of 
real property set by the tax assessors in each State, which are 
generally intended to reflect full cash value of the property, though 
there may be State-specific laws and regulations that interfere (that 
is, by limiting the percentage increase in a property from year to year 
if it has not been transferred). Assessments for commercial properties 
often rely heavily on the ``income method'' of valuation, which 
capitalizes the net income the property does or could receive if 
rented. The advantage of assessments for use in creation of a 
geographic index is their existence for every property in the United 
States.
    The second criterion is that appropriate adjustments need to be 
made to reduce variation for other factors, or the standardization of 
the data reported by a considered alternative data source. The primary 
data adjustment is to standardize the size of the property. For 
commercial space, conversion to a price per square foot (price/SF) 
value allows for direct comparison between properties. There are other 
factors involved in standardizing commercial rents and sale prices. The 
Building Owners and Managers Association (BOMA) groups buildings into 
three property classes:
    <bullet> Class A: Most prestigious buildings competing for premiere 
office users with rents above market average for the area. These 
buildings have high quality standard finishes, state of the art 
building systems and amenities,

[[Page 46012]]

exceptional accessibility, and a definite market presence.
    <bullet> Class B: Buildings competing for a wide range of users 
with rents in the average range for the market. Buildings finishes are 
good to fair for the area, and systems are adequate but the building 
does not compete with Class A at the same price.
    <bullet> Class C: Buildings competing for tenants requiring 
functional space at rents below average for the market.\72\
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    \72\ https://www.boma.org/BOMA/Research-Resources/Industry_Resources/BuildingClassDefinitions.aspx.
---------------------------------------------------------------------------

    A dataset of commercial rentals or sales must include the building 
class information so properties can be appropriately compared to each 
other, similar to the way that CMS currently only compares ACS rent 
data for two-bedroom apartments. For leases, the dataset would also 
need to specify lease type (Single Net, Double Net, Triple Net, 
Bondable Net, Full Service Gross, Modified Gross, and or 
Percentage).\73\ The same property rented under a type of Net lease 
would be expected to have a lower rent than if it were rented under a 
Full-Service lease because the lessee would pay some amount towards 
operating expenses. Although a dataset may contain an indication of the 
type of lease, it may not include the amount of operating expenses paid 
by the lessee that would be necessary to standardize the rent or other 
terms that affected the final transaction price. There are often 
considerable privacy considerations with respect to commercial 
transactions in order to maintain competitive advantage, so accurate 
information is often difficult to obtain. Typically, the sale price for 
a leased property, assuming an arms-length transaction, accounts for 
the detailed lease terms applicable to the property and likely would 
not require adjustment for this factor. Another consideration is the 
effective date of the transaction. Market prices for leases and sales 
can change rapidly or slowly, and even transactions occurring within 
the same calendar year may or may not require adjustment in order to be 
reflective of the market at the intended point in time, and therefore, 
the transaction date is critical for professional appraisals. Markets 
are also localized, so even data reported for areas in relatively close 
proximity may not experience the same price fluctuations.
---------------------------------------------------------------------------

    \73\ https://www.reonomy.com/blog/post/commercial-lease-types.
---------------------------------------------------------------------------

    The third criterion is that potential bias is limited in a 
considered alternative data source. Our search to date was unable to 
locate any scientifically designed national survey of commercial 
property costs. Many of the data sources are intended to facilitate the 
sale of commercial property and provide listings, rather than 
comparables. They also may only contain a fraction of the listings on 
the market and have been selected by brokers to advertise for sale, 
rather than to represent the entire market, resulting in substantial 
bias. Even the most comprehensive and detailed data sources for 
verified transactions are designed to support valuation of individual 
properties. These databases reflect the mix of properties that are 
either currently available or have been sold or leased during a defined 
period. The aggregate data are not intended to produce an unbiased 
estimate of the average cost per square foot in a particular geographic 
area, whereas, the ACS is a scientifically designed and implemented 
national housing survey created by the U.S. Census Bureau that has been 
designed to reduce bias in the statistics it creates.
    The fourth criterion is that the alternate data source would need 
to be national in scope and sufficiently granular to capture the 
characteristics of highly localized real estate markets. The ACS data 
have been consistently available in each year for the majority of 
counties in the nation. Although some of the commercial data sources 
may range nationwide and provide property-level data, there may be a 
much higher proportion of areas with missing data. An important 
consideration for the office rent index is that it sufficiently 
captures data in both urban and rural areas. Rural areas may have a 
less active commercial real estate market than urban areas, in which 
case there may be few transactions to use in a geographic index.
    Lastly, the fifth criterion is that the data source be publicly 
available, consistently available for CMS' GPCI update years, and/or 
reasonably priced in order to facilitate transparency and 
administrative efficiency. Proprietary databases can only be accessed 
by those who sign up for the service, and use of the data is governed 
by Terms of Service (TOS) that may preclude its use in derivative 
works, such as the creation of a geographic index, or dissemination of 
the data. Public databases are more likely to be accessible and able to 
be used for derivative work, such as the creation of the GPCIs. Any 
change in the data source we use in the creation of the index is likely 
to cause changes in index values, and possibly invoke critique if the 
resulting changes are significant. If CMS were to consider a change in 
data source, the change would need to be sustainable over time, and 
therefore, the data must be consistently accessible for subsequent GPCI 
updates, and data sources must maintain consistency over time in order 
to avoid any potential dramatic changes and/or the need to refine the 
adjustments to a dataset each update year, which would introduce 
unnecessary variation in the index. If the data source changes or 
discontinues the dataset, CMS would need to find a replacement data 
source, possibly within a short time period. This would likely 
introduce the possibility of dramatic changes and variation in the 
index that does not reflect the real geographic changes between update 
years--stemming from the use of different data sources. Additionally, 
the price to obtain and make necessary adjustments to the data 
discussed above may be prohibitive for use in the GPCIs.
    The Federal Government already paid for the construction of the 
ACS, the ACS provides the data in a very usable form, CMS can 
consistently and freely access the data, and relatively minor 
processing is required to turn it into an index. Every proprietary 
database is likely to charge substantial amounts to access the data as 
it is currently provided, which will be geared to uses very different 
from the creation of an office rent index. There may be substantial 
work required to gather and process the data and TOS conditions imposed 
by the database owners may not allow even free data to be used for the 
intended purpose. In all cases, it is likely that CMS would need to 
negotiate the terms for utilizing any proprietary sources.
    We identified eight data sources for analysis as potential 
alternatives to the ACS, but all failed to meet one or more of the five 
key criteria discussed above that would allow us to better reflect 
geographic cost variation for the office rent component of the PE GPCI 
that is currently measured using the ACS. We specifically identified 
the following potential data sources: (1) REIS[supreg] Real Estate 
Solutions by Moody's Analytics[supreg]; (2) CompStak; (3) 
CoStar<SUP>TM</SUP>; (4) Zillow[supreg] Assessor and Real Estate 
Database (ZTRAX); (5) U.S. Postal Service (USPS[supreg]) P.O. Box 
Rental; (6) GSA[supreg] Lease Inventory; (7) Reonomy[supreg]; and (8) 
SMR Research. Three of the eight data sources had substantial costs 
associated with obtaining the data, and we were unable to obtain 
pricing information for an additional two of the eight without 
extensive discussions with a sales representative. Two of the eight 
sources lacked necessary building class information, and many of the 
eight sources presented challenges with TOS restrictions, 
representativeness of rural

[[Page 46013]]

areas, small or undisclosed sample sizes, sample sizes that differed 
from year to year, and/or a large number of geographic areas with 
missing data.
    While we determined that none of these data sources are appropriate 
substitutes for the ACS data we currently use, based on their failure 
to meet one or more of the five key criteria discussed above, some of 
the sources possess useful qualities that allowed for further 
preliminary research into the correlation between commercial and 
residential rent that fell within the confines of our contractual 
restrictions. To investigate whether the use of ASC residential rents 
captures geographic variation in office rents, as discussed above, we 
identified a few data alternatives above for further research and 
examined their correlation with the ACS residential rent data in effort 
to evaluate the validity of the ACS data as a proxy for determining 
geographic variation in office rents. Overall, our ongoing analysis 
shows that the ACS residential rent data are highly correlated with 
commercial rents across areas. Therefore, we have concluded that the 
continued use of the ACS data for the office rent component of the PE 
GPCI is appropriate. We considered the use of USPS P.O. Box Rental data 
for preliminary analysis, as it is free, publicly available, and 
national in scope (in all zip codes where P.O. Boxes are available), 
but resource and time constraints limited us from considering this for 
the CY 2023 update. P.O. Box rent data is available online, but it is 
not formatted in an easy-to-use dataset that we could readily analyze 
without conducting resource-intensive data extraction and preparation. 
Considering that the P.O. Box rent data would have required significant 
resources, and that expending such resources was not feasible for the 
CY 2023 proposed rule, we identified the GSA Lease Inventory data 
source as the next best alternative data source to use to evaluate the 
correlation between residential and commercial rents because it is 
publicly available, free, and accessible in an easy-to-use format that 
required limited adjustments to allow analysis. To get a comparative 
sense of the rents per square foot that would be suggested for a 
specific geographic area, we chose to compare the GSA Lease Inventory 
data and the ACS data for available counties in the State of Maryland. 
As shown in Table 23, the GSA Lease Inventory data are missing for 
approximately half of the counties in Maryland. For those counties with 
available GSA data, the rent per square foot of the GSA leased 
facilities is shown in Table 23 and can be compared to the 
corresponding ACS residential rent data for that county.
[GRAPHIC] [TIFF OMITTED] TP29JY22.060


[[Page 46014]]


    Figure 1 shows a rank order test for the counties in Maryland where 
both GSA Lease Inventory data and ACS data are available. Allegany 
County has the lowest rent per square foot in the GSA Lease Inventory 
data and the lowest residential rent in the ACS data. Anne Arundel 
County has the highest residential rent data and the second highest GSA 
Lease Inventory data. Analysis shows that the rank order of the 
available counties in the GSA Lease Inventory data follow a relatively 
similar pattern (positive, linear relationship) to the same counties in 
the ACS data.
[GRAPHIC] [TIFF OMITTED] TP29JY22.061

    We expanded the comparison of the GSA Lease Inventory data with the 
ACS residential rent data from available counties in Maryland to all 
available counties nationwide by creating a rent per square foot 
measure for all GSA Lease Inventory records using the January 2017 GSA 
Leased Inventory data. The comparison was done by condensing the GSA 
Lease data to the county level, merging it with the ACS data (for 
counties where GSA data were available), and aggregating it to the 
Medicare locality level, weighting by county population. We performed 
two rank order tests for both ACS (median two-bedroom rent) and GSA 
(rent per SF) measures in all available localities where at least 50 
percent, and 75 percent, subsequently, of the locality population was 
represented in the county-level GSA data file. Similar to our findings 
from the initial analysis of Maryland counties, the expanded 
comparisons generally show a positive, linear relationship between rank 
of ACS (median two-bedroom rent) and rank of GSA (rent per SF) 
measures. Because the GSA Lease Inventory data are not geographically 
complete, our analyses were limited. GSA Lease Inventory data are 
sparse or nonexistent in some counties, therefore, we calculated the 
percent of the locality population and only included localities in our 
analysis with county-level data where at least 50 percent (and 75 
percent for the second analysis) of the locality population was 
represented in the county-level GSA data file. For example, Locality A 
includes county 1 and county 2. If the GSA data includes county 1 (with 
a population of 1,000), but not county 2 (population of 50), we 
included Locality A in the analysis, as it met the 50 percent and 75 
percent thresholds. In contrast, if the GSA data includes county 2 
(population of 50), but not county 1 (population of 1,000), we did not 
perform analysis on Locality A. The January 2017 GSA data file includes 
information on approximately 8,200 GSA leases across the country, which 
were then aggregated to the county level, and then to the Medicare 
locality level for our analysis. After these two aggregations, we had 
enough GSA Lease Inventory data to perform two rank order tests on 52 
Medicare localities, one rank order test for counties where at least 50 
percent of the locality population was represented and a second rank 
order test for counties where 75 percent of the locality population was 
represented. We further analyzed the outlier localities (where the ACS 
rank differs from the GSA rank by <plus-minus>30 ranks) and found that 
when the population threshold increased from 50 percent to 75 percent, 
we see a reduction in outliers from 13 to only two localities, 
indicating that more

[[Page 46015]]

complete data (that is, 75 percent of the locality population 
represented in GSA lease data) yields higher correlation between the 
median two-bedroom rent in the ACS data and the rent per square foot in 
the GSA data. This correlative effect supports the continued use of ACS 
data in the GPCI update for CY 2023, as it indicates that GSA lease 
data (a commercial rent data source) and ACS residential rents varied 
similarly across geographic areas.
    It is important to note that we use the ACS data to create an index 
to measure cost differences, and not as a direct proxy for commercial 
office rents. Rather, the ACS data are used to measure geographic 
variation in residential rents, which is used as a proxy for the 
geographic variation in commercial office rent. Based on our limited 
analyses comparing the GSA and ACS data, which showed that commercial 
and residential rents varied similarly across geographic areas, and the 
lack of any identified alternative data source that meets all five of 
the criteria discussed above, we believe that it is appropriate to 
continue use of the ACS data.
    With regard to the suggestion that CMS should collect commercial 
rent data, we note that we discussed this issue in the CY 2012 PFS 
final rule with comment period (76 FR 73088) and stated that the 
development and implementation of a survey could take several years if 
CMS were to survey physicians directly to gather data to compute the 
office rent index. Additionally, we have historically not sought direct 
survey data from physicians related to the GPCI to avoid issues of 
circularity and self-reporting bias. In the CY 2011 PFS final rule with 
comment period (75 FR 73259), we solicited public comments regarding 
the benefits of utilizing physician cost reports to potentially achieve 
greater precision in measuring the relative cost difference among 
Medicare localities. We also asked for comments regarding the 
administrative burden of requiring physicians to routinely complete 
these cost reports and whether this should be mandatory for physicians' 
practices. We did not receive any feedback related to that comment 
solicitation during the open public comment period for the CY 2011 PFS 
final rule with comment period.
    We reiterate that the GPCIs are not an absolute measure of practice 
costs. Rather they are a measure of the relative cost differences for 
each of the three GPCI components. The U.S. Census Bureau is a Federal 
agency that specializes in data collection, accuracy, and reliability, 
and we continue to believe that where such a publicly available 
resource exists that can provide useful data to assess geographic cost 
differences in office rent, even though it is a proxy for the exact 
data we seek, that we should utilize that available resource. In 
addition to reviewing alternative data sources, we also explored 
whether there are alternative ways of using the ACS data that could 
improve geographic representation or improve impacted parties' 
confidence in it as a reasonable way to capture geographic variation in 
office rent, including consideration of alternative ways to handle 
counties where we are missing ACS data, as well as using alternative 
variables within the ACS data to assess whether there are other similar 
variables that have more complete data than median gross rent for two-
bedroom residences. Our research indicates that using alternatives 
within the ACS would likely result in minimal changes to the resulting 
index and would likely not address commenters' concerns regarding use 
of residential rent data as a proxy for office rent. Our research also 
suggests that the variation captured by the two-bedroom measure is 
highly correlated with the geographic variation in one-bedroom and 
three-bedroom units. The high correlation coefficient strengthens the 
support for using the ACS two-bedroom measure to capture office rent 
variation across areas. We explored the continued use of the ACS data 
to see if there are other available variables that have a lower count 
of missing observations. The data includes variables on the median 
gross rent for no bedrooms, one bedroom, two bedrooms, three bedrooms, 
four bedrooms, five or more bedrooms, and the total median gross rent. 
Table 24 shows the number of observations that are missing for each of 
the median gross rent variables in the 2017 5-year ACS data.
[GRAPHIC] [TIFF OMITTED] TP29JY22.062

    Based on the 2017 5-year ACS data, total median gross rent and 
median gross rent for three bedrooms are two available alternative 
variables that have fewer missing county-level ACS data than the 
currently used median gross rent for two bedrooms. However, it is 
important to note that the number of missing observations for each 
variable could change over time. While the median gross rent for two 
bedrooms has a relatively low count for missing observations, it could 
be substituted with the total median gross rent, which has the smallest 
count of missing observations. In future years of ACS data, there could 
be more or fewer missing observations for this list of variables. 
Moving to use of the median gross rent for three bedrooms would result 
in slightly fewer missing observations in the 2017 ACS 5-Year 
Estimates, but this may not be the case for all update years.
    There are also alternative ways of handling counties that are 
missing data. In the CY 2020 update, we imputed county-level rent 
estimates using the average value for a given county's MSA. Other 
options include using the average value for contiguous counties, using 
an average value for the county's State or removing the missing 
observation from

[[Page 46016]]

the calculation. However, we note that the current method of handling 
counties that are missing data is a reasonable approach and any 
alternative would not likely affect the calculation materially. 
Additionally, since there are so few counties that are missing data 
(less than one percent), these alternatives (even if we had reason to 
prefer one of them) would likely have no impact on the resulting index. 
Table 25 shows the correlation coefficients between the available 
residential rent variables in the ACS. The variation captured by the 
two-bedroom measure is highly correlated with the geographic variation 
in one-bedroom and three-bedroom units (approximately 0.9). This 
relationship is similar, but not quite as prominent for the other 
residential measures. The correlation coefficient between three-bedroom 
and four-bedroom rent measures is also approximately 0.9. Based on our 
research, the geographic variation in residential rents is consistent 
regardless of specific measure used, and therefore, a change in the ACS 
variable used or a change in the way of handling counties that are 
missing data would likely result in minimal changes to the resulting 
index.
[GRAPHIC] [TIFF OMITTED] TP29JY22.063

    Given its national representation, reliability, high response rate 
and frequent updates, and based on the rank order comparison of GSA and 
ACS data and high correlation coefficients for the ASC residential rent 
variables discussed above, we continue to believe the ACS residential 
rent data is the most appropriate data source available at this time 
for the purposes of calculating the rent index of the PE GPCI. We 
undertook a comprehensive analysis of alternatives to the ACS data and 
concluded that there is still no acceptable national data source 
available for physician office or other comparable commercial rents, 
and therefore, we propose to continue to use county-level residential 
rent data from the ACS as a proxy for the relative cost differences in 
commercial office rents for the proposed CY 2023 update, and have done 
so in calculating the CY 2023 proposed GPCIs.
j. Proposed GPCI Update Summary
    As explained in the Background section above, section 1848(e)(1)(C) 
of the Act mandates the periodic review and adjustment of GPCIs. For 
each periodic review and adjustment, we publish the proposed GPCIs in 
the PFS proposed rule to provide an opportunity for public notice and 
comment, and allow us to consider whether any revisions in response to 
comments are warranted prior to implementation. The CY 2023 updated 
GPCIs that we propose for the first and second year of the 2-year 
phase-in, along with the GAFs, are displayed in Addenda D and E to this 
proposed rule available on our website under the supporting documents 
section of the CY 2023 PFS proposed rule web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.

H. Determination of Malpractice Relative Value Units (RVUs)

1. Overview
    Section 1848(c) of the Act requires that valuations for each 
service under the PFS be composed of three components: work, practice 
expense (PE), and malpractice (MP) expense. As required by section 
1848(c)(2)(C)(iii) of the Act, beginning in CY 2000, MP RVUs are 
resource based. Section 1848(c)(2)(B)(i) of the Act also requires that 
we review, and if necessary adjust, RVUs no less often than every 5 
years. In the CY 2015 PFS final rule with comment period (79 FR 67591 
through 67596), we implemented the third review and update of MP RVUs. 
For a comprehensive discussion of the third review and update of MP 
RVUs, see the CY 2015 PFS proposed rule (79 FR 40349 through 40355) and 
final rule with comment period (79 FR 67591 through 67596). In the CY 
2018 PFS proposed rule (82 FR 33965 through 33970), we proposed to 
update the specialty-level risk factors, used in the calculation of MP 
RVUs, prior to the next required 5-year update (CY 2020), using the 
updated MP premium data that were used in the eighth Geographic 
Practice Cost Index (GPCI) update for CY 2017; however, the proposal 
was ultimately not finalized for CY 2018.
    We consider the following factors when we determine MP RVUs for 
individual PFS services: (1) specialty-level risk factors derived from 
data on specialty-specific MP premiums incurred by practitioners; (2) 
service-level risk factors derived from Medicare claims data of the 
weighted average risk factors of the specialties that furnish each 
service; and (3) an intensity/complexity of service adjustment to the 
service-level risk factor based on either the higher of the work RVU or 
clinical labor portion of the direct PE RVU. Prior to CY 2016, MP RVUs 
were only updated once every 5 years, except in the case of new and 
revised codes.
    As explained in the CY 2011 PFS final rule with comment period (75 
FR 73208), MP RVUs for new and revised codes effective before the next 
5-year review of MP RVUs were determined either by a direct crosswalk 
from a similar source code or by a modified crosswalk to account for 
differences in work RVUs between the new/revised code and the source 
code. For the modified crosswalk approach, we adjusted (or scaled) the 
MP RVU for the new/revised code to reflect the difference in work RVU 
between the source code and the new/revised work RVU (or, if greater, 
the difference in the clinical labor portion of the fully implemented 
PE RVU) for the new code. For example, if the proposed work RVU for a 
revised code was 10 percent higher than the work RVU for its source 
code, the MP RVU for the revised code would be increased by 10 percent 
over the source code MP RVU. Under this approach, the same risk factor 
(RF) was

[[Page 46017]]

applied for the new/revised code and source code, but the work RVU for 
the new/revised code was used to adjust the MP RVUs for risk.
    In the CY 2016 PFS final rule with comment period (80 FR 70906 
through 70910), we finalized a policy to begin conducting annual MP RVU 
updates to reflect changes in the mix of practitioners providing 
services (using Medicare claims data), and to adjust MP RVUs for risk 
for intensity and complexity (using the work RVU or clinical labor 
RVU). We also finalized a policy to modify the specialty mix assignment 
methodology (for both MP and PE RVU calculations) to use an average of 
the 3 most recent years of data instead of a single year of data. Under 
this approach, for new and revised codes, we generally assign a 
specialty-level risk factor to individual codes based on the same 
utilization assumptions we make regarding specialty mix we use for 
calculating PE RVUs and for PFS budget neutrality. We continue to use 
the work RVU or clinical labor RVU to adjust the MP RVU for each code 
for intensity and complexity. In finalizing this policy, we stated that 
the specialty-level risk factors would continue to be updated through 
notice and comment rulemaking every 5 years using updated premium data, 
but would remain unchanged between the 5-year reviews.
    Section 1848(e)(1)(C) of the Act requires us to review, and if 
necessary, adjust the GPCIs at least every 3 years. In the CY 2020 PFS 
final rule with comment period, we implemented the fourth review and 
update of MP RVUs, and we also conducted the statutorily required 3-
year review of the GPCIs. For a comprehensive discussion of the fourth 
review and update of MP RVUs, see the CY 2020 PFS proposed rule (84 FR 
40504 through 40510) and final rule with comment period (84 FR 62606 
through 62615). The MP premium data used to update the MP GPCIs are the 
same data used to determine the specialty-level risk factors, which are 
used in the calculation of MP RVUs. Therefore, for the CY 2020 update 
of MP RVUs we finalized a policy to align the update of MP premium data 
with the update to the MP GPCIs to increase efficiency. Effective 
beginning in CY 2020, our policy is to review, and if necessary update, 
the MP RVUs at least every 3 years, similar to our review and update of 
the GPCIs.
2. Methodology for the Proposed Revision of Resource-Based Malpractice 
(MP) RVUs
a. General Discussion
    We calculated the MP RVUs that we are proposing for CY 2023 using 
updated MP premium data obtained from State insurance rate filings. We 
used a calculation methodology for the CY 2023 review and update of 
resource-based MP RVUs that largely parallels the process used in the 
CY 2020 update; however, we are proposing to incorporate some 
methodological refinements, which are described below. The MP RVU 
calculation requires us to obtain information on specialty-specific MP 
premiums that are linked to specific services, and using this 
information, we derive relative risk factors (RFs) for the various 
specialties that furnish a particular service. Because MP premiums vary 
by State and specialty, the MP premium information must be weighted 
geographically and by specialty. The MP RVUs that we are proposing were 
calculated using four data sources:
    <bullet> MP premium data presumed to be in effect as of December 
31, 2020;
    <bullet> CY 2020 Medicare payment and utilization data;
    <bullet> Higher of the CY 2022 final work RVUs or the clinical 
labor portion of the direct PE RVUs; and
    <bullet> CY 2022 MP GPCIs.
    We used the higher of the CY 2022 final work RVUs or clinical labor 
portion of the direct PE RVUs in our calculation to develop the CY 2023 
proposed MP RVUs while maintaining overall PFS budget neutrality.
    Similar to the CY 2020 update, the proposed MP RVUs were calculated 
using specialty-specific MP premium data because they represent the 
expense incurred by practitioners to obtain MP insurance as reported by 
insurers. For CY 2023, the most current MP premium data available, with 
a presumed effective date of no later than December 31, 2020, were 
obtained from insurers with the largest market share in each State. We 
identified insurers with the largest market share using the National 
Association of Insurance Commissioners (NAIC) market share report. This 
annual report provides State-level market share for entities that 
provide premium liability insurance (PLI) in a State. Premium data were 
downloaded from the System for Electronic Rates & Forms Filing Access 
Interface (SERFF) (accessed from the NAIC website) for participating 
States. For non-SERFF States, data were downloaded from the State-
specific website (if available online) or obtained directly from the 
State's alternate access to filings. For SERFF States and non-SERFF 
States with online access to filings, the 2020 market share report was 
used to select companies. These were the most current data available 
during the data collection and acquisition process.
    MP insurance premium data were collected from all 50 States, and 
the District of Columbia. Efforts were made to collect filings from 
Puerto Rico; however, no recent filings were submitted at the time of 
data collection, and therefore, filings from the previous update were 
used. Consistent with the CY 2020 update, no filings were collected for 
the other U.S. territories: American Samoa; Guam; Virgin Islands; or 
Northern Mariana Islands. MP premiums were collected for coverage 
limits of $1 million/$3 million, mature, claims-made policies (policies 
covering claims made, rather than those covering losses occurring, 
during the policy term). A $1 million/$3 million liability limit policy 
means that the most that would be paid on any claim is $1 million and 
the most that the policy would pay for claims over the timeframe of the 
policy is $3 million. Adjustments were made to the premium data to 
reflect mandatory surcharges for patient compensation funds (PCF, funds 
used to pay for any claim beyond the State's statutory amount, thereby 
limiting an individual physician's liability in cases of a large suit) 
in States where participation in such funds is mandatory.
    Premium data were included for all physician and nonphysician 
practitioner (NPP) specialties, and all risk classifications available 
in the collected rate filings. Although premium data were collected 
from all States, the District of Columbia, and previous filings for 
Puerto Rico were utilized, not all specialties had distinct premium 
data in the rate filings from all States. In the CY 2020 PFS final rule 
(84 FR 62607 through 62610), we finalized methodological improvements 
that expanded the specialties and amount of filings data used to 
develop the proposed risk factors, which are used to develop the 
proposed MP RVUs.
b. Proposed Methodological Refinements
    For the CY 2023 update, we are proposing the following 
methodological improvements to the development of MP premium data:
    (1) Improving our current imputation strategy to develop a more 
comprehensive data set when CMS specialty names are not distinctly 
identified in the insurer filings, which

[[Page 46018]]

sometimes use unique specialty names or do not include all CMS 
specialties.
    In instances where insurers report data for some (but not all) 
specialties that explicitly corresponded to a CMS specialty, where 
those data were missing, we finalized in the CY 2020 final rule (84 FR 
62607 through 62610) to use partial imputation based on available data 
to establish what the premiums would likely have been had that 
specialty been delineated in the filing. In instances where there were 
no data corresponding to a CMS specialty in the filing, we finalized a 
policy to use total imputation to establish premiums for that 
specialty. We are proposing to further refine our strategy for imputing 
risk factor values for specialties that have incomplete data during the 
data collection process by using rates mapped from the more commonly 
reported specialty within risk class as opposed to excluding 
underrepresented filing data.
    For example, Hospice and Palliative Care is typically assigned the 
same risk class as Internal medicine. Rather than excluding Hospice and 
Palliative Care because there is insufficient filing data, we would use 
Internal Medicine rates in filings that did not explicitly report 
Hospice and Palliative Care. For the CY 2020 update, commenters 
requested that we continue to improve our data collection process to 
ensure that as much specialty-specific data as possible are used to 
calculate risk factors. Therefore, we are proposing to utilize this 
small improvement for collecting risk value input data in the future, 
as this retains as much data as possible and maps specialties more 
intentionally.
    (2) Creation of a risk index for the calculation of MP RVUs.
    We are proposing to utilize a true MP risk index as opposed to 
derived risk factors when calculating MP RVUs. Historically, we have 
used risk factors, which is a ratio of a specialty's national average 
premium to a single referent specialty's national average premium. This 
denominator has typically been based on the national average premium 
for the Allergy/Immunology specialty, which has had the lowest average 
premium for 2017 and 2020. The proposed risk index would be calculated 
as a ratio of the specialty's national average premium to the volume-
weighted national average premium across all specialties. We believe 
this change will increase consistency with the calculation of MP RVUs, 
so that changes in the MP risk index reflect changes in payment, as 
opposed to changes relative only to the specialty with the lowest 
national average premium. We believe that this definitional change to 
risk index does not impact the pricing of services in the PFS since it 
does not change relative risk across specialties, and MP RVUs are 
rescaled for purposes of budget neutrality to be equal to the overall 
pool of MP RVUs. Readers can refer to the section of this proposed rule 
entitled, ``Application of BN to Adjustments of RVUs'' for a discussion 
of our budget neutrality process.
c. Steps for Calculating Malpractice RVUs
    Calculation of the proposed MP RVUs conceptually follows the 
specialty-weighted approach used in the CY 2015 PFS final rule with 
comment period (79 FR 67591), along with the above proposed 
methodological improvements. The specialty-weighted approach bases the 
MP RVUs for a given service on a weighted average of the risk index of 
all specialties furnishing the service. This approach ensures that all 
specialties furnishing a given service are reflected in the calculation 
of the MP RVUs. The steps for calculating the proposed MP RVUs are 
described below.
    Step (1): Compute a preliminary national average premium for each 
specialty.
    Insurance rating area MP premiums for each specialty are mapped to 
the county level. The specialty premium for each county is then 
multiplied by its share of the total U.S. population (from the U.S. 
Census Bureau's 2015-2019 American Community Survey (ACS) 5-year 
estimates). This is in contrast to the method used for creating 
national average premiums for each specialty in the 2015 update; in 
that update, specialty premiums were weighted by the total RVU per 
county, rather than by the county share of the total U.S. population. 
We refer readers to the CY 2016 PFS final rule with comment period (80 
FR 70909) for a discussion of why we have adopted a weighting method 
based on share of total U.S. population. This calculation is then 
divided by the average MP GPCI across all counties for each specialty 
to yield a normalized national average premium for each specialty. The 
specialty premiums are normalized for geographic variation so that the 
locality cost differences (as reflected by the 2022 GPCIs) would not be 
counted twice. Without the geographic variation adjustment, the cost 
differences among fee schedule areas would be reflected once under the 
methodology used to calculate the MP RVUs and again when computing the 
service specific payment amount for a given fee schedule area.
    Step (2): Determine which premium service risk groups to use within 
each specialty.
    Some specialties had premium rates that differed for surgery, 
surgery with obstetrics, and non-surgery. These premium classes are 
designed to reflect differences in risk of professional liability and 
the cost of MP claims if they occur. To account for the presence of 
different classes in the MP premium data and the task of mapping these 
premiums to procedures, we calculated a distinct risk index for 
surgical, surgical with obstetrics, and nonsurgical procedures where 
applicable. However, the availability of data by surgery and non-
surgery varied across specialties. Historically, no single approach 
accurately addressed the variability in premium class among 
specialties, and we previously employed several methods for calculating 
average premiums by specialty. These methods are discussed below.
    Developing Distinct Service Risk Groups: We determined that there 
were sufficient data for surgery and non-surgery premiums, as well as 
sufficient differences in rates between classes for 17 specialties 
(there were 15 such specialties in the CY 2020 update). These 
specialties are listed in Table 26. The CY 2023 update uses the same 
structure of specialty/service risk group as the previous update except 
that Unknown Physician Specialty (99) is now divided into surgery and 
non-surgery groups. We were able to collect an expanded amount of 
premium data for this specialty relative to the previous update, and 
this service risk group structure change is reflective of the patterns 
observed in the most current premium data. For all other specialties 
(those that are not listed in Table 26) that typically do not 
distinguish premiums as described above, a single risk index value was 
calculated, and that specialty risk index value was applied to all 
services performed by those specialties. For further discussion of the 
information contained in Table 26, refer to ``Interim Report for the CY 
2023 Update of GPCIs and MP RVUs for the Medicare Physician Fee 
Schedule'' Available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.

[[Page 46019]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.064

    Step (3): Calculate a risk index for each specialty.
    The relative differences in national average premiums between 
specialties are expressed in our methodology as a specialty-level risk 
index. These risk index values are calculated by dividing the national 
average premium for each specialty by the volume-weighted national 
average premium across all specialties. For specialties with sufficient 
surgical and non-surgical premium data, we calculated both a surgical 
and non-surgical risk index value. Similarly, for specialties with rate 
filings that distinguished surgical premiums with obstetrics, we 
recognized that service-risk subgroup of the specialty and calculated a 
separate surgical with obstetrics risk index value.
    Table 27 shows the risk index values by specialty type and service 
risk group.
BILLING CODE 4120-01-P

[[Page 46020]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.065


[[Page 46021]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.066

BILLING CODE 4120-01-C
    Step (4): Calculate MP RVUs for each CPT/HCPCS code.
    Resource-based MP RVUs were calculated for each CPT/HCPCS code that 
has work or PE RVUs. The first step was to identify the percentage of 
services furnished by each specialty for each respective CPT/HCPCS 
code. This percentage was then multiplied by each respective 
specialty's risk index value as calculated in Step 3. The products for 
all specialties for the CPT/HCPCS code were then added together, 
yielding a specialty-weighted service specific risk

[[Page 46022]]

index reflecting the weighted MP costs across all specialties 
furnishing that procedure. The service specific risk index was 
multiplied by the greater of the work RVU or clinical labor portion of 
the direct PE RVU for that service, to reflect differences in the 
complexity and risk-of-service between services.
    Impacts of expanded data collection: As we discussed previously in 
this proposed rule, we are proposing important methodological 
improvements to our process for calculating MP RVUs. These improvements 
are in response to comments from interested parties suggesting that we 
continue to improve data collection to ensure that we use as much 
specialty-specific data as possible to reflect the most accurate trends 
in malpractice premiums. When we do not have sufficient premium data 
for a specialty, our practice has been to use the data from the 
specialty with the lowest premium. We now have specialty-specific data 
for many more specialties. However, although the newly captured 
specialty-specific premium data are more accurate, the new data produce 
premiums and risk index values that are significantly lower for some 
specialties than the ones we applied in the absence of sufficient 
specialty-specific data.
    We acknowledge that this reduction in premiums and risk index value 
is expected to negatively impact payment for services furnished by 
those specialties that are affected by the improved data collection 
process. Based on our analyses of the new risk index data, we 
identified an impact threshold to guide how we could integrate the new 
information into our calculations and minimize the impact on affected 
specialties. Specifically, we identified a reduction of approximately 
\1/3\ to the risk index calculated for specialties based on the new 
specialty-specific premium data compared to the information we had 
previously used. To mitigate the negative impact on affected 
specialties, promote payment stability, and prevent potential 
reductions in access to services for beneficiaries, for specialties for 
which the use of newly available premium data would result in a 30 
percent or greater reduction in the risk index for CY 2023 as compared 
to the current risk index value for CY 2022, we are proposing to phase 
in the reduction in MP RVUs over the 3 years that precedes the next 
update, by \1/3\ of the change in MP RVUs for those specialties in each 
year that have a 30 percent or more threshold reduction in risk index 
value as a result of the update. For a detailed explanation of how the 
phase-in will be applied per specialty, a file is available on our 
website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. This proposed 
phase-in is similar to the 2-year phase-in required under section 
1848(e)(1)(C) of the Act for changes to the GPCIs when it has been more 
than one year since the last changes. We propose to phase in the 
reduction in MP RVUs over 3 years rather than 2 years because the MP 
risk index values are updated every 3 years. The list of specialties 
that would be subject to the phase-in under this proposed policy, and 
the corresponding risk index values for each specialty is available on 
our website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Low volume service codes: As we discuss above in this proposed 
rule, for low volume service codes, we use the list of expected 
specialties who may perform a service instead of the claims-based 
specialty mix when calculating MP RVUs. We finalized this approach in 
the CY 2018 PFS final rule to address concerns from interested parties 
about the year-to-year variability in PE and MP RVUs for low volume 
services (which also includes no volume services). (82 FR 53000 through 
53006). Low volume codes are codes that have 100 or fewer allowed 
services for a year. These service-level overrides are used to 
determine the expected specialty for low volume procedures for both PE 
and MP.
    In the CY 2018 PFS final rule (82 FR 53000 through 53006), we also 
finalized our proposal to eliminate general use of an MP-specific 
specialty-mix crosswalk for new and revised codes. However, we 
indicated that we would continue to consider, in conjunction with 
annual recommendations, specific recommendations regarding specialty 
mix assignments for new and revised codes, particularly in cases where 
coding changes are expected to result in differential reporting of 
services by specialty, or where the new or revised code is expected to 
be low-volume. Absent such information, the specialty mix assumption 
for a new or revised code would derive from the analytic crosswalk in 
the first year, followed by the introduction of actual claims data, 
which is consistent with our approach for developing PE RVUs.
    For CY 2023, we are soliciting public comment on the list of 
expected specialties. The proposed list of codes and expected 
specialties is available on our website under downloads for the CY 2023 
PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Step (5): Rescale for budget neutrality.
    The statute requires that changes to fee schedule RVUs must be 
budget neutral. Thus, the last step is to adjust for relativity by 
rescaling the proposed MP RVUs so that the total proposed resource-
based MP RVUs are equal to the total current resource-based MP RVUs 
scaled by the ratio of the pools of the proposed and current MP and 
work RVUs. This scaling is necessary to maintain the work RVUs for 
individual services from year to year while also maintaining the 
overall relationship among work, PE, and MP RVUs.
    Specialties Excluded from Ratesetting Calculation: In section II.B. 
of this proposed rule, Determination of Practice Expense Relative Value 
Units, we discuss specialties that are excluded from ratesetting for 
the purposes of calculating PE RVUs. We are proposing to treat those 
excluded specialties in a consistent manner for the purposes of 
calculating MP RVUs. We note that all specialties are included for 
purposes of calculating the final BN adjustment. The list of 
specialties excluded from the ratesetting calculation for the purpose 
of calculating the PE RVUs that we proposed to also exclude for the 
purpose of calculating MP RVUs is available in section II.B. of this 
final rule, Determination of Practice Expense Relative Value Units. The 
resource-based MP RVUs are shown in Addendum B, which is available on 
the CMS website under the downloads section of the CY 2023 PFS rule at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
    Because a different share of the resources involved in furnishing 
PFS services is reflected in each of the three fee schedule components, 
implementation of the resource-based MP RVU update will have much 
smaller payment effects than implementing updates of resource-based 
work RVUs and resource-based PE RVUs. On average, work represents about 
50.9 percent of payment for a service under the fee schedule, PE about 
44.8 percent, and MP about 4.3 percent. Therefore, a 25 percent change 
in PE RVUs or work RVUs for a service would result in a change in 
payment of about 11 to 13 percent. In contrast, a corresponding 25 
percent change in MP values for a service would yield a change in 
payment of only about 1 percent.

[[Page 46023]]

Estimates of the effects on payment by specialty type is detailed in 
section VII. of this proposed rule, the Regulatory Impact Analysis.
    Additional information on our methodology for updating the MP RVUs 
is available in the ``Interim Report for the CY 2023 Update of GPCIs 
and MP RVUs for the Medicare Physician Fee Schedule,'' which is 
available on the CMS website under the downloads section of the CY 2023 
PFS proposed rule at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.

I. Non-Face-to-Face Services/Remote Therapeutic Monitoring (RTM) 
Services

    Remote Therapeutic Monitoring (RTM) is a family of five codes 
created by the CPT Editorial Panel in October 2020, valued by the RUC 
at its January 2021 meeting, and finalized for Medicare payment in the 
CY 2022 PFS final rule (86 FR 65114 through 65117). The RTM codes 
include three PE-only codes and two professional work, treatment 
management codes.
    In the CY 2022 PFS final rule, we finalized refinements to payment 
for the three PE-only RTM codes: CPT code 98975 (Remote therapeutic 
monitoring (e.g., respiratory system status, musculoskeletal system 
status, therapy adherence, therapy response); initial set-up and 
patient education on use of equipment); CPT code 98976 (Remote 
therapeutic monitoring (e.g., respiratory system status, 
musculoskeletal system status, therapy adherence, therapy response); 
device(s) supply with scheduled (e.g., daily) recording(s) and/or 
programmed alert(s) transmission to monitor respiratory system, each 30 
days); and CPT code 98977 (Remote therapeutic monitoring (e.g., 
respiratory system status, musculoskeletal system status, therapy 
adherence, therapy response); device(s) supply with scheduled (e.g., 
daily) recording(s) and/or programmed alert(s) transmission to monitor 
musculoskeletal system, each 30 days). We valued the three PE-only 
codes by: (1) cross-walking CPT code 98975 to the PE RVU value of CPT 
code 99453 (Remote monitoring of physiologic parameter(s) (e.g., 
weight, blood pressure, pulse oximetry, respiratory flow rate), 
initial; set-up and patient education on use of equipment); and by (2) 
cross-walking CPT codes 98976 and 98977 to the PE RVU of comparable CPT 
code 99454 (Remote monitoring of physiologic parameter(s) (e.g., 
weight, blood pressure, pulse oximetry, respiratory flow rate), 
initial; device(s) supply with daily recording(s) or programmed 
alert(s) transmission, each 30 days), a code that includes payment for 
the medical device used to collect and transmit data.
    For the two RTM treatment management codes, we finalized the RUC-
recommended work RVU of 0.62 for CPT code 98980 (Remote therapeutic 
monitoring treatment management services, physician/other qualified 
health care professional time in a calendar month requiring at least 
one interactive communication with the patient/caregiver during the 
calendar month; first 20 minutes) and the RUC-recommended work RVU of 
0.61 for its add-on code, CPT code 98981 (Remote therapeutic monitoring 
treatment management services, physician/other qualified health care 
professional time in a calendar month requiring at least one 
interactive communication with the patient/caregiver during the 
calendar month; each additional 20 minutes (List separately in addition 
to code for primary procedure)).
    We also finalized the RUC-recommended direct PE inputs for the two 
treatment management codes without refinement. The direct PE for these 
two codes includes clinical labor. According to the supporting 
materials in the RUC recommendations that we accepted, CPT code 98980 
includes 40 minutes of activities performed by clinical staff while CPT 
code 98981 includes 20 minutes of activities performed by clinical 
staff as direct practice expenses (PE). The RUC materials describe the 
activities of clinical staff who perform the clinical labor involved in 
each of these codes as including: communicating with the patient 
throughout the month, resolving technology or data transmission 
concerns, reviewing data with the billing practitioner, updating and 
modifying care plans, and addressing lack of patient improvement. These 
activities performed by clinical staff of the billing practitioner 
would be considered services provided incident to the services of the 
billing practitioner. For more information about ``incident to'' 
services, see Sec.  410.26.
    We expressed concern in the CY 2022 PFS final rule (86 FR 65116) 
about the treatment management codes as described by the CPT and RUC. 
In particular, we expressed concern about the inclusion of clinical 
labor in codes that could be billed by qualified nonphysician 
healthcare professionals because Medicare Part B does not include a 
benefit for services furnished ``incident to'' the services of some 
types of qualified nonphysician healthcare professionals including 
CSWs, CRNAs, PTs, OTs, and SLPs. Commenters on the CY 2022 PFS proposed 
rule (86 FR 65116) agreed with our assessment and suggested that we 
consider developing new coding to resolve the issue. In the CY 2022 PFS 
final rule, we finalized a policy that permitted therapists and other 
qualified healthcare practitioners to bill the RTM codes. We stated 
that where the practitioner's Medicare benefit does not include 
services furnished incident to their professional services, the 
services described by the codes must be furnished directly by the 
billing practitioner or, in the case of a PT or OT, by a therapy 
assistant under the billing PT's or OT's supervision.
    The commenters also expressed concern about another issue with the 
RTM coding that also relates to the clinical labor in the direct PE for 
the two treatment management codes (86 FR 65116). The commenters 
acknowledged that the clinical labor involved in these codes, that is, 
the portion of these services performed by clinical staff incident to 
the services of the billing clinician, requires direct supervision by 
the billing practitioner. The commenters stated that direct supervision 
of clinical staff performing these activities was burdensome, and 
suggested that physicians and nonphysician practitioners who can bill 
for ``incident to'' services would be unlikely to use the codes if 
direct supervision were required. The commenters suggested that we 
designate CPT codes 98980 and 98981 as care management services or 
alternatively, that we develop HCPCS G codes that would allow the 
``incident to'' clinical labor portions of the services to be furnished 
under general supervision of the billing physician or nonphysician 
practitioner.
    Since the CY 2022 PFS final rule was issued, we have remained in 
communication with interested parties. Conversations continue to 
revolve around the two concerns detailed above related to the clinical 
labor in the direct PE for the two RTM treatment management codes, CPT 
codes 98980 and 98981. Thus, for CY 2023 we are proposing to create 
four new HCPCS G codes with one pair of codes aimed at increasing 
patient access to remote therapeutic monitoring services and the second 
pair aimed at reducing physician and NPP supervisory burden.
    We note that we also considered requests from interested parties to 
develop a generic device code for RTM. We have decided to wait to 
develop a generic RTM device code and instead will seek comment to 
inform any new coding relating to devices. Thus, we are seeking comment 
about RTM devices that are used to deliver services that meet the 
``reasonable and necessary'' standard under section 1862(a)(1)(A) of

[[Page 46024]]

the Act. We seek information related to the types of data collected 
using RTM devices, how the data that are collected solve specific 
health conditions and what those health conditions are, the costs 
associated with RTM devices that are available to collect RTM data, how 
long the typical episode of care by condition type might last, and the 
potential number of beneficiaries for whom an RTM device might be used 
by the health condition type.
    Proposal to develop two HCPCS G codes that allow certain qualified 
nonphysician healthcare professionals to furnish RTM services. In our 
ongoing dialogue with interested parties, we have heard that a primary 
reason for developing the RTM codes was to increase beneficiary access 
to remote monitoring services by allowing the services to be furnished 
by a broad array of qualified nonphysician healthcare professionals. 
However, concerns with the CPT coding structure related to the 
inclusion of clinical labor integral to the professional services have 
complicated the achievement of those goals. In the CY 2022 PFS final 
rule, we finalized a policy that permitted therapists and other 
qualified healthcare practitioners to bill the RTM codes, though we 
expressed some concerns about the ability of therapists to bill for 
these codes because the Medicare benefit does not include services 
provided incident to the services of a therapist (86 FR 65116). We 
stated that where the practitioner's Medicare benefit does not include 
services furnished incident to their professional services, the 
services described by the codes must be furnished directly by the 
billing practitioner or, in the case of a PT or OT, by a therapy 
assistant under the billing PT's or OT's supervision. We said that 
these practitioners could bill CPT codes 98980 and 98981 even when the 
practitioner's Medicare benefit category did not include services 
furnished incident to their professional services as long as the 
services were furnished directly by the billing practitioner.
    For CY 2023, as a means of increasing beneficiary access to RTM 
services, as well as more clearly defining the services of RTM for 
qualified nonphysician healthcare practitioners whose Medicare benefit 
category does not include services provided incident to their own 
services, we are proposing two codes that would expressly facilitate 
RTM services furnished by qualified nonphysician healthcare 
professionals who cannot bill under Medicare Part B for services 
furnished incident to their professional services. These codes would 
not include ``incident to'' activities in the PE. Neither of the two 
proposed new codes include clinical labor inputs in the direct PE. We 
are proposing to make the current CPT codes 98980 and 98981 codes non-
payable by Medicare.
    The two proposed HCPCS G codes are:
    <bullet> GRTM3 (Remote therapeutic monitoring treatment assessment 
services, first 20 minutes furnished personally/directly by a 
nonphysician qualified health care professional over a calendar month 
requiring at least one interactive communication with the patient/
caregiver during the month).
    <bullet> GRTM4 (Remote therapeutic monitoring treatment assessment 
services, additional 20 minutes furnished personally/directly by a 
nonphysician qualified health care professional over a calendar month 
requiring at least one interactive communication with the patient/
caregiver during the calendar month (List separately in addition to 
code for primary procedure)).
    For CY 2023, we are proposing a work RVU of 0.62 for the base code, 
HCPCS code GRTM3, which is the RUC-recommended work RVU we established 
for CPT code 98980 in the CY 2022 PFS final rule. Similarly, for the 
add-on code, HCPCS code GRTM4, we are proposing a work RVU of 0.61, 
which is the RUC-recommended value we established for CPT code 98981. 
We are proposing to remove the clinical labor inputs in the direct PE 
for both codes, which will facilitate the use of these codes by 
qualified nonphysician healthcare practitioners who cannot bill under 
Medicare Part B for services furnished incident to their professional 
services. See Table 28: Summary of Proposed HCPCS G Codes for Remote 
Therapeutic Monitoring Services for more detailed information about the 
codes.
    Additionally, we note that all the RTM codes including proposed 
HCPCS codes GRTM3 and GRTM4 would be designated as ``sometimes 
therapy'' codes, which means that the services could be billed outside 
a therapy plan of care by physicians and certain NPPs. When the 
services described by proposed HCPCS codes GRTM3 and GRTM4 are 
furnished by PTs, OTs, or SLPs, the services would always need to be 
furnished under a therapy plan of care. We remind readers that RTM 
services that relate to devices specific to therapy services should 
always be furnished under a therapy plan of care regardless of who 
provides them. See the Medicare Benefit Policy Manual Chapter 15, 
Section 230 for more information about the practice of PT, OT, and SLP.
    Proposal to develop two HCPCS G codes allowing general supervision 
of auxiliary personnel. As we described previously in this proposed 
rule, since the CY 2022 PFS final rule was published, we have continued 
to hear concerns from interested parties that, as for most ``incident 
to'' services, the clinical labor activities described in the direct PE 
of CPT codes 98980 and 98981 must be furnished under the direct 
supervision of the billing practitioner, which imposes burden on 
physicians and NPPs who are delivering services to other patients. 
Thus, for CY 2023, we are proposing to create two HCPCS G codes, one 
base code and one add-on code, that include clinical labor activities 
(that is, incident to services such as communicating with the patient, 
resolving technology concerns, reviewing data, updating and modifying 
care plans, and addressing lack of patient improvement) that can be 
furnished by auxiliary personnel under general supervision. These two 
new G codes, GRTM1 and GRTM2, will include physician work and direct PE 
inputs as currently described in CPT codes 98980 and 98981 but will 
allow general supervision of the clinical labor found in the direct PE 
inputs. See Table 28: Summary of Proposed HCPCS G Codes for Remote 
Therapeutic Monitoring Services for more detailed information about the 
codes and use of the codes.
    The two proposed HCPCS G codes are described as follows:
    <bullet> HCPCS code GRTM1 (Remote therapeutic monitoring treatment 
management services, physician or NPP professional time over a calendar 
month requiring at least one interactive communication with the 
patient/caregiver during the calendar month; first 20 minutes of 
evaluation and management services).
    <bullet> HCPCS code GRTM2 (Remote therapeutic monitoring treatment 
management services, physician or NPP professional time over a calendar 
month requiring at least one interactive communication with the 
patient/caregiver over a calendar month; each additional 20 minutes of 
evaluation and management services during the calendar month (List 
separately in additional to code for primary procedure).
    For CY 2023, we are proposing a work RVU of 0.62 for HCPCS code 
GRTM1, which reflects the work RVU for CPT code 98980 that we finalized 
in the CY 2022 PFS final rule. For HCPCS code GRTM2, we are proposing a 
work RVU of 0.61, which is the RUC-recommended

[[Page 46025]]

value we finalized for the similar CPT code 98981. We are proposing the 
direct PE inputs associated with CPT codes 98980 and 98981 without 
refinement for HCPCS codes GRTM1 and GRTM2, respectively. As stated 
previously, we are proposing to make the current CPT codes 98980 and 
98981 codes non-payable by Medicare.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP29JY22.067


[[Page 46026]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.068

BILLING CODE 4120-01-C
Review of New RTM Device Code: Cognitive Behavioral Therapy Monitoring 
(CPT Code 989X6)
    During its October 2021 meeting, the CPT Editorial Panel replaced 
two Category III codes: 0702T (Remote therapeutic monitoring of a 
standardized online digital cognitive behavioral therapy program 
ordered by a physician or other qualified health care professional; 
supply and technical support, per 30 days) and 0703T (Remote 
therapeutic monitoring of a standardized online digital cognitive 
behavioral therapy program ordered by a physician or other qualified 
health care professional; management services by physician or other 
qualified health care professional per calendar month) (e.g., 
respiratory system status, musculoskeletal system status, cognitive 
behavioral therapy, therapy adherence, therapy response) with the 
Category 1 CPT code 989X6, Cognitive Behavioral Therapy Monitoring 
(Remote therapeutic monitoring (e.g., respiratory system status, 
musculoskeletal system status, cognitive behavioral therapy, therapy 
adherence, therapy response); initial set-up and patient education on 
use of equipment; device(s) supply with scheduled (e.g., daily) 
recording(s) and/or programmed alert(s) transmission to monitor 
cognitive behavioral therapy, each 30 days). The CPT Editorial Panel 
created 989X6 for CY 2023 and deleted Codes 0702T and 0703T.
    Also, during the October 2021 meeting, the CPT Editorial Panel 
revised the code descriptors for the PE-only RTM codes (that is, CPT 
codes 98975, 98976, and 98977) that CMS finalized in the CY 2022 PFS 
final rule (86 FR 65114 through 65117) to include ``cognitive 
behavioral therapy'' as another example of the type of service 
described by the coding. The RUC indicated that it considered this 
revision to be editorial.
    During the January 2022 RUC review, the definition of new CPT code 
989X6 was further refined to read Remote therapeutic monitoring (e.g., 
therapy adherence, therapy response); device(s) supply with scheduled 
(e.g., daily)

[[Page 46027]]

recording(s) and/or programmed alert(s) transmission to monitor 
cognitive behavior therapy, each 30 days). During the RUC review of CPT 
code 989X6, specialty societies indicated that the technologies for 
this service are still evolving. As a result, there were no invoices 
for devices specific to the cognitive behavioral therapy monitoring 
services described by the code that could be shared. In response, the 
RUC recommended that CPT code 989X6 be contractor priced.
    Given the anticipatory nature of this code, we agree with the RUC 
recommendation that this new code should be contractor priced until we 
learn more about the devices being used to furnish the service. Thus, 
we are proposing to accept the RUC recommendation to contractor price 
CPT code 989X6, a PE-only device code. There is no professional work 
associated with the code. We will work with our Medicare Administrative 
Contractors (MACs) to better understand the kinds of devices and device 
costs they are encountering as they review claims for payment for the 
new cognitive behavioral monitoring code, CPT code 989X6.
    We thank last year's commenters and the many others who have 
contacted us with their questions and ideas. We appreciate the 
continuing dialogue about the remote monitoring codes and welcome 
comments including any additional information that the medical 
community and other members of the public believe may provide further 
clarity on how remote patient monitoring services are used in clinical 
practice, and how they would be most appropriately coded, billed and 
valued under the Medicare PFS.

J. Payment for Skin Substitutes

1. Background
    In the CY 2022 PFS final rule, we finalized an approach for payment 
of synthetic skin substitutes in the physician office setting. We also 
announced that we had established a unique HCPCS code for each of ten 
products for which we had received a HCPCS Level II coding application, 
and we finalized that those products would be payable in the physician 
office setting as contractor priced products that are billed separately 
from the procedure to apply them. The ten products are as follows: 
NovoSorb[supreg] SynPath<SUP>TM,</SUP> Restrata[supreg] Wound Matrix, 
Symphony<SUP>TM</SUP>, InnovaMatrix<SUP>TM</SUP> AC, Mirragen[supreg] 
Advanced Wound Matrix, bio-ConneKt[supreg] Wound Matrix, 
TheraGenesis[supreg], XCelliStem[supreg], Microlyte[supreg] Matrix, and 
Apis[supreg] (86 FR 65121). After, the CY 2022 PFS Final rule was 
released, we deleted the ``A'' code that was established for bio-
ConneKt Wound Matrix after subsequent determination that a HCPCS Level 
II code was already established for this product. We note that since we 
issued the CY 2022 PFS final rule, we have received additional HCPCS 
Level II coding applications for similarly situated 510(k) cleared 
wound care management products. Those products have been issued unique 
HCPCS ``A'' codes and are also payable in the physician office setting 
as contractor priced products that are billed separately from the 
procedure to apply them.
    We also received several comments in response to our finalized 
policies expressing concern about potential inconsistencies in our 
policies for synthetic and non-synthetic skin substitutes. We indicated 
we would take these concerns into future consideration.
2. Key Objectives/Roadmap for Consistent Treatment of Skin Substitutes
    We believe outlining our HCPCS Level II coding and payment policy 
objectives in this proposed rule will be beneficial for interested 
parties, as we work to create a consistent approach for treatment of 
the suite of products we have referred to as skin substitutes. We have 
a number of objectives related to refining our Medicare policies in 
this area, including: (1) ensuring a consistent payment approach for 
skin substitute products across the physician office and hospital 
outpatient department setting; (2) ensuring that all skin substitute 
products are assigned an appropriate HCPCS code; (3) using a uniform 
benefit category across products within the physician office setting, 
regardless of whether the product is synthetic or comprised of human or 
animal based material, so we can incorporate payment methodologies that 
are more consistent; and (4) maintaining clarity for interested parties 
on CMS skin substitutes policies and procedures. Interested parties 
have asked CMS to address what they have described as inconsistencies 
in our payment and coding policies, indicating that treating clinically 
similar products (for example, animal-based and synthetic skin 
products) differently for purposes of payment is confusing and 
problematic for healthcare providers and patients. These concerns exist 
specifically within the physician office setting; however, interested 
parties have also indicated that further alignment of our policies 
across the physician office and hospital outpatient department settings 
would reduce confusion.
    Interested parties have suggested that all skin substitutes, 
regardless of the inclusion of human, animal or synthetic material in 
the product should be treated as drugs and biological products. 
Furthermore, they believe all skin substitute products should receive 
product-specific ``Q'' codes and receive separate payment under the 
ASP+6 methodology. They have expressed confusion regarding our 
assignment of HCPCS Level II ``A'' codes to the 10 skin substitute 
products in accordance the policy finalized in the CY 2022 PFS final 
rule, which we typically assign to identify ambulance services and 
medical supplies, instead of ``Q'' codes, which we typically assign to 
identify drugs, biologicals, and medical equipment or services not 
identified by national HCPCS Level II codes. They have indicated that 
the use of ``A'' HCPCS codes has caused confusion, not only for 
interested parties, but also for the A/B MACs, who the interested 
parties assert, have inconsistently processed submitted claims, in part 
because they are assigned HCPCS ``A'' codes that are treated as 
supplies which are subject to contractor pricing under the PFS. 
Additionally, interested parties have expressed concern that physicians 
and practitioners are hesitant to use the products associated with 
``A'' codes because they are unsure if they will be paid appropriately 
for using those products. When considering potential changes to 
policies involving skin substitutes, we believe it would be appropriate 
to take a phased approach over the next 1 to 5 years, that allows CMS 
sufficient time to consider input from interested parties on coding and 
policy changes primarily through our rulemaking process, and to account 
for FDA's regulation of these products, with the goal of avoiding 
unintended impacts on access to medically necessary care involving the 
use of these products.
    We welcome comment on our policy objectives for creating a 
consistent approach for treatment of the suite of products we have 
referred to as skin substitutes. Additionally, we welcome feedback on 
our phased approach and associated timeline. To achieve our objective 
of creating a consistent approach for paying for skin substitutes 
across the physician office and hospital outpatient department setting, 
we are including similar proposed changes in the CY 2023 OPPS proposed 
rule, which will be issued near the time this proposed rule is issued.

[[Page 46028]]

3. Changing the Terminology of Skin Substitutes
    As we work to clarify our policies for these products, we believe 
that the existing terminology of ``skin substitutes'' is problematic as 
it is an overly broad misnomer. In the CY 2021 OPPS/ASC final rule with 
comment period, we revised our description of skin substitutes to refer 
to a category of biological and synthetic products that are most 
commonly used in outpatient settings for the treatment of diabetic foot 
ulcers and venous leg ulcers (85 FR 80605). We noted that skin 
substitute products are not a substitute for a skin graft as they do 
not actually function like human skin that is grafted onto a wound. 
Instead, these products are applied to wounds to aid wound healing and 
through various mechanisms of action they stimulate the host to 
regenerate lost tissue. We also clarified that our definition of skin 
substitutes does not include bandages or standard dressings, and that 
within the hospital outpatient department, these items cannot be 
assigned to either the high cost or low-cost skin substitute groups or 
be reported with either CPT codes 15271 through 15278 or HCPCS codes 
C5271 through C5278. (85 FR 86066).
    While this definition has been updated to provide clarity that 
synthetic products are considered to be skin substitutes, there is 
still confusion with the usage of the term skin substitutes because as 
noted above in the definition, these skin substitute products are 
technically not a substitute for skin, but rather, a wound covering 
that is used to promote healing. We have used the current term ``skin 
substitutes'' to describe the suite of products that are currently 
referred to as skin substitutes. Additionally, the term ``skin 
substitutes'' is used within the Current Procedural Terminology 
(CPT[supreg]) code series 15271-8 as maintained by American Medical 
Association. Also, skin substitute products are generally regulated by 
the FDA as medical devices under section 510(k) of the Federal Food, 
Drug and Cosmetic (FD&C) Act and implementing regulations per 21 CFR 
part 807, or as HCT/Ps solely under section 361 of the PHS Act and the 
FDA regulations in 21 CFR part 1271.
    We believe that improving how we reference these products by using 
a more accurate and meaningful term will help address confusion among 
interested parties about how we describe these products, and further, 
how we pay for them. We are proposing to replace the term ``skin 
substitutes'' with the term ``wound care management'' or ``wound care 
management products.'' We believe this new term more accurately 
describes the suite of products that are currently referred to as skin 
substitutes while providing enough specificity to not include bandages 
or standard dressings, which as noted above, are not considered skin 
substitutes. We understand that our proposed terms contain the words 
``care management'' which could be construed to implicate the care 
management series of AMA CPT codes (for example, 99424-99427, 99437, 
99439, 99487, 99489, 99490-99491) that are commonly used by healthcare 
professionals. We also understand that the use of the word 
``management'' in our proposed terms might be construed by some to 
implicate AMA CPT Evaluation or Assessment and Management (E/M) codes. 
We would like to clarify that the proposed terms ``wound care 
management'' and ``wound care management products'' would not implicate 
the care management series of AMA CPT codes (for example, 99424-99427, 
99437, 99439, 99487, 99489, 99490-99491), or our own G-codes that 
describe care management services. Nor would our proposed terms relate 
to the AMA CPT E/M codes. Unlike ``care management'' or ``evaluation 
and management'' codes and services, the proposed terms would describe 
a category of items or products, not a type of services. Lastly, we 
also considered alternate terms such as wound coverings, wound 
dressings, wound care products, skin coverings and cellular and/or 
tissue-based products for skin wounds but believe the proposed terms 
are more technically accurate and descriptive for how these products 
are used than the alternative's considered.
    We solicit feedback on our proposal to change the terminology we 
use for the suite of products referred to as ``skin substitutes'' to 
instead use the term ``wound care management'' or ``wound care 
management products,'' and on the alternative terms we considered 
including wound coverings, wound dressings, wound care products, skin 
coverings and cellular and/or tissue-based products for skin wounds. We 
are particularly interested in how these products are referenced in 
current CPT coding and would appreciate feedback from the CPT Editorial 
Panel and other interested parties on how to address the challenges we 
discuss above. We also are interested in feedback on other possible 
terms that could be used to more meaningfully and accurately describe 
the suite of products currently referred to as skin substitutes.
4. Revising Payment for Skin Substitutes
    In 2003, the Medicare Modernization Act established the Average 
Sales Price (ASP) approach for drugs and biologicals as described under 
section 1847A of the Act. We generally considered skin substitute 
products to be biologicals in our initial implementation of the ASP 
methodology. However, with the introduction of synthetic skin 
substitutes products over the last several years, we are reviewing our 
categorization of these products, especially as we work to establish 
payment policies for these products across the various care settings. 
As explained above, we announced in the CY 2022 PFS final rule the 
establishment of product specific HCPCS Level II codes for certain 
products for which we had received a HCPCS Level II coding application. 
We also finalized that these products would be payable in the physician 
office setting as contractor priced products that are billed separately 
from the procedure to apply them (86 FR 65120). After we issued the CY 
2022 PFS final rule, we assigned nine HCPCS ``A'' codes for the 
synthetic skin substitute products that were addressed in the rule.
    In the CY 2022 PFS final rule, we stated that we recognized there 
was no payment mechanism for synthetic skin substitute products within 
the PFS, and we acknowledged the need to reconcile the gap in payment 
for synthetic products in the physician office setting without delay 
(86 FR 65121). Additionally, as we described in the CY 2022 PFS final 
rule, a commenter stated that skin substitutes are a heterogenous group 
and there is an increasing intersection between biological, 
bioengineered, and synthetic components. This highlights that the 
current categorization of skin substitutes as either synthetic or non-
synthetic is not mutually exclusive given the expansion of skin 
substitute products that may contain both biological and synthetic 
elements. The increasing overlap of both synthetic and non-synthetic 
skin substitute products emphasizes the importance of treating all skin 
substitute products in a similar manner in terms of coding and payment
    After further review, we agree with interested party 
recommendations that the suite of products referred to as skin 
substitutes should be treated in a uniform manner across different 
outpatient care settings. In terms of payment for these products within 
the office setting, we acknowledge the current variation between 
contractor

[[Page 46029]]

pricing for synthetic skin substitute products and payment based on 
ASP+6% for non-synthetic skin substitute products; and also the 
challenges to the clear categorization of products as synthetic or non-
synthetic. As a result, we believe establishing a consistent framework 
for how these products are treated within the physician office and 
hospital outpatient settings will help ensure equitable access and 
appropriate payment for these services. As referenced in section 
II.J.3. of this proposed rule, we believe the term skin substitutes is 
not all-inclusive or particularly technically accurate, and therefore, 
we propose to replace the term skin substitutes with `wound care 
management products.' Additionally, the term `wound care management 
products' accurately reflects our belief that these products are more 
appropriately considered as supplies incident to a physician service.
    In order to ensure we treat skin substitutes consistently in terms 
of coverage, coding, and payment, we are proposing that skin substitute 
products that are commonly furnished in the physician office setting be 
considered as incident to supplies in accordance with section 
1861(s)(2)(A) of the Act, effective January 1, 2024. ``Incident to 
supplies'' refers to supplies that are furnished as an integral, 
although incidental, part of the physician's personal professional 
services in the course of diagnosis or treatment of an injury or 
illness (Sec.  410.26). Under our proposal, in the office setting, we 
would no longer pay separately for skin substitute products under the 
ASP+6% payment methodology.
    By categorizing skin substitute products that are furnished in the 
office setting as incident to supplies, we would consider the cost of 
the supply used in furnishing a physicians' service through the 
physician fee schedule practice expense (PE) methodology. Treating 
these products as incident to supplies would mean that the resource 
costs for these products would be included in establishing PE relative 
value units (RVUs) for the associated physicians' service with which 
they would be furnished. For example, for CPT Code 15271 (application 
of skin substitute graft, leg or ankle), we establish the PE RVU by 
considering three separate categories of PE resource costs involved in 
furnishing the service: clinical labor, supplies, and equipment. 
Together, these costs are the total direct PE resource inputs. When 
considering these skin substitute products as a supply, we would add 
their associated cost to the direct PE inputs for the service with 
which the product is furnished. For a more detailed description of the 
PE RVU methodology, please refer to section II.B. of this proposed 
rule, Determination of Practice Expense Relative Value Units in the 
rule.
    We acknowledge that this proposed change to consider skin 
substitute products furnished in the office setting as incident to 
supplies would not be implemented immediately in CY 2023. Rather, we 
would need to transition toward consistent coding and payment for these 
products. Please refer to section III.O. of this proposed rule for our 
proposed changes to our process for assigning HCPCS Level II codes to 
wound care management products. In that section, we are proposing a 
deadline of 12 months after the effective date of the CY 2023 PFS final 
rule for applicants to submit HCPCS Level II applications for HCT/Ps . 
In order to move forward with the proposed changes toward uniform 
coding, we anticipate that the Q codes for all skin substitute products 
will be discontinued at the end of CY 2023. We further propose to 
establish ``A'' codes for all skin substitute products meeting the 
criteria for a HCPCS Level II code, and propose to contractor price 
these codes effective January 1, 2024. For CY 2023, skin substitute 
products that were previously assigned Q codes will continue to be paid 
under the current ASP+6 payment methodology.
    We believe it is necessary to establish an effective date of 
January 1, 2024, for the proposed payment of skin substitutes in the 
non-facility setting as incident to supplies in order to align with the 
HCPCS Level II coding proposals for wound care management products as 
described in section III.O., to ensure all interested parties have the 
same opportunity to effectively transition toward the coding and 
payment changes. Additionally, we intend to engage with interested 
parties via an open-door forum/listening session to receive feedback on 
this proposal.
    To summarize, we propose to treat skin substitutes (including 
synthetic skin substitutes) as incident to supplies as described under 
section 1861(s)(2)(A) of the Act when furnished in non-facility 
settings and to include the costs of these products as resource inputs 
in establishing practice expense RVUs for associated physician's 
services effective January 1, 2024. This proposal would mean skin 
substitutes are treated in the same manner for purposes of payment when 
furnished in non-facility settings, and would be consistently 
contractor priced through CY 2024. Given these significant changes, we 
believe maintaining the current treatment of these products for 
purposes of payment during CY 2023 will aid interested parties through 
the transition. We also propose to discontinue the use of the term skin 
substitutes beginning January 1, 2024 and to instead refer to this 
suite of products as ``wound care management products.'' We solicit 
feedback on our proposals.

K. Proposal To Allow Audiologists To Furnish Certain Diagnostic Tests 
Without a Physician Order

    Audiologists are recognized under Medicare Part B to provide 
certain diagnostic audiology services as defined at section 1861(ll)(3) 
of the Act. Specifically, the statute describes audiology services that 
include such hearing and balance assessment services as the audiologist 
is legally authorized to perform under State law, as would otherwise be 
covered if the services were furnished by a physician. The definition 
of qualified audiologist appears at section 1861(ll)(4)(B) of the Act. 
Currently, the only other provision in the Medicare statute that 
relates to audiology services is found at section 1862(a)(7) of the 
Act, which excludes payment for hearing aids and related examinations. 
This exclusion is codified at Sec.  411.15(d)(1) which precludes 
payment for hearing aids or examinations for the purpose of 
prescription, fitting, and changing hearing aids. There are no other 
Medicare statutory provisions addressing audiologists or audiology 
services. Diagnostic tests are included as a Medicare Part B benefit 
under section 1861(s)(3) of the Act.
    For many diagnostic testing services, payment under the PFS can be 
made in two separate components of the service when parts of the 
services are furnished by two different physicians, practitioners, or 
other suppliers: the technical component (TC) and the professional 
component (PC). The TC is the portion of the service that involves the 
collection of information from the patient--for example, a radiological 
image, sample, specimen, or interrogatory study. When the TC is 
furnished separately, the ``TC'' modifier is used with the relevant 
HCPCS code to bill for the service under the PFS. The PC of a 
diagnostic test is the portion of the service involving the 
interpretation of the collected information by a physician or other 
practitioner. When the PC is furnished separately, the service is coded 
with modifier ``26''. When the same physician or practitioner furnishes 
both the TC and PC of the service, the relevant HCPCS code (known as 
the ``global'') is billed

[[Page 46030]]

without a modifier. We have established general requirements for 
furnishing and billing diagnostic tests at Sec.  410.32.
    In the CY 1997 PFS final rule, we established in regulations at 
Sec.  410.32(a), based on long-standing manual provisions, that all 
diagnostic tests, including audiology tests, must be ordered by the 
physician who is treating the beneficiary who will use the results to 
manage the beneficiary's care. We believed this requirement was 
necessary to ensure that the physician had a relationship with the 
beneficiary, and would ensure the tests were reasonable and medically 
necessary, as well as prevent patterns of abuse. At the same time, we 
finalized a regulatory provision at Sec.  410.32(c) (later redesignated 
to Sec.  410.32(a)(2)) to recognize as the treating practitioner for 
the purpose of ordering diagnostic tests certain nonphysician 
practitioners (NPPs) who are authorized under the statute to provide 
services that would be physician services if furnished by a physician 
when they are operating within the scope of their State license. The 
NPPs who can serve as the treating practitioner for purposes of 
ordering diagnostic tests include physician assistants (PAs), nurse 
practitioners (NPs), and clinical nurse specialists (CNSs) (defined in 
sections 1861(s)(2)(K)(i) and (ii) of the Act, respectively), certified 
nurse-midwives (defined in section 1861(gg) of the Act), qualified 
psychologists (defined in section 1861(ii) of the Act), and social 
workers (defined in section 1861(hh) of the Act)) (61 FR 59497 through 
59498). We note that all of these NPPs are included as practitioners 
who must accept Medicare payment on an assignment-related-basis under 
section 1842(b)(18)(C) of the Act. As such, these NPPs can only collect 
any applicable cost-sharing from the patient, and cannot balance bill 
the patient for additional amounts above the Medicare payment amount. 
The regulation reflecting the ordering requirements for diagnostic 
tests has not been substantively amended since that time, except to add 
an exception to the treating practitioner ordering requirement for 
screening mammography and, in response to the PHE for COVID-19 to add a 
limited exception for a single, otherwise-covered COVID-19 diagnostic 
test (and one otherwise covered diagnostic laboratory test for flu or 
similar respiratory condition needed to diagnose COVID-19) per patient 
per year during the PHE.
    In the CY 1998 final rule (62 FR 59057 through 59070), we also 
amended Sec.  410.32(a) to clarify that the ordering requirement is 
based on the exclusion in section 1862(a)(1)(A) of the Act and 
contained in Sec.  411.15(k)(1); that is, diagnostic testing services 
that do not meet the ordering requirements in Sec.  410.32(a) are 
considered not reasonable and necessary for the diagnosis and treatment 
of illness or injury or to improve the functioning of a malformed body 
member. We explained that we found tests not demonstrably reasonable 
and medically necessary if they are not ordered by the beneficiary's 
treating physician or practitioner who will use the test results to 
manage the beneficiary's condition or symptom. Also in the CY 1998 PFS 
final rule, while we continued to require physician supervision for 
most diagnostic tests, we amended our regulation to except diagnostic 
tests personally furnished by audiologists (as well as psychologists 
and certain physical therapists board-certified in electrophysiology) 
from the physician supervision requirement.
    As explained above, all of the NPPs that we recognize as treating 
practitioners in Sec.  410.32(a)(2) for purposes of the diagnostic test 
order requirement who must accept Medicare payment on an assignment-
related basis can only collect any applicable cost-sharing from the 
patient and cannot balance bill the patient for additional amounts. 
Audiologists are not NPPs as defined by the statute (that is, they are 
not listed at section 1842(b)(18)(C) of the Act). However, beginning in 
2008, we allowed audiologists to enroll in the Medicare program so that 
they could independently bill for their audiology services rather than 
relying on physicians or other enrolled practitioners to bill on their 
behalf. As such, audiologists are not required to accept payment on an 
assignment-related basis.
    Over the past several years, interested parties have requested that 
CMS eliminate the treating physician or other practitioner order 
requirement for the hearing and balance assessment services furnished 
by audiologists. They have suggested that CMS has the administrative 
authority to eliminate the order requirement for audiology services via 
notice and comment rulemaking, and that doing so would enable greater 
access to these important services. The interested parties believe that 
an order from the treating physician or practitioner is not required by 
the statute, and that audiology services are covered unless they are 
otherwise excluded, such as because they are not reasonable and 
necessary in a particular circumstance. To support their points, these 
interested parties shared with us a report prepared in 2020 by a 
consultant concluding that removal of the treating physician or 
practitioner ordering requirement for audiology hearing and balance 
assessment services would result in an estimated savings to Medicare 
over a 10-year period of approximately $108 million, which includes a 
savings of $36 million in beneficiary copayments. These savings 
estimates are based on projected Medicare payments and beneficiary 
copayments that would not occur if Medicare beneficiaries directly 
accessed the audiology hearing and balance services furnished by an 
audiologist without the order of a treating physician or other 
practitioner. In addition, we have heard from interested parties that 
an order is not required for audiology services by certain other public 
or private health insurers including Medicare Advantage plans, 
Medicaid, plans under the Federal Health Benefit Program, and the 
Veterans Administration. We do not know the scope of services that are 
covered by these plans or insurers when furnished by audiologists, 
including whether these health insurers cover only hearing and balance 
assessment services (as the Medicare program does in accordance with 
the statute) or also hearing aid examinations for the prescription, 
fitting, and programming of hearing aids or other services excluded 
from payment under Medicare Part B and/or whether only some or all of 
the plans allow payment directly to audiologists for some or all of the 
covered services without a physician/NPP order. Additionally, we note 
that some of these health insurance programs involve closed systems 
with greater levels of interprofessional communication and control (for 
example, within certain accountable care organizations (ACOs), managed 
care plan networks, or through various Veterans Affairs medical 
centers). In contrast, the physicians and practitioners furnishing care 
under the fee-for-service Medicare Part B program often practice 
independently from each other, which can pose barriers to communication 
and coordination of care between health care professionals such as 
audiologists and the treating physicians or other practitioners.
    In addition, the nature of audiology services personally furnished 
by audiologists is such that these services are often billed based on 
the audiologist's reassignment of billing rights by an entity other 
than the furnishing audiologist, so we are currently unable to 
determine the number of audiologists furnishing these services or the 
full scope of beneficiary

[[Page 46031]]

utilization of these services in those settings.
    While we believe that CMS has the administrative authority to 
remove the treating physician or practitioner order requirement for 
audiology hearing and balance assessment services via notice and 
comment rulemaking, we do not agree with the suggestions of interested 
parties that audiologists should be considered in the same way as the 
NPPs we recognized as treating practitioners for purposes of the order 
requirement under Sec.  410.32(a)(2). Specifically, we allowed the NPPs 
(including PAs, NPs, and CNSs) to order diagnostic tests for the 
beneficiaries they treat, and we continued to require that the results 
of the tests be used in the management of the patient's specific 
medical problem. In these cases, the relationship of the patient to the 
NPP who orders diagnostic tests and uses the results in managing the 
beneficiary's medical condition serves to provide assurance that the 
services are medically necessary. In contrast, audiologists are not 
recognized under Medicare Part B to treat or manage patients. We 
consider audiologists' services to be more specialized that those of 
other physicians and NPPs who provide diagnostic services. That is, 
their diagnostic tests are more limited and focused in scope than 
others furnishing services under the Medicare Part B benefit for 
diagnostic tests at section 1861(s)(3) of the Act. Unlike PAs, NPs or 
CNSs who may bill for E/M services, and for whom Medicare Part B covers 
services and supplies incident to their own professional services as 
provided in the regulation at Sec.  410.26, the scope of audiology 
services under the Medicare Part B statute includes only diagnostic 
hearing and balance assessment services. We are concerned that removal 
of the order requirement for hearing and balance services furnished by 
audiologists could lead to the furnishing and payment of services that 
are not used by a treating physician or practitioner in the management 
of the patient's medical condition, and thus, not medically necessary. 
We are also concerned about patient safety if Medicare beneficiaries 
seek hearing and balance services directly from audiologists without 
the involvement of a treating physician or practitioner. For example, 
the beneficiary could have an acute condition or symptom such as acute 
sensorineural hearing loss resulting from a viral neuronitis that needs 
to be diagnosed and treated by a physician or practitioner on an 
emergent basis, and that care could be delayed if the beneficiary first 
sought care directly from an audiologist. As an additional example, 
disequilibrium has many possible causes, including potentially life 
threatening cardiologic (for example, arrythmias, heart attack or 
cardiac ischemia) and neurologic etiologies (for example, migraines, 
TIAs (transient ischemic attacks), strokes). The wide variety of 
possible causes of disequilibrium with some of these in both categories 
being potentially life threatening (for example, stroke, heart attack, 
arrythmias) speaks to the importance of a physician or NPP being 
involved in the initial patient assessment. Such an assessment would 
include a careful history, a physical examination, and immediate 
office-based testing (for example, EKG) to look for some of the more 
critical possible causes of disequilibrium, and the physician or NPP 
would determine the plan for the progression of the outpatient workup. 
That is to say, the physician or NPP would decide, given the history 
and clinical exam, whether the evaluation should continue along 
cardiologic, neurologic, or vestibular perspectives--the latter of 
which could possibly result in an order/referral to an audiologist for 
balance assessments using the vestibular dysfunction testing codes. For 
these reasons, we believe patients with disequilibrium would be best 
served by seeing a physician or NPP before being referred to an 
audiologist as appropriate. Furthermore, as previously noted, 
audiologists are not required to accept Medicare payment on an 
assignment-related basis, and therefore, can balance bill the 
beneficiary. We are concerned that the removal of the treating 
physician or practitioner ordering requirement, and potentially 
increased volume of audiology services, could lead to unnecessary costs 
to beneficiaries. In addition, in the absence of a required order of 
the treating physician or practitioner, we are concerned that the 
direct access to audiologists might incentivize changes in behavior and 
practice patterns among audiologists that could lead to overutilization 
of audiology services.
    We have carefully considered the interested parties' requests to 
remove the treating physician or practitioner order requirement for 
diagnostic audiology hearing and balance assessment services. We 
believe it would be appropriate to provide a limited exception to the 
order requirement for diagnostic hearing testing services furnished by 
audiologists in order to broaden patient access to these services. In 
response to the requests of interested parties, we are proposing to 
amend our regulation by adding a paragraph at Sec.  410.32(a)(4) to 
remove the order requirement under certain circumstances for certain 
audiology services furnished personally by an audiologist for non-acute 
hearing conditions. These non-acute hearing conditions would not 
include balance assessments that are used for patients with 
disequilibrium, because as we explained above, the physician/NPP needs 
to first evaluate the patient clinically due to the many serious 
medical conditions the beneficiary might have, and ensure the patient 
is cleared medically before setting them on track to receive vestibular 
function tests, possibly from an audiologist. The list of audiology 
services for which Medicare payment can be made when an audiologist 
personally performs them on the order of the treating physician or NPP 
can be found on the Medicare physician fee schedule web page under the 
link titled ``Audiology Services'' at https://www.cms.gov/medicare/medicare-fee-for-service-payment/physicianfeesched. We propose to 
permit the services described by the codes listed in Table 29 to be 
furnished under the proposed exception without the order of the 
treating physician or NPP. We note that Table 29 does not include the 
codes for vestibular function tests in the code ranges of 92517-92519 
and 92537-92549 because, as discussed above, we believe it is in the 
clinical interest of the beneficiary to be assessed by a treating 
physician or NPP for potentially serious medical implications of 
disequilibrium symptoms, including cardiologic and neurologic 
etiologies before they can be cleared and referred for vestibular 
function tests.
BILLING CODE 4120-01-P

[[Page 46032]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.069

BILLING CODE 4120-01-C
    We are proposing to create HCPCS code GAUDX (Audiology service(s) 
furnished personally by an audiologist without a physician/NPP order 
for non-acute hearing assessment unrelated to disequilibrium, or 
hearing aids or examinations for the purpose of prescribing, fitting, 
or changing hearing aids; (service may be performed once every 12 
months) to describe these audiology services furnished personally by an 
audiologist without the order of the treating physician or other 
practitioner. We believe that limiting the audiology services that can 
be furnished without an order to include only hearing conditions that 
are non-acute in onset and balance services (patients with 
disequilibrium symptoms) by removing the CPT codes for vestibular 
dysfunction would be appropriate to address our patient safety 
concerns. We also propose to specify in the code descriptor for HCPCS 
code GAUDX that the audiology services can be performed only once every 
12 months. We believe this limitation is appropriate to avoid potential 
program integrity issues, such as audiologists billing for GAUDX with a 
greater frequency, or providing services that are not reasonable and 
necessary for the treatment of the patient's illness or injury. We 
selected once every 12 months, rather than every 6 months, for two 
reasons. The first is because 6 months did not seem long enough for a 
new, non-acute hearing condition to arise, and if an acute hearing 
condition were to onset, it would necessitate an evaluation with a 
physician/NPP. The second reason is that, at any time, the beneficiary 
may always elect to see their physician/NPP for any hearing 
conditions--acute or non-acute--or for conditions with disequilibrium 
symptoms.
    Under this proposal, an audiologist would be able to bill code 
GAUDX once every 12 months for a beneficiary. The GAUDX code would 
include and be used to bill for any number of audiology services 
furnished in that particular

[[Page 46033]]

encounter with the beneficiary. Since the proposed GAUDX code is 
generic, the tests provided could include those that are split into PC/
TC and those that are not. As with all services, the actual tests 
provided and their results would need to be documented in the medical 
record, for purposes of medical review. Further, we propose that no 
more than one unit of code GAUDX could be billed--that means ``1'' is 
inserted in the ``days or units'' block 24G on the CMS 1500 
professional claim form. We are also concerned that beneficiaries may 
receive services billed as code GAUDX from more than one audiologist in 
the 12-month period and/or be mistaken or misled into thinking that 
code GAUDX represents a screening/preventive service which Medicare 
does not cover. To avoid the potential for inappropriate use of HCPCS 
code GAUDX, we plan to establish system edits through our usual change 
management process to ensure that GAUDX is only paid once every 12 
months, per each beneficiary. We note that the code descriptor proposed 
for GAUDX could be billed for patients seeking care for non-acute 
hearing conditions, and that the furnished audiology services would 
still have to be medically necessary. Under our proposal, after 
receiving audiology services from an audiologist accessed directly 
without the order of a treating physician or practitioner, the 
beneficiary would have to wait a full 12 months before receiving 
additional diagnostic tests from an audiologist without a physician/NPP 
order. The beneficiary would remain free to seek care from a treating 
physician (or/NPP) if needed, and that care could potentially include a 
referral with an order for further diagnostic testing furnished by an 
audiologist.
    To value HCPCS code GAUDX, we propose to use the combined values of 
CPT codes 92557 (Comprehensive audiometry threshold evaluation and 
speech recognition (92553 and 92556 combined)) and 92567 (Tympanometry 
(impedance testing)), which we believe would represent a typical 
service provided by audiologists. We chose CPT Codes 92557 and 92567 as 
typical because they make up 72 percent of all billings for 
audiologists; and, when all physician and practitioner specialties are 
considered, including audiologists, code 92557 is billed with code 
92567 over 60 percent of the time and code 92567 is billed with code 
92557 over 83 percent of the time in the same clinical encounter, 
according to Medicare claims data.
    Thus, we propose a total work RVU of 0.8 for GAUDX, calculated by 
combining the 0.60 work RVU for CPT code 92557 and 0.20 work RVU for 
CPT code 92567. We are proposing to establish the PE value for GAUDX by 
combining the unduplicated PE of CPT codes 92557 and 92567. 
Specifically, we propose to include the following direct practice 
expense (PE) inputs for supply items: two SD046 (Ear tip, tympanometry 
probe), two SJ053 (Swab pad, alcohol), one SM0251 (Specula tips, 
otoscope), one (SK059) sheet of recording paper, and two SD047 (Ear tip 
insert with sound tube); and the following direct PE inputs for 
equipment: EQ054 (Audiometric soundproof booth (exam and control room)) 
for 20 minutes, EQ053 (Audiometer, clinical, diagnostic) for 20 
minutes, and EQ244 (Tympanometer with printer) for 4 minutes. We also 
propose to apply the same provisions for code GAUDX as those set for 
92557 and 92567 (for example, PC/TC indicator, bilateral indicator, 
physician supervision indicator, etc.), as they now appear in the PFS 
Relative Value file found at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Relative-Value-Files.
    We believe that proposed HCPCS code GAUDX, if finalized, will allow 
us to better understand the scope of beneficiary access to these 
services with or without the order requirement. We also believe that 
proposed HCPCS code GAUDX, if finalized, will allow us to better assess 
possible burdens to the beneficiary when attempting to access these 
services. Given the makeup and intended use of proposed code GAUDX, we 
would like to increase our understanding about how and where these 
audiology services would be provided without the order of a treating 
physician or practitioner. We are also requesting comments from 
interested parties about what settings might represent the typical 
places of service and which institutional providers might bill for 
HCPCS code GAUDX.

L. Proposals and Request for Information on Medicare Parts A and B 
Payment for Dental Services

1. Background on Medicare Payment for Dental Services
    Section 1862(a)(12) of the Act generally precludes payment under 
Medicare Parts A or B for any expenses incurred for services in 
connection with the care, treatment, filling, removal, or replacement 
of teeth or structures directly supporting teeth. (Collectively here, 
we will refer to ``the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth'' as 
``dental services.'') That section of the statute also includes an 
exception to allow payment to be made under Medicare Part A for 
inpatient hospital services in connection with the provision of such 
dental services if the individual, because of their underlying medical 
condition and clinical status or because of the severity of the dental 
procedure, requires hospitalization in connection with the provision of 
such services. Our regulation at 42 CFR 411.15(i) similarly excludes 
payment for dental services except for inpatient hospital services in 
connection with dental services when hospitalization is required 
because of: (1) the individual's underlying medical condition and 
clinical status; or (2) the severity of the dental procedure.
    However, under our current policy, we make payment under both 
Medicare Part A and Part B for certain dental services in circumstances 
where the services are not considered to be in connection with dental 
services within the meaning of section 1862(a)(12) of the Act or our 
regulation at Sec.  411.15(i). We make payment when a doctor of dental 
medicine or dental surgery (hereinafter referred to as a ``dentist'') 
furnishes dental services that are an integral part of the covered 
primary procedure or service furnished by another physician treating 
the primary medical illness. In these limited circumstances, Medicare 
payment can be made for dental services such as, but not limited to, 
the wiring of teeth when done in connection with a reduction of a jaw 
fracture, the extraction of teeth to prepare the jaw for radiation 
treatment of neoplastic disease, and/or an oral or dental examination 
on an inpatient basis performed as part of a comprehensive workup prior 
to renal transplant surgery. (See Medicare Benefit Policy Manual (IOM 
Pub 100-02, Chapter 15, section 150); and Medicare National Coverage 
Determinations Manual Chapter 1, Part 4 (IOM Pub 100-03, Chapter 1, 
Part 4, section 260.6)). Medicare Administrative Contractors (MACs) 
make claim-by-claim determinations as to whether a patient's 
circumstances do or do not fit within the terms of the preclusion and 
exception specified in section 1862(a)(12) of the Act and Sec.  
411.15(i) of our regulations, and in accordance with the CMS manual 
provisions.
    We have received feedback from interested parties suggesting that 
our interpretation of section 1862(a)(12) of the Act is unnecessarily 
restrictive, which may contribute to inequitable distribution of dental 
services for Medicare beneficiaries. Additionally, a recent report from 
the National

[[Page 46034]]

Institutes of Health, ``Oral Health in America Advances and 
Challenges,'' discusses how unequal distribution of dental services and 
prohibitive costs, particularly for older adults who are at the highest 
risk for poor oral health, can lead to and further complicate the 
treatment of other medical conditions (for more information, see 
https://directorsblog.nih.gov/2022/06/14/using-science-to-solve-oral-health-inequities/). The interested parties also suggest that there are 
instances where dental services are directly related to the clinical 
success of an otherwise covered medical service under Medicare Parts A 
and B, and that the regulation at Sec.  411.15(i) should be amended to 
reflect that Medicare payment is available in these circumstances. 
Recognizing that there may be instances where medical services 
necessary to diagnose and treat the individual's underlying medical 
condition and clinical status may require the performance of certain 
dental services, we believe that there are instances where dental 
services are so integral to other medically necessary services that 
they are not in connection with the care, treatment, filling, removal, 
or replacement of teeth or structures directly supporting teeth within 
the meaning of section 1862(a)(12) of the Act. Rather, such dental 
services are inextricably linked to the clinical success of an 
otherwise covered medical service, and therefore, are instead 
substantially related and integral to that primary medical service. We 
also believe that there are circumstances where the dental services are 
in direct connection with the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth, and are 
not inextricably linked to the clinical success of a covered medical 
service. In these instances, we continue to believe that Medicare 
payment is precluded by section 1862(a)(12) of the Act except when, due 
to the patient's underlying medical condition and clinical status, or 
the severity of the dental procedure, hospitalization is required; and 
that in those instances, the Medicare Part A exception provided under 
section 1862(a)(12) of the Act would apply.
    To provide greater clarity to our current policies and respond to 
issues raised by interested parties, as described in section II.L.2 of 
this proposed rule, we are: (1) proposing to clarify our interpretation 
of section 1862(a)(12) of the Act and codify certain of our current 
Medicare FFS payment policies for medically necessary dental services; 
(2) proposing and seeking comment on payment for other dental services, 
such as dental examinations, including necessary treatment, performed 
as part of a comprehensive workup prior to organ transplant surgery, or 
prior to cardiac valve replacement or valvuloplasty procedures, that 
are similarly inextricably linked to, and substantially related and 
integral to the clinical success of, certain other covered medical 
services; (3) requesting comments on other types of clinical scenarios 
where the dental services may be inextricably linked to, and 
substantially related and integral to the clinical success of, other 
covered medical services; (4) requesting comments on the potential 
establishment of a process to identify for our consideration and review 
submissions of additional dental services that are inextricably linked 
and substantially related and integral to the clinical success of other 
covered medical services; (5) requesting comment on other potentially 
impacted policies; and (6) requesting comment on potential future 
payment models for dental and oral health care services. We welcome 
public comments on these areas.
2. Proposals To Clarify the Interpretation of Section 1862(a)(12) of 
the Act and Codify Current Payment Policies for Certain Dental Services 
and Request for Comment
a. Proposed Payment for Inpatient Hospital Dental Services and Request 
for Comment
    As explained above, under our interpretation of the statute and our 
current regulation, and as reflected in our regulation and manuals, 
items and services furnished in connection with the care, treatment, 
filling, removal, or replacement of teeth or structures directly 
supporting the teeth generally are not covered, and no payment may be 
made for them under either Medicare Part A or Part B. Section 
1862(a)(12) of the Act and our regulation at Sec.  411.15(i) includes 
an exception to allow Medicare Part A payment to be made for inpatient 
hospital services in connection with the provision of dental services 
if the individual, because of their underlying medical condition and 
clinical status or because of the severity of the dental procedure, 
requires hospitalization in connection with the provision of such 
services. We believe that there are instances in which a Medicare 
beneficiary may require dental services that are in direct connection 
with the care, treatment, filling, removal, or replacement of teeth or 
structures directly supporting teeth such that the application of the 
Medicare Part A payment exception would apply when hospitalization is 
required because of: (1) a patient's underlying medical condition and 
clinical status; or (2) the severity of the dental procedure. Under 
these circumstances, we would continue to apply the exception under 
section 1862(a)(12) of the Act, and make payment for inpatient hospital 
services. We are interested in receiving public comments on what 
professional services, including, but not limited to dental services, 
may occur during and prior to the patient's hospitalization or 
procedure requiring hospitalization under this exception. We may 
consider finalizing, based on our review of public comments, additional 
payment policies in this area.
b. Proposal To Clarify the Interpretation of Section 1862(a)(12) of the 
Act and Codify Current Payment Policies for Certain Dental Services
    As explained above, Medicare payment can be made for inpatient 
hospital services associated with dental services that fall within the 
statutory exception under section 1862(a)(12) of the Act. However, 
under our current policy, if a dental service and other related 
services (for example, anesthesia or imaging services) are performed as 
incident to and as an integral part of a covered procedure or service 
performed by a dentist, the total service performed by the dentist is 
covered, and payment can be made under Medicare Parts A and B as 
appropriate. This policy is based on the idea that some dental services 
that would ordinarily be excluded by statute from payment are 
inextricably linked to, and substantially related and integral to the 
clinical success of, certain other covered medical services. When that 
is the case, then we believe those dental services are not in 
connection with dental services within the meaning of section 
1862(a)(12) of the Act, but are instead inextricably linked to, and 
substantially related and integral to the clinical success of, certain 
other covered medical services. As such, we propose to interpret the 
statute under section 1862(a)(12) of the Act to permit Medicare payment 
under Parts A and B for dental services where the dental service is 
inextricably linked to, and substantially related and integral to the 
clinical success of, certain other covered medical services and allow 
payment to be made, regardless of whether the services are furnished in 
an inpatient or outpatient setting. Under these circumstances, we 
propose that the exclusion under section 1862(a)(12) of the Act would 
not apply, because the service is not in connection with the

[[Page 46035]]

care, treatment, filling, removal, or replacement of the teeth or 
structures supporting the teeth, but instead is inextricably linked to, 
and substantially related and integral to the clinical success of, 
certain other covered medical services.
    As described in section II.L.1. of this proposed rule, in a limited 
number of circumstances, Medicare Part B currently pays for dental 
services under the PFS when a dentist furnishes a service(s) that is 
integral to the covered primary procedure or service rendered when 
treating the primary medical illness. Our current payment policies for 
dental services are contained in manual provisions (The Medicare 
Benefit Policy Manual Chapter 15 (IOM Pub 100-02, Chapter 15, section 
150) and Medicare National Coverage Determinations Manual Chapter 1, 
Part 4 (IOM Pub 100-03, Chapter 1, Part 4, section 260.6)) that reflect 
the proposed interpretation of section 1862(a)(12) of the Act discussed 
above.
    Our payment policy contained in Medicare National Coverage 
Determinations Manual Chapter 1, Part 4 (IOM Pub 100-03, Chapter 1, 
Part 4, section 260.6) \74\ (herein ``the NCD Manual'') provides for 
payment of an oral or dental examination performed on an inpatient 
basis as part of a comprehensive workup prior to renal transplant 
surgery. We believe Medicare payment is permitted under this manual 
provision for such a dental or oral examination prior to renal 
transplant surgery, because the examination is inextricably linked to, 
and substantially related and integral to the clinical success of, the 
renal transplant procedure. As such, we believe such services are not 
subject to the payment preclusion under section 1862(a)(12) of the Act. 
However, we believe that comprehensive workups prior to renal 
transplant surgery, including related dental examinations, can occur in 
either the inpatient and outpatient setting. As such, we are proposing 
to provide Medicare payment for oral or dental examinations performed 
as part of a comprehensive workup prior to renal transplant surgery 
when these services occur in either the inpatient or outpatient 
setting, and revise our regulation at Sec.  411.15(i) accordingly.
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    The NCD Manual goes on to state that, when performing a dental or 
oral examination, a dentist is not recognized as a physician under 
section 1861(r) of the Act. We believe this statement is based on an 
unnecessarily narrow reading of section 1861(r) of the Act, and is also 
not consistent with other manual provisions. The statutory definition 
of physician includes a doctor of dental surgery or of dental medicine 
in section 1861(r)(2) of the Act, and a similar definition of physician 
is included in our IOM Pub 100-1, Section 70.2 \75\ when dental or oral 
examinations, and specific treatments, are within the State scope of 
practice for the dentist. As such, we are proposing to amend Sec.  
411.15(i) to clarify that Medicare Part B coverage and payment can be 
made for such a dental or oral examination prior to renal transplant 
surgery when performed by a doctor of dental surgery or dental medicine 
as defined in section 1861(r)(2) of the Act.
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    \75\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS050111.
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    The Medicare Benefit Policy Manual Chapter 15 (IOM Pub 100-02, 
Chapter 15, section 150) (herein ``the MBP Manual'') states that if an 
otherwise noncovered procedure or service is performed by a dentist as 
incident to and as an integral part of a covered procedure or service 
performed by the dentist, the total service performed by the dentist on 
such an occasion is covered.\76\ The MBP Manual continues by providing 
several specific examples where CMS would pay for dental services:
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    <bullet> The reconstruction of a ridge when it is performed as a 
result of and at the same time as the surgical removal of a tumor 
(other than for dental purposes).
    <bullet> The wiring of teeth when done in connection with the 
reduction of a jaw fracture.
    <bullet> The extraction of teeth to prepare the jaw for radiation 
treatment of neoplastic disease.
    <bullet> The dental splint when performed in conjunction with 
treatment that is determined to be a covered medical condition.
    Specifically, in the MBP Manual, we describe that the 
reconstruction of a ridge performed primarily to prepare the mouth for 
dentures is a noncovered procedure and therefore would not generally be 
eligible for payment. However, when the reconstruction of a ridge is 
performed as a result of and at the same time as the surgical removal 
of a tumor (for other than dental purposes), the totality of surgical 
procedures is a covered service. In the case of the procedure of ridge 
reconstruction occurring in conjunction with the surgical removal of a 
tumor, we believe that the dental services are inextricably linked to, 
and substantially related and integral to the clinical success of, the 
other covered medical services, that is, the removal of a tumor; and 
therefore, Medicare Part A and Part B payment could be made. 
Additionally, the MBP Manual explains that Medicare makes payment for 
the wiring of teeth when this is done in connection with the reduction 
of a jaw fracture. Once again, we believe that the dental services of 
wiring of the teeth are inextricably linked to, and substantially 
related and integral to the clinical success of, certain other covered 
medical services, which in this case is the reduction of a jaw 
fracture, and therefore, Medicare Part A and Part B payment could be 
made. Likewise, the MBP Manual states that the extraction of teeth to 
prepare the jaw for radiation treatment of neoplastic disease is also 
currently covered. We continue to believe that in this clinical 
scenario the dental services related to teeth extraction are 
inextricably linked to, and substantially related and integral to the 
clinical success of, the radiation treatment of neoplastic disease; and 
therefore, Medicare Part A and Part B payment could be made. The Manual 
also describes a specific situation in which certain dental services 
may be considered a covered service, depending on whether the 
underlying medical condition is deemed to be covered. The Manual 
explains that dental splints used to treat a dental condition are 
generally excluded from coverage under section 1862(a)(12) of the Act, 
but if the treatment is determined to be a covered medical condition 
(that is, dislocated upper/lower jaw joints), then the splint can be 
covered. We believe that dental splint services could be covered and 
paid, because the dental services could be inextricably linked to, and 
substantially related and integral to the clinical success of, a 
covered medical service, such as treatment of a dislocated jaw. 
Therefore, we are proposing to clarify and modify the regulations text 
at Sec.  411.15(i) to include this scenario of dental splints used in 
the treatment of a covered medical condition. We seek comments on this 
aspect of the proposal.
    Therefore, we are proposing to codify and clarify in the regulation 
at Sec.  411.15(i) that payment can be made under Medicare Part A and 
Part B for dental services that are inextricably linked to, and 
substantially related and integral to the clinical success of, certain 
other covered medical services, including (1) reconstruction of a ridge 
when it is performed as a result of and

[[Page 46036]]

at the same time as the surgical removal of a tumor; (2) the wiring or 
immobilization of teeth when done in connection with the reduction of a 
jaw fracture; (3) the extraction of teeth to prepare the jaw for 
radiation treatment of neoplastic disease; and (4) a dental splint only 
when used in conjunction with covered treatment of a medical condition. 
This proposal would constitute a clarification to existing policy, as 
we are codifying in regulation existing manual provisions.
    The MBP Manual states that payment can be made under Medicare Parts 
A and B for a covered dental procedure regardless of where the service 
is performed, noting that the hospitalization or non-hospitalization of 
a patient has no direct bearing on the coverage, payment, or exclusion 
of a given dental procedure in specific circumstances. As such, dental 
services that are not excluded from Medicare payment under section 
1862(a)(12) of the Act could be appropriately furnished in inpatient or 
outpatient settings. We propose to clarify in the regulation at Sec.  
411.15(i) that payment for dental services that do not fall within the 
scope of section 1862(a)(12) of the Act, and that are inextricably 
linked to, and substantially related and integral to the clinical 
success of, certain other covered medical services, could be made 
regardless of whether the services are furnished on an inpatient or 
outpatient basis. We seek comments on whether it is clinically 
appropriate for these services to be furnished in inpatient or 
outpatient settings.
    The MBP Manual further states that the coverage of services such as 
the administration of anesthesia, diagnostic x-rays, and other related 
procedures depends upon whether the primary procedure being performed 
by the dentist is itself covered. The MBP Manual explains that an x-ray 
taken in connection with the reduction of a fracture of the jaw or 
facial bone is covered, while a single x-ray or x-ray survey taken in 
connection with the care or treatment of teeth or the periodontium is 
not covered. In order to clarify and codify this current policy, we 
propose to amend our regulation at Sec.  411.15(i) to provide that 
payment can be made for dental services provided in conjunction with 
medical services that are inextricably linked to, and substantially 
related and integral to the clinical success of, covered medical 
services, such as X-rays, administration of anesthesia, and use of the 
operating room.
    The MBP Manual also specifies that payment can be made for services 
and supplies furnished incident to other dental services for which 
Medicare payment can be made, for example, services furnished incident 
to the dentist's professional services by a dental technician or 
registered nurse under the dentist's direct supervision. Medicare 
payment policy for services furnished incident to the services of the 
billing practitioner are contained in Sec.  410.26 of our regulations.
    Additionally, the MBP Manual provides that when an excluded service 
is the primary procedure involved, dental services are not covered, 
regardless of complexity or difficulty. The MBP Manual describes an 
example of the extraction of an impacted tooth as not covered, and goes 
on to state that certain procedures, including an alveoplasty (the 
surgical improvement of the shape and condition of the alveolar 
process) and a frenectomy, are excluded from coverage when either of 
these procedures is performed in connection with an excluded service, 
for example, the preparation of the mouth for dentures. Additionally, 
the MBP Manual states that the removal of a torus palatinus (a bony 
protuberance of the hard palate) may be a covered service, but notes 
that it is often provided in connection with an excluded service (that 
is, the preparation of the mouth for dentures), and in that event, 
Medicare does not pay for this procedure.
    We are not proposing to modify this policy. No payment is made for 
dental services when an excluded service is the primary procedure 
involved. Our interpretation of section 1862(a)(12) of the Act allows 
for Medicare payment when dental services are inextricably linked to, 
and substantially related and integral to the clinical success of, 
certain other covered medical services. Therefore, no payment is made 
when dental services are related to medical services that are not 
covered, even if the dental services are inextricably linked to, and 
substantially related and integral to the clinical success of, the non-
covered services. The proposed amendment to Sec.  411.15(i) would 
specify that, in order for Medicare payment to be made, the dental 
services must be inextricably linked to, and substantially related and 
integral to the clinical success of, certain other covered medical 
services.
    Under our proposal to clarify and codify our current payment policy 
for dental services, section 1862(a)(12) of the Act does not apply only 
when dental services are inextricably linked to, and substantially 
related and integral to the clinical success of, certain other covered 
medical services, such that the standard of care for that medical 
service would be compromised or require the dental services to be 
performed in conjunction with the covered medical services. When such 
medically necessary dental services are furnished by a physician or 
practitioner, including a dentist, Medicare Part A or B payment can be 
made for the dental services and other services integral or incident to 
those dental services. Specifically, such services include:
    <bullet> The wiring of teeth when done in connection with an 
otherwise covered medical service,
    <bullet> The reduction of a jaw fracture (such as services 
described by CPT code sets 21440-21490),
    <bullet> The extraction of teeth to prepare the jaw for radiation 
treatment of neoplastic disease (such as services described by Current 
Dental Terminology (CDT) \77\ codes D7140 and D7210 for ICD-10 C41.1 
Malignant neoplasm of mandible),
---------------------------------------------------------------------------

    \77\ https://www.ada.org/publications/cdt.
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    <bullet> Dental splints only when used in conjunction with covered 
treatment of a medical condition (such as dislocated upper/lower jaw 
joints), or
    <bullet> An oral or dental examination performed as part of a 
comprehensive workup prior to renal transplant surgery (such as 
services described by ICD-10 Z94.0, and codes D0150, D0180, or D0160).
    We propose that Medicare Part A and B payment for these dental 
services can be made, because the services are inextricably linked to, 
and substantially related and integral to the clinical success of, the 
other covered medical services. We further seek comment on whether, 
given current clinical advances, the descriptions of these dental 
services are clinically accurate and appropriate. For example, we are 
interested in whether the phrase ``wiring of the teeth'' is still 
clinically accurate or if other terminology would be more appropriate.
    Given that such dental services would not be subject to the 
preclusion on payment under section 1862(a)(12) of the Act, Medicare 
would make payment to the furnishing dentist or another physician or 
practitioner for the professional dental services. As described in the 
MBP Manual, payment may also be made for services and supplies 
furnished incident to those dental services furnished by the dentist or 
other physician or practitioner, and for other ancillary services 
integral to the dental services. For example, Medicare payment could be 
made for services furnished incident to the professional dental 
services by auxiliary personnel, such as a dental hygienist,

[[Page 46037]]

dental therapist, or registered nurse who is under the direct 
supervision of the furnishing dentist or other physician or 
practitioner, if they meet the requirements for ``incident to'' 
services as described in Sec.  410.26 of our regulations. When such 
dental services are furnished in a facility setting, such as an 
inpatient acute care hospital or hospital outpatient department, 
payment for the facility or ancillary services would be made under the 
applicable payment system.
    In summary, we are proposing to amend Sec.  411.15(i) to codify 
that payment can be made under Medicare Part A and Part B for dental 
services that are inextricably linked to, and substantially related and 
integral to the clinical success of, an otherwise covered medical 
service. We further propose to amend Sec.  411.15(i) to include 
examples of services for which payment can be made under Medicare Parts 
A and B on that basis. Specifically, we propose to include as examples 
the following dental services for which payment is permitted under our 
current policy: (1) dental or oral examination as part of a 
comprehensive workup prior to a renal organ transplant surgery; (2) 
reconstruction of a dental ridge performed as a result of and at the 
same time as the surgical removal of a tumor; (3) wiring or 
immobilization of teeth in connection with the reduction of a jaw 
fracture; (4) extraction of teeth to prepare the jaw for radiation 
treatment of neoplastic disease; and (5) dental splints only when used 
in conjunction with medically necessary treatment of a medical 
condition. We further propose that Medicare payment would be made for 
these dental services regardless of whether the services are furnished 
in an inpatient or outpatient setting, and we propose that payment can 
also be made for services that are ancillary to these dental services, 
such as x-rays, administration of anesthesia, use of an operating room, 
other facility services.
    We seek comment on all aspects of this proposal. If finalized, we 
note that we will make conforming changes to the MBP Manual to reflect 
changes or clarifications, and to remove any text that is no longer 
applicable. We will also make conforming changes to other Manual 
provisions or National Coverage Decision policies as necessary.
    As discussed, MACs may determine on a claim-by-claim basis whether 
a patient's circumstances do or do not fit within the terms of the 
preclusion or exception specified in section 1862(a)(12) of the Act and 
Sec.  411.15(i). The proposed policies outlined in this section of this 
proposed rule would not prevent a MAC from making a determination that 
payment can be made for dental services in other circumstances not 
specifically addressed within this proposed rule and the proposed 
amendments to Sec.  411.15(i).
c. Proposed Update to Current Payment Policies for Dental Services
    As discussed in section II.L.2 of this proposed rule, we are 
proposing that payment can be made under Medicare Parts A and B for 
dental services such as the reconstruction of a dental ridge performed 
as a result of and at the same time as the surgical removal of a tumor, 
the wiring or immobilization of the teeth when done in connection with 
a reduction of a jaw fracture, the extraction of teeth to prepare the 
jaw for radiation treatment of neoplastic disease, dental splints only 
when used in conjunction with covered treatment of a medical condition, 
and an oral or dental examination performed as part of a comprehensive 
workup prior to renal transplant surgery. We believe, after further 
review of current medical practice, through consultations with 
interested parties and our medical officers, that there are additional 
circumstances that are clinically similar to these examples, and where 
Medicare payment for the service could be made, because the dental 
services are inextricably linked to, and substantially related and 
integral to the clinical success of, the other covered medical 
service(s).
    For example, after further review, we believe that if a patient 
requiring an organ transplant has an oral infection, the success of 
that transplant could be compromised if the infection is not properly 
diagnosed and treated prior to the transplant surgery. Without an oral 
or dental examination to identify such an infection, and the necessary 
treatment, such as restorative dental services, to eradicate it prior 
to the transplant procedure, the patient's ability to accept the organ 
transplant could be seriously complicated or compromised. Examples of 
restorative dental services to eradicate infection could include: 
extractions (removal of the entire infection, such as pulling of 
teeth--for example, CDT D7140, D7210), restorations (removal of the 
infection from tooth/actual structure, such as fillings--for example, 
CDT D2000-2999), periodontal therapy (removal of the infection that is 
surrounding the tooth, such as scaling and root planning--for example, 
CDT D4000-4999, more specifically D4341, D4342, D4335 and D4910), or 
endodontic therapy (removal of infection from the inside of the tooth 
and surrounding structures, such as root canal--for example, CDT D3000-
3999). If such an infection is not treated prior to transplant, and 
immunosuppressant therapy is initiated to preserve the transplant, then 
there is an increased likelihood for morbidity and mortality resulting 
from spreading of the local infection to sepsis. Similarly, without a 
dental or oral exam and necessary diagnosis and treatment of any 
presenting infection of the mouth prior to a cardiac valve replacement 
\78\ or valvuloplasty procedures, an undetected, non-eradicated oral or 
dental infection could lead to bacteria seeding the valves, seeding 
surrounding cardiac muscle tissues involved with the surgical site, and 
conceivably leading to systemic infection or sepsis, all of which 
increase the likelihood of unnecessary and preventable acute and 
chronic complications for the patient. Because an oral or dental 
infection can present substantial risk to the success of these 
procedures, such that the standard of care would be to not proceed with 
the procedure when there is a known oral or dental infection present, 
we believe dental services furnished to identify, diagnose, and treat 
oral or dental infections prior to organ transplant, cardiac valve 
replacement, or valvuloplasty procedures are not in connection with the 
care, treatment, filling, removal, or replacement of teeth or 
structures directly supporting teeth, but instead are inextricably 
linked to, and substantially related and integral to the clinical 
success of, these other covered medical services. We note that, in 
these circumstances, the necessary treatment to eradicate an infection 
may not be the totality of recommended dental services for a given 
patient. For example, if an infected tooth is identified in a patient 
requiring an organ transplant, cardiac valve replacement, or 
valvuloplasty procedure, the necessary treatment would be to eradicate 
the infection, which could result in the tooth being extracted. 
Additional dental services, such as a dental implant or crown, may not 
be considered immediately necessary to eliminate or eradicate the 
infection or its source prior to surgery. Therefore, such additional 
services would not be inextricably linked to, and substantially related 
and integral to the clinical success of, the organ transplant, cardiac 
valve replacement, or valvuloplasty services. As such, no Medicare 
payment would be made for

[[Page 46038]]

the additional services that are not immediately necessary prior to 
surgery to eliminate or eradicate the infection.
---------------------------------------------------------------------------

    \78\ Knox, K.W., & Hunter, N. (1991). The role of oral bacteria 
in the pathogenesis of infective endocarditis. Australian dental 
journal, 36(4), 286-292. https://doi.org/10.1111/j.1834-7819.1991.tb00724.x.
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    As discussed, we believe that there are circumstances where the 
clinical success of medical or surgical services required for a 
successful organ transplantation, cardiac valve replacement, and 
valvuloplasty procedure may require the performance of certain dental 
services. As such, we propose to amend our regulation at Sec.  
411.15(i)(3) to provide that dental services that are inextricably 
linked to, and substantially related and integral to the clinical 
success of, a certain covered medical service are not subject to the 
exclusion under section 1862(a)(12) of the Act; and that payment can be 
made under Medicare Parts A and B for such dental services. We are 
proposing to amend Sec.  411.15(i) to include examples of payable 
services under Medicare Parts A and B, as: (1) the dental or oral 
examination as part of a comprehensive workup prior to an organ 
transplant, cardiac valve replacement, or valvuloplasty procedure; and 
(2) the necessary dental treatments and diagnostics to eliminate the 
oral or dental infections found during a dental or oral examination as 
part of a comprehensive workup prior to an organ transplant, cardiac 
valve replacement, or valvuloplasty procedure. We believe that clinical 
practice is such that these services can occur within the inpatient 
hospital or outpatient setting, and we further propose that Medicare 
Parts A and B would make payment for these dental services, as 
applicable, regardless of whether the services are furnished in an 
inpatient or outpatient setting. Furthermore, we propose that payment 
under the applicable payment system could also be made for services 
that are ancillary to these dental services, such as x-rays, 
administration of anesthesia, and use of the operating room.
    We seek comment on this proposed policy and our proposed amendments 
to Sec.  411.15(i)(3) to specify that payment under Medicare Parts A 
and B can be made for an oral or dental examination, and medically 
necessary diagnostic and treatment services to eliminate an oral or 
dental infection, prior to an organ transplant, cardiac valve 
replacement, or valvuloplasty procedure. We propose to continue to 
contractor price the dental services for which payment is made 
currently, and for the dental services that can be made under the 
proposed amendments to Sec.  411.15(i)(3) for CY 2023, or until we have 
further data to establish prospective payment rates. We also seek 
public comment on the expected utilization of these services.
    We solicit comment on these proposals.
i. Other Clinical Scenarios for Dental Services Integral to Other 
Covered Medical Services
    In addition to the examples of dental services for which payment is 
made under our current policy, and dental services to avoid risk of an 
oral or dental infection prior to organ transplant, cardiac valve 
replacement, or valvuloplasty procedures, we believe there may be other 
clinical scenarios where dental services may not be in connection with 
the care, treatment, filling, removal, or replacement of teeth or 
structures directly supporting teeth, but instead are inextricably 
linked to, and substantially related and integral to the clinical 
success of, certain other covered medical services. These could include 
certain dental exams and medically necessary diagnostic and treatment 
services prior to treatments for head and neck cancers, such as 
radiation therapy with or without chemotherapy, or the initiation of 
immunosuppressant therapy, such as those used during cancer treatments, 
where the standard of care is such that it is clinically advisable to 
eliminate the source of infection prior to proceeding with the 
necessary medical care, or the standard of care for the primary medical 
condition would be significantly materially compromised if the dental 
services are not performed. As with any assessment of patient health 
prior to initiating immunosuppressant therapy, it may be necessary to 
eradicate all sites of infection, including oral infections, prior to 
suppressing the immune system, regardless of the reason for prescribing 
an immunosuppressant. We also note some medications may have an 
immunosuppressant effect, even though they are not prescribed 
principally to suppress the immune system. We believe, in these 
circumstances, eradicating oral or dental infection prior to beginning 
a medication that has been found to have a suppressant effect on that 
part of the immune system required to eradicate infectious agents could 
be necessary to the clinical success of the medication therapy.
    Similarly, in joint replacement surgery (such as total hip and knee 
arthroplasty surgery) we believe there may be risks to the outcome of 
the procedure if an oral infection is not treated. There is evidence 
that some joint replacement patients have significant dental pathology 
found before their surgery.\79\ Given the incidence of dental pathology 
in joint replacement patients, there may be some joint replacement 
patients who would experience a clinically significant benefit from a 
pre-operative dental exam and medically necessary treatment of oral 
pathology(ies). As in transplant surgery, patients having joint 
replacement surgery are at risk for surgical site infection, and there 
may be an increased risk for those patients with significant dental 
pathology. The presence of an overlooked oral infection may increase 
the risk for acute and chronic surgical site infection.\80\ \81\
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    \79\ https://www.aaos.org/aaosnow/2011/feb/clinical/clinical2/.
    \80\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4919067/.
    \81\ https://www.nebh.org/blog/why-its-a-good-idea-to-see-a-dentist-before-your-joint- replacement/.
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    We acknowledge there is other clinical evidence that does not 
support the need for a dental exam and necessary treatment prior to 
total joint replacement surgery, specifically total hip and knee 
arthroplasty.<SUP>82 83</SUP> Rather, there is evidence that further 
study is needed to determine whether pre-operative dental exams and 
treatments are necessary and clinically beneficial.\84\ Therefore, we 
are interested in public comment providing systematic clinical evidence 
as to whether there is an inextricable link between dental service(s) 
and joint replacement surgery such that the dental services are 
substantially related and integral to the clinical success of the 
surgical procedures. We note that if we receive compelling clinical 
evidence, we may finalize in this final rule additional clinical 
scenarios, such as dental services prior to joint replacement surgery 
(for example, total hip and knee arthroplasty surgery), where payment 
could be made under Medicare Part A or Part B. We are seeking comment 
on whether there is a significant quality-of-care detriment if certain 
dental services are not provided prior to joint replacement surgery 
(such as total hip and knee arthroplasty surgery), and if so, we 
request a description of that systematic evidence. Specifically, we are 
looking for medical evidence that

[[Page 46039]]

the provision of certain dental services leads to improved healing, 
improved quality of surgery, and the reduced likelihood of readmission 
and/or surgical revisions, because an infection has interfered with the 
integration of the implant and interfered with the implant to the 
skeletal structure. Evidence needs to be clinically meaningful and 
represent a material difference that results in some level of 
persistence in the clinical success of the procedure to support that 
pre-operative dental services are similarly inextricably linked to, and 
substantially related and integral to the clinical success of, certain 
other covered medical services, and therefore in connection with, and 
substantially related and integral to that primary covered medical 
service. If commenters are able to provide us with compelling evidence 
to support that a dental exam and necessary treatment prior to joint 
replacement procedures such as total hip and knee arthroplasty surgery 
would result in clinically significant improvements in quality and 
safety outcomes, for example, fewer revisions, fewer readmissions, more 
rapid healing, quicker discharge, quicker rehabilitation for the 
patient, then we would consider whether such dental services may be 
inextricably linked to, and substantially related and integral to the 
clinical success of, the joint replacement surgery.
---------------------------------------------------------------------------

    \82\ Barrere S, Reina N, Peters OA, Rapp L, Vergnes JN, Maret D. 
Dental assessment prior to orthopedic surgery: A systematic review. 
Orthop Traumatol Surg Res. 2019 Jun;105(4):761-772. doi: 10.1016/
j.otsr.2019.02.024. Epub 2019 May 3. PMID: 31060914.
    \83\ Young, H., Hirsh, J., Hammerberg, E.M., & Price, C.S. 
(2014). Dental disease and periprosthetic joint infection. The 
Journal of bone and joint surgery. American volume, 96(2), 162-168. 
https://doi.org/10.2106/JBJS.L.01379.
    \84\ https://www.sciencedirect.com/science/article/pii/S1877056819301318.
---------------------------------------------------------------------------

    We also believe there may be other clinical scenarios involving 
dental services that we have not yet considered, where certain dental 
services may be similarly inextricably linked to, and substantially 
related and integral to the clinical success of, certain otherwise 
covered medical service such that the exclusion under section 
1862(a)(12) of the Act would not apply. For example, we are proposing 
to codify current policy that Medicare payment can be made for the 
wiring of teeth when done in connection with the reduction of a jaw 
fracture. We request comment on whether there are other dental services 
associated with stabilizing and/or repairing the jaw after accidental 
injury or trauma and similarly that similarly would not be subject to 
the exclusion under section 1862(a)(12) of the Act, and for which we 
should consider providing Medicare payment.
    We solicit comment on our current approach to payment for dental 
services that we have already identified under our current and proposed 
policies as inextricably linked to, and substantially related and 
integral to the clinical success of, certain covered services, as well 
as those services we may yet identify, and other operational topics we 
should consider further. We acknowledge that there may be other 
clinical circumstances we have not yet identified where dental services 
may not be in connection with the care, treatment, filling, removal, or 
replacement of teeth or structures directly supporting teeth, and 
instead are similarly inextricably linked to, and substantially related 
and integral to the clinical success of, certain other covered medical 
services. There may be other clinical scenarios involving physiologic 
or anatomic conditions in which dental services could be a medically 
critical precondition to the clinical success of other services, such 
as certain surgical procedures or cancer treatments. For these reasons, 
we solicit comment on whether there are other clinical scenarios for 
medical or surgical services where the standard of care is such that 
the performance of certain dental services (for example, an exam, and 
certain diagnostic and treatment services) is considered to be a 
critical clinical precondition to proceeding with the primary medical 
procedure and/or treatment, and therefore may be similarly inextricably 
linked to, and substantially related and integral to the clinical 
success of, a certain covered service, and therefore, not subject to 
the exclusion under section 1862(a)(12) of the Act. If we were to 
finalize our proposed policies as discussed under sections II.L.2.a. 
and II.L.2.b. of this proposed rule, we may consider finalizing, based 
on our review of public comments, these additional examples of dental 
services that may not be subject to the payment exclusion under section 
1862(a)(12) of the Act because they are similarly inextricably linked 
to, and substantially related and integral to the clinical success of, 
covered medical services. If we were to finalize such additional 
examples of dental services, we would list those services as examples 
under the regulation at Sec.  411.15(i)(3), as discussed in section 
II.L.2.c. of this proposed rule. Lastly, as discussed above, we 
recognize that the dental services we have identified for which 
Medicare payment could be made under our proposed policies would occur 
either prior to, or contemporaneously with, the covered medical 
service. We are also interested in comments on whether, on the same 
basis, there are clinical circumstances under which Medicare payment 
could be made for dental services furnished after the covered medical 
procedure or treatment.
ii. Establishment of a Process To Consider Additional Clinical 
Scenarios for Future Updates
    As discussed, we believe there may be clinical scenarios where 
dental services are not in connection with the care, treatment, 
filling, removal, or replacement of teeth or structures directly 
supporting teeth, and instead are inextricably linked to, and 
substantially related and integral to the clinical success of, certain 
covered medical services. We believe there may be additional clinical 
scenarios we have not yet identified under which Medicare payment could 
be made for certain dental services on this basis. To ensure we are 
appropriately considering other potential clinical scenarios that may 
involve such dental services, we believe it may be appropriate to 
establish a process whereby interested parties can share 
recommendations for our consideration, review and analysis for 
potential inclusion on the list of dental services for which payment 
can be made under Sec.  411.15(i)(3) through future rulemaking. If an 
interested party believes that there is a clinical scenario in which 
certain dental services are similarly inextricably linked to, and 
substantially related and integral to the clinical success of, certain 
covered medical services, we invite interested parties to submit 
information about the clinical scenario and the medical evidence to 
support that the standard of care for the medical service is such that 
one would not proceed with the medical procedure or service without 
performing the dental services, because the covered medical services 
would or could be significantly and materially compromised, or where 
dental services are a clinical prerequisite to proceeding with the 
primary medical procedure and/or treatment. The interested party should 
explain why the particular dental services should not be subject to the 
general preclusion on payment for dental services under section 
1862(a)(12) of the Act, because they are inextricably linked to, and 
substantially related and integral to the clinical success of, covered 
medical services, and provide the medical evidence to support that 
conclusion.
    To ensure a thorough review can occur, we encourage interested 
parties to include relevant medical literature, clinical guidelines or 
generally accepted standards of care, and other supporting 
documentation to support our review and consideration of the clinical 
scenario involving dental services. To facilitate our consideration of 
interested parties' recommendations within an annual rulemaking cycle, 
we would

[[Page 46040]]

request that interested parties submit this information by February 
10th of that year at <a href="/cdn-cgi/l/email-protection#3f725a5b565c5e4d5a6f57464c565c565e51795a5a6c5c575a5b4a535a7f5c524c1157574c11585049"><span class="__cf_email__" data-cfemail="e9a48c8d808a889b8cb981909a808a808887af8c8cba8a818c8d9c858ca98a849ac781819ac78e869f">[email protected]</span></a>. 
Submissions received outside of the public comment period for a PFS 
proposed rule will be considered for possible inclusion in future 
notice and comment rulemaking cycles. Recommendations received by 
February, 10th of a calendar year would be reviewed for consideration 
and potential inclusion within the PFS proposed rule for the subsequent 
calendar year. For example, information received by February 10, 2024 
would be reviewed for consideration and potential inclusion within the 
CY 2025 PFS proposed rule. We encourage interested parties to engage 
with us and provide medical evidence to support their recommendations 
for additional clinical scenarios where dental services may not fall 
within the scope of the payment preclusion under section 1862(a)(12) of 
the Act.
    As discussed previously, we may consider finalizing a change, after 
reviewing public comments, in the CY 2023 PFS final rule to revise the 
list of examples of dental services for which Medicare payment can be 
made. Furthermore, we solicit feedback on: (1) whether there are 
additional clinical circumstances we should consider where dental 
services are inextricably linked to, and substantially related and 
integral to the clinical success of, covered medical services; and (2) 
the establishment of a process to review additional clinical scenarios 
identified by the public, which we may consider finalizing, after 
review of public comments received, in this final rule.
iii. Request for Comment on Dental Services Integral to Covered Medical 
Services Which Can Result in Improved Patient Outcomes
    As described in section II.L.2 of this proposed rule, we believe 
there are clinical scenarios where the standard of care is such that 
there is an immediate need for certain dental services as the necessary 
clinical prerequisite to an otherwise covered medical service. We 
believe there may be other clinical scenarios, however, where the 
ongoing disease management of the patient receiving the medically 
necessary procedure may have an improved outcome or see a clinical 
benefit from the performance of dental services, but that the dental 
service may not be inextricably linked to, or substantially related and 
integral to the clinical success of, the otherwise covered medical 
service.
    For example, we believe there may be certain circumstances where 
the clinical benefit of medical care or treatment of a diabetic patient 
could be improved if certain dental services are furnished. We are 
interested in public feedback on whether certain dental services (for 
example, a dental exam, necessary treatment of a dental condition such 
as the extraction of an infected and mobile tooth) should be considered 
so integral to the standard of care for an otherwise covered medical 
service that the preclusion on Medicare payment under section 
1862(a)(12) of the Act does not apply.
    Additionally, we are interested in comments on whether the success 
of a given surgery is dependent upon eradication of dental or oral 
infection. As noted in section II.L.2.c., we believe surgeries dealing 
with organ transplants, cardiac valve replacement, or valvuloplasty 
procedures may require a dental exam and treatment prior to the surgery 
because the services to identify and eradicate dental or oral infection 
are inextricably linked to, and substantially related and integral to 
the success of, these otherwise covered medical services. However, we 
are interested in feedback on whether there are other types of surgery 
for which certain dental services would meet this threshold. We invite 
public comment on whether there are other clinical scenarios involving 
acute or chronic conditions that would have an improved patient outcome 
if dental services are furnished, and if so, whether we should consider 
these services as inextricably linked to, and substantially related and 
integral to the clinical success of, certain covered medical services.
3. Request for Comment on Other Potentially Impacted Policies
    As discussed in section II.L.2.a-b of this proposed rule, we are 
proposing to codify and clarify our current payment policies for dental 
services. We recognize that under these policies there may be instances 
where multiple health care providers may need to coordinate the 
performance of certain medical and dental services based on the 
patients' chronic conditions and/or serious illnesses. We continue to 
consider improvements to our payment policies for care management 
services as health care delivery models evolve. As such, we seek 
comment on whether our current policies for care management services 
make clear that time spent by physicians or non-physician practitioners 
coordinating care with dentists regarding the performance and outcomes 
of services as proposed under section II.L.2 of this proposed rule, may 
be counted for purposes of applicable care management codes. We are 
also interested in whether existing care management codes adequately 
describe and account for time spent coordinating with dentists and 
their clinical staff. We are also interested in comments regarding the 
impact of changes in how health care is delivered, and whether an 
increased integration and coordination of care among health care 
providers should also be taken into account in considering dental 
services that may be inextricably linked to, and substantially related 
and integral to the clinical success of, a primary medical service. 
Additionally, we are interested in whether, and to what extent, the 
proposed policies as described in section II.L.2 of this proposed rule 
would address any inequitable distribution of dental services for 
Medicare beneficiaries.
    Finally, we recognize that many Medicare beneficiaries have 
separate or supplemental dental coverage, such as through a Medigap 
plan or other plan offering. If we were to finalize in the CY 2023 PFS 
final rule our proposed policies as described further in section II.L.2 
of this proposed rule, we seek comment on how current coordination of 
dental benefits operates, and where improvements could be provided. 
Additionally, we seek comment on what aspects of coordinating benefits 
among supplemental dental providers we should consider if we were to 
finalize the proposed policies as specified under section II.L.2 of 
this proposed rule.
4. Request for Comment on Potential Future Payment Models for Dental 
and Oral Health Care Services
    Our waiver authority under section 1115A(d)(1) of the Act provides 
broad authority for the Secretary to waive such requirements of title 
XVIII of the Act, which pertain to Medicare, as may be necessary solely 
for purposes of carrying out section 1115A of the Act with respect to 
testing models described in section 1115A(b) of the Act.
    In 2014, the Health Care Innovation Awards (HCIA) Round 2, a 
limited time grant initiative, included awards with the goal to improve 
the health of populations through activities focused on engaging 
beneficiaries, prevention, wellness, and comprehensive care that 
extended beyond the clinical service delivery setting. Several 
participants used their HCIA Round 2 funds to test models of clinical 
care that included payment for dental and oral care services. For 
further information regarding the success of these awards as applied to 
dental and oral care services please review the HCIA Round 2 Final

[[Page 46041]]

Awardee Evaluation Report (2014-2018).\85\
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    \85\ https://innovation.cms.gov/data-and-reports/2020/hcia2-fg-finalevalrpt.
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    We are seeking comment on additional ways to integrate the payment 
for dental and oral health care services within existing and future 
payment models using the Innovation Center's waiver authority in 
existing or future service delivery models, including models focused on 
equity, care coordination, total cost of care and specific disease 
conditions.

M. Rebasing and Revising the Medicare Economic Index (MEI)

1. Background
    The Medicare Economic Index (MEI) is authorized under section 
1842(b)(3) of the Act, which relates to the reasonable charge-based 
payment methodology that was in place for physicians' services prior to 
the PFS. That section states that prevailing charge levels beginning 
after June 30, 1973 may not exceed the level from the previous year 
except to the extent that the Secretary finds, on the basis of 
appropriate economic index data, that such higher level is justified by 
year-to-year economic changes. CMS began calculating the MEI for this 
purpose on July 1, 1975, and continues to do so today for several 
statutory and other purposes. The MEI reflects the weighted-average 
annual price change for various inputs involved in furnishing 
physicians' services.
    The MEI is a fixed-weight input price index comprised of two broad 
categories: (1) Physicians' own time (compensation); and (2) 
physicians' practice expense (PE). Additionally, it includes an 
adjustment for the change in economy-wide, private nonfarm business 
total factor productivity (previously referred to as multifactor 
productivity).\86\ The U.S. Department of Labor's Bureau of Labor 
Statistics (BLS) publishes the official measures of productivity for 
the U.S. economy. We note that previously the productivity measure 
referenced in section 1886(b)(3)(B)(xi)(II) of the Act was published by 
BLS as private nonfarm business multifactor productivity. Beginning 
with the November 18, 2021 release of productivity data, BLS replaced 
the term multifactor productivity (MFP) with total factor productivity 
(TFP). BLS noted that this is a change in terminology only and will not 
affect the data or methodology.
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    \86\ https://www.bls.gov/news.release/prod5.nr0.htm.
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    The current form of the MEI was described in the November 25, 1992 
Federal Register (57 FR 55896) and was based in part on the 
recommendations of a Congressionally-mandated meeting of experts held 
in March 1987. Since that time, the MEI has been updated or revised on 
five instances. First, the MEI was rebased in 1998 (63 FR 58845), which 
moved the cost structure of the index from 1992 data to 1996 data. 
Second, the methodology for the productivity adjustment was revised in 
the CY 2003 PFS final rule with comment period (67 FR 80019) to reflect 
the percentage change in the 10-year moving average of economy-wide 
private nonfarm business total factor (multifactor) productivity. 
Third, the MEI was rebased in the CY 2004 PFS final rule with comment 
period (68 FR 63239), which moved the cost structure of the index from 
1996 data to 2000 data. Fourth, the MEI was rebased in 2011 (75 FR 
73262), which moved the cost structure of the index from 2000 data to 
2006 data. Subsequently, in the CY 2014 PFS final rule with comment 
period (78 FR 74264), the MEI cost share weights were revised based on 
recommendations from the MEI technical advisory panel (MEI-TAP). From 
May 2012 through September 2012, the MEI Technical Advisory Panel 
conducted a technical review of the MEI, including analyses of the 
inputs, input weights, price-measurement proxies, and productivity 
adjustment. Details regarding the Panel's work and documents such as 
transcripts, meeting summaries, presentations, and the final report 
with recommendations to the Secretary of Health and Human Services are 
available at https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/MEITAP and in the FY 2014 PFS proposed rule (78 FR 43311) which 
provides details related to how the MEI TAP panel recommendations were 
implemented into the revised 2006-based MEI. The current 2006-based MEI 
relies on data collected from the American Medical Association (AMA) 
for self-employed physicians from the Physician Practice Information 
Survey (PPIS). The AMA has not fielded another survey since that 2006 
data collection effort and so the MEI has continued to be based on 
2006-based costs. In its August 28, 2012 report, the MEI-TAP expressed 
concern regarding the representativeness and availability of data to 
support the MEI, and provided two recommendations regarding the data 
sources to update the MEI in the future. Recommendation 2.1 stated that 
CMS should research whether using self-employed physician data for the 
MEI cost weights continues to be the most appropriate approach given 
the trend toward larger, physician-owned practices, as well as movement 
from physician-owned practices toward hospital-owned practices. 
Recommendation 2.2 stated that CMS should scan for and research 
additional data sources that may allow for more frequent updates to the 
MEI's cost categories and their respective weights.\87\
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    \87\ The MEI-TAP's final report, including all findings and 
recommendations, are available at https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/MEITAP.
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    Updates to the PFS conversion factor (CF) were previously 
calculated based on a prescribed statutory formula that used a 
combination of the MEI and a ``sustainable growth rate''; for details 
about this formula, we refer readers to the CY 2015 PFS final rule with 
comment period (79 FR 67741 through 67742). Section 101 of the Medicare 
Access and CHIP Reauthorization Act (MACRA) of 2015 (Pub. L. 115-05, 
April 16, 2015) repealed the previous statutory update formula and 
specified the update adjustment factors for calendar years 2015 and 
beyond. Therefore, effective beginning for CY 2015, the MEI was no 
longer used in calculating the annual update to the PFS CF. The annual 
growth in the MEI continues to be used to update the following: the 
Medicare telehealth originating site facility fee under section 
1834(m)(2)(B)(i) of the Act, the KX Modifier Thresholds (formerly the 
therapy caps) under section 1833(g)(2) of the Act, targeted medical 
review (MR) threshold amounts (beginning in 2029) under section 
1833(g)(7)(B)(ii) of the Act, Rural Health Clinic Payment Limits under 
section 1833(f)(2) of the Act, and the annual update to the non-drug 
portion of the Opioid Treatment Program payment as finalized in the CY 
2020 PFS final rule (84 FR 62668 and 62669).
    While the MEI annual percentage change increase is not directly 
used in determining the update to the PFS CF, the MEI cost weights have 
historically been used to update the GPCI cost share weights to weigh 
the four components of the practice expense GPCI (employee 
compensation, the office rent, purchased services, and medical 
equipment, supplies, and other miscellaneous expenses), as discussed in 
detail in section II.G. of this proposed rule, and to recalibrate the 
relativity adjustment to ensure that the total pool of aggregate PE 
RVUs remains relative to the pool of work and MP RVUs, as discussed in 
section II.B. and section VII. of this proposed rule. The most recent 
recalibration was done for the CY 2014 RVUs, when the MEI was last

[[Page 46042]]

updated. As described in the CY 2014 PFS final rule (78 FR 74236 
through 74237, and 74241), in steps 3 and 10, we adjusted the aggregate 
pool of PE costs in proportion to the change in the PE share in the 
revised MEI cost share weights. These adjustments were consistent with 
our longstanding practice to make adjustments to match the RVUs for the 
PFS components with the MEI cost share weights for the components, 
including the adjustments described in the CY 1999 PFS final rule (63 
FR 58829), CY 2004 PFS final rule (68 FR 63246 and 63247), and CY 2011 
PFS final rule (75 FR 73275). Therefore, we believe that the MEI cost 
weights need to be updated to reflect more current market conditions 
faced by physicians in furnishing physicians' services, but note that 
we are proposing to delay the implementation of the proposed rebased 
and revised MEI cost weights for both PFS ratesetting and the proposed 
CY 2023 GPCIs. We believe that doing so will allow interested parties 
the opportunity to review and comment on the proposed rebased and 
revised MEI cost share weights discussed in section II.M. of this 
proposed rule and their potential impacts before we use such rebased 
and revised MEI cost share weights for purposes of proportioning the 
work, PE, and MP RVU pools in PFS ratesetting and updating the GPCIs. 
We refer readers to our discussion about using the proposed rebased and 
revised MEI cost share weights for purposes of proportioning the work, 
PE, and MP RVU pools in PFS ratesetting and for the purposes of 
updating the GPCIs for CY 2023 in sections II.B. and VII. of this 
proposed rule. In those sections, we discuss our considerations for 
updating the MEI cost share weights for the RVUs and the GPCIs and the 
potential redistributive impact that making such a change would have on 
PFS payments. We are soliciting comments on the proposed delay and 
potential use of the proposed updated MEI cost weights in future years 
to recalibrate the RVU shares and to update the GPCI cost share 
weights, which were last realigned to the revised MEI weights in the CY 
2014 PFS final rule (78 FR 74380 through 74391).
    The terms ``rebasing'' and ``revising,'' while often used 
interchangeably, actually denote different activities. Rebasing refers 
to moving the base year for the structure of costs of an input price 
index, while revising relates to other types of changes such as using 
different data sources, cost categories, or price proxies in the input 
price index. Effective with this CY 2023 PFS rulemaking cycle, we are 
proposing to rebase and revise the MEI based on a methodology that uses 
publicly available data sources for input costs that represent all 
types of physician practice ownership; that is, not limited to only 
self-employed physicians. In the following sections of this proposed 
rule, we detail our proposals regarding derivation of the cost 
categories and associated cost share weights, selection of the price 
proxies in the MEI, and the results of the proposed 2017-based MEI as 
compared to the current 2006-based MEI.
2. Developing the Cost Weights for Use in the MEI
    The 2006-based MEI was last rebased in the CY 2011 PFS final rule 
with comment period (75 FR 73262 through 73275) and subsequently 
revised in the CY 2014 PFS final rule with comment period (78 FR 74264 
through 74278). The proposed 2017-based MEI cost weights are derived 
predominantly from the annual expense data from the U.S. Census 
Bureau's Services Annual Survey (SAS, https://www.census.gov/programs-surveys/sas.html). Other data sources that were considered and analyzed 
as potential sources of expense data for Physician Offices included the 
BEA Benchmark Input-Output data, the Internal Revenue Services (IRS) 
Statistics of Income data for sole proprietors, and Medical Group 
Management Association (MGMA) cost and revenue data. While each of 
these data sources provided information on physician input price 
expenses, we found the SAS data to be the most technically appropriate 
data source available based on various factors including public 
availability, level of detail of expense categories, and sample 
representativeness of the universe. The SAS data are publicly available 
data that provide annual receipts estimates for the service industries. 
Collected data include sources of revenue and expenses by type for 
selected industries and selected industry-specific items. Specifically, 
we propose to use the 2017 SAS data from Table 5, Estimated Selected 
Expenses for Employer Firms for NAICS 6211 (Office of Physicians). The 
survey data collection in 2018 and 2019 were scaled back and therefore, 
data by expense category was limited. For example, the SAS expense data 
for lease and rental payments, professional and technical services, 
repair and maintenance services, and detailed utility cost were 
unavailable in 2018 and 2019. The 2020 data included a return to the 
more comprehensive collection of expense data; however, the presence of 
the PHE for COVID-19 raised questions regarding the representativeness 
and stability of the data given impacts on the utilization of 
physicians' services and associated expenses. Therefore, we propose to 
use the 2017 SAS data for the proposed 2017-based MEI because it is the 
most recently available and complete data.
    We are proposing to supplement the 2017 SAS expense data by using 
several data sources for further disaggregation of compensation costs 
and all other residual costs, including: the 2017 Bureau of Labor 
Statistics (BLS) Occupational Employment and Wage Statistics (OEWS), 
the 2012 Bureau of Economic Analysis (BEA) Benchmark Input-Output data 
(I/O), the 2006 AMA PPIS, and the 2020 AMA Physician Practice Benchmark 
Survey. Table 30 lists the set of mutually exclusive and exhaustive 
cost categories and weights for the proposed 2017-based MEI compared to 
the 2006-based MEI.
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[GRAPHIC] [TIFF OMITTED] TP29JY22.070

BILLING CODE 4120-01-C
    Total costs equal the sum of the costs for Physician Compensation 
and Practice Expenses. The development of the cost weights for each 
cost category in the proposed 2017-based MEI is described, in detail, 
as follows.
a. Physician's Compensation
    The component of the MEI that reflects physician work is 
represented by the estimated portion of compensation expenses 
attributable to physicians. The proposed 2017 cost weight associated 
with the physician's work (otherwise referred to as the Physician 
Compensation cost weight) is based on the estimated share of 2017 SAS 
expenses for total compensation associated with physician compensation. 
Since the compensation expense in the SAS data is only reported as an 
aggregate for all employees, we propose to split the compensation 
expenses between physicians (including nonphysician practitioners that 
can bill independently such as nurse practitioners (NPs), physician 
assistants (PAs), and other clinical personnel) and all other workers 
using the following process.
    Step 1: Total compensation costs are calculated by summing the 
reported expenses in the SAS for gross annual payroll, employer costs 
for fringe benefits (including health insurance, defined benefit and 
defined contribution plans, payroll taxes, employer paid insurance 
premiums, and all other benefits), and temporary staff and leased 
employees as reported in the 2017 SAS data for NAICS 6211 (Office of 
Physicians).
    Step 2: Determine the ratio of physician (including nonphysician 
practitioners that can bill independently such as NPs, PAs, and other 
clinical personnel) wage costs to total wage costs. This ratio is 
calculated using data from the Bureau of Labor Statistics (BLS) 
Occupational Employment and Wage Statistics (OEWS) May 2017 National 
Industry-Specific Occupational Employment and Wage Estimates for 
Offices of Physicians (NAICS 6211). This data reports the number of 
employees by occupational category based on the Standard Occupational 
Classification System (SOC) and the mean hourly wage for each 
occupation. For each occupation, we multiply the number of employees by 
the mean hourly wage to estimate the total mean hourly wage expense. 
The sum of each occupation category represents total mean hourly wage 
expenses for all occupations in NAICS 6211. Then to derive the total 
mean hourly wage expenses for physicians (including nonphysician 
practitioners that can bill independently such as NPs, PAs, and other 
clinical personnel) we sum the following occupations: Physicians and 
Surgeons (29-1060); Chiropractor (29-1011); Optometrist (29-1041); 
Podiatrist (29-1081); Physical Therapist (29-

[[Page 46044]]

1123); Dieticians & Nutritionists (29-1031); Physician Assistants (29-
1071); Nurse Practitioners (29-1171); and All Other Diagnosing & 
Treating Occupations (29-11XX) to estimate OEWS expenses for 
physicians. The ratio of physician total mean hourly wage costs to 
total mean hourly wage costs is 63.2 percent.
    Step 3: We multiply the total compensation expenses from Step 1 by 
the ratio determined in Step 2 to derive estimated Employed Physician 
Compensation Expenses, which in 2017 are estimated to account for 42.4 
percent of total costs.
    Next, since the expenses estimated above reflect only employed 
physician compensation, we propose to add an estimate of compensation 
costs to account for physician practice owners that are not classified 
as employees but instead would be included in the net income of the 
practice. The net income physician compensation costs are estimated by 
the following methodology. This amount is determined in three steps:
    Step 1: Subtract total expenses from total revenue as reported in 
the 2017 SAS data for NAICS 6211.
    Step 2: Estimate the share of owners versus employees of physician 
practices for 2017 based on the average share of ``owners'' for 2016 
and 2018 as reported in Exhibit 1 of the 2020 AMA Physician Practice 
Benchmark Survey. This estimated share for 2017 is 46.5 percent (and 
reflects the average of the share for 2016 and 2018).
    Step 3: Multiply the share determined in step 2 by the amount 
determined in step 1, which represents the estimated expenses for net 
income for owners of physician practices and are 4.845 percent of total 
costs in 2017.
    The proposed aggregate 2017-based Physician Compensation cost 
weight is the sum of Employed Physician Compensation cost weight 
(42.416 percent) and Estimated Net Income for Physician Practice Owners 
cost weight (4.845 percent), or 47.261 percent. By comparison, the 
2006-based Physician Compensation cost weight is 50.866 percent and 
reflects the net income for self-employed physicians and the expenses 
for nonphysician clinical staff that can bill Medicare independently. 
The proposed 2017-based MEI cost weight for Physician Compensation is 
3.6 percentage points lower than the 2006-based MEI cost weight. This 
difference is due to two key factors: (1) any changes that occurred in 
the cost to provide physician services between 2006 and 2017, and (2) 
the SAS data reflects relative costs for all physician ownership 
practices while the 2006 AMA PPIS data reflected relative costs only 
for self-employed physician practices.
    We propose to split the Physician Compensation cost weight into two 
cost categories: Physician Wages and Salaries, and Physician Benefits. 
The Physician Wages and Salaries cost weight is calculated by 
multiplying the total Physician Compensation weight by the ratio of the 
gross payroll to the sum of gross payroll and employer's cost for 
fringe benefits in the 2017 SAS data, which is 83 percent. The 
Physician Benefits cost weight is calculated by multiplying the total 
physician compensation weight by the ratio of the employee benefits to 
the sum of gross payroll and employer's cost for fringe benefits in the 
2017 SAS data, which is 17 percent. As a result, the proposed Physician 
Wages and Salaries cost weight is 39.226 percent and the proposed 
Physician Benefits cost weight is 8.034 percent in the 2017-based MEI.
b. Practice Expenses
    The Practice Expenses cost weight reflects all remaining operating 
costs other than physician compensation. We propose to determine the 
remaining Practice Expense cost weights in the 2017-based MEI using the 
2017 SAS Expense data for NAICS 6211 expressed as a percentage of total 
costs. The explanations for the derivation of the individual cost 
weights under Practice Expenses are detailed below.
(1) Non-Physician Compensation
    We propose to estimate the cost weight for Non-physician 
Compensation using the 2017 SAS data for these expenses. As mentioned 
previously, since the compensation expenses in the SAS data are only 
reported as an aggregate for all employees, we are proposing to 
multiply the 2017 SAS total compensation expenses for NAICS 6211 by 
36.8 percent, which is the residual of the 63.2-percent share 
determined for physicians (including nonphysician practitioners that 
can bill independently such as NPs, PAs, and other clinical personnel).
    Then, we multiply the total compensation expenses by the ratio of 
nonphysician compensation expenses to total compensation expenses. This 
results in the proposed Non-physician Compensation cost weight of 
24.716 percent in the proposed 2017-based MEI.
    Next, we propose to split the Non-physician Compensation cost 
weight into two cost categories: Non-physician Wages and Salaries, and 
Non-physician Benefits. The Non-physician Wages and Salaries cost 
weight is calculated by multiplying the total Non-physician 
Compensation cost weight by ratio of the gross payroll to the sum of 
gross payroll and employer's expense for fringe benefits in the 2017 
SAS data, which is 83 percent. The Non-physician Benefits cost weight 
is calculated by multiplying the total Non-physician Compensation 
weight by the ratio of the employee benefits to the sum of gross 
payroll and employer's expenses for fringe benefits in the 2017 SAS 
data, which is 17 percent. As a result, the proposed Non-physician 
Wages and Salaries cost weight is 20.514 percent in the proposed 2017-
based MEI and the proposed Non-physician Benefits cost weight is 4.202 
percent. For comparison purposes, the 2006-based MEI cost weights are 
11.885 percent and 4.668 percent, respectively. We are also proposing 
to disaggregate the Non-physician Wages and Salaries cost weight into 
two categories: (1) Health-related, non-physician and (2) Nonhealth, 
non-physician Wages and Salaries.
    Of the 36.8 percent of total SAS compensation costs associated with 
non-physicians, 14.7 percent points are determined to be associated 
with The Health-related, non-physician Wages and salaries. This 
percentage reflects the mean hourly wages to total mean hourly wages 
from the 2017 OEWS data for the following occupations: Health 
Technologists and Technicians (29-2000); Other Healthcare Practitioners 
and Technical (29-9000); and Healthcare Support (31-0000). Applying 
this share (40 percent) to the Non-physician wages cost weight results 
in a proposed weight of 8.208 percent for the health-related, non-
physician Wages and Salaries cost weight for the proposed 2017-based 
MEI.
    The remaining approximately 60 percent are associated with 
Nonhealth, non-physician Wages and salaries (Salary 22.1 percentage 
points of the 36.8 percent). This percentage reflects the mean hourly 
wages to total mean hourly wages from the 2017 OEWS data for the 
following occupations: Management (11-0000); Business and Financial 
Operations (13-0000); Computer and Mathematical (15-0000); Architecture 
and Engineering (17-0000); Life, Physical, and Social Science (19-
0000); Community and Social Service (21-0000); Legal (23-0000); 
Education, Training, and Library (25-0000); Arts, Design, 
Entertainment, Sports, and Media (27-0000); Protective Service (33-
0000); Food Preparation and Serving Related (35-0000); Building and 
Grounds Cleaning and Maintenance (37-0000); Personal Care and Service 
(39-0000); Sales and Related (41-0000);

[[Page 46045]]

Office and Administrative Support (43-0000); Construction and 
Extraction (47-0000); Installation, Maintenance, and Repair (49-0000); 
Production (51-0000); and Transportation and Material Moving (53-0000). 
Applying this share (60 percent) to the non-physician wages cost weight 
results in a proposed weight of 12.306 percent for the Nonhealth, non-
physician Wages and Salaries cost weight for the proposed 2017-based 
MEI.
    Next, since the non-health, non-physician wages represent various 
types of occupations that may experience different wage inflation 
pressures, we propose to disaggregate the Non-health, non-physician 
Wages and Salaries cost weight of 12.306 percent into four occupational 
subcategories. To arrive at a distribution for these separate 
occupational categories (Professional Related (PR) workers, Managers, 
Clerical workers, and Service workers), we determined an estimate of 
annual earnings for each using the Standard Occupational Classification 
(SOC) system. The professional and related wages salaries consist of 
the following occupational categories: Business and Financial 
Operations (13-0000); Computer and Mathematical (15-0000); Architecture 
and Engineering (17-0000); and Life, Physical, and Social Science (19-
0000). The Clerical wages salaries consist of the occupational category 
Office Administrative Support (43-0000). The Services wages salaries 
consist of the following occupational categories: Community and Social 
Service (21-0000); Arts, Design, Entertainment, Sports, and Media (25-
0000); Protective Service (33-0000); Food Preparation and Serving 
Related (35-0000); Building and Grounds Cleaning and Maintenance (37-
0000); Personal Care and Service (39-0000); Sales and Related (41-
0000); Construction and Extraction (47-0000); Installation, 
Maintenance, and Repair (49-0000); Production (51-0000); and 
Transportation and Material Moving (53-0000).
    The Non-health, non-physician Wages and Salaries cost weight of 
12.306 percent is multiplied by the relative share of each category to 
arrive at the detailed distribution. The occupational distribution in 
the proposed 2017-based MEI, as well as the distribution for the 2006-
based MEI is presented in Table 31.
[GRAPHIC] [TIFF OMITTED] TP29JY22.071

(2) Other Practice Expenses
    We propose that the remaining aggregate Other Practice Expenses 
would be derived using the 2017 NAICS 6211 SAS expense data and 
calculated as the sum of the expenses for the detailed categories 
expressed as a percentage of total expenses. The aggregate Other 
Practice Expenses include all SAS expenses other than gross annual 
payroll, fringe benefits, and temporary staff and leased employee 
expenses. Additionally, we propose to remove the estimated expenses for 
drugs and separately billable supplies (which are paid outside of the 
PFS system) from total expenses in order to be consistent with the PFS. 
The Other Practice Expenses share of total costs in the proposed 2017-
based MEI is 28.023 percent compared to a cost weight of 32.582 percent 
in the 2006-based MEI.
    We further propose to use the 2017 SAS data for NAICS 6211 to 
disaggregate the Other Practice Expenses into the following ten cost 
categories: Utilities; All Other Products; Telephone; Administrative 
Support & Waste Services; All Other Services; Professional, Scientific, 
and Technical; Fixed Capital; Moveable Capital; Professional Liability 
Insurance; and Medical Supplies. Table 32 shows the 10 detailed cost 
weights for the Other Practice Expenses for the 2017-based MEI, which 
is 6 fewer categories than the 2006-based MEI. The major differences 
are: (1) we propose to have one cost category for All Other Products in 
the proposed 2017-based MEI instead of having separate cost categories 
for Chemicals, Paper, Rubber and Plastics, and Other Miscellaneous 
Products as done for the 2006-based MEI, (2) we propose to eliminate 
the separate cost category for Postage as the cost weight was small 
(less than 0.2 percentage point) and include the expenses for postage 
in the proposed All Other Products cost weight, and (3) we propose to 
eliminate the cost category for Medical Equipment as the cost weight 
for the Moveable Capital in the proposed 2017-based MEI includes the 
expenses for all types of machinery and equipment, including medical 
equipment; we do not have a data source available to split the expenses 
between Medical Equipment and All Other Equipment in the SAS or I/O 
data.

[[Page 46046]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.072

    As previously mentioned, we are proposing to make one adjustment to 
the medical supplies expenses as reported on the SAS data to exclude 
estimated expenses associated with drugs and separately billable 
supplies. We propose to make this adjustment in order to exclude the 
expenses that are paid outside of the PFS and to be consistent with the 
expenses that were also excluded in the 2006-based MEI. Finally, we 
propose to use the BEA 2012--Benchmark I/O data aged to 2017 to 
determine the split between All Other Products and All Other Services 
that are captured in the residual ``all other expenses'' line in the 
2017 SAS data. The BEA 2012--Benchmark I/O data can be accessed at 
https://www.bea.gov/industry/input-output-accounts-data#supplemental-estimate-tables. We note that this method of splitting residual 
expenses is similar to the methodology used in the 2006-based MEI where 
the 2002 Benchmark I/O data was aged to 2006 to further disaggregate 
the residual expense from the AMA PPIS.
    The following is a description of the types of expenses included in 
each of the detailed categories under Other Practice Expenses:
(a) Utilities
    The proposed weight for Utilities was calculated using the 2017 SAS 
expense data expressed as a percentage of total expenses. Utilities 
expenses are calculated as the sum of the expenses from SAS for: (1) 
purchased electricity, (2) purchased fuels (except motor fuels), and 
(3) water, sewer, refuse removal, and other utility payments. The SAS 
survey questionnaire defines the purchased electricity expenses as 
costs paid for electricity. The SAS survey questionnaire defines the 
purchased fuels (except motor fuels) as the costs for fuel for heating, 
power, or generating electricity (e.g., natural gas, propane, oil, 
coal). The SAS survey questionnaire defines the water, sewer, refuse 
removal, and other utility payments as the costs for hazardous waste 
removal. If the utility payments for any of these expenses are included 
with lease and rental payments then they are captured in the SAS 
question for lease and rental payments for land, building, structures, 
storage spaces, or offices. The proposed cost weight for Utilities in 
the 2017-based MEI is 0.366 percent.
(b) Telephone Services
    The Telephone cost weight in the proposed 2017-based MEI includes 
2017 SAS expenses reported for purchased communication services. The 
SAS survey questionnaire defines purchased communication services as 
telephone, cellular, and fax services; computer-related communications 
(for example, internet, connectivity, online), and other wired and 
wireless communication services. The proposed cost weight for Telephone 
Services is 0.471 percent.
(c) All Other Products
    The proposed cost weight for All Other Products for the proposed 
2017-based MEI was calculated in two steps. First, all other operating 
expenses are calculated as a percentage of total expenses from the 2017 
SAS, which was 9.158 percent. The SAS survey questionnaire defines the 
All other operating expenses as operating expenses not reported or 
captured by any other survey expense question or specifically excluded 
in the general instructions. These expenses specifically excluded in 
the general instructions are: transfers made within the company, 
capitalized expenses, interest, bad debt, impairment, and income tax.
    Second, All Other Products expenses are calculated as the estimated 
percentage of expenses from SAS for all other operating expenses using 
Benchmark I/O data. In order to split the aggregate all other operating 
expenses, which reflects both products and services, we propose to rely 
on the 2012 Benchmark I/O data for NAICS 6211, Offices of Physicians 
aged to 2017 for the NAICS categories that align with expenses in the 
SAS all other operating expenses. The process for doing this is 
explained step by step as follows:
    Step 1: We crosswalked the NAICS categories in the 2012 Benchmark 
I/O data to the expense questions in the 2017 SAS data. This process 
allowed for all Benchmark I/O costs to be grouped into similar buckets 
as the SAS Expenses as closely as possible
    Step 2: We aged the 2012 Benchmark I/O costs to 2017 for each of 
the following major buckets of expenses: Physician Compensation, Non-
Physician Compensation, Capital-related expenses (fixed and moveable), 
PLI, Professional Services, Other Products, Other Services, Utilities, 
and Medical Supplies using the growth of

[[Page 46047]]

the various price proxies used for these cost categories in the 2006-
based MEI.
    Step 3: The share of each of the aged 2012 I/O expenses were 
calculated as a percentage of the total aged 2012 I/O expenses. The 
aged 2012 I/O categories of other products and other services were 
estimated to account for about 9.6 percent of total costs. This share 
is similar to the SAS residual cost share weight of 9.158 percent
    The following Table 33 shows the Benchmark I/O NAICS categories 
that were crosswalked to the SAS all other operating expenses for all 
other product expenses.
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[GRAPHIC] [TIFF OMITTED] TP29JY22.073

BILLING CODE 4120-01-C

[[Page 46049]]

    Step 4: The share of expenses for the aged 2012 Benchmark I/O all 
other products to the aged total all other operating expenses in the 
Benchmark I/O were calculated. This resulted in products accounting for 
22.4 percent and services accounting for 77.6 percent of the I/O 
expenses classified as all other costs. We then multiplied the SAS all 
other operating expenses (9.158 percent) by 22.4 percent to estimate 
expenses for the all other products .
    Step 5: Lastly, we divided the estimated all other products SAS 
expenses by the total SAS expenses and the resulting proposed 2017-
based MEI cost weight for All Other Products is 2.055 percent.
(d) Administrative Support and Waste Services
    The proposed weight for Administrative Support and Waste for the 
proposed 2017-based MEI is based on a portion of the 2017 SAS all other 
operating expenses (Residual). Similar to the methodology to calculate 
the All Other Products cost weight we follow a similar process for the 
Administrative Support Waste Services cost weight and the All Other 
Services cost weight discussed in the next section. First, we estimated 
the total SAS residual expenses associated with other services by 
multiplying the SAS all other operating expenses by 77.6 percent, or a 
cost weight of 7.103 percent accounting for the SAS residual expenses 
associated with services rather than products.
    Next, we carved out a portion of these all other services expenses 
that we identified as Administrative Support and Waste Services from 
the I/O categories as shown in Table 34 below. These categories 
accounted for about 26 percent of All other operating expenses. 
Finally, we divided the estimated Administrative Support and Waste 
Services expenses by the Total SAS Expenses and the resulting proposed 
2017-based MEI cost weight for Administrative Support and Waste 
Services is 2.341 percent.
[GRAPHIC] [TIFF OMITTED] TP29JY22.074

(e) All Other Services
    The proposed weight for All Other Services for the proposed 2017-
based MEI was determined in two steps. First, as was done for other 
products, we identified I/O categories (as shown in Table 35) 
associated with other services that would crosswalk to the 2017 SAS 
data for all other operating expenses. Next, we carved out a portion of 
these all other services expenses that were not assigned to 
Administrative Support and Waste Services from the I/O categories, the 
categories assigned to all other services are shown in Table 35. Using 
this information, we determined that All Other Services accounted for 
52 percent of the SAS expenses for other operating expenses, or a 
weight of 4.762 percent.

[[Page 46050]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.075

    Second, we also propose to include the expenses directly reported 
on the SAS survey for purchased repairs and maintenance to machinery 
and equipment in the other services category. The SAS survey 
questionnaire defines these expenses to include expensed repair and 
maintenance services to machinery, vehicles, equipment, and computer 
hardware. These expenses accounted for 0.461 percent of total expenses, 
and when added to the 4.762 percent calculated above, results in a 
proposed 2017-based MEI cost weight for All Other Services of 5.223 
percent.
(f) Professional, Scientific, and Technical Services
    The Professional, Scientific and Technical Services cost weight 
includes the sum of the 2017 SAS expenses for three categories: (1) 
data processing and other purchased computer services, (2) purchased 
advertising and promotional services, and (3) purchased professional 
and technical services. The SAS survey questionnaire defines data 
processing and other purchased computer services to include expenses 
for web hosting, computer facilities management services, computer 
input preparation, data storage, computer time rental, optical scanning 
services, and other computer-related advice and services (including 
training). The SAS survey questionnaire defines purchased advertising 
and promotional services to include marketing and public relations 
services. The SAS survey questionnaire defines purchased professional 
and technical services to include management consulting, accounting, 
auditing, bookkeeping, legal, actuarial, payroll processing, 
architectural, engineering, and other professional services. The cost 
weight for Professional, Scientific, and Technical Services is 6.350 
percent in the proposed 2017-based MEI.
(g) Fixed Capital
    The Fixed Capital cost weight includes the sum of the 2017 SAS 
expenses for four categories: (1) purchased repairs and maintenance to 
buildings, structures, and offices, (2) lease and rental payments for 
land, buildings, structures, store spaces, and offices, (3) an 
estimated portion of depreciation and amortization charges, and (4) 
governmental taxes and license fees. The SAS survey questionnaire 
defines purchased repairs and maintenance to buildings, structures, and 
offices as repair and maintenance to integral parts of buildings (for 
example, elevators, heating systems). The SAS survey questionnaire 
defines lease and rental payments for land, buildings, structures, 
store spaces, and offices to include the rental or lease expenses paid 
for these items including any penalties incurred for broken leases. The 
SAS survey questionnaire defines depreciation and amortization charges 
to include depreciation charges taken against tangible assets owned and 
used by this firm, tangible assets owned and used by this firm within 
leaseholds, tangible assets obtained through capital lease agreements, 
and amortization charges against intangible assets (patents, 
copyrights). We propose to include the share of the depreciation 
expenses applicable to only the structures by multiplying the total

[[Page 46051]]

depreciation expenses by the share of total lease and rental payments 
that were associated with land, buildings, structures, store spaces, 
and offices as reported on the SAS, which is 89 percent. The SAS survey 
question defines governmental taxes and license fees as payments to 
government agencies for taxes and licenses including business and 
property taxes. The proposed cost weight for Fixed Capital for the 
proposed 2017-based MEI is 5.527 percent.
(h) Moveable Capital
    The Moveable Capital cost weight includes the sum of the 2017 SAS 
expenses for five categories: (1) expensed equipment, (2) expensed 
purchases of other materials, parts, and supplies, (3) expensed 
purchases of software, (4) an estimated portion of depreciation and 
amortization charges, and (5) lease and rental payments for machinery, 
equipment, and other tangible items. The SAS survey questionnaire 
defines expensed equipment as expensed computer hardware and other 
equipment (for example, copiers, fax machines, phones, shop and lab 
equipment, CPUs, monitors). The SAS survey questionnaire defines 
depreciation and amortization charges to include depreciation charges 
taken against tangible assets owned and used by this firm, tangible 
assets owned and used by this firm within leaseholds, tangible assets 
obtained through capital lease agreements, and amortization charges 
against intangible assets (patents, copyrights). We propose to include 
the share of the depreciation expenses applicable to only the machinery 
equipment by multiplying the total depreciation expenses by the share 
of total lease and rental payments associated with machinery equipment 
as reported on the SAS, which is 11 percent. The SAS survey question 
defines lease and rental payments for machinery, equipment, and other 
tangible items as lease and rental of transportation equipment without 
operators including penalties incurred for broken lease agreements. The 
proposed cost weight for Moveable Capital for the proposed 2017-based 
MEI is 2.221 percent.
(i) Professional Liability Insurance (PLI)
    The Professional Liability Insurance (PLI) cost weight includes 
2017 SAS expenses reported for professional liability insurance. The 
SAS survey questionnaire defines professional liability insurance as 
the premiums paid for professional liability insurance and the amounts 
set aside for self-insurance. The proposed cost weight for PLI is 1.398 
percent in the proposed 2017-based MEI.
(j) Medical Supplies
    The Medical Supplies cost weight includes 2017 SAS expenses 
reported for Medical supplies with an adjustment to remove the 
estimated expenses for drugs and separately billable medical supplies. 
The SAS survey questionnaire defines medical supplies as the materials 
and supplies used to provide medical services to others (except for 
medical equipment). Since the reported expenses in the SAS would 
include the expenses for drugs and biologicals, as well as the expenses 
for supplies that generally are paid separately under Medicare we 
propose to remove the expenses for these two items from the SAS 
expenses reported using the following methodology:
    Step 1: To remove the separately billable drug expenses, we rely on 
the reported expenses for separately billable drugs from the 2006 AMA 
PPIS data. We inflate the reported AMA PPIS expenses for separately 
billable drugs to 2017 using the growth in Medicare Part B physician-
administered drug spending. Using this method, we inflate the 2006 AMA 
PPIS expenses for separately billable drugs to 2017 by an increase 
factor of 1.784 (or 78.4 percent).
    Step 2: To remove the non-separately billable drug expenses, we 
rely on a similar method where we start with the reported expenses for 
non-separately billable drugs from the 2006 AMA PPIS data. We inflate 
the reported AMA PPIS expenses for non-separately billable drugs to 
2017 using the growth in the PPI for prescription drugs. Using this 
method, we inflate the 2006 AMA PPIS expenses for non-separately 
billable drugs to 2017 by an increase factor of 2.122 (or 112.2 
percent).
    Step 3: To remove the non-separately billable supply expenses, we 
start with the reported expenses for non-separately billable supplies 
from the 2006 AMA PPIS data. We inflate the reported AMA PPIS expenses 
for non-separately billable supplies to 2017 using the growth in the 
Medical supplies price proxy in the 2006-based MEI (a 50/50 blend of 
the PPI--Commodity--Medical and surgical appliances and supplies and 
the CPI--Medical equipment and supplies). Using this method, we inflate 
the 2006 AMA PPIS expenses for non-separately billable supplies to 2017 
by an increase factor of 1.048 (or 4.8 percent).
    Step 4: We then calculate the share of estimated 2017 expenses for 
all drugs and separately billable supplies from steps 1-3 as a 
percentage of total drugs and medical supplies expenses from the 2017 
SAS for NAICS 6211. This share is 80 percent.
    Step 5: We multiply the SAS 2017 total medical supplies expenses by 
a factor of 0.2 (or 1-0.8) in order to estimate the 2017 SAS expenses 
for non-separately billable medical supplies only.
    Taking the 2017 estimated expenses for non-separately billable 
medical supplies as a ratio of total expenses as reported on the 2017 
SAS for NAICS 6211 results in a proposed Medical Supplies cost weight 
of 2.071 percent in the proposed 2017-based MEI.
3. Selection of Price Proxies for Use in the MEI
    To select prices proxies for the proposed 2017-based MEI cost 
categories, most of the proxy measures we considered are based on BLS 
data and are grouped into one of the following four categories:
    <bullet> Producer Price Indices (PPIs): PPIs measure the average 
change over time in the selling prices received by domestic producers 
for their output. The prices included in the PPI are from the first 
commercial transaction for many products and some services (https://www.bls.gov/ppi/).
    <bullet> Consumer Price Indices (CPIs): CPIs measure the average 
change over time in the prices paid by urban consumers for a market 
basket of consumer goods and services (https://www.bls.gov/cpi/). CPIs 
are only used when the purchases are similar to those of retail 
consumers rather than purchases at the producer level, or if no 
appropriate PPIs are available or if the particular expenditure 
category is likely to contain purchases made at the final point of 
sale.
    <bullet> Employment Cost Indices (ECIs): ECIs measure the rate of 
change in employee wage rates and employer costs for employee benefits 
per hour worked. These indexes are fixed-weight indexes and strictly 
measure the change in wage rates and employee benefits per hour. ECIs 
are superior to Average Hourly Earnings (AHE) as price proxies for 
input price indexes because they are not affected by shifts in 
occupation or industry mix, and because they measure pure price change 
and are available by both occupational group and by industry. The 
industry ECIs are based on the NAICS and the occupational ECIs are 
based on the Standard Occupational Classification System (SOC). We 
evaluated the price proxies using the criteria of reliability, 
timeliness, availability, and relevance:
    <bullet> Reliability: Reliability indicates that the index is based 
on valid statistical

[[Page 46052]]

methods and has low sampling variability. Widely accepted statistical 
methods ensure that the data were collected and aggregated in a way 
that can be replicated. Low sampling variability is desirable because 
it indicates that the sample reflects the typical members of the 
population. (Sampling variability is variation that occurs by chance 
because only a sample was surveyed rather than the entire population.)
    <bullet> Timeliness: Timeliness implies that the proxy is published 
regularly, preferably at least once a quarter. The market basket levels 
are updated quarterly, and therefore, it is important for the 
underlying price proxies to be up-to-date, reflecting the most recent 
data available. We believe that using proxies that are published 
regularly (at least quarterly, whenever possible) helps to ensure that 
we are using the most recent data available to update the market 
basket. We strive to use publications that are disseminated frequently, 
because we believe that this is an optimal way to stay abreast of the 
most current data available.
    <bullet> Availability: Availability means that the proxy is 
publicly available. We prefer that our proxies are publicly available 
because this will help ensure that our market basket updates are as 
transparent to the public as possible. In addition, this enables the 
public to be able to obtain the price proxy data on a regular basis.
    <bullet> Relevance means that the proxy is applicable and 
representative of the cost category weight to which it is applied. We 
believe the proposed PPIs, CPIs, and ECIs selected meet these criteria. 
Therefore, we believe that they continue to be the best measure of 
price changes for the cost categories to which they would be applied. 
In this rule, we present a detailed explanation of the price proxies 
that we are proposing for each cost category weight. We note that many 
of the proxies that we are proposing to use for the proposed 2017-based 
MEI (as shown in Table 36) are the same as those used in the 2006-based 
MEI except as noted below.
a. Physician Compensation
(1) Physician Wages and Salaries
    We propose to continue to use the ECI for Wages and Salaries for 
Professional and Related Occupations (Private Industry) (BLS series 
code CIU2020000120000I) to measure price growth of this category in the 
proposed 2017-based MEI. We believe this price proxy reflects the wage 
pressures faced by physicians in that it captures wage trends in labor 
markets of skilled professional workers without being directly affected 
by trends in physician income that may be influenced by the ownership 
structure of physician practices. This price proxy also follows the 
recommendation of the MEI-TAP that the price proxy would maintain 
consistency with the guidance provided in the 1972 Senate Finance 
Committee report titled ``Social Security Amendments of 1972,'' which 
stated that the index should reflect changes in practice expenses and 
``general earnings''. This is the same proxy used in the 2006-based 
MEI.
(2) Physician Benefits
    We propose to continue to use the ECI for Benefits for Professional 
and Related Occupations (Private Industry) to measure price growth of 
this category in the proposed 2017-based MEI. The ECI for Benefits for 
Professional and Related Occupations is derived using BLS's Total 
Compensation for Professional and Related Occupations (BLS series ID 
CIU2010000120000I) and the relative importance of wages and salaries 
within total compensation. We believe this series is technically 
appropriate because it better reflects the benefit trends for 
professionals requiring advanced training. This is the same proxy used 
in the 2006-based MEI.
b. Practice Expense
(1) Non-Physician, Non-Health-Related Wages and Salaries
    <bullet> Professional and Related: We propose to continue using the 
ECI for Wages and Salaries for Professional and Related Occupation 
(Private Industry) (BLS series code CIU2020000120000I) to measure the 
price growth of this cost category. This is the same proxy used in the 
2006-based MEI.
    <bullet> Management: We propose to continue using the ECI for Wages 
and Salaries for Management, Business, and Financial (Private Industry) 
(BLS series code CIU2020000110000I) to measure the price growth of this 
cost category. This is the same proxy used in the 2006-based MEI.
    <bullet> Clerical: We propose to continue using the ECI for Wages 
and Salaries for Office and Administrative Support (Private Industry) 
(BLS series code CIU2020000220000I) to measure the price growth of this 
cost category. This is the same proxy used in the 2006-based MEI.
    <bullet> Services: We propose to continue using the ECI for Wages 
and Salaries for Service Occupations (Private Industry) (BLS series 
code CIU2020000300000I) to measure the price growth of this cost 
category. This is the same proxy used in the 2006-based MEI.
(2) Non-Physician, Health-Related Wages and Salaries
    We propose to continue to use the ECI for Wages and Salaries for 
Hospital Workers (Private Industry) (BLS series code CIU2026220000000I) 
to measure the price growth of this cost category in the proposed 2017-
based MEI. The ECI for Hospital workers has an occupational mix that 
approximates that of physicians' offices. This is the same proxy used 
in the 2006-based MEI.
(3) Non-Physician Benefits
    We propose to continue using a composite ECI for non-physician 
employee benefits in the proposed 2017-based MEI. The weights and price 
proxies for the composite benefits index are shown in Table 36, which 
lists the five ECI series and corresponding weights used to construct 
the proposed composite benefit index for nonphysician employees in the 
proposed 2017-based MEI. We note the ECI benefits series are derived 
based on BLS published data from the applicable Total Compensation ECI 
and Wages & Salaries ECI as BLS does not publish the ECI Benefit 
Indexes directly.

[[Page 46053]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.076

(4) Other Practice Expense
(a) Utilities
    We propose to continue using the CPI for Fuel and Utilities (BLS 
series code CUUR0000SAH2) to measure the price growth of this cost 
category. This is the same proxy used in the 2006-based MEI.
(b) All Other Products
    We propose to use the PPI--Final demand--Finished goods less foods 
and energy (BLS series code WPUFD413) as the price proxy for this 
category. We believe that the expenses that physician purchase for use 
in providing physicians services are better reflected by purchases at 
the wholesale or producer level rather than at the consumer level and 
the growth in overall prices less food and energy provides a good 
approximation for the inflation pressures experienced for these 
expenses. The 2006-based MEI used several PPI and CPI series to proxy 
the price growth for the products reflected in this category.
(c) Telephone
    We propose to continue using the CPI for Telephone Services (BLS 
series code CUUR0000SEED) to measure the price growth of this cost 
category in the proposed 2017-based MEI. This is the same proxy used in 
the 2006-based MEI.
(d) Professional, Scientific, and Technical Services
    We propose to continue to use the ECI for Total Compensation for 
Professional, Scientific, and Technical Services (Private Industry) 
(BLS series code CIU2015400000000I) to measure the price growth of this 
cost category in the proposed 2017-based MEI. This is the same proxy 
used in the 2006-based MEI.
(e) Administrative and Support Services
    We propose to continue to use the ECI for Total Compensation for 
Administrative, Support, Waste Management, and Remediation Services 
(Private Industry) (BLS series code CIU2015600000000I) to measure the 
price growth of this cost category in the 2017-based MEI. This is the 
same proxy used in the 2006-based MEI.
(f) All Other Services
    We are proposing to continue to use the ECI for Compensation for 
Service Occupations (Private Industry) (BLS series code 
CIU2010000300000I) to measure the price growth of this cost category.
(g) Fixed Capital
    We propose to continue to use the PPI for Lessors of Nonresidential 
Buildings (BLS series code PCU531120531120) to measure the price growth 
of this cost category in the proposed 2017-based MEI. This is the same 
proxy used in the 2006-based MEI.
(h) Moveable Capital
    We propose to continue to use the PPI for Machinery and Equipment 
(series code WPU11) to measure the price growth of this cost category 
in the proposed 2017-based MEI. This is the same proxy used in the 
2006-based MEI.
(i) Professional Liability Insurance
    Unlike the other price proxies based on data from BLS and other 
public sources, the proxy for PLI is based on data collected directly 
by CMS from a sample of commercial insurance carriers. The MEI-TAP 
discussed the methodology of the CMS PLI index, as well as considered 
alternative data sources for the PLI price proxy, including information 
available from BLS and through State insurance commissioners. As 
detailed in the CY 2014 PFS final rule (78 FR 74271), the MEI-TAP 
``believes the current index appropriately reflects the price changes 
in premiums throughout the industry.'' Accordingly, we propose to 
continue using the CMS Physician PLI index to measure the price growth 
of this cost category in the proposed 2017-based MEI. This is the same 
proxy used in the 2006-based MEI.
(j) Medical Supplies
    We propose to continue using a blended index comprised of 50/50 
blend of the PPI for Surgical Appliances (BLS series code WPU156301) 
and the CPI-U for Medical Equipment and Supplies (BLS series code 
CUUR0000SEMG). This is the same proxy used in the 2006-based MEI.
    Table 37 shows the proposed 2017-based MEI cost categories, weights 
and price proxies.
BILLING CODE 4120-01-P

[[Page 46054]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.077

BILLING CODE 4120-01-C
4. Productivity Adjustment to the MEI
    The MEI has been adjusted for changes in productivity since its 
inception. In the CY 2003 PFS final rule with comment period (67 FR 
80019), we implemented a change in the way the MEI was adjusted to 
account for changes in productivity. The MEI used for the 2003 
physician payment update incorporated changes in the 10-year moving 
average of private nonfarm business (economy-wide) total factor 
productivity (previously referred to as multifactor productivity) that 
were applied to the entire index. Previously, the index incorporated 
changes in productivity by adjusting the labor portions of the index by 
the 10-year moving average of economy-wide private nonfarm business 
labor productivity.
    The MEI-TAP's Finding 5.1 states that, ``[t]he Panel reviewed the 
basis for the current economy-wide multifactor productivity adjustment 
(Private

[[Page 46055]]

Nonfarm Business Multifactor Productivity) in the MEI and finds such an 
adjustment continues to be appropriate. This adjustment prevents 
``double counting'' of the effects of productivity improvements, which 
would otherwise be reflected in both (i) the increase in compensation 
and other input price proxies underlying the MEI, and (ii) the growth 
in the number of physician services performed per unit of input 
resources, which results from advances in productivity by individual 
physician practices.''
    We propose to continue to use the current method of applying a 
productivity adjustment to the full MEI increase factor in the proposed 
2017-based MEI. As described in the CY 2003 PFS final rule with comment 
period, we believe this adjustment is appropriate because it explicitly 
reflects the productivity gains associated with all inputs (both labor 
and non-labor). We believe that using the 10-year moving average 
percent change in economy-wide total factor productivity is appropriate 
for deriving a stable measure that helps alleviate the influence that 
the peak (or a trough) of a business cycle may have on the measure. The 
adjustment will be based on the latest available historical economy-
wide nonfarm business total factor productivity data as measured and 
published by BLS.
5. Results of Proposed Rebasing and Revising of the MEI
    Table 38 illustrates the results of the proposed update to the MEI 
cost weights for Physician Compensation, Practice Expenses (excluding 
PLI), and PLI from a 2006-based cost distribution to the proposed 2017-
based cost distribution, including all the proposals as specified.
[GRAPHIC] [TIFF OMITTED] TP29JY22.078

     Table 39 shows the average calendar year percent change for CY 
2016 to CY 2023 for both the 2006-based MEI and proposed 2017-based 
MEI. The proposed 2017-based MEI annual percent changes differ from the 
2006-based MEI annual percent changes by 0.1 to 0.2 percentage point 
for any given year.
[GRAPHIC] [TIFF OMITTED] TP29JY22.079

    As shown in Table 39, the percent change of the proposed 2017-based 
MEI for the CY 2023 is an increase of 3.8 percent, one tenth of a 
percentage point higher than the 2006-based MEI for the same period 
based on the current expectation from the IGI 2022Q1 forecast with 
historical data through 2021Q4. The CY 2023 MEI increase factors for 
the 2006-based MEI and the proposed 2017-based MEI will be updated to 
reflect historical data available (through 2022Q2) for the CY 2023 PFS 
final rule.

III. Other Provisions of the Proposed Rule

A. Requiring Manufacturers of Certain Single-Dose Container or Single-
Use Package Drugs To Provide Refunds With Respect to Discarded Amounts 
Sec. Sec.  414.902 and 414.940)
1. Background
    Drugs and biologicals payable under Medicare Part B fall into three 
general categories: those furnished incident to a physician's service 
(hereinafter referred to as ``incident to'') (section 1861(s)(2) of the 
Act), those administered via a covered item of durable medical 
equipment (DME) (section 1861(s)(6) of the Act), and others as 
specified by statute (for example, certain vaccines described in 
sections 1861(s)(10)(A) and (B) of the Act). Payment limit amounts for 
most drugs and biologicals separately payable under Medicare Part B are 
determined using the methodology

[[Page 46056]]

in section 1847A of the Act, and in many cases, payment is based on the 
average sales price (ASP) plus a statutorily mandated 6 percent add-on. 
Most drugs payable under Part B are covered under the ``incident to'' 
benefit under section 1861(s)(2) of the Act, which includes drugs and 
biologicals not usually self-administered by the patient.
    Many drugs and biologicals (hereafter referred to as a drugs) 
payable under Medicare Part B are dosed in a variable manner such that 
the entire amount identified on the vial or package is not administered 
to the patient. For example, many drugs are dosed based on the 
patient's body weight or body surface area (BSA). Often times, these 
drugs are available only in single-dose containers. As stated in U.S. 
Food and Drug Administration (FDA) guidance for industry,\88\ a single-
dose container is designed for use with a single patient as a single 
injection or infusion. The FDA-approved labeling for a drug packaged in 
a single-dose container typically states that any extra amount of the 
drug remaining after the dose is administered must be discarded. When a 
provider must discard the amount of drug that was unused (that is, the 
discarded amount) from a single-dose container or other single-use 
package of a drug after administering a dose to a Medicare beneficiary, 
the program provides payment for the unused and discarded amount as 
well as the dose administered, up to the amount of the drug indicated 
on the vial or package labeling. On a Medicare Part B claim, the JW 
modifier (Drug amount discarded/not administered to any patient) is a 
Healthcare Common Procedure Coding System (HCPCS) Level II modifier 
used to report the amount of a drug that is discarded and eligible for 
payment.
---------------------------------------------------------------------------

    \88\ https://www.fda.gov/media/117883/download.
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    Beginning on January 1, 2017, CMS revised the JW modifier policy to 
require the uniform use of the modifier for all claims for separately 
payable drugs with discarded drug amounts from single use vials or 
single use packages payable under Part B in order to more effectively 
identify and monitor billing and payment for discarded amounts of 
drugs.<SUP>89 90</SUP> The policy does not apply to drugs that are not 
separately payable, such as packaged hospital outpatient prospective 
payment system (OPPS) drugs or those administered in the Federally 
qualified health centers (FQHC) or rural health clinics (RHC) setting. 
Additional details about this policy can be found in Chapter 17 of the 
Medicare Claims Processing Manual \91\ and in the JW modifier 
frequently asked questions (FAQ) document.\92\
---------------------------------------------------------------------------

    \89\ CF6603: https://www.cms/gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3538CP.pdf.
    \90\ MLN Matters[supreg] Number MM9603: https://www.cms/gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM9603.pdf.
    \91\ https://www.cms/gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c17.pdf.
    \92\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/JW-Modifier-PAQs.pdf.
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    Medicare Part B data for discarded amounts of drug (based on the JW 
modifier) have been published on the CMS website annually for calendar 
years beginning in 2017.\93\ Data for 2020 shows that Medicare paid 
nearly $720 million for discarded amounts of drugs from a single-dose 
container or single-use package (hereafter referred to as single-dose 
container) paid under Part B with claims identifying the discarded 
amounts with the JW modifier. JW modifier data from 2020 is the most 
recent available at the time of this analysis. This data is comparable 
to 2017-2019 with regards to percentage of discarded amounts and total 
Medicare spending for discarded drugs each year, which ranged from 
approximately $700-750 million each year during that time. More than 
half of Medicare spending for discarded amounts in 2020 represents 
about 40 billing and payment codes (that is, HCPCS codes), for which 10 
percent or more of the total charges for the drug were for discarded 
units. A large proportion of single source drugs with 10 percent or 
more discarded units are dosed based on patient's body weight or BSA. 
We note that the JW modifier data published on the CMS website is 
limited to only billing and payment codes that are published on the ASP 
Drug Pricing File.\94\ There are likely additional billing and payment 
codes payable under Medicare Part B available in single-dose containers 
that would be subject to the JW modifier policy and are not reflected 
in the data discussed above.
---------------------------------------------------------------------------

    \93\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-discarded-drug-units.
    \94\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice.
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    When the calculated dose (based on weight or BSA) is drawn from one 
or more vials and any remaining amount of the drug is discarded. For 
example, if labeled dose of a drug is 20 mg/m\2\, the dose for a 
patient with a BSA of 1.9 m\2\ (the approximate average BSA of an adult 
male) would be 38 mg. If the drug is available in single-dose 60-mg 
vials, then 38 mg would be administered to the patient and 22 mg (36.67 
percent) would be discarded. If the ASP payment limit amount 
(typically, ASP plus 6 percent) for this drug for a given quarter is 
$190 per 1 mg, the total payment for the amount of drug that was 
administered to the beneficiary would be $7,220 and for the amount of 
drug that was discarded would be $4,180. Both the amount of drug 
administered and the amount discarded (consistent with the discarded 
drug policy) are subject to the deductible and coinsurance. For a 
beneficiary who has already met the deductible, the coinsurance for the 
entire 60-mg vial would be $2280. Since the vial in this example 
contains enough drug to provide a 20 mg/m\2\ dose to an individual with 
a BSA of 3 m\2\, the full amount of drug labeled on the vial would be 
used in a small subset of patients.
    Section 90004 of the Infrastructure Investment and Jobs Act (Pub. 
L. 117-9, November 15, 2021) (hereinafter is referred to as ``the 
Infrastructure Act'') amended section 1847A of the Act to redesignate 
subsection (h) as subsection (i) and insert a new subsection (h), which 
requires manufacturers to provide a refund to CMS for certain discarded 
amounts from a refundable single-dose container or single-use package 
drug. The refund amount is the amount of discarded drug that exceeds an 
applicable percentage, which is required to be at least 10 percent, of 
total charges for the drug in a given calendar quarter. A refundable 
single-dose container or single-use package drug does not include a 
radiopharmaceutical or imaging agent, certain drugs requiring 
filtration, and certain new drugs. We are proposing implementation of 
section 90004 of the Infrastructure Act below including: how discarded 
amounts of drugs are determined; a definition of which drugs are 
subject to refunds (and exclusions); when and how often CMS will notify 
manufacturers of refunds; when and how often payment of refunds from 
manufacturers to CMS is required; refund calculation methodology 
(including applicable percentages); a dispute resolution process; and 
enforcement provisions.
    We are proposing regulatory changes to implement new section 
1847A(h) of the Act at 42 CFR part 414, subpart K.
2. Discarded Amounts
    The JW modifier has existed since 2003, and since 2017 its use has 
been required on claims for separately payable Part B drugs that 
include discarded amounts of single use vials or

[[Page 46057]]

single use packages. Currently, there are no other modifiers to measure 
discarded units of Part B drugs. On the claim form, the amount of drug 
administered is billed on one line (reflected as billing units in the 
unit field); discarded amounts are billed on a separate line with the 
JW modifier (reflected as billing units in the unit field). The term 
``billing unit'' is defined in section 1847A(b)(6)(B) of the Act as the 
identifiable quantity associated with a billing and payment code, as 
established by the Secretary. For example, in a circumstance where a 
single-dose container is labeled to contain 200 mg and the established 
billing unit for the billing and payment code is 2 mg, then there are 
100 billing units in the vial. If 95 billing units (190 mg) are 
administered to the patient and 5 billing units (10 mg) are discarded, 
the 95 billing units are billed on one line, and the discarded 5 
billing units are billed on another line using the JW modifier. Both 
line items are processed for payment.
    The JW modifier must not be used to report discarded amounts of 
overfill, which is any amount of drug greater than the amount 
identified on FDA-approved labeling. Additional information on the 
overfill policy is available in the Physician Fee Schedule Final Rule 
published in the November 29, 2010 Federal Register (75 FR 73466 
through 70). Contents of a vial or package that are considered overfill 
are not included in the total billing units contained in the vial or 
package and also do not count toward the number of billing units that 
are discarded.
    Section 1847A(h) of the Act specifies that discarded amounts of 
refundable single-dose container or single-use package drugs are to be 
determined using a mechanism such as the JW modifier used as of the 
date of enactment of the Infrastructure Act or any successor modifier 
that includes such data as determined appropriate by the Secretary. For 
consistency with our current billing procedures and to minimize burden, 
we propose to use the JW modifier or any successor modifier that 
includes the same data to determine the total number of billing units 
of a billing and payment code (that is, the identifiable quantity 
associated with a billing and payment code, as established by CMS) of a 
refundable single-dose container or single-use package drug (defined in 
the next section), if any, that were discarded for dates of service 
during such quarter. We propose to use the JW modifier (or any 
successor modifier that includes the same data) to identify discarded 
billing units of a billing and payment code for the purpose of 
calculating the refund amount as described in section 1847A(h)(3) of 
the Act.
    Currently, under the Outpatient Prospective Payment System (OPPS) 
and Ambulatory Surgical Center (ASC) Payment System, hospital 
outpatient departments (HOPDs) and ASCs use the JW modifier to identify 
all separately payable drugs and biologicals for which there is an 
unused or discarded amount. For consistency with our current billing 
procedures we propose that HOPDs would be required to report the JW 
modifier or any successor modifier to identify discarded amounts of 
refundable single-dose container or single-use package drugs described 
by HCPCS codes that are assigned status indicator ``K'' (Nonpass-
Through Drugs and Nonimplantable Biologicals, Including Therapeutic 
Radiopharmaceuticals) or status indicator ``G'' (Pass-Through Drugs and 
Biologicals) under the OPPS. Specifically, we propose that the JW 
modifier would be used to determine the total number of billing units 
of the HCPCS code (that is, the identifiable quantity associated with a 
HCPCS code, as established by CMS) of a refundable single-dose 
container or single-use package drug (defined in the next section), if 
any, assigned status indicator ``K'' or ``G'' that were discarded for 
dates of service during such quarter for the purpose of calculating the 
refund amount described in section 1847A(h)(3) of the Act. Similarly, 
we propose that ASCs would be required to report the JW modifier or any 
successor modifier to identify discarded amounts of refundable single-
dose container or single-use package drugs described by HCPCS codes 
assigned payment indicator ``K2'' (`Drugs and biologicals paid 
separately when provided integral to a surgical procedure on ASC list; 
payment based on OPPS rate) under the ASC payment system. Specifically, 
we propose that ASCs would be required to report the JW modifier or any 
successor modifier that includes the same data to determine the total 
number of billing units of the HCPCS code (that is, the identifiable 
quantity associated with a HCPCS code, as established by CMS) of a 
refundable single-dose container or single-use package drug (defined in 
the next section), if any, assigned status indicator ``K2'' that were 
discarded for dates of service during such quarter.
    Consistent with section 1847A(h)(1)(C) of the Act, which excludes 
units that are packaged into the payment amount for an item or service 
and not separately payable, as well as current HOPD and ASC use of the 
JW modifier, we propose that the JW modifier would not be required to 
identify discarded amounts of drugs that are not separately payable, 
such as drugs for which payment is packaged under the OPPS or ASC 
payment system or drugs administered in the FQHC or RHC setting. 
Specifically, in HOPD setting and the ASC setting, the JW modifier does 
not apply to drugs that are described by HCPCS codes assigned status 
indicator ``N'' (Items and Services Packaged into APC Rates) under the 
OPPS or assigned to a payment indicator of ``N1'' (Packaged service/
item; no separate payment made) under the ASC payment system.
    Similarly, we propose to exclude from the refund amount those units 
of drugs for which payment is packaged into payment for a comprehensive 
ambulatory payment classification (C-APC) service under the OPPS. We 
propose to exclude such drugs when payment is packaged into a C-APC 
service which is assigned to an OPPS status indicator of ``J1'' 
(Hospital Part B Services Paid Through a Comprehensive APC) or ``J2'' 
(Hospital Part B Services That May Be Paid Through a Comprehensive 
APC). For example, if a drug under the OPPS is assigned to status 
indicator ``K'', reports the JW or similar modifier, but is then 
packaged into a C-APC service assigned to a status indicator of ``J1'' 
or ``J2'', we would exclude from the refund those units associated with 
the packaged drug. For a complete list of all proposed OPPS status 
indicator and ASC payment indicator descriptors, please see the 
addendum D1 and addendum DD1 to the CY 2023 OPPS/ASC proposed rule, 
which we expect to issue at around the same time as this proposed rule.
    As described in the section III.A.1 of this proposed rule 
(Background) and also in section III.A.6 of this proposed rule, section 
1847A(h) of the Act requires manufacturers to provide refunds for 
discarded amounts of refundable single-dose container or single-use 
package drugs for which payment is made under Part B exceeding an 
applicable percentage of 10 percent of the estimated total allowed 
charges for such a drug (less the amount paid for packaged drugs) 
during the quarter. Under our current discarded drug policy, no 
modifier is required when there are no discarded amounts from a single 
use vial or single use package drug. However, we are aware that the JW 
modifier is often omitted on claims, and it is unclear whether the 
absence of the JW modifier on a claim for a single-dose container drug 
indicates that there were no discarded amounts or that the modifier was 
incorrectly omitted from the claim. This

[[Page 46058]]

has led to incomplete data describing quantities of discarded amounts 
and the associated Medicare payments. There are a number of possible 
reasons why the modifier might be incorrectly omitted on the claim 
form, including provider burden for documentation or lack of awareness 
of the policy. In addition, there may not be strong incentive for 
appropriate JW modifier use because Medicare pays for administered and 
discarded amounts of the drug. For instance, if a provider administers 
a portion and discards a portion of a single-use vial, but bills for 
the entire vial as administered (incorrectly omitting the JW modifier), 
the provider payment and beneficiary coinsurance amounts would be the 
same as if the provider had correctly billed for the administered 
amounts and the discarded amounts (using the JW modifier). The JW 
modifier FAQs state that claims that do not use the modifier correctly 
may be subject to review, but we do not have quantifiable numbers 
regarding how often the modifier is omitted or how many discarded units 
are not accounted for because of such omissions. Because JW modifier 
data is incomplete and because refund amounts would rely on this data, 
we propose that for dates of service on or after January 1, 2023, the 
JW modifier be required on claims for all single-dose container or 
single use drugs for which any amount is discarded (as reflected in our 
current policy and proposed above), and a separate modifier be required 
on claims for these drugs when there are no discarded amounts. 
Specifically, we propose to require the use of a separate modifier, the 
JZ modifier, to attest that there were no discarded amounts. To align 
with the JW modifier policy, the JZ modifier would be required when 
there are no discarded amounts from single use vials or single use 
packages payable under Part B for which the JW modifier would be 
required if there were discarded amounts. So, on all claims for single 
use vials or single use packages payable under Part B, either the JW 
modifier would be used (on a separate line) to identify any discarded 
amounts or the JZ modifier (on the claim line with the administered 
amount) would be present to attest that there were no discarded 
amounts. We believe the proposed JZ modifier requirement would not 
increase burden on the provider because under the current JW modifier 
policy, the provider already needs to determine whether or not there 
are any discarded units from a single use vial or package, record 
discarded amounts in the patient medical record, and specify 
administered and discarded amounts on the claim form.
    We welcome comments on these proposals.
3. Refundable Single-Dose Container or Single-Use Package Drug
    Section 90004 of the Infrastructure Act added section 1847A(h)(8) 
of the Act, which defines in subparagraph (A) of such section the term 
``refundable single-dose container or single-use package drug'' as a 
single source drug or biological (as defined in section 1847A(c)(6)(D) 
of the Act) or a biosimilar biological product (as defined in section 
1847A(c)(6)(H) of the Act) for which payment is made under Part B and 
that is furnished from a single-dose container or single-use package.
    For the purposes of section 1847A(h) of the Act, we propose that 
the definition of ``refundable single-dose container or single-use 
package drug'' would apply to drugs paid under Medicare Part B (that 
is, under any payment methodology) that are described as being supplied 
in a ``single-dose'' container or ``single-use'' package based on FDA-
approved labeling or product information. This definition also includes 
drugs described in FDA-approved labeling as a ``kit'' that is intended 
for a single dose or single use. As discussed above in the background, 
we note that the JW modifier data published on the CMS website is 
limited to only billing and payment codes that are published on the ASP 
Drug Pricing File. Therefore, there are likely billing and payment 
codes payable under Medicare Part B that would meet the proposed 
definition of refundable single-dose container or single-use package 
drug that are not found on the ASP drug pricing file or the JW modifier 
data published on the CMS website.
    In our analysis of drugs that meet this definition, there may be a 
need to revise existing billing and payment codes or establish a new 
billing and payment codes for the purposes of implementing these 
provisions because estimated total number of units discarded and total 
allowed charges must be determined at the billing and payment code 
level for the purpose of calculating refund amounts (described below in 
section III.A.6. of this proposed rule). For example, if there is a 
drug that meets the definition of refundable single-dose container or 
single-use package drug that does not have a unique billing and payment 
code, a new code may be needed for the purposes of estimating the total 
number of units that were discarded during such quarter and the total 
allowed charges.
    There may be drugs for which there are national drug codes (NDCs) 
of single-dose containers and NDCs of multiple-dose containers under 
the same FDA approval, and these NDCs are assigned to the same billing 
and payment code. We propose that for a drug to meet the definition of 
``refundable single-dose container or single-use package drug,'' all 
NDCs assigned to the drug's billing and payment code must be single-
dose containers or single-use packages, as described in each product's 
labeling.
    Section 1847A(h)(8)(B) of the Act specifies that the term 
``refundable single-dose container or single-use package drug'' 
excludes drugs that are either radiopharmaceuticals or imaging agents, 
drugs that require filtration during the drug preparation process, and 
drugs approved on or after the date of enactment of the Infrastructure 
Act (that is, November 15, 2021) for which payment under Part B has 
been made for fewer than 18 months. Our proposals for implementing this 
definition and its exclusions are discussed below.
a. Exclusions for Radiopharmaceuticals and Imaging Agents
    Section 1847A(h)(8)(B)(i) of the Act excludes a drug or biological 
that is either a radiopharmaceutical or an imaging agent. We propose to 
identify radiopharmaceuticals (including therapeutic or diagnostic 
radiopharmaceuticals) and imaging agents (including contrast agents 
\95\) for purposes of the exception at section 1847A(h)(8)(B)(i) of the 
Act by language describing them as such in FDA-approved labeling.
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    \95\ https://www.fda.gov/media/72295/download.
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    We propose to codify the exclusion of radiopharmaceuticals and 
imaging agents from the definition of ``refundable single-dose 
container or single-use package drug'' at Sec.  414.902.
b. Exclusions for Drugs Requiring Filtration
    Section 1847A(h)(8)(B)(ii) of the Act excludes from the definition 
of refundable single-dose container or single-use package a drug 
approved by FDA for which dosage and administration instructions 
included in the labeling require filtration during the drug preparation 
process, prior to dilution and administration, and require that any 
unused portion of such drug after the filtration process be discarded 
after the completion of such filtration process. As the statute states, 
for the purposes of this exclusion, the filtration must occur prior to 
dilution and administration. Therefore, for example,

[[Page 46059]]

the definition excludes those drugs requiring filtration in order to 
remove the product from a vial, such as drugs contained within ampules 
or certain liposomal products that require filtration when removing the 
product from the manufacturer's vial consistent with FDA labeling. 
However, drugs that require in-line filters only as part of the drug 
administration process would not meet this exclusion. We propose that, 
consistent with section 1847A(h)(8)(B)(ii) of the Act, requirement for 
filtration must be present on FDA labeling in order for the drug to be 
excluded.
    Additionally, consistent with our longstanding interpretation of 
the distinction between multiple source drugs and single source drugs 
(see program instructions available at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Downloads/051807_coding_annoucement.pdf), we are 
proposing if there is any NDC under a single New Drug Application (NDA) 
or Biologics License Application (BLA) that requires filtration as 
described in section 1847A(h)(8)(B)(ii) of the Act, then all NDCs of 
such drug or biological (that is, any billing and payment code to which 
any such NDCs are assigned) would be excluded from the definition of 
refundable single-dose container or single-use package drug, even if 
other products under the relevant approval and assigned to that billing 
and payment code do not require such filtration. We believe this is 
appropriate because drugs and biologicals payable under Medicare Part B 
are billed at the level of the billing and payment code (not with the 
NDC of the individual product). If some products that require 
filtration and some products that do not require filtration are 
assigned to the same billing and payment code, we would not be able to 
distinguish (based on JW modifier data) which discarded amounts were 
from the filtered product and which were from the non-filtered product.
c. Exclusions for Drugs for Which Payment Under Medicare Part B Has 
Been Made for Fewer Than 18 Months
    Section 1847A(h)(8)(B)(iii) of the Act excludes from the definition 
of refundable single-dose container or single-use package drugs 
approved by FDA on or after November 15, 2021 and for which payment has 
been made under Part B for fewer than 18 months. Typically, if their 
use is reasonable and necessary and all other coverage requirements are 
met, FDA-approved drugs become payable under Medicare Part B on the 
date which they are marketed in the United States. However, we are not 
able to reliably determine the exact date on which the first Part B 
claim was paid for a particular new drug because they are usually first 
billed using an unclassified drug or biological billing and payment 
code. Therefore, our ability to accurately determine when payment for a 
new drug has been made under Part B for 18 months is exceedingly 
limited. Because of the operational challenges with identifying the 
date of when the first Part B claim was paid for a new drug and because 
this exclusion would be operationally difficult to implement if the 18-
month period ends in the middle of a calendar quarter, we believe it is 
appropriate to measure the 18-month period using the first day of the 
calendar quarter following the date of first sale as reported to CMS, 
which is a required field for reporting ASP data.\96\ That is, for 
purposes of this exclusion, we propose to consider the 18-month period 
to begin on the first day of the calendar quarter following the date of 
first sale as reported to CMS for the drug. Because 18 months is the 
equivalent of six calendar quarters, under our proposed approach, 
refundable single-dose container or single-use package drugs approved 
or licensed by FDA on or after November 15, 2021 would be excluded from 
the definition of refundable single-dose container or single-use 
package, and thus, not subject to a refund, for the first 6 full 
calendar quarters following the date of first sale for any NDCs of such 
drug. Thereafter, that is, beginning with dates of service after the 
last day of the sixth full sales quarter, the drug would no longer be 
excluded from the definition of refundable single-dose container or 
single-use package drug. For example, if a drug that would otherwise 
meet the definition of refundable single-dose container or single-use 
package drug is approved by FDA in June 2023 and the first date of sale 
is June 20, 2023, the first day of the calendar quarter following the 
date of first sale for such drug would be sales occurring in the third 
calendar quarter of 2023 (July 1, 2023 through September 30, 2023), and 
we would consider the drug to be excluded from the definition for the 
next six quarters (that is, through December 31, 2024). As of January 
1, 2025, the drug would no longer be excluded from the definition of 
refundable single-dose container or single-use package drug and would 
be subject to applicable refunds.
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    \96\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/Downloads/ASP_Data_Collection_Validation_Macro_User_Guide.pdf.
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    We propose that exclusion would apply only once for a drug. That 
is, it would apply for the first NDC of such drug assigned to a billing 
and payment code and paid under Medicare Part B. If additional NDCs in 
the same billing and payment code, such as a new vial size or ready-to-
use syringe, were subsequently approved under the same FDA approved 
application (for example, under the same approved NDA or BLA number), 
marketed, and paid under Part B, these subsequent NDCs would not start 
a new 18-month exception period. We believe this proposed approach is 
appropriate to prevent a drug from periodic or continual exemption from 
reports and refunds due to new NDCs that are marketed under the same 
FDA-approval.
    We propose to add a new definition at Sec.  414.902 of ``refundable 
single-dose container or single-use package drug,'' which would be 
defined to mean a single source drug or biological or a biosimilar 
biological product for which payment is made under this part and that 
is furnished from a single-dose container or single-use package based 
on FDA-approved labeling or product information, except as otherwise 
specified. We welcome comment on the proposed implementation of these 
statutory exclusions.
4. Provision of Information to Manufacturers
    Section 1847A(h)(1) of the Act requires the Secretary to provide 
each manufacturer of a refundable single-dose container or single-use 
package drug (as defined in section 1847A(h)(8) of the Act) with a 
report, for each calendar quarter beginning on or after January 1, 
2023, that includes the following information:
    <bullet> The total number of units of the billing and payment code 
of such drug, if any, that were discarded during such quarter, as 
determined using a mechanism such as the JW modifier used as of the 
date of enactment of this subsection (or any such successor modifier 
that includes such data as determined appropriate by the Secretary).
    <bullet> The refund amount that the manufacturer is liable for 
pursuant to section 1847A(h)(3) of the Act.
    We propose to use the definition of manufacturer at section 
1847A(c)(6)(A) of the Act, which is codified at Sec.  414.802 and 
defines manufacturer as any entity that is engaged in the following 
(this term does not include a wholesale distributor of drugs or a 
retail pharmacy licensed under State law):

[[Page 46060]]

    (1) Production, preparation, propagation, compounding, conversion 
or processing of prescription drug products, either directly or 
indirectly by extraction from substances of natural origin, or 
independently by means of chemical synthesis, or by a combination of 
extraction and chemical synthesis.
    (2) The packaging, repackaging, labeling, relabeling, or 
distribution of prescription drug products.
    We propose to identify the manufacturer responsible for the 
provision of refunds by the labeler code of the refundable single-dose 
container or single-use package drug. If such product does not have an 
NDC, we propose to use manufacturer information included on the ASP 
data submission for the product.
    We propose that there be a lag between the date of service quarter 
and the date we send reports to manufacturers to allow for claims 
maturity from the date of service. To operationalize reports to 
manufacturers, we must consider the timing with regards to the 
availability of JW modifier data. Providers and suppliers have a 12-
month period to submit Medicare Part B claims, including claims for 
drugs payable under Part B, so a lag exists between the date of service 
when a drug is administered and when the claim is submitted and 
adjudicated. Because of this lag in finalized claims, there may also be 
a lag in available JW modifier data for any given date of service 
quarter. An evaluation of July 2010 Medicare Part B claims in the 
Physician/Supplier-Carrier setting showed that 91.68, 96.84, and 98.32, 
and 99.13 percent of claims were final at 3, 6, 9, and 12 months, 
respectively, following the date of service. At 24 and 48 months, 99.83 
and 100 percent of the claims, respectively, were considered to be 
final.
    Section 1847A(h)(1) of the Act does not specify the interval by 
which reports for each calendar quarter must be sent to manufacturers. 
We propose that CMS provide an annual report to manufacturers with 
information for each calendar quarter. Sending reports (with 
information for each calendar quarter) annually would reduce the 
operational resources needed to implement this provision and would 
streamline the dispute resolution process as described in section 
III.A.7 of this proposed rule. We propose to send reports to 
manufacturers no later than October 1 of each year. We propose that the 
report reflect claims data that is finalized by the end of the second 
calendar quarter (that is, June 30) of the year in which the report is 
sent. This will allow time for CMS to analyze the data and calculate 
refund amounts (as discussed in section III.A.5 of this proposed rule) 
to provide reports to manufacturers no later than October 1. In 
addition, we propose that annual reports would include any additional 
lagged claims data not included for the quarters first reflected in the 
prior year's report.
    In an effort to implement this provision in a timely manner, we 
propose to send the first report to manufacturers no later than October 
1, 2023. Under our proposal, this first report would contain 
information only for the first calendar quarter of 2023, because that 
would be the only quarter for which we would have a substantial amount 
of claims data that is finalized by the end of the second calendar 
quarter of the year in which the report is sent. We propose to send the 
second annual report no later than October 1, 2024, and this report 
would include information for the second, third, and fourth quarters of 
2023 and the first calendar quarter of 2024. It also would include any 
additional lagged claims for dates of service in the first calendar 
quarter of 2023 that were not included in the first report. Subsequent 
annual reports would be done in this manner, meaning that they would 
provide the information required under section 1847A(h)(1) of the Act 
for the last 3 quarters of the prior year, the first quarter of the 
current year, and lagged claims data not reflected for the last three 
quarters of the year that is two years prior and the first quarter of 
the prior year (that is, the quarters first reflected in the previous 
year's report). This means that reports (except for those in 2023 and 
2024) would include information for eight calendar quarters: four new 
calendar quarters and four quarters with additional information for 
claims that were not yet finalized for those dates of service in the 
previous year's report. In this proposed approach, we would expect to 
capture JW modifier data and total allowed charges from over 99 percent 
of claims for dates of service in a given quarter. For example, the 
report sent to manufacturers in 2025 would include information for 
dates of service in the second, third, and fourth quarters of 2024 and 
the first quarter of 2025 plus additional lagged claims that were not 
included in the report sent in 2024 (that is, information for dates of 
service in the second, third, and fourth quarters of 2023 and the first 
quarter of 2024).
    When lagged claims data is evaluated, any changes in the refund 
amount owed for those quarters and not already accounted for in the 
previous year's report would be calculated as described below in 
section III.A.6. of this proposed rule.
5. Manufacturer Provision of Refund
    Section 1847A(h)(2) of the Act states that for each calendar 
quarter beginning on or after January 1, 2023, the manufacturer of a 
refundable single-dose container or single-use package drug shall, for 
such drug, provide to the Secretary a refund for such quarter. As 
described in the previous section, we propose to issue reports for each 
calendar quarter on an annual basis. Section 1847A(h)(4) of the Act 
states that refunds under section 1847A(h)(2) of the Act must be paid 
in regular intervals as determined appropriate by the Secretary. We 
propose that refunds be paid in 12-month intervals (that is, annually) 
to align with our proposal to issue reports for each calendar quarter 
on an annual basis. Additionally, we believe requiring refunds to be 
paid on an annual basis is operationally optimal because it allows for 
some claims runout while administering reports in a timely manner 
following the date of service and leaves more time for dispute 
resolution (discussed below in section III.A.6. of this proposed rule), 
which we believe will be important for refund calculation accuracy. 
Including lagged claims data from the previous year's report allows 
more time for claims to be finalized for a given calendar quarter, 
subsequently represent a more accurate estimate of discarded units, and 
result in a more accurate refund calculation. Therefore, we propose to 
specify that the regular interval for the payment of refunds is annual 
and that refund amounts for the quarters reported in an annual report 
must be paid no later than December 31 of the year in which the report 
was sent to the manufacturer except in circumstances where a dispute is 
pending. In the case of a dispute, payment of the refund is due no 
later than 30 days after the resolution of the dispute. As discussed in 
more detail in the next section, we believe December 31 is an 
appropriate deadline because it would allow manufacturers to review 
their annual reports and initiate dispute resolution if needed. We 
propose to require manufacturers owing refunds to transmit payment in a 
form and manner specified by CMS.
    We propose to reflect these provisions at Sec.  414.940.
6. Refund Amount
    Section 1847A(h)(3) of the Act provides, with respect to a 
refundable single-dose container or single-use package drug of a 
manufacturer assigned to a billing and payment code for a calendar 
quarter beginning on or after

[[Page 46061]]

January 1, 2023, that the refund for which the manufacturer is liable 
is the amount equal to the estimated amount (if any) by which:
    <bullet> The product of:
    ++ The total number of units of the billing and payment code for 
such drug that were discarded during such quarter; and
    ++ The payment limit amount for the refundable single-dose 
container or single-use package drug;
    <bullet> Exceeds an amount equal to the applicable percentage of 
the estimated total allowed charges for such a drug (less the amount 
paid for packaged drugs) during the quarter.
    Section 1847A(h)(3) of the Act specifies that the applicable 
percentage is 10 percent, but authorizes us to increase this percentage 
as appropriate, through notice and comment rulemaking, in the case of a 
refundable single-dose container or single-use package drug that has 
unique circumstances involving similar loss of product as that 
described in section 1847A(h)(8)(B)(ii) of the Act (discussed above in 
section III.A.3. of this proposed rule).
    We propose to calculate the refund required under section 
1847A(h)(1) of the Act using the number of discarded units for dates of 
services in the same calendar quarter to which the payment limit amount 
applies. We propose to estimate the total allowed charges during the 
quarter by multiplying the drug's payment limit amount for the quarter 
by the total number of units of the billing and payment code of such 
drug that were subject to JW modifier reporting (as described above in 
sections III.A.1. and 2. of this proposed rule) including those for 
which the JZ modifier would be required if no units were discarded. As 
specified in section 1847A(h)(1)(C) of the Act, the total number of 
units of the billing and payment code of a refundable single-dose 
container furnished during a calendar quarter for purposes of 
subparagraph (A)(i), and the determination of the estimated total 
allowed charges for the drug in the quarter for purposes of paragraph 
(3)(A)(ii), exclude such units that are packaged into the payment 
amount for an item or service and are not separately payable.
    To illustrate how the refund would be calculated, if 2,000 units of 
a billing and payment code for a given drug were unused and discarded 
during dates of service in the first calendar quarter of 2023, that 
number would be multiplied by the drug's payment limit amount for the 
first calendar quarter of 2023. If the payment limit amount was $100, 
that would be multiplied by 2,000 (the number of discarded units) to 
equal $200,000. If Medicare paid for 15,000 units of the billing and 
payment code subject to the JW modifier with dates of service in the 
first quarter of 2023, that would be multiplied by the same payment 
limit amount ($100) to determine the total allowed charges during the 
quarter ($1,500,000). Then, the applicable percentage (in this example, 
10 percent) of those total allowed charges ($150,000) would be 
subtracted out to determine the refund amount. For the sake of this 
example, that would be $200,000 (the amount described in section 
1847A(h)(3)(A)(i) of the Act) minus $150,000 (the amount described in 
section 1847A(h)(3)(A)(ii) of the Act) to equal a refund amount of 
$50,000 for the first calendar quarter of 2023.
    Section 1847A(h)(3)(A) of the Act states that the refund amount is 
equal to an estimated amount and that the determination of amount that 
exceeds the applicable percentage of the estimated total allowed 
charges for a refundable single-dose container or single-use package 
drug during a given quarter. Exact amounts are likely not attainable 
for these numbers because of, for example, lagged claims data, appeals, 
or reversals in the case of an audit. To obtain the most accurate 
estimates possible, we propose above in section III.A.2 to provide 
information and determine any refund amount for discarded refundable 
single-dose container or single-use package drugs annually, and to 
include additional lagged claims data not included in the previous 
year's report. Based on claims maturity data, we expect this approach 
would capture over 99 percent of claims for a given date of service 
quarter in an effort to make the most accurate estimates possible for 
the purposes of calculating refund amounts. If the assessment of lagged 
claims data increases the refund amount for a quarter, the manufacturer 
would be liable for that additional refund amount, which would be 
reflected in the report. If the assessment of lagged claims data 
decreases the refund amount for a quarter, we propose that any 
overpayment be corrected. In the event that an assessment of lagged 
claims data for a calendar quarter causes the product of total 
discarded units and the payment limit amount to fall below the 
applicable percentage, which would result in no refund due from that 
manufacturer for the given quarter, we propose that any overpayment be 
corrected. We solicit comments on the operational process of 
overpayment correction.
    We propose to reflect these provisions at Sec.  414.940.
a. Increased Applicable Percentage for Drugs With Unique Circumstances
    Section 1847A(h)(3)(B)(ii) of the Act provides that, in the case of 
a refundable single-dose container or single-use package drug that has 
unique circumstances involving similar loss of product as that 
described in section 1847A(h)(8)(B)(ii) of the Act, the Secretary may 
increase the applicable percentage otherwise applicable as determined 
appropriate by the Secretary.
    At this time, we do not propose an increase of the applicable 
percentage for any drugs with unique circumstances. We expect that for 
most drugs supplied in single-dose containers, the amount of drug 
indicated on the vial or container reflects the amount of drug that 
could potentially be administered to a patient. This is consistent with 
FDA regulations at 21 CFR 201.51(g), which provide that for drugs in 
ampules or vials intended for injection, the declaration of net 
quantity of contents on the label is considered to express the minimum 
quantity of contents and that variation above the stated measure must 
comply with the excess volumes set forth in the United States 
Pharmacopeia (USP). FDA guidance for industry \97\ explains that USP 
General Chapter 1151 Pharmaceutical Dosage Forms provides excess volume 
recommendations for mobile and viscous liquids in a range of fill 
volumes, noting that the excess volumes recommended are usually 
sufficient to permit withdrawal and administration of the labeled 
volumes. In this guidance, FDA recommends that single-dose vials should 
not contain a significant volume beyond what would be considered a 
usual or maximum dose for the expected use of the drug product.
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    \97\ https://www.fda.gov/media/88138/download.
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    We recognize there may be very rare cases in which, as part of a 
drug's FDA-approved preparation and administration in labeling, the 
amount of drug identified on the package or labeling far exceeds the 
amount administered to a patient, thus leading to a substantial 
percentage of drug that is discarded. For example, in the case of a 
drug that is reconstituted with a hydrogel and administered via 
ureteral catheter or nephrostomy tube into the kidneys, there is 
substantial amount of reconstituted hydrogel that adheres to

[[Page 46062]]

the vial wall during preparation.\98\ In this instance, the drug 
adhering to the vial wall (and not able to be extracted from the vial) 
must be discarded, which leads to a higher percentage of discarded 
units billed with the JW modifier. If the labeled amount of the package 
is 80 mg and the maximum extracted amount from the vial guarantees 
delivery of the maximum dose of 60 mg, then there would be at least 25 
percent discarded units. In the case that a patient does not require 
the maximum dose, the percent of discarded units would be even higher. 
In this circumstance, an applicable percentage of 35 percent may be 
appropriate because it would allow for the amount drug diluted in 
hydrogel that adheres to the vial wall (25 percent) plus an additional 
10 percent to align with the applicable percentage for drugs without a 
unique circumstance.
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    \98\ https://dailymed.nlm.nih.gov/dailymed/drugInfo.cfm?setid=3d3d5053-5427-4a68-a40b-edb60699521e.
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    We are considering whether we should adopt a higher applicable 
percentage for a drug in this circumstance. We welcome comments on 
specifying a higher applicable percentage for drugs that are diluted in 
hydrogel and administered via the pyelocaliceal route, and we welcome 
comments on whether an applicable percentage of 35 percent would be 
appropriate in this circumstance. We welcome comments on whether there 
are other drugs with unique circumstances as described under section 
1847A(h)(3)(B)(ii) of the Act that may warrant an increase in the 
applicable percentage.
7. Dispute Resolution
    As a part of implementing this provision, we recognize the need for 
establishing a dispute resolution process because of the nature of 
determining the estimated total allowed charges for a given calendar 
quarter and the methods by which the estimated refund amount is 
determined. Although a dispute resolution process is not expressly 
required by section 1847A(h) of the Act, we believe that proactively 
establishing such a process will aid in the successful implementation 
of this provision. We propose that each manufacturer have an 
opportunity to dispute the report by submitting an error report as 
described in this section.
    We propose that to assert that there have been one or more errors 
in a report, a manufacturer must submit a dispute with each asserted 
error. We propose that the dispute must include the following 
information: (1) Manufacturer name and address; (2) The name, telephone 
number, and email address of one or more employees or representatives 
of the manufacturer with whom the Secretary may discuss the claimed 
errors; (3) For a mathematical calculation error, the specific 
calculation element(s) that the manufacturer disputes and its proposed 
corrected calculation; and (4) For any other asserted error, an 
explanation of the nature of the error, how the error affects the 
refund calculation, an explanation of how the manufacturer established 
that an error occurred, the proposed correction to the error, and an 
explanation of why CMS should use the proposed corrected data.
    We propose that in order to dispute a report, manufacturers must 
assert any basis for contesting its refund calculation during the 30-
day period following the issuance of the report. We would evaluate 
error reports and would decide whether the information (such as number 
of discarded billing units or refund amount calculation) requires 
correction based on the information provided. We propose that we would 
provide manufacturers who have submitted a dispute a response to each 
dispute and inform manufacturers of the final refund amount no later 
than 30 days after receipt of the dispute. We propose that if we find 
that a different refund amount is owed than what was stated on the 
report, we would issue a new report with updated discarded amounts and/
or refund. We propose that if we disagree with the dispute, we would 
notify the manufacturer that refund amount on the report is still owed 
and should be paid as described above in section 5 (no later than 
December 31 of the year in which the report was sent). We welcome 
comment on whether CMS should develop an appeal mechanism, which we 
will consider for future rulemaking.
    We propose to codify the dispute resolution process at Sec.  
414.940.
8. Enforcement
a. Audits
    Section 1847A(h)(6)(A)(i) of the Act requires that we perform 
periodic audits on each manufacturer of a refundable single-dose 
container or single-use package drug that is required to provide a 
refund under section 1847A(h) of the Act with respect to such drug and 
such refunds. We propose to specify at 414.940(e) that we periodically 
audit manufacturers of refundable single-dose container or single-use 
package drugs consistent with this requirement. We welcome comments 
about what such audits should entail, which we will consider for future 
rulemaking.
    Section 1847A(h)(6)(A)(ii) of the Act requires us to conduct 
periodic audits of claims submitted under Medicare Part B with respect 
to refundable single-dose container or single-use package drugs in 
accordance with the authority under section 1833(e) of the Act. Under 
the JW modifier policy, claims for drugs furnished on or after January 
1, 2017 containing billing for discarded drugs that do not use the JW 
modifier may be subject to review.\99\ We propose that our review 
contractors would periodically review Part B medication claims to 
ensure the JW modifier, JZ modifier (if adopted), and discarded drug 
amounts are billed appropriately consistent with our normal claims 
audit policies and protocols.
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    \99\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/JW-Modifier-FAQs.pdf.
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b. Civil Money Penalty
    Provisions in section 1847A(h)(6)(B) of the Act give the Secretary 
authority to impose a civil money penalty on a manufacturer of a 
refundable single-dose container or single-use package drug who fails 
to comply with the requirement under section 1847A(h)(2) of the Act for 
such drug for a calendar quarter.
    As set forth in section 1847A(h)(6)(B) of the Act, the civil money 
penalty would be an amount equal to the sum of--
    <bullet> The amount that the manufacturer would have paid under 
such paragraph with respect to such drug for such quarter; and
    <bullet> 25 percent of such amount.
    We propose to codify the civil money penalty at Sec.  414.940.

B. Rural Health Clinics (RHCs) and Federally Qualified Health Centers 
(FQHCs)

1. Background
a. RHC and FQHC Payment Methodologies
    As provided in 42 CFR part 405, subpart X, RHC and FQHC visits 
generally are face-to-face encounters between a patient and one or more 
RHC or FQHC practitioners during which one or more RHC or FQHC 
qualifying services are furnished. RHC and FQHC practitioners are 
physicians, NPs, PAs, CNMs, clinical psychologists (CPs), and clinical 
social workers, and under certain conditions, a registered nurse or 
licensed practical nurse furnishing care to a homebound RHC or FQHC 
patient in an area with a shortage of home

[[Page 46063]]

health agencies. Transitional Care Management (TCM) services can also 
be paid by Medicare as an RHC or FQHC visit. In addition, Diabetes 
Self-Management Training (DSMT) or Medical Nutrition Therapy (MNT) 
sessions furnished by a certified DSMT or MNT program may also be 
considered FQHC visits for Medicare payment purposes. Only medically 
necessary medical, mental health, or qualified preventive health 
services that require the skill level of an RHC or FQHC practitioner 
are RHC or FQHC billable visits. Services furnished by auxiliary 
personnel (for example, nurses, medical assistants, or other clinical 
personnel acting under the supervision of the RHC or FQHC practitioner) 
are considered incident to the visit and are included in the per-visit 
payment.
    RHCs generally are paid an all-inclusive rate (AIR) for all 
medically necessary medical and mental health services and qualified 
preventive health services furnished on the same day (with some 
exceptions). The AIR is subject to a payment limit, meaning that an RHC 
will not receive any payment beyond the specified limit amount. As of 
April 1, 2021, all RHCs are subject to new payment limits on the AIR, 
and this limit will be determined for each RHC in accordance with 
section 1833(f) of the Act.
    FQHCs were paid under the same AIR methodology until October 1, 
2014. Beginning that date, in accordance with section 1834(o) of the 
Act (as added by section 10501(i)(3) of the Affordable Care Act), they 
began to transition to the FQHC PPS system, in which they are paid 
based on the lesser of the FQHC PPS rate or their actual charges. The 
FQHC PPS rate is adjusted for geographic differences in the cost of 
services by the FQHC PPS geographic adjustment factor (GAF). The rate 
is increased by 34 percent when an FQHC furnishes care to a patient 
that is new to the FQHC, or to a beneficiary receiving an initial 
preventive physical examination (IPPE) or has an annual wellness visit 
(AWV).
    Both the RHC AIR and FQHC PPS payment rates were designed to 
reflect the cost of all services and supplies that an RHC or FQHC 
furnishes to a patient in a single day. The rates are not adjusted for 
the complexity of the patient health care needs, the length of the 
visit, or the number or type of practitioners involved in the patient's 
care.
b. Care Management Services in RHCs and FQHCs
    We have been engaged in a multi-year examination of coordinated and 
collaborative care services in professional settings, and as a result 
established codes and separate payment in the PFS to separately 
recognize and pay for these important services. The care coordination 
included in services, such as office visits, do not always adequately 
describe the non-face-to-face care management work involved in primary 
care. Payment for office visits may not reflect all the services and 
resources required to furnish comprehensive, coordinated care 
management for certain categories of beneficiaries, such as those who 
are returning to a community setting following discharge from a 
hospital or skilled nursing facility (SNF) stay.
    A separate payment was established in the CY 2016 PFS final rule 
with comment period (80 FR 71080 through 71088) for RHCs and FQHCs that 
furnish Chronic Care Management (CCM) services. We believe the non-
face-to-face time required to coordinate care is not captured in the 
RHC AIR or the FQHC PPS payment, particularly for the rural and/or low-
income populations served by RHCs and FQHCs. Allowing separate payment 
for CCM services in RHCs and FQHCs is intended to reflect the 
additional resources necessary for the unique components of CCM 
services.
    In the CY 2018 PFS final rule with comment period (82 FR 53169 and 
53180), we finalized revisions to the payment methodology for CCM 
services furnished by RHCs and FQHCs and established requirements for 
general Behavioral Health Integration (BHI) and psychiatric 
Collaborative Care Management (CoCM) services furnished in RHCs and 
FQHCs, beginning on January 1, 2018.
    HCPCS code G0511, is a General Care Management code for use by RHCs 
or FQHCs when at least 20 minutes of qualified CCM or general BHI 
services are furnished to a patient in a calendar month.
    In the CY 2019 PFS final rule (83 FR 59683), we explained for CY 
2018 the payment amount for HCPCS code G0511 was set at the average of 
the 3 national non-facility PFS payment rates for the CCM and general 
BHI codes and updated annually based on the PFS amounts. That is, for 
CY 2018 the 3 codes that comprised G0511 were CPT 99490 (20 minutes or 
more of CCM services), CPT 99487 (60 minutes or more of complex CCM 
services), and CPT 99484 (20 minutes or more of BHI services).
    We also explained that another CCM code was introduced for 
practitioners billing under the PFS, 99491, which would correspond to 
30 minutes or more of CCM furnished by a physician or other qualified 
health care professional and is similar to CPT codes 99490 and 99487 
(83 FR 56983). Therefore, for RHCs and FQHCs, we added CPT code 99491 
as a general care management service and included it in the calculation 
of HCPCS code G0511. Starting on January 1, 2019, RHCs and FQHCs were 
paid for HCPCS code G0511 based on the average of the national non-
facility PFS payment rates for CPT codes 99490, 99487, 99484, and 99491 
(83 FR 59687).
    In the CY 2020 PFS final rule with comment (84 FR 62692), we 
established a separate payment for Principle Care Management (PCM) 
services under the PFS. PCM services include comprehensive care 
services for a single high-risk disease or complex condition, typically 
expected to last at least 3 months and may have led to a recent 
hospitalization, and/or placed the patient at significant risk of 
death. Beginning January 1, 2020, practitioners billing under the PFS 
can bill for PCM services using HCPCS codes G2064 or G2065. HCPCS code 
G2064 is for at least 30 minutes of PCM services furnished by 
physicians or nonphysicians during a calendar month. HCPCS code G2065 
is for at least 30 minutes of PCM services furnished by clinical staff 
under the direct supervision of a physician or non-physician during a 
calendar month.
    In the CY 2021 PFS final rule (85 FR 84697 through 84699), we 
explained that since the requirements for the new PCM codes were 
similar to the requirements for the services described by HCPCS code 
G0511, we added HCPCS code G2064 and G2065 to G0511 as a general care 
management service for RHCs and FQHCs starting January 1, 2021. The 
payment rate for HCPCS G0511 for CY 2021 was the average of the 
national non-facility PFS payment rate for the RHC and FQHC care 
management and general behavioral health codes (CPT codes 99490, 99487, 
99484, and 99491), and PCM codes (HCPCS G2064 and G2065). Finally, we 
note that in the CY 2022 PFS final rule (86 FR 65118), HCPCS codes 
G2064 and G2065 were replaced by CPT codes 99424 and 99435. Therefore, 
for CY 2022 the current payment rate for HCPCS G0511 is the average of 
the national non-facility PFS payment rate for the RHC and FQHC care 
management and general behavioral health codes (CPT codes 99490, 99487,

[[Page 46064]]

99484, and 99491), and PCM codes (CPT codes 99424 and 99425).
    Additional information on care management requirements is available 
on the CMS Care Management Web page at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Care-Management.html 
and on the CMS RHC and FQHC Web pages at https://www.cms.gov/Center/Provider-Type/Rural-Health-Clinics-Center.html and https://www.cms.gov/Center/Provider-Type/Federally-Qualified-Health-Centers-FQHC-Center.html.
2. New Care Management Codes for Chronic Pain Management (CPM) and 
General Behavioral Health Integration (GBHI)
    Consistent with the discussion earlier in section II.E.4 of this 
proposed rule, there are two new HCPCS codes proposed to describe CPM 
and the proposed CPM codes would be created to separately pay for a 
specified set of pain management and treatment services, specifically 
including the administration of validates rating scales, and a person-
centered care plan that includes strengths, goals, clinical needs, and 
desired outcomes.
    (1) HCPCS codes GYYY1: Chronic pain management and treatment, 
monthly bundle including, diagnosis; assessment and monitoring; 
administration of a validated pain rating scale or tool; the 
development, implementation, revision, and maintenance of a person-
centered care plan that includes strengths, goals, clinical needs, and 
desired outcomes; overall treatment management; facilitation and 
coordination of any necessary behavioral health treatment; medication 
management; pain and health literacy counseling; any necessary chronic 
pain related crisis care; and ongoing communication and care 
coordination between relevant practitioners furnishing care, e.g., 
physical therapy and occupational therapy, and community-based care, as 
appropriate. Required face-to-face visit at least 30 minutes provided 
by a physician or other qualified health professional; first 30 minutes 
personally provided by physician or other qualified health care 
professional, per calendar month. (When using GYYY1, 30 minutes must be 
met or exceeded.) and (2) HCPCS code GYYY2: Each additional 15 minutes 
of chronic pain management and treatment by a physician or other 
qualified health care professional, per calendar month). For GYYY1, CPM 
services, we are requiring an face-to-face visit of at least 30 minutes 
provided by a physician or other qualified health professional, per 
calendar month to a beneficiary who has a diagnosis of pain that has 
lasted more than 3 months, which could be the result of an underlying 
medical disease or condition. HCPCS code GYYY2 will apply to up to 
three units of an additional 15 minutes of CPM and treatment by a 
physician or other qualified health care professional, per calendar 
month (listed separately in addition to GYYY1). The new codes for CPM 
would be valued using crosswalks to the CY 2023 ratesetting inputs for 
the PCM services, CPT codes 99424 and 99425.
    The new coding and payment for general BHI services, as described 
in section II.E.4 of this proposed rule, would be a new HCPCS code 
(GBHI1): (Care management services for behavioral health conditions, at 
least 20 minutes of clinical psychologist or clinical social worker 
time, per calendar month, with the following required elements: initial 
assessment or follow-up monitoring, including the use of applicable 
validated rating scales; behavioral health care planning in relation to 
behavioral/psychiatric health problems, including revision for patients 
who are not progressing or whose status changes; facilitating and 
coordinating treatment such as psychotherapy, coordination with an/or 
referral to physicians and practitioners who are authorized by Medicare 
law to prescribe medications and furnish E/M services counseling and/or 
psychiatric consultation; and continuity of care with a designated 
member of the care team) describing general BHI services performed by 
clinical psychologists (CPs) and clinical social workers (CSWs). The 
payment rate for the new General BHI code would be based on the payment 
rate for the current general BHI code, 99484. CPs and CSWs are 
statutorily authorized to furnish services in RHCs and FQHCs (Sec.  
405.2411(a)(6)).
    The requirements for the proposed CPM service (that is, HCPCS code 
GYYY1) are similar to the requirements for the general care management 
services furnished by RHCs and FQHCs and as such, we believe the non-
face-to-face time required to coordinate care is not captured in the 
RHC AIR or the FQHC PPS payment, particularly for the rural and/or low-
income populations served by RHCs and FQHCs. The pain management 
coordination included in services, such as office visits, do not always 
adequately describe the non-face-to-face pain management work involved 
in primary care. Payment for office visits may not reflect all the 
services and resources required to furnish comprehensive, coordinated 
pain care management described in the HCPCS code, such as the 
assessment and monitoring; administration of a validated pain rating 
scale or tool; the development, implementation, revision, and 
maintenance of a person-centered care plan that includes strengths, 
goals, clinical needs, and desired outcomes; overall treatment 
management; facilitation and coordination of any necessary behavioral 
health treatment; medication management; pain and health literacy 
counseling; any necessary chronic pain related crisis care.
    Allowing separate payment for CPM services in RHCs and FQHCs is 
intended to reflect the additional time and resources necessary for the 
unique components of care coordination services. We are not proposing 
to utilize the add-on HCPCS code GYYY2 for RHC/FQHC payments because 
RHCs and FQHCs do not pay their practitioners based on additional 
minutes spent by practitioners, as is the case for practitioners under 
the PFS. In an effort to be consistent with the new services that are 
being proposed for practitioners billing under the PFS, we are 
proposing to include CPM services in the general care management HCPCS 
code G0511 when these services are provided by RHCs and FQHCs. Since 
HCPCS code GYYY1 would be valued using a crosswalk to the PCM CPT code 
99424, which is currently one of the CPT codes that comprise HCPCS code 
G0511, we propose no change to the average used to calculate the G0511 
payment rate.
    In addition, since CPs and CSWs are considered practitioners that 
can provide services in RHCs/FQHCs, in this proposed rule we clarify 
that when CPs and CSWs provide the services described in HCPCS code 
GBHI1 in an RHC or FQHC, they can bill HCPCS code G0511.
    If finalized as proposed, RHCs and FQHCs that furnish the new CPM 
and GBHI services performed by CPs and CSWs would be able to bill these 
services using HCPCS code G0511, either alone or with other payable 
services on an RHC or FQHC claim for dates of service on or after 
January 1, 2023. The payment rate for HCPCS code G0511 would continue 
to be the average of the national non-facility PFS payment rates for 
the RHC and FQHC care management and general behavioral health codes 
(CPT codes 99484, 99487, 99490, and 99491) and PCM codes (CPT codes 
99424 and 99425) and would be updated annually based on the PFS amounts 
for these codes.
    In future rulemaking, we may consider other approaches for

[[Page 46065]]

calculating the rate of HCPCS code G0511 as the number of services is 
growing each year. For example, we could value HCPCS code G0511 using a 
weighted average of the services that comprise HCPCS code G0511 or 
using the national average of the top three services comprising HCPCS 
code G0511. We welcome comments on potential methodologies.
3. Conforming Technical Changes to 42 CFR 405.2463
    Last year in the CY 2022 PFS final rule with comment (86 FR 65211), 
we finalized a policy to revise the regulatory requirement that an RHC 
or FQHC mental health visit must be a face-to-face (that is, in person) 
encounter between an RHC or FQHC patient and an RHC or FQHC 
practitioner. We revised the regulations under Sec.  405.2463 to state 
that an RHC or FQHC mental health visit can also include encounters 
furnished through interactive, real-time, audio and video 
telecommunications technology or audio-only interactions in cases where 
beneficiaries are not capable of, or do not consent to, the use of 
devices that permit a two-way, audio/video interaction for the purposes 
of diagnosis, evaluation or treatment of a mental health disorder. We 
noted that these changes aligned with similar mental health services 
furnished under the PFS. This change allows RHCs and FQHCs to report 
and be paid for mental health visits furnished via real-time, 
telecommunication technology in the same way they currently do when 
these services are furnished in-person.
    In addition, we finalized a revision to the regulation under Sec.  
405.2463 to state that there must be an in-person mental health service 
furnished within 6 months prior to the furnishing of the 
telecommunications service and that an in-person mental health service 
(without the use of telecommunications technology) must be provided at 
least every 12 months while the beneficiary is receiving services 
furnished via telecommunications technology for diagnosis, evaluation, 
or treatment of mental health disorders, unless, for a particular 12-
month period, the physician or practitioner and patient agree that the 
risks and burdens outweigh the benefits associated with furnishing the 
in-person item or service, and the practitioner documents the reasons 
for this decision in the patient's medical record (86 FR 65210 and 
65211).
    We also finalized a revision to the regulation under Sec.  
405.2469, FQHC supplemental payments, to state that a supplemental 
payment required under this section is made to the FQHC when a covered 
face-to-face (that is, in-person) encounter or an encounter where 
services are furnished using interactive, real-time, telecommunications 
technology or audio-only interactions in cases where beneficiaries do 
not wish to use or do not have access to devices that permit a two-way, 
audio/video interaction for the purposes of diagnosis, evaluation or 
treatment of a mental health disorder occurs between a MA enrollee and 
a practitioner as set forth in Sec.  405.2463. At Sec.  405.2469, we 
also finalized a revision to paragraph (d) to describe the same in-
person visit requirement referenced in Sec.  405.2463.
    The Consolidated Appropriations Act, 2022 (Pub. L. 117-103) (CAA, 
2022) was signed into law on March 15, 2022, and included extension of 
a number of Medicare telehealth flexibilities established during the 
PHE for a limited 151-day period beginning on the first day after the 
end of the public health emergency (PHE) for COVID-19. Specifically, 
section 303 of the CAA, 2022 amended section 1834(m)(8) of the Act to 
extend payment for telehealth services furnished by FQHCs and RHCs for 
the 151-day period beginning on the first day after the end of the 
COVID-19 PHE. Payment would continue to be made under the methodology 
established for telehealth services furnished by FQHCs and RHCs during 
the PHE, which is based on payment rates that are similar to the 
national average payment rates for comparable telehealth services under 
the PFS.
    We do not believe it necessary to conform the regulation to this 
temporary provision. However, another provision applicable to RHCs and 
FQHCs requires conforming regulatory text changes. Section 304 of the 
CAA, 2022 delayed the in-person requirements under Medicare for mental 
health services furnished through telehealth under the PFS and for 
mental health visits furnished by RHCs and FQHCs via telecommunications 
technology which requires conforming regulatory text changes. For RHCs 
and FQHCs, in-person visits will not be required until the 152nd day 
after the end of the PHE for COVID-19. We note that while the 
extensions of mental health telehealth visits under section 304 of the 
CAA, 2022 were placed into paragraphs of section 1834 of the Act 
applicable only to hospice patients served by RHCs and FQHCs, the 
overall intent of the amendments made by section 304 of the CAA, 2022 
appear to be to provide an exception to the limitations otherwise in 
place on payment for mental health visits that are not in-person 
visits. Therefore, we are proposing to apply the 151-day extension of 
non-in-person visits to all RHC and FQHC mental health visits.
    Therefore, we are proposing to make conforming regulatory text 
changes to the applicable RHC and FQHC regulations in 42 CFR part 405, 
subpart X, specifically, at Sec.  405.2463, ``What constitutes a 
visit,'' we propose to amend paragraph (b)(3) and at Sec.  405.2469 
``FQHC supplemental payments'' we proposed to amend paragraph (d) to 
include the delay of the in-person requirements for mental health 
visits furnished by RHCs and FQHCs through telecommunication technology 
under Medicare until the 152nd day after the PHE for COVID-19.
    In addition, several other provisions of the CAA, 2022 would apply 
to telehealth services (those that are not mental health visits) 
furnished by RHCs and FQHCs.
    Section 301 of the CAA, 2022 amended section 1834(m)(4)(C) of the 
Act to add a new clause (iii) expand the originating site requirements 
to include any site in the U.S. at which the beneficiary is located, 
including an individual's home, for a 151-day period beginning on the 
first day after the end of the PHE for COVID-19. It also prohibits an 
originating site facility fee from being paid unless the site is a 
setting included on the originating site list in section 
1834(m)(4)(C)(ii) of the Act, excluding the home of an individual.
    Section 305 of division P, title III, subtitle A of the CAA, 2022 
amended section 1834(m) to extend coverage and payment of telehealth 
services that are furnished via audio-only telecommunications system 
for the 151-day period beginning on the first day after the end of the 
PHE for COVID-19.
    Section 309 of division P, title III, subtitle A of the CAA, 2022 
authorized the Secretary to implement the Medicare telehealth 
provisions via program instruction or otherwise. Therefore, given that 
the end date of the PHE is not yet known and may occur prior to the 
provisions of this rule being finalized, we note that we intend to 
issue program instruction or other subregulatory guidance to implement 
the provisions of this section of this rule to ensure a smooth 
transition after the declared end of the PHE for COVID-19.
4. Specified Provider-Based RHC Payment-Limit Per-Visit
a. Background
    Beginning April 1, 2021, provider-based RHCs that meet 
qualifications in section 1833(f)(3)(B) of the Act are entitled to the 
special payment rules

[[Page 46066]]

described in section 1833(f)(3)(A) of the Act. In order to have their 
payment limit established based on their applicable All-Inclusive Rate 
(AIR) and remain this way instead of being based on the national 
statutory payment limit as applicable in section 1833(f)(2) of the Act, 
RHCs must meet the following specified criteria:
    <bullet> As of December 31, 2020, the provider-based RHC was in a 
hospital with less than 50 beds and after December 31, 2020 in a 
hospital that continues to have less than 50 beds (not taking into 
account any increase in the number of beds pursuant to a waiver during 
the PHE for COVID-19); and one of the following circumstances:
    ++ As of December 31, 2020, was enrolled in Medicare (including 
temporary enrollment during the PHE for COVID-19); or
    ++ Submitted an application for enrollment in Medicare (or a 
request for temporary enrollment during the PHE for COVID-19) that was 
received not later than December 31, 2020.
    In accordance with section 1833(f)(3)(A)(i)(I) of the Act, 
beginning April 1, 2021, for provider-based RHCs that had a per visit 
payment amount (or AIR) established for services furnished in 2020, the 
payment limit per visit shall be set at an amount equal to the greater 
of: (1) the per visit payment amount applicable to such RHC for 
services furnished in 2020, increased by the percentage increase in the 
MEI applicable to primary care services furnished as of the first day 
of 2021; or (2) the national statutory payment limit for RHCs per 
visit. We note, the MEI was last revised in the CY 2014 PFS final rule 
with comment period (78 FR 74264) and the proposal to rebase and revise 
the MEI for CY 2023 can be found in section II.N. of this proposed 
rule.
    In a subsequent year (that is, after 2021), the provider-based 
RHC's payment limit per visit shall be set at an amount equal to the 
greater of: (1) the payment limit per visit established for the 
previous year, increased by the percentage increase in the MEI 
applicable to primary care services furnished as of the first day of 
such subsequent year; or (2) the national statutory payment limit for 
RHCs.
    In accordance with section 1833(f)(3)(A)(i)(II) of the Act, 
beginning April 1, 2021, for provider-based RHCs that meet the 
specified criteria under section 1833(f)(3)(B) of the Act, but did not 
have a per visit payment amount (or AIR) established for services 
furnished in 2020, the payment limit per visit shall be at an amount 
equal to the greater of: (1) the per visit payment amount applicable to 
the provider-based RHC for services furnished in 2021; or (2) the 
national statutory payment limit for RHCs.
    In a subsequent year (that is, after 2022), the provider-based RHCs 
payment limit per visit will be the greater of: (1) the payment limit 
per visit established for the previous year, increased by the 
percentage increase in MEI applicable to primary care services 
furnished as of the first day of such subsequent year; or (2) the 
national statutory payment limit for RHCs.
    Once a provider-based RHC meets the qualifications of section 
1833(f)(3)(B) of the Act, it will lose its designation if the hospital 
does not continue to have less than 50 beds, beyond the exemptions 
provided for the COVID-19 PHE. If this occurs the provider-based RHC 
would be subject to the statutory payment limit per visit applicable 
for such year and will not be able to regain the specified provider-
based payment limit.
    In the CY 2022 PFS final rule (86 FR 65204), we discussed the 
provisions in section 1833(f) of the Act \100\ and finalized conforming 
regulations under Sec.  405.2462. On March 16, 2021, we issued Change 
Request 12185, Transmittal 10679, to instruct the Medicare 
Administrative Contractors (MACs) to establish the provider-based RHC 
payment limits per visit in accordance with section 1833(f)(3)(A), 
beginning April 1, 2021. Change Request 12185, Transmittal 10679, was 
rescinded and replaced by Transmittal 10780 issued on May 4, 2021.\101\ 
Change Request 12489, Transmittal 11130, issued on November 19, 2021, 
implemented the RHC payment limits for CY 2022.\102\
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    \100\ As amended by Division CC, section 130 of the Consolidated 
Appropriations Act of 2021 (P.L. 116-260), December 27, 2020). 
Section 2 of H.R. 1868 (Pub. L. 117-7), enacted April 14, 2021, 
provided a technical correction to section 1833(f) of the Act. The 
amendments made by this technical correction took effect as if 
included in the enactment of the Consolidated Appropriations Act of 
2021 (Pub. L. 116-260).
    \101\ https://www.cms.gov/files/document/r10780OTN.pdf.
    \102\ https://www.cms.gov/files/document/r11130cp.pdf.
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b. Clarification to the RHC Payment Limit for Specified Provider-Based 
RHCs
    As we state above, section 1833(f)(3)(A) of the Act instructed CMS 
to set payment limits per visit for specified provider-based RHCs under 
certain payment rules. For specified provider-based RHCs that had a per 
visit payment amount (that is, an AIR) established for services 
furnished in 2020, beginning April 1, 2021, section 1833(f)(3)(A)(i)(I) 
of the Act requires the payment limit per visit to be set at an amount 
equal to the greater of: (1) the per visit payment amount applicable to 
such RHC for services furnished in 2020, increased by the percentage 
increase in the MEI applicable to primary care services furnished as of 
the first day of 2021 or; (2) the statutory payment limit per visit as 
described in section 1833(f)(2)(A) of the Act. For subsequent years, in 
accordance with section 1833(f)(3)(A)(ii) of the Act, the payment limit 
per visit shall be set at an amount equal to the greater of: (1) the 
payment limit per visit established for the previous year, increased by 
the percentage increase in the MEI or; (2) the statutory payment limit 
described in section 1833(f)(2) of the Act as applicable.
    For specified provider-based RHCs that did not have an AIR 
established for services furnished in 2020, beginning April 1, 2021, 
section 1833(f)(3)(A)(i)(II) of the Act requires the payment limit per 
visit shall be set at an amount equal to the greater of: (1) the per 
visit payment amount applicable to such RHC for services furnished in 
2021 or; (2) the statutory payment limit per visit as described in 
section 1833(f)(2)(A) of the Act. For subsequent years, in accordance 
with section 1833(f)(3)(A)(ii) of the Act, the payment limit per visit 
shall be set at an amount equal to the greater of: (1) the amount 
established in the previous year increased by the percentage increase 
in the MEI or; (2) the statutory payment limit described in section 
1833(f)(2) of the Act as applicable.
    In the CY 2022 PFS final rule (86 FR 65201), we interpreted the 
``per visit payment amount'' to align with the interim rate process the 
MACs use in determining an RHC's AIR.\103\ That is, as explained in 
Sec.  405.2464(a) the AIR is determined by the MAC using the most 
recently available cost report. Therefore, using the RHCs discussed in 
section 1833(f)(3)(A)(i)(I) of the Act as an example, we interpreted 
the term ``services furnished in 2020'' to mean the period at which the 
services were furnished in 2020 and that costs for those services were 
reported. We acknowledged that there may be more than one cost report 
that reports costs for services furnished in calendar year 2020 and 
explained that since section 1833(f)(3)(A)(i)(I)(aa) of the Act 
requires the ``per visit payment amount'' to be increased by the CY 
2021 MEI, if a provider has a cost reporting period that differs from a 
calendar year time-period

[[Page 46067]]

(that is, January 1, 2020 through December 31, 2020) then the MACs 
should use data based on the relevant cost report period ending in 
2020.
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    \103\ Note: A discussion of the interim rate process is provided 
in section III.A.2 of the CY 2022 PFS final rule (86 FR 65198 and 
65199).
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    In the CY 2022 PFS final rule (86 FR 65200), we received comments 
from interested parties expressing concern about how the payment limit 
per visit is established for specified provider-based RHCs. To be 
appropriately reflective of an individual clinic's true costs, one 
commenter stated that grandfathered, clinic specific, upper payment 
limits should be based on the final cost settled amount for cost 
reporting periods that end in 2020, or 2021 (for grandfathered RHCs 
that did not have cost reporting period that end in 2020), not an 
interim rate. If an interim final rate is necessary for the time period 
before final cost settled rates are adjudicated, the commenter 
suggested that CMS set interim clinic-specific upper limits only until 
such time that a final rate is established. In our response to these 
comments, we agreed, and stated that what the commenter described was 
aligned with the statute and how we implemented the payment limit per 
visit for specified provider-based RHCs through Change Request 12185, 
Transmittal 10780, issued on May 4, 2021. That is, in accordance with 
section 1833(f)(3)(A) of the Act, specified provider-based RHCs that 
had a per visit payment amount (or AIR) established for services 
furnished in 2020, had their payment limit per visit based on their AIR 
determined from their final settled cost report ending in 2020 
increased by the percentage increase in the MEI applicable to primary 
care services furnished as of the first day of 2021 (CY 2021 MEI of 1.4 
percent). However, if the product of those two numbers (AIR established 
for services furnished in 2020 * 1.014) were less than the national 
statutory payment limit of $100, their payment limit per visit was 
established at $100. With regard to a specified provider based RHC that 
did not have an AIR established for services furnished in 2020 and 
received an interim rate until the MAC accepted and finalized the RHC's 
initial cost report, we again agreed with the commenter. We believed 
that what the commenter described also aligned with the statute and how 
we implemented the payment limit per visit for these specified 
provider-based RHCs through Change Request 12185, Transmittal 10780, 
issued on May 4, 2021. That is, in accordance with section 
1833(f)(3)(A) of the Act, specified provider-based RHCs that did not 
have an AIR established for services furnished in 2020, would have 
their payment limit per visit established based on their AIR determined 
by MACs using the RHC's final settled cost report ending in 2021. The 
interim rate estimate would be reconciled at cost report settlement for 
the cost reporting period ending in 2021 which is used to establish the 
RHC's payment limit per visit for services furnished in 2021.
    Since publication of the CY 2022 PFS final rule, interested parties 
requested clarification regarding the timing of cost reports, 
specifically if the payment limit could be set using a short cost 
report (less than 12 consecutive months). In the CY 2022 PFS final rule 
(86 FR 65198 through 65202), we did not specifically address requiring 
the cost report to span a full 12-consecutive month period or whether 
MACs, following their interim rate setting process, could establish the 
payment limit using a specified RHC's short period cost report (less 
than 12-consecutive months). Since many questions were raised 
subsequent to the publication of the CY 2022 PFS final rule regarding 
the use of short-period cost reports (less than 12 consecutive months) 
versus 12-consecutive month cost reports to establish the payment limit 
for specified provider-based RHCs, in this proposed rule, we are 
providing a discussion of this issue and providing clarification.
    For purposes of establishing the payment limit effective April 1, 
2021 for specified provider-based RHCs defined in section 
1833(f)(3)(A)(i)(I) of the Act, that is, had an AIR established for 
services furnished in 2020, we are proposing that MACs use the cost 
report ending in 2020 that reports costs for 12 consecutive months. If 
the RHC does not have a 12 consecutive month cost report ending in 
2020, the MACs should use the next most-recent final settled cost 
report that reports cost for 12 consecutive months. This proposal would 
impact specified provider-based RHC's that had an established AIR for 
services furnished in 2020 but submitted a short cost report (less than 
12 consecutive months) ending in 2020 since that period would have been 
used by MACs for determining the RHC's payment limit per Change Request 
12185, Transmittal 10679.
    The payment limit per visit is based on each specified provider-
based RHC's AIR determined from their final settled cost report ending 
in 2020 when such cost reporting period is for 12-consecutive months. 
If a 12-consecutive month cost report ending in 2020 is not available, 
the MAC should use the next available 12-consecutive month cost report 
that reports costs for RHC services furnished in 2020, (for example, a 
cost reporting period October 1, 2020 through September 30, 2021 would 
be acceptable).
    We considered the idea of combining cost report data that spans 
from the end of one year into the next year to equal a 12-consecutive 
month cost report (for example, a cost report that consists of three 
months ending December 31, 2020 plus a cost report that ends July 31, 
2021) and prorating the rates from the time services were furnished in 
both years. We decided against combining cost report data to equal a 
12-consecutive month cost report because prorating may result in an 
inaccurate AIR. We seek comment on whether we should combine cost 
report data that spans from one year into the next year to equal a 12-
consecutive month cost report.
    Consequently, for purposes of establishing the payment limit 
effective April 1, 2021 for specified provider-based RHCs defined in 
section 1833(f)(3)(A)(i)(II) of the Act (that is, those that did not 
have an AIR established for services furnished in 2020), we are 
proposing that MACs use the cost report ending in 2021 that reports 
costs for 12 consecutive months. If the RHC does not have a 12-
consecutive month cost report ending in 2021, the MACs should use the 
next most-recent final settled cost report that reports cost for 12 
consecutive months.
    In addition, for those specified provider-based RHCs who did not 
have an AIR established for services furnished in 2020 the 2021 MEI 
percentage increase update would not be applied. As discussed in the CY 
2022 PFS final rule (86 FR 65200), for those specified provider-based 
RHCs, the payment limit per visit would be at an amount equal to the 
greater of: (1) The per visit payment amount applicable to the 
provider-based RHC for services furnished in 2021; or (2) the national 
statutory payment limit for RHCs, and since the MEI is already built in 
the rate for services furnished in 2021 adding an MEI update would be 
duplicative. Therefore, those specified provider-based RHCs that did 
not have an AIR established for services furnished in 2020 would 
receive the CY 2023 percentage increase in the MEI, which will be based 
on the proposed 2017-based MEI update. We note that in section II. M. 
of this proposed rule, we are proposing to rebase and revise the MEI 
from a 2006-base year to a 2017-base year.
    We believe 12 consecutive months of cost report data will more 
accurately reflect the costs of providing RHC services and will 
establish a more accurate base from which the payment limits will be 
updated going forward.

[[Page 46068]]

We seek comment on this proposed interpretation.

C. Clinical Laboratory Fee Schedule: Revised Data Reporting Period and 
Phase-In of Payment Reductions, and Proposals for Specimen Collection 
Fees and Travel Allowance for Clinical Diagnostic Laboratory Tests

1. Background on the Clinical Laboratory Fee Schedule
    Prior to January 1, 2018, Medicare paid for clinical diagnostic 
laboratory tests (CDLTs) on the Clinical Laboratory Fee Schedule 
(CLFS), with certain exceptions, under section 1833(a), (b), and (h) of 
the Act. Under the previous payment system, CDLTs were paid based on 
the lesser of: (1) the amount billed; (2) the local fee schedule amount 
established by the Medicare Administrative Contractor (MAC); or (3) a 
national limitation amount (NLA), which is a percentage of the median 
of all the local fee schedule amounts (or 100 percent of the median for 
new tests furnished on or after January 1, 2001). In practice, most 
tests were paid at the NLA. Under the previous payment system, the CLFS 
amounts were updated for inflation based on the percentage change in 
the Consumer Price Index for All Urban Consumers (CPI-U), and reduced 
by a productivity adjustment and other statutory adjustments, but were 
not otherwise updated or changed. Coinsurance and deductibles generally 
do not apply to CDLTs paid under the CLFS.
    Section 1834A of the Act, as established by section 216(a) of the 
Protecting Access to Medicare Act of 2014 (PAMA), required significant 
changes to how Medicare pays for CDLTs under the CLFS. In the June 23, 
2016 Federal Register (81 FR 41036), we published a final rule entitled 
Medicare Clinical Diagnostic Laboratory Tests Payment System (CLFS 
final rule), that implemented section 1834A of the Act at 42 CFR part 
414, subpart G.
    Under the CLFS final rule, ``reporting entities'' must report to 
CMS during a ``data reporting period'' ``applicable information'' 
collected during a ``data collection period'' for their component 
``applicable laboratories.'' The first data collection period occurred 
from January 1, 2016 through June 30, 2016. The first data reporting 
period occurred from January 1, 2017 through March 31, 2017. On March 
30, 2017, we announced a 60-day period of enforcement discretion for 
the application of the Secretary's potential assessment of civil 
monetary penalties (CMPs) for failure to report applicable information 
with respect to the initial data reporting period.\104\
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    \104\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/Downloads/2017-March-Announcement.pdf.
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    In the CY 2018 PFS proposed rule (82 FR 34089 through 34090), we 
solicited public comments from applicable laboratories and reporting 
entities to better understand the applicable laboratories' experiences 
with data reporting, data collection, and other compliance requirements 
for the first data collection and reporting periods. We discussed these 
comments in the CY 2018 PFS final rule (82 FR 53181 through 53182) and 
stated that we would consider the comments for potential future 
rulemaking or guidance.
    As part of the CY 2019 Medicare PFS rulemaking, we finalized two 
changes to the definition of ``applicable laboratory'' at Sec.  414.502 
(see 83 FR 59667 through 59681, 60074; 83 FR 35849 through 35850, 35855 
through 35862). First, we excluded Medicare Advantage (MA) plan 
payments under Part C from the denominator of the Medicare revenues 
threshold calculation, in an effort to broaden the types of 
laboratories qualifying as an applicable laboratory. Specifically, 
excluding MA plan payments could allow additional laboratories of all 
types serving a significant population of beneficiaries enrolled in 
Medicare Part C to meet the majority of Medicare revenues threshold and 
potentially qualify as an applicable laboratory (if they also meet the 
low expenditure threshold) and report data to CMS during the data 
reporting period. Because MA plan payments are now excluded from the 
total Medicare revenues calculation, the denominator amount (total 
Medicare revenues) would decrease. If the denominator amount decreases, 
the likelihood increases that a laboratory would qualify as an 
applicable laboratory. This is because the laboratory's PFS and CLFS 
revenues are being compared to a lower total Medicare payment amount 
than what they would have been compared to if MA plan payments remained 
in the denominator. Second, consistent with our goal of obtaining a 
broader representation of laboratories that could potentially qualify 
as an applicable laboratory and report data, we also amended the 
definition of applicable laboratory to include hospital outreach 
laboratories that bill Medicare Part B using the CMS-1450 14x Type of 
Bill.
2. Payment Requirements for Clinical Diagnostic Laboratory Tests
    In general, under section 1834A of the Act, the payment amount for 
each CDLT on the CLFS furnished beginning January 1, 2018, is based on 
the applicable information collected during the data collection period 
and reported to CMS during the data reporting period, and is equal to 
the weighted median of the private payor rates for the test. The 
weighted median is calculated by arraying the distribution of all 
private payor rates, weighted by the volume for each payor and each 
laboratory. The payment amounts established under the CLFS are not 
subject to any other adjustment, such as geographic, budget neutrality, 
or annual update, as required by section 1834A(b)(4)(B) of the Act. 
Additionally, section 1834A(b)(3) of the Act, implemented at Sec.  
414.507(d), provides for a phase-in of payment reductions, limiting the 
amounts the CLFS rates for each CDLT (that is not a new advanced 
diagnostic laboratory test (ADLT) or new CDLT) can be reduced as 
compared to the payment rates for the preceding year. Under the 
provisions enacted by section 216(a) of PAMA, for the first 3 years 
after implementation (CY 2018 through CY 2020), the reduction cannot be 
more than 10 percent per year, and for the next 3 years (CY 2021 
through CY 2023), the reduction cannot be more than 15 percent per 
year. Under section 1834A(a)(1) and (b) of the Act, as enacted by PAMA, 
for CDLTs that are not ADLTs, the data collection period, data 
reporting period, and payment rate update occur every 3 years. As such, 
the second data collection period for CDLTs that are not ADLTs occurred 
from January 1, 2019 through June 30, 2019, and the next data reporting 
period was scheduled to take place from January 1, 2020 through March 
31, 2020, with the next update to the Medicare payment rates for these 
tests based on that reported applicable information scheduled to take 
effect as of January 1, 2021.
    Section 216(a) of PAMA established a new subcategory of CDLTs known 
as ADLTs, with separate reporting and payment requirements under 
section 1834A of the Act. The definition of an ADLT is set forth in 
section 1834A(d)(5) of the Act and implemented at Sec.  414.502.
    Generally, under section 1834A(d) of the Act, the Medicare payment 
rate for a new ADLT is equal to its actual list charge during an 
initial period of 3 calendar quarters. After the new ADLT initial 
period, ADLTs are paid using the same methodology based on the weighted 
median of private payor rates as other CDLTs. However, under section 
1834A(d)(3) of the Act, updates to the Medicare payment rates for ADLTs 
occur annually instead of every 3 years.

[[Page 46069]]

    Additional information on the private payor rate-based CLFS is 
detailed in the CLFS final rule (81 FR 41036 through 41101) and is 
available on the CMS website.\105\
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    \105\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ClinicalLabFeeSched/PAMA-regulations.
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3. Previous Statutory Revisions to the Data Reporting Period and Phase-
In of Payment Reductions
    Section 105(a) of the Further Consolidated Appropriations Act, 2020 
(FCAA) (Pub. L. 116-94, enacted on December 20, 2019), and section 3718 
of the Coronavirus Aid, Relief, and Economic Security Act, 2020 (CARES 
Act) (Pub. L. 116-136, enacted on March 27, 2020), made revisions to 
the CLFS requirements for the next data reporting period for CDLTs that 
are not ADLTs under section 1834A of the Act. Additionally, the CARES 
Act made revisions to the phase-in of payment reductions under section 
1834A of the Act. Specifically, section 105(a)(1) of the FCAA amended 
the data reporting requirements in section 1834A(a) of the Act to delay 
the next data reporting period for CDLTs that are not ADLTs by 1 year, 
so that data reporting would be required during the period of January 
1, 2021 through March 31, 2021; the 3-year data reporting cycle for 
CDLTs that are not ADLTs would resume after that data reporting period. 
Section 105(a)(1) of the FCAA also specified that the data collection 
period that applied to the data reporting period of January 1, 2021 
through March 30, 2021 would be the period of January 1, 2019 through 
June 30, 2019, which was the same data collection period that would 
have applied absent the amendments. In addition, section 105(a)(2) of 
the FCAA amended section 1834A(b)(3) of the Act regarding the phase-in 
of payment reductions to provide that payments may not be reduced by 
more than 10 percent as compared to the amount established for the 
preceding year through CY 2020, and for CYs 2021 through 2023, payment 
may not be reduced by more than 15 percent as compared to the amount 
established for the preceding year. These statutory changes were 
consistent with our regulations implementing the private payor rate-
based CLFS at Sec.  414.507(d) (81 FR 41036).
    Subsequently, section 3718 of the CARES Act further amended the 
data reporting requirements for CDLTs that are not ADLTs and the phase-
in of payment reductions under the CLFS. Specifically, section 3718(a) 
of the CARES Act amended section 1834A(a)(1)(B) of the Act to delay the 
next data reporting period for CDLTs that are not ADLTs by one 
additional year, to require data reporting during the period of January 
1, 2022 through March 31, 2022. As amended by the CARES Act, section 
1834A(a)(1)(B) of the Act provided that in the case of reporting with 
respect to CDLTs that are not ADLTs, the Secretary shall revise the 
reporting period under subparagraph (A) such that: (i) no reporting is 
required during the period beginning January 1, 2020, and ending 
December 31, 2021; (ii) reporting is required during the period 
beginning January 1, 2022, and ending March 31, 2022; and (iii) 
reporting is required every 3 years after the period described in 
clause (ii).
    The CARES Act did not modify the data collection period that 
applied to the next data reporting period for these tests. Thus, under 
section 1834A(a)(4)(B) of the Act, as amended by section 105(a)(1) of 
the FCAA, the next data reporting period for CDLTs that are not ADLTs 
(January 1, 2022 through March 31, 2022) would have been based on the 
data collection period of January 1, 2019 through June 30, 2019.
    Section 3718(b) of the CARES Act further amended the provisions in 
section 1834A(b)(3) of the Act regarding the phase-in of payment 
reductions under the CLFS. First, it extended the statutory phase-in of 
payment reductions resulting from private payor rate implementation by 
an additional year, that is, through CY 2024. It further amended 
section 1834A(b)(3)(B)(ii) of the Act to specify that the applicable 
percent for CY 2021 is 0 percent, meaning that the payment amount 
determined for a CDLT for CY 2021 shall not result in any reduction in 
payment as compared to the payment amount for that test for CY 2020. 
Section 3718(b) of the CARES Act further amended section 
1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 
15 percent will apply for CYs 2022 through 2024, instead of CYs 2021 
through 2023.
    In the CY 2021 PFS rulemaking (85 FR 50210 through 50211 and 85 FR 
84693 through 84694), in accordance with section 105(a) of the FCAA and 
section 3718 of the CARES Act, we proposed and finalized conforming 
changes to the data reporting and payment requirements at 42 CFR part 
414, subpart G. Specifically, we finalized revisions to Sec.  414.502 
to update the definitions of both the data collection period and data 
reporting period, specifying that for the data reporting period of 
January 1, 2022 through March 31, 2022, the data collection period is 
January 1, 2019 through June 30, 2019. We also revised Sec.  
414.504(a)(1) to indicate that initially, data reporting begins January 
1, 2017 and is required every 3 years beginning January 2022. In 
addition, we finalized conforming changes to our requirements for the 
phase-in of payment reductions to reflect the CARES Act amendments. 
Specifically, we finalized revisions to Sec.  414.507(d) to indicate 
that for CY 2021, payment may not be reduced by more than 0.0 percent 
as compared to the amount established for CY 2020, and for CYs 2022 
through 2024, payment may not be reduced by more than 15 percent as 
compared to the amount established for the preceding year.
4. Additional Statutory Revisions to the Data Reporting Period and 
Phase-In of Payment Reductions
    Section 4 of the Protecting Medicare and American Farmers from 
Sequester Cuts Act (PMAFSCA) (Pub. L. 117-71, enacted on December 10, 
2021) made additional revisions to the CLFS requirements for the next 
data reporting period for CDLTs that are not ADLTs and to the phase-in 
of payment reductions under section 1834A of the Act. Specifically, 
section 4(b) of PMAFSCA amended the data reporting requirements in 
section 1834A(a) of the Act to delay the next data reporting period for 
CDLTs that are not ADLTs by 1 year, so that data reporting would be 
required during the period of January 1, 2023 through March 31, 2023; 
the 3-year data reporting cycle for CDLTs that are not ADLTs would 
resume after that data reporting period. As amended by section 4 of 
PMAFSCA, section 1834A(a)(1)(B) of the Act now provides that in the 
case of reporting with respect to CDLTs that are not ADLTs, the 
Secretary shall revise the reporting period under subparagraph (A) such 
that--(i) no reporting is required during the period beginning January 
1, 2020, and ending December 31, 2022; (ii) reporting is required 
during the period beginning January 1, 2023, and ending March 31, 2023; 
and (iii) reporting is required every 3 years after the period 
described in clause (ii).
    Section 4 of PMAFSCA does not modify the data collection period 
that applies to the next data reporting period for these tests. Thus, 
under section 1834A(a)(4)(B) of the Act, as amended by section 
105(a)(1) of the FCAA, the next data reporting period for CDLTs that 
are not ADLTs (January 1, 2023 through March 31, 2023) will continue to 
be based on the data collection period of January 1, 2019 through June 
30, 2019, as defined in Sec.  414.502.

[[Page 46070]]

    Section 4 of PMAFSCA further amends the provisions in section 
1834A(b)(3) of the Act regarding the phase-in of payment reductions 
under the CLFS. First, it extends the statutory phase-in of payment 
reductions resulting from private payor rate implementation by an 
additional year, that is, through CY 2025. It further amends section 
1834A(b)(3)(B)(ii) of the Act to specify that the applicable percent 
for each of CY 2021 and 2022 is 0 percent, meaning that the payment 
amount determined for a CDLT for CY 2021 and 2022 shall not result in 
any reduction in payment as compared to the payment amount for that 
test for CY 2020. Section 4(a) of PMAFSCA further amends section 
1834A(b)(3)(B)(iii) of the Act to state that the applicable percent of 
15 percent will apply for CYs 2023 through 2025, instead of CYs 2022 
through 2024.
5. Proposed Conforming Regulatory Changes
    In accordance with section 4(b) of PMAFSCA, we are proposing to 
make certain conforming changes to the data reporting and payment 
requirements at 42 CFR part 414, subpart G. Specifically, we are 
proposing to revise Sec.  414.502 to update the definitions of both the 
``data collection period'' and ``data reporting period,'' specifying 
that for the data reporting period of January 1, 2023 through March 31, 
2023, the data collection period is January 1, 2019 through June 30, 
2019. We are also proposing to revise Sec.  414.504(a)(1) to indicate 
that initially, data reporting begins January 1, 2017 and is required 
every 3 years beginning January 2023. In addition, we are proposing to 
make conforming changes to our requirements for the phase-in of payment 
reductions to reflect the amendments in section 4(b) of PMAFSCA. 
Specifically, we are proposing to revise Sec.  414.507(d) to indicate 
that for CY 2022, payment may not be reduced by more than 0.0 percent 
as compared to the amount established for CY 2021, and for CYs 2023 
through 2025, payment may not be reduced by more than 15 percent as 
compared to the amount established for the preceding year.
    We note that the CYs 2022 and 2023 CLFS payment rates for CDLTs 
that are not ADLTs are based on applicable information collected in the 
data collection period of January 1, 2016 through June 30, 2016. Under 
current law, the CLFS payment rates for CY 2024 through CY 2026 will be 
based on applicable information collected during the data collection 
period of January 1, 2019 through June 30, 2019 and reported to CMS 
during the data reporting period of January 1, 2023 through March 31, 
2023.
6. Laboratory Specimen Collection Fee and Travel Allowance Proposals
    In general, section 1833(h)(3) of the Act requires the Secretary to 
provide for and establish a nominal fee for specimen collection for 
laboratory testing and a fee to cover transportation and personnel 
expenses for trained personnel to collect specimens from homebound 
patients and inpatients (not in a hospital), in addition to the amounts 
provided under the Medicare CLFS. In this section of the proposed rule, 
we are proposing to codify our longstanding specimen collection fee 
policies at Sec.  414.523(a)(1) and our travel allowance policies at 
Sec.  414.523(a)(2), as well as proposing certain changes to modify or 
clarify those policies.
a. Background on Laboratory Specimen Collection Fee Policy
    Medicare Part B, which includes a variety of outpatient services, 
generally covers medically necessary CDLTs when a doctor or non-
physician practitioner orders them. Medically necessary CDLTs are 
generally not subject to coinsurance or deductible. Section 
1833(h)(3)(A) of the Act provides that, in addition to the amounts 
provided under fee schedules (for tests furnished before January 1, 
2017) or under section 1834A of the Act (for tests furnished on or 
after January 1, 2017), the Secretary shall provide for and establish a 
nominal fee to cover the appropriate costs in collecting the sample on 
which a CDLTs was performed and for which payment is made under 
Medicare Part B, except that not more than one such fee may be provided 
with respect to samples collected in the same encounter. As detailed 
later in this section of the proposed rule, we provided manual 
instructions regarding payment of the nominal specimen collection fee 
in the Medicare Claims Processing Manual Pub. 100-04, chapter 16, 
section 60.1,\106\ but we have not reflected these general policies in 
our regulations.\107\ The HCPCS codes for the nominal specimen 
collection fees currently listed on the CLFS (HCPCS codes 36415, P9612, 
and P9615 \108\) have a payment rate of $3. Neither the annual 
deductible nor the 20 percent coinsurance for Medicare apply to the 
specimen collection fees or travel allowance for laboratory tests.
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    \106\ The Medicare Claims Processing Manual is available on the 
CMS website at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items/CMS018912.
    \107\ In 1993, we proposed to implement the payment 
methodologies for the specimen collection fee and travel allowance 
in the regulations, see 53 FR 43837 through 43838, but did not 
finalize those proposals.
    \108\ HCPCS codes and long descriptors: 36415 (Insertion of 
needle into vein for collection of blood sample); P9612 
(Catheterization for collection of specimen, single patient, all 
places of); P9615 (Catheterization for collection of specimen(s) 
(multiple patients)).
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    Section 216(a) of the Protecting Access to Medicare Act of 2014 
(PAMA) (Pub. L. 113-93, enacted April 1, 2014) added section 
1834A(b)(5) to the Act, which increases by $2 the nominal fee that 
would otherwise apply under section 1833(h)(3)(A) of the Act for a 
specimen collected from an individual in a skilled nursing facility 
(SNF) or by a laboratory on behalf of a HHA. Therefore, effective April 
1, 2014, the nominal fee that would otherwise apply for a specimen 
collected from an individual in a SNF or by a laboratory on behalf of a 
HHA is $5, and the relevant HCPCS code is G0471.\109\ We implemented 
this provision in our regulations at Sec.  414.507(f). However, as we 
discuss below, we are proposing to codify our specimen collection fee 
policies in Sec.  414.523(a)(1), including moving that provision from 
Sec.  414.507(f) to Sec.  414.523(a)(1)(iv).
---------------------------------------------------------------------------

    \109\ HCPCS code and descriptor: G0471 (Collection of venous 
blood by venipuncture or urine sample by catheterization from an 
individual in a skilled nursing facility (SNF) or by a labortory on 
behalf of a home health agency (HHA)).
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    In the ``Medicare and Medicaid Programs; Policy and Regulatory 
Revisions in Response to the COVID-19 Public Health Emergency'' interim 
final rule with comment period (IFC), which appeared in the Federal 
Register on April 6, 2020 (85 FR 19230), we established that Medicare 
would pay a nominal specimen collection fee and associated travel 
allowance to independent laboratories for the collection of specimens 
for COVID-19 CDLTs for homebound and non-hospital inpatients (85 FR 
19256 through 19258). Under this policy, the nominal specimen 
collection fee for COVID-19 testing for homebound and non-hospital 
inpatients generally is $23.46 and for individuals in a SNF and 
individuals whose samples are collected by laboratory on behalf of an 
HHA is $25.46. We indicated in that IFC that this specimen collection 
fee policy was established for the duration of the PHE for COVID-19 (85 
FR 19256) and noted in that IFC and subsequent rules (86 FR 39309; 86 
FR 65327) that this policy will end once the PHE for the COVID-19 
pandemic has ended.
    In the CY 2022 PFS proposed rule (86 FR 39310), we requested broad

[[Page 46071]]

comments on our policies for specimen collection fees for consideration 
for possible updates to those policies in the future through notice and 
comment rulemaking. We requested comments regarding the nominal 
specimen collection fees for trained personnel to collect specimens 
from homebound patients and inpatients (not in a hospital), how 
specimen collection practices may have changed as a result of, or from 
insight gained during, the PHE for COVID-19, and what additional 
resources might be needed for specimen collection for COVID-19 CDLTs 
and other tests after the PHE ends, as well as comments related to the 
calculation of costs for transportation and personnel expenses for 
trained personnel to collect specimens from such patients. In the CY 
2022 PFS final rule (86 FR 65327 through 65328), we described the 
comments received and provided responses to those comments. We 
expressed appreciation for the comments regarding the nominal specimen 
collection fees for the collection of specimens for COVID-19 CDLTs and 
acknowledged that the types of resources utilized and supplies needed 
for specimen collection have been influenced by the PHE for COVID-19. 
We stated that although we would not extend the increased payment 
amount beyond the PHE, we would take the feedback received from the 
comment solicitation into consideration for possible future rulemaking 
and guidance.
b. Longstanding Laboratory Specimen Collection Fee Policies and 
Practices
    We have longstanding policies and practices regarding the statutory 
requirements under section 1833(h)(3)(A) of the Act for the laboratory 
specimen collection fee, which are currently described in the Medicare 
Claims Processing Manual Pub. 100-04, chapter 16, Sec.  60.1. However, 
we do not have corresponding regulations text related to the manual 
guidance and some of the manual guidance is no longer applicable. The 
manual guidance specifies when a specimen fee is allowed and not 
allowed. In particular, the manual provides guidance on the following 
topics: (1) specimen drawing by a physician; (2) specimen drawing by an 
independent laboratory; (3) specimen drawing for a dialysis patient; 
and (4) the coding requirements for specimen collection. We note that 
laboratory services, including specimen collection and travel for 
specimen collection, paid under the CLFS must be reasonable and 
necessary as required under section 1862(a)(1)(A) of the Act.
    Specifically, the guidance provides that a specimen collection fee 
is allowed in circumstances such as drawing a blood sample through 
venipuncture (that is, inserting into a vein a needle with syringe or 
vacutainer to draw the specimen) or collecting a urine sample by 
catheterization. A specimen collection fee is not allowed for a throat 
culture or a routine capillary puncture for clotting or bleeding time. 
Additionally, the specimen fee will not be paid to anyone who has not 
extracted the specimen. The manual guidance addresses the number of 
specimen collection fees allowed for each specimen type per patient 
encounter. The manual also addresses how to treat a series of 
specimens; when a series of specimens is required to perform a single 
test (for example, a glucose tolerance test), the series is treated as 
a single encounter.
    The Medicare Claims Processing Manual (chapter 16, Sec.  60.1.1) 
describes specimen collection fees for physicians. Specifically, the 
manual states that Medicare allows a specimen collection fee for 
physicians only when: (1) it is the accepted and prevailing practice 
among physicians in the locality to make separate charges for drawing 
or collecting a specimen; and (2) it is the customary practice of the 
physician performing such services to bill separate charges for drawing 
or collecting the specimen.
    In reviewing the specimen collection criteria for physicians to be 
paid for this service, we had concerns regarding outdated terminology 
and the eligibility criteria for these suppliers to bill Medicare for a 
specimen collection fee. For example, we found that these criteria were 
established prior to January 1, 1992, which is when Medicare began to 
pay for physicians' services under section 1848 of the Act (56 FR 
59502). Since that time, the provision of laboratory services and 
physicians' services have evolved. Therefore, we evaluated those 
criteria as they would apply today. In consideration of current 
standards of practice, we analyzed utilization of the specimen 
collection Current Procedural Terminology (CPT[supreg]) codes to 
determine if the physician office setting is billing for this fee. We 
found that, in 2019, office-based physician and nonphysician 
practitioners had 67.4 million claims billed with specimen collection, 
comprising 31.1 percent of all specimen collection claims.
    We also looked to the PFS to see if there are similar services that 
physicians and nonphysician practitioners can bill and be paid for 
under section 1848 of the Act. We found that there are codes available 
that address collection of blood, for example, CPT[supreg] codes 36410 
(Venipuncture, age 3 years or older, necessitating the skill of a 
physician or other qualified health care professional (separate 
procedure), for diagnostic or therapeutic purposes (not to be used for 
routine venipuncture)). These findings confirm specimen collection 
occurs in the physician's office setting and there are coding options 
to bill for that service via the PFS when applicable. Therefore, we 
believe the criteria currently included in the manual for physician 
eligibility for the CLFS specimen collection fee no longer apply. We 
would not reflect those policies in regulation and would remove this 
section of the manual accordingly.
    The Medicare Claims Processing Manual (chapter 16, Sec.  60.1.2) 
describes policies for specimen drawing by independent laboratories. 
Specifically, the manual states the following:
    Medicare allows separate charges made by laboratories for drawing 
or collecting specimens whether or not the specimens are referred to 
hospitals or independent laboratories. The laboratory does not bill for 
routine handling charges where a specimen is referred by one laboratory 
to another. Medicare allows payment for a specimen collection fee when 
it is medically necessary for a laboratory technician to draw a 
specimen from either a nursing home patient or homebound patient. 
Payment for the specimen collection fee is made based on the CLFS. The 
technician must personally draw the specimen, for example, venipuncture 
or urine sample by catheterization. Medicare does not allow a specimen 
collection fee to the visiting technician if a patient in a facility 
is: (1) not confined to the facility; or (2) the facility has personnel 
on duty qualified to perform the specimen collection. Medical necessity 
for such services exists, for example, where a laboratory technician 
draws a blood specimen from a homebound or an institutionalized 
patient. A patient need not be bedridden to be homebound. However, 
where the specimen is a type that would require only the services of a 
messenger and would not require the skills of a laboratory technician, 
for example, urine or sputum, a specimen pickup service would not be 
considered medically necessary. The manual then refers to the Medicare 
Benefit Policy Manual, Chapters 7 and 15 of Pub. 100-02, for a 
discussion of ``homebound'' and a more complete definition of a 
medically necessary laboratory service

[[Page 46072]]

to a homebound or an institutional patient.
    Under sections 1814(a) and 1835(a) of the Act, an individual shall 
be considered to be ``homebound'' or ``confined to his home'' if the 
individual has a condition, due to an illness or injury, that restricts 
the ability of the individual to leave his or her home except with the 
assistance of another individual or the aid of a supportive device 
(such as crutches, a cane, a wheelchair, or a walker), or if the 
individual has a condition such that leaving his or her home is 
medically contraindicated. While an individual does not have to be 
bedridden to be considered ``confined to his home,'' the condition of 
the individual should be such that there exists an inability to leave 
home such that leaving home requires a considerable and taxing effort 
by the individual. Moreover, Sec.  424.22(a)(1)(ii) describes homebound 
for the purposes of the provision of Medicare home health services as 
home health services are or were required because the individual is or 
was confined to the home, as defined in sections 1835(a) and 1814(a) of 
the Act, except when receiving outpatient services. Additionally, 
chapter 15 of the Medicare Benefit Policy Manual \110\ Section 60.4.1--
``Definition of Homebound Patient Under the Medicare Home Health (HH) 
Benefit'' describes the definition of homebound in that the patient is 
confined to his/her home, which has two criteria: (1) the patient must 
either, because of illness or injury, need the aid of supportive 
devices such as crutches, canes, wheelchairs, and walkers; the use of 
special transportation; or the assistance of another person in order to 
leave their place of residence; or (2) otherwise have a condition such 
that leaving his or her home is medically contraindicated. The patient 
must also meet two additional requirements defined in criterion two 
such that there must exist an inability to leave home; and leaving home 
must require a considerable and taxing effort.
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    \110\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf.
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    The Medicare Claims Processing Manual (chapter 16, Sec.  60.1.2) 
also explains the information that must be included on an independent 
laboratory claim for specimen drawing. Specifically, the manual states 
that in addition to the usual information required on claim forms 
(including the name of the prescribing physician), all independent 
laboratory claims for such specimen drawing ordered by a physician 
should be appropriately annotated, for example, ``patient confined to 
home,'' ``patient homebound,'' or ``patient in nursing home, no 
qualified person on duty to draw specimen.'' The manual states that A/B 
MACs (B) must assure the validity of the annotation through scientific 
claims samples, as well as through regular bill review techniques. 
(This could be done by use of the information in A/B MAC (B) files, and 
where necessary, contact with the ordering physician.) If a physician 
requests an independent laboratory to obtain specimens in situations 
which do not meet, or without regard to whether they meet, medical 
necessity criteria in Medicare Benefit Policy Manual, Chapter 15, the 
manual provides that an educational contact with the ordering physician 
is warranted and, where necessary, corroborating documentation should 
be obtained on claims until the A/B MAC (B) is assured that the 
physician prescribes such services only when the criteria are met. The 
manual states that the specimen collection fee is paid based on the 
location of the independent laboratory where the test is performed and 
is billed in conjunction with a covered laboratory test.
    The Medicare Claims Processing Manual (chapter 16, Sec.  60.1.3) 
describes specimen drawing for dialysis patients. It states that, with 
the implementation of the End-Stage Renal Disease (ESRD) Prospective 
Payment System (PPS), effective for claims with dates of service on or 
after January 1, 2011, all ESRD-related laboratory services are 
included in the ESRD PPS base rate.\111\ Clinical laboratory tests for 
dialysis patients can be performed individually or in predetermined 
groups on automated profile equipment. The manual states that a 
specimen collection fee determined by CMS will be allowed only in the 
following circumstances:
---------------------------------------------------------------------------

    \111\ The manual refers to the Medicare Benefits Policy Manual, 
Chapter 11, for a description of labortory services included in the 
composite rate.
---------------------------------------------------------------------------

    <bullet> Drawing a blood sample through venipuncture (that is, 
inserting into a vein a needle with a syringe or vacutainer to draw the 
specimen).
    <bullet> Collecting a urine sample by catheterization.
    The manual provides that special rules apply when such services are 
furnished to dialysis patients. That is, the specimen collection fee is 
not separately payable for patients dialyzed in the ESRD facility or 
for patients dialyzed at home. A specimen collection fee is also not 
separately payable when an ESRD facility is collecting a specimen for 
transplant eligibility or other transplant requirements. Payment for 
specimen collection is included under the ESRD PPS, regardless of 
whether the laboratory test itself is designated as payable under the 
ESRD PPS as a renal dialysis service or is separately billable by the 
ESRD facility with the AY modifier (see Medicare Claims Processing 
Manual, chapter 16, Sec.  40.6). Fees for taking specimens in the 
hospital setting, but outside of the dialysis unit, for use in 
performing laboratory tests not included in the ESRD PPS base rate, may 
be paid separately.
    We believe that the implementation of the ESRD PPS made the 
specimen collection provision for ESRD beneficiaries in the ESRD 
facility setting obsolete. That is, prior to the ESRD PPS, ESRD 
facilities could be paid for laboratory services furnished to ESRD 
beneficiaries that were considered to be separately payable. Under the 
prior composite rate system, ESRD facilities with the appropriate 
Clinical Laboratory Improvement Amendments (CLIA) certification could 
bill Medicare Part B directly and be paid based on the CLFS for certain 
laboratory tests, and when appropriate, for a specimen collection 
fee.\112\ In implementing the ESRD PPS, we also implemented 
consolidated billing requirements in the CY 2011 ESRD PPS final rule 
(75 FR 49168 through 49173). In that ESRD PPS final rule, we stated 
that we established these consolidated billing requirements because the 
ESRD PPS provides an all-inclusive payment for renal dialysis services 
and home dialysis items and services and the ESRD facility is 
responsible for all of the renal dialysis services that its patients 
receive. We further explained that items and services that were paid 
separately under the basic case-mix adjusted composite rate (such as 
laboratory tests), would no longer be billed for by other entities 
(such as laboratories), and therefore, payment for these services would 
be made only to the ESRD facility so that duplicate payment is not made 
by Medicare (75 FR 49168).
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    \112\ Pub. 100-02, Chapter 11, Section 20.0.E.2 and 3. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c11.pdf.
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    Additionally, section 1881(b)(14)(B)(i) and (iv) of the Act 
provides that items and services included in the prior composite rate 
and other diagnostic laboratory tests not reflected in the composite 
rate that are furnished to individuals for the treatment of ESRD are 
renal dialysis services that must be included as part of the ESRD PPS 
bundled payment. In the CY 2011 ESRD PPS final rule, we explained that

[[Page 46073]]

patients with ESRD often have comorbid conditions which would require 
many of the same laboratory tests as those required to monitor a 
patient's ESRD (75 FR 49168). In that ESRD PPS final rule, we 
acknowledged that it may be difficult to differentiate between a renal 
dialysis service laboratory test and tests ordered for non-renal 
dialysis service conditions. Therefore, to ensure proper payment in all 
settings, as part of the consolidated billing approach, we provided 
ESRD facilities and independent laboratories the ability to identify 
non-renal dialysis service laboratory tests, by using the AY modifier, 
which allows for separate payment under Medicare Part B (75 FR 49168 
through 49169). While this longstanding policy permits ESRD facilities 
to be paid separately for the non-renal dialysis service laboratory 
tests, the specimen collection fee is no longer available since staff 
time used to collect specimens is considered to be a composite rate 
service (Sec.  413.171) and therefore payment for specimen collection 
is made through the ESRD PPS bundled payment to the ESRD facility. 
Therefore, we believe this section of the manual guidance describing 
specimen drawing for dialysis patients is no longer applicable, and we 
would not reflect this policy in regulation and would remove this 
section of the manual accordingly. We note when an ESRD beneficiary 
goes to an independent laboratory or a hospital setting, the same 
payment rules would apply for specimen collection as they would for a 
non-ESRD beneficiary for that setting.
    Lastly, the Medicare Claims Processing Manual (chapter 16, Sec.  
60.1.4) includes coding requirements for the specimen collection fees. 
Specifically, the following HCPCS codes and terminology must be used:
    <bullet> 36415--Collection of venous blood by venipuncture.
    <bullet> G0471--Collection of venous blood by venipuncture or urine 
sample by catheterization from an individual in a skilled nursing 
facility (SNF) or by a laboratory on behalf of a home health agency 
(HHA).
    <bullet> P9612--Catheterization for collection of specimen, single 
patient, all places of service.
    <bullet> P9615--Catheterization for collection of specimen(s) 
(multiple patients).
c. Proposal To Codify the Laboratory Specimen Collection Fee Policy in 
Regulation
    As noted previously, most of our laboratory specimen collection fee 
policies are not reflected in the CLFS regulations. In this section of 
the proposed rule, we propose the laboratory specimen collection fee 
policies we would include in regulations.
    Section 1833(h)(3) of the Act specifies that payment amounts for 
the specimen collection fee and travel allowance are ``in addition'' to 
the payment amounts for CDLTs on the CLFS. As Sec.  414.507 pertains to 
payment for CDLTs, we believe it is appropriate to create a separate 
regulation to more clearly reflect that payment for the specimen 
collection fee and travel allowance is in addition to payment for 
CDLTs. We are proposing to create a new Sec.  414.523 titled Payment 
for laboratory specimen collection fee and travel allowance. We would 
specify in Sec.  414.523(a) that in addition to the payment amounts 
provided for CDLTs, new CDLTs, and new ADLTs, CMS pays a specimen 
collection fee and a travel allowance. In Sec.  414.523(a)(1), we would 
reflect the longstanding specimen collection fee policies described in 
the manual that continue to be applicable. As noted previously in this 
proposed rule, we would not reflect in the regulation the specimen 
collection fee policies that are no longer applicable--specifically, 
the policies relating to physician eligibility for specimen collection 
and specimen drawing for dialysis patients--and would remove those 
policies from the manual.
    First, we are proposing that Sec.  414.523(a)(1) would specify that 
CMS will pay $3 for all specimens collected in one patient encounter. 
As previously stated in this proposed rule, section 1833(h)(3)(A) of 
the Act requires the Secretary to provide for and establish a ``nominal 
fee to cover the appropriate costs in collecting the sample'' for 
laboratory testing. We have paid $3 as the nominal specimen collection 
fee amount for several years and at this time we are proposing to 
maintain the $3 amount. First, the statute specifies that the amount is 
``nominal'' and we believe $3 is an appropriate nominal amount to 
recognize the costs associated with specimen collection. Further, we 
believe that in enacting section 216(a) of PAMA, Congress recognized 
CMS's authority to establish the specific nominal fee amount as $3 when 
it added section 1834A(b)(5) of the Act to increase by $2 the nominal 
fee that would otherwise apply under section 1833(h)(3)(A) of the Act 
for a specimen collected from an individual in a SNF or by a laboratory 
on behalf of an HHA. We are soliciting comments on our proposal to 
maintain the $3 nominal specimen collection fee amount, including how 
this amount could be updated.
    Next, we are proposing to move and clarify the provision in our 
regulations regarding the increased specimen collection fee under 
section 1834A(b)(5) of the Act, as discussed in the previous paragraph. 
We implemented this PAMA requirement in a Medicare Change Request (CR) 
transmittal effective December 1, 2014 (Transmittal <greek-i>R3056CP; 
CR <greek-i>8837) and ultimately finalized this policy in Sec.  
414.507(f). \113\ The CR provides that, in the case of a specimen 
collected from an individual in a SNF or from an individual by a 
laboratory on behalf of a HHA (billed using new HCPCS code, G0471 
(Collection of venous blood by venipuncture or urine sample by 
catheterization from an individual in a skilled nursing facility (SNF) 
or by a laboratory on behalf of a home health agency (HHA))), the 
nominal fee that would otherwise apply under section 1833(h)(3)(A) of 
the Act shall be increased by $2, from $3 to $5, in accordance with 
section 216(a) of the PAMA. The specimen collection fee is raised from 
$3 to $5 only when the specimen is being collected by a laboratory 
technician and when the specimen is from an individual in either a SNF 
or HHA. We are proposing that this requirement, which is currently 
reflected in Sec.  414.507(f), would be moved to Sec.  
414.523(a)(1)(iv) and would be revised to state that beginning April 1, 
2014, for a specimen collected from a Medicare beneficiary in a SNF or 
on behalf of an HHA, the specimen collection fee otherwise paid under 
paragraph (a)(1) of Sec.  414.523 is increased by $2.
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    \113\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R3056CP.pdf.
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    Next, we are proposing to include in regulation that one specimen 
collection fee would be allowed for each single patient encounter. This 
means that, if different types or multiple specimens are drawn from one 
patient, only one specimen collection fee would be allowed. We believe 
this policy is consistent with section 1833(h)(3)(A) of the Act, which 
provides that not more than one such fee may be provided under this 
paragraph with respect to samples collected in the same encounter. We 
propose to reflect this policy in Sec.  414.523(a)(1) by indicating 
that CMS pays $3 for ``all specimens collected in one patient 
encounter.''
    In Sec.  414.523(a)(1)(i) through (iii), we propose to indicate the 
specimen collection requirements that must be met for a specimen 
collection fee to be payable are as follows and described in more 
detail below. The specimen is:

[[Page 46074]]

used to perform a CDLT paid under the CLFS regulations in 42 CFR part 
414, subpart G; collected by a trained technician from a Medicare 
beneficiary who is homebound as described in 42 CFR 424.22(a)(1)(ii) or 
is a non-hospital inpatient, but only when no qualified personnel are 
available at the facility to collect the specimen; of the following 
type--blood specimen collected through venipuncture or a urine sample 
collected by catheterization.
    In Sec.  414.523(a)(1)(ii) we are proposing to clarify the 
requirement that the specimen must be collected by a ``trained 
technician.'' Section 1833(h)(3) of the Act refers to staff providing 
specimen collection services as ``trained personnel'' whereas the 
Medicare Claims Processing Manual, chapter 16, Sec.  60.2 refers to 
``the technician.'' The United States Bureau of Labor Statistics (BLS) 
defines clinical laboratory technologists and technicians as workers 
who collect samples and also perform tests to analyze body fluids, 
tissue, and other substances.\114\ The term ``laboratory technician'' 
may not apply to those staff that would generally be providing specimen 
collection services, as the staff collecting specimens may not also 
analyze the specimens. Therefore, for the purposes of our Medicare 
payment policies for specimen collection and travel allowance, we 
propose to use the phrase ``trained technician'' to refer to the staff 
providing specimen collection services. We believe this clarification 
would more closely align the regulatory text pertaining to specimen 
collection and travel allowance with the statute.
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    \114\ https://www.bls.gov/ooh/healthcare/clinical-laboratory-technologists-and-technicians.htm.
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    As previously discussed in this proposed rule, Medicare allows 
payment of a specimen collection fee when it is medically necessary for 
a trained technician to draw a specimen from either a nursing home 
patient or homebound patient. Medicare does not allow a specimen 
collection fee for the technician if a patient in a facility is: (1) 
Not confined to the facility; or (2) the facility has qualified 
personnel available to perform the specimen collection. We are 
proposing to reflect in regulation that the specimen must be collected 
either from a Medicare beneficiary who is homebound as described in 42 
CFR 424.22(a)(1)(ii), or from a non-hospital inpatient, but only when 
no qualified personnel are available at the facility to collect the 
specimen. We believe this proposed requirement regarding homebound 
beneficiaries would be consistent with Medicare policy which describes 
home health services requirements. We are proposing to clarify that 
payment for specimen collection would only be made to the laboratory 
when no qualified personnel are available at the inpatient facility to 
collect the specimen. We believe this proposed clarification would 
reflect the justification for ``medical necessity'' for purposes of 
section 1862(a)(1) of the Act. We would reflect this requirement in 
Sec.  414.523(a)(1)(ii)(B) but would not explicitly state the term 
``medically necessary''.
    We are proposing to clarify that a specimen collected by a trained 
technician would have to be either blood collected through venipuncture 
or a urine collected by catheterization. We would reflect this 
requirement in Sec.  414.523(a)(1)(iii), which would state that the 
specimen collection fees are permitted for only these two types of 
specimens: (1) Blood collected through venipuncture or (2) a urine 
sample by catheterization. We acknowledge that the manual guidance 
(described above) uses the terms ``such as'' and ``example'' to 
describe the types of specimens for which specimen collection fees are 
paid, which suggests that specimen collections of other than blood and 
urine are eligible for specimen collection fees. We note, however, that 
there are only two HCPCS codes for the two types of specimen 
collections, which means we do not pay, and have not been paying, 
specimen collection fees for any other types of specimens. Therefore, 
under our current policy and this proposal, a specimen collection fee 
would not be payable for any other specimen types, for example, a 
throat culture or a routine capillary puncture for clotting or bleeding 
time.
    We welcome public comment on the proposed codification and 
modification of these laboratory specimen collection fee policies. If 
finalized, we would make conforming changes to the Medicare Claims 
Processing Manual, Chapter 16, section 60 to reflect changes or 
clarifications and remove sections that are no longer applicable.
    Lastly, we are soliciting comment on specimen collection by 
physician office laboratories (POLs). As discussed previously in this 
proposed rule, we are proposing to delete the section in the manual 
regarding physician specimen collection as codes exist to describe 
these services when performed by physicians under the PFS. However, we 
understand that specimens may be collected in the physician's office by 
POL personnel. As stated in 42 CFR 410.32(d)(1)(iii), Medicare Part B 
pays for covered diagnostic laboratory tests that are furnished by the 
office of the patient's attending or consulting physician if that 
physician is a doctor of medicine, osteopathy, podiatric medicine, 
dental surgery, or dental medicine. When the physician's office is 
furnishing CDLTs for its own patients and collecting specimens for 
those tests, we do not believe this would include specimen collection 
for homebound or non-hospital inpatients or involve travel for specimen 
collection, since a POL is not an independent laboratory. However, we 
seek comments on any possible considerations for the removal of the 
manual section related to POL specimen collection.
d. Background on the Laboratory Specimen Collection Travel Allowance 
Policy
    Section 1833(h)(3)(B) of the Act requires the Secretary to provide 
for and establish a fee to cover the transportation and personnel 
expenses for trained personnel to travel to the location of an 
individual to collect the sample on which a CDLT was performed, except 
that such a fee may be provided only to an individual who is homebound 
or an inpatient in an inpatient facility (other than a hospital). Like 
the laboratory specimen collection fee policy discussed in the previous 
section of this proposed rule, our longstanding policies and 
instructions regarding the statutory requirements for the CLFS specimen 
collection travel allowance are described in the Medicare Claims 
Processing Manual guidance and CRs, currently with no corresponding 
regulations text. In an August 18, 1993 proposed rule titled ``Medicare 
and Medicaid: Programs; Payment for Clinical Diagnostic Laboratory 
Tests,'' we proposed to reflect both the CLFS specimen collection and 
travel allowance payment policies in regulation (58 FR 43838); however, 
the proposals therein were not finalized.
    As discussed in that proposed rule, due to the variability in time, 
distance, and wage circumstances in different localities, we 
implemented the travel allowance under section 1833(h)(3)(B) of the Act 
by allowing Medicare Administrative Contractors (MACs) discretion in 
calculating travel allowances. We provided general guidance through our 
manuals, specifically in the Medicare Claims Processing Manual, chapter 
16, Sec.  60.2.\115\
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    \115\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c16.pdf.
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    The Medicare Claims Processing Manual guidance at chapter 16, Sec.  
60.2 describes two methods for calculating and billing travel allowance 
for

[[Page 46075]]

specimen collection. HCPCS code P9603 is used when the average round 
trip to a beneficiary's home or nursing home is farther than 20 miles, 
paid on a mileage per trip basis. HCPCS code P9604 is used when the 
average round trip is less than or equal to 20 miles, paid on a flat 
rate per trip basis. The manual further states that the travel 
allowance is intended to cover the estimated travel costs for a 
laboratory technician to travel to collect the specimen and to reflect 
the technician's salary and travel costs. The travel allowance can be 
made only where a specimen collection fee is also payable; that is, no 
travel allowance is made where the technician merely performs a 
messenger service to pick up a specimen drawn by a physician or nursing 
home personnel. The manual also states that the travel allowance may 
not be paid to a physician unless the trip to the beneficiary's home, 
or to the nursing home where the beneficiary resides, was solely for 
the purpose of drawing a specimen. Otherwise travel costs are 
considered to be associated with the other purposes of the trip. 
Furthermore, the manual states that the travel allowance is not 
distributed by CMS. Instead, the MACs (that is, within the claims 
processing system) calculate the travel allowance for each claim using 
the rules for the HCPCS codes used for travel allowances, which are 
P9603--Per Mile Travel Allowance and P9604--Flat Rate.
    As described in the manual, the conditions for usage of HCPCS code 
P9603 are that the minimum ``per mile travel allowance'' is $1.04 
(based on CY 2022 instructions). The per mile travel allowance is to be 
used in situations where the average trip to beneficiaries' homes is 
farther than 20 miles, and is to be prorated in situations where 
specimens are drawn or picked up from non-Medicare patients in the same 
trip.
    The manual further states that the per mile allowance is computed 
using the Federal mileage rate (as determined by the Internal Revenue 
Service (IRS)), plus an additional 45 cents a mile to cover the 
technician's time and travel costs. For 2022, the Federal mileage rate 
is 58.5 cents; \116\ that amount plus 45 cents equals $1.035, rounded 
up to $1.04. Contractors have the option of establishing a higher per 
mile rate in excess of the minimum ($1.04 a mile in CY 2022) if local 
conditions warrant it. The manual also states that the minimum mileage 
rate will be reviewed and updated in conjunction with the CLFS as 
needed and that at no time will the laboratory be allowed to bill for 
more miles than are reasonable or for miles not actually traveled by 
the laboratory technician.\117\
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    \116\ https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2022.
    \117\ The Medicare Claims Processing Manual is available on the 
CMS website at https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c16.pdf. The manual provides 
examples of the per-mile travel allowance in section 60.2--Travel 
Allowance.
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    For the flat-rate HCPCS code, P9604, the manual provides the 
following conditions of usage: CMS will pay a minimum of $10.40 for the 
flat rate code (HCPCS code P9604, based on CY 2022 instructions), which 
is the one-way flat rate travel allowance. The flat rate travel 
allowance is to be used in areas where average trips are less than 20 
miles. The flat rate travel allowance is to be prorated for more than 
one blood draw at the same address, and for stops at the homes of 
Medicare beneficiaries and non-Medicare patients. The laboratory 
performs the proration calculation when the claim is submitted based on 
the number of beneficiaries seen on that trip, and the specimen 
collection fee will be paid for each beneficiary encounter.
    The manual states that this rate is based on the assumption that a 
trip is an average of 15 minutes and up to 10 miles one way and uses 
the Federal mileage rate (as determined by the IRS) and a laboratory 
technician's time of $17.66 an hour, including overhead. The manual 
states that contractors have the option of establishing a flat rate in 
excess of the minimum of $10.00, if local conditions warrant it, and 
that the minimum national flat rate will be reviewed and updated in 
conjunction with the CLFS, as necessitated by adjustments in the 
Federal travel allowance and salaries. The manual provides examples of 
the flat rate calculation and describes further MAC flexibilities 
regarding payment for the CLFS specimen collection travel allowance. 
The manual also indicates that MACs may use their discretion for the 
payment of travel allowance in circumstances where the CDLTs are needed 
on an emergency basis outside the general business hours of the 
laboratory making the collection. The manual also states that updates 
to the travel allowance amounts will be issued by CMS via Recurring 
Update Notification (RUN) on an annual basis.
    In summary, the Medicare Claims Processing Manual, chapter 16, 
Sec.  60.2, indicates that HCPCS code P9603 is used when the average 
round trip to a beneficiary's home or nursing home is farther than 20 
miles, paid on a mileage per trip basis. HCPCS code P9604 is used when 
the average round trip is less than or equal to 20 miles, paid on a 
flat rate per trip basis. In instances where one trip is made in order 
to execute specimen draws or pickups from multiple patients, the travel 
payment component is prorated based on the number of Medicare 
beneficiaries and non-Medicare patients (not the number of specimens 
collected) on that trip. All instances of specimen collection and 
pickups are included in the proration, and the prorated specimen 
collection travel allowance is billed on behalf of each Medicare 
patient.
    Furthermore, we have provided additional payment instructions 
through RUN CLFS--Medicare Travel Allowance Fees for Collection of 
Specimens CRs; the latest being CR 12593,\118\ which was issued on 
January 14, 2022. Consistent with the manual, CR 12593 states that the 
travel allowance HCPCS codes allow for payment either on a per-mileage 
basis (P9603) or on a flat-rate per-trip basis (P9604). The CR states 
that under either method, when one trip is made for multiple specimen 
collections (for example, at a nursing home), the travel payment 
component is prorated based on the number of specimens collected on 
that trip, for both Medicare and non-Medicare patients, either at the 
time the claim is submitted by the laboratory or when the flat rate is 
set by the contractor.
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    \118\ https://www.cms.gov/files/document/r11184cp.pdf.
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    CR 12593 states that the Per Mile Travel Allowance (P9603) is to be 
used in situations where the average trip to the patients' homes is 
longer than 20 miles round trip and is to be prorated in situations 
where specimens are drawn from non-Medicare patients in the same trip. 
For CY 2022, the allowance per mile was computed using the Federal 
mileage rate of $0.585 per mile plus an additional $0.45 per mile to 
cover the technician's time and travel costs. The IRS determines the 
standard mileage rate for businesses based on periodic studies of the 
fixed and variable costs of operating an automobile, and CMS utilizes 
this amount for P9604. The CR also states that the Per Flat-Rate Trip 
Basis Travel Allowance (P9604) is a set fee amount, which is $10.40 for 
CY 2022.
    In summary, CR 12593 states that the travel payment component is 
prorated based on the number of specimens collected on the trip (and 
not the number of Medicare and non-Medicare patients), for both 
Medicare and non-Medicare patients, which differs from the manual 
instruction which states that the travel allowance should be prorated 
based on the number of Medicare

[[Page 46076]]

beneficiaries and non-Medicare patients (not the number of specimens 
collected) on that trip.
e. Policy Concerns and Recommendations on the CLFS Specimen Collection 
Travel Allowance
    Laboratories, members of the laboratory industry, and other 
interested parties have expressed concerns regarding our current CLFS 
travel allowance payment policy, suggesting that the travel proration 
methodology is unclear and guidance in the Medicare Claims Processing 
Manual, payment CRs, and guidance provided by the MACs are conflicting. 
Additionally, members of the public claim that the travel allowance 
requirements are administratively complex.
    In the CY 2022 PFS proposed rule (86 FR 39310), we requested broad 
comments on our policies for specimen collection fees and the travel 
allowance for consideration for possible updates to policies in the 
future through notice and comment rulemaking. As discussed in the CY 
2022 PFS final rule (86 FR 65328), commenters supported clarification 
to the existing travel allowance policy and also made suggestions 
regarding possible refinements.
    Several commenters described their concerns regarding the current 
travel allowance policy, stating that the current system requires the 
individual tracking of miles and paperwork documenting those miles, as 
well as the calculation of billable charges. Commenters stated that 
this system creates inconsistencies across facilities providing 
specimen collection services and creates confusion and burden for 
health care providers and MACs. One commenter also noted that because 
of the complex logistics involved in obtaining specimens from homebound 
patients and non-hospital inpatients and transporting the specimens for 
prompt processing, a disincentive is created for serving this 
potentially underserved patient population, leading to potential access 
issues for Medicare beneficiaries.
    Several commenters requested that CMS simplify the travel allowance 
by creating a single per-encounter flat-rate payment for travel, which 
would simplify personnel and transportation expenses by eliminating the 
individual tracking of miles and paper documenting of those miles as 
well as the calculation of billable charges. The commenters stated that 
a flat-rate approach would also provide greater consistency across 
facilities served and reduce the burden on health care providers and 
MACs, and therefore, further support continued patient access to these 
laboratory services. A few commenters suggested the creation of a rural 
add-on payment to provide payment to those laboratories serving 
Medicare beneficiaries residing in remote areas. Several commenters 
also stated that the current travel allowance is prone to billing 
inconsistencies, so simplifying the calculation of the travel allowance 
would increase the overall understanding of the policy among impacted 
parties, decrease the instances of health care providers inadvertently 
overbilling for mileage, reduce program integrity concerns, and improve 
clarity for all parties involved.
    Several commenters also recommended that business requirements 
outlined in the annual Medicare travel allowance CR be updated to 
require the contractor to search their files to adjust claims already 
paid at the prior year travel allowance rather than require action by 
laboratories. The commenter requested that contractors be instructed to 
review claims and reprocess at the updated rates rather than require 
laboratories to initiate the revisions.
    Additionally, the OIG issued an August 25, 2021 report, CMS Needs 
To Issue Regulations Related to Phlebotomy Travel Allowances (A-06-20-
04000),\119\ in which the OIG discussed ongoing concerns regarding the 
Medicare CLFS travel allowance policy and summarized findings from 
previous audits of MACs in which claims for phlebotomy travel 
allowances were paid using incorrect prorated mileage and claims for 
phlebotomy travel allowances were paid using incorrect payment rates. 
The OIG also described instances in which health care provider 
documentation was insufficient to warrant payment of the phlebotomy 
travel allowances.
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    \119\ https://oig.hhs.gov/oas/reports/region6/62004000.asp.
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    The 2021 OIG report presented recommendations to CMS regarding the 
CLFS travel allowance policy, including working with the MACs to 
educate health care providers about the documentation requirements for 
specimen collection travel allowances, instructing the MACs to identify 
and adjust any paid claims that incorrectly used the previous year's 
rate, and issuing regulations related to phlebotomy travel to clarify 
various aspects of the travel allowance payment policy.
    In the CY 2022 PFS proposed rule (86 FR 39310 through 39311) and CY 
2022 PFS final rule (86 FR 65328), we discussed the travel allowance 
policy and stated that we made permanent the option for laboratories to 
maintain electronic documentation of miles traveled for the purposes of 
covering the transportation and personnel expenses for trained 
personnel to travel to the location of an individual to collect a 
specimen sample. This option for laboratories to maintain electronic 
documentation applies to specimen collection for any CDLT. We noted 
that laboratories will need to be able to produce electronic 
documentation in a form and manner that can be shared with MACs, and 
should continue to consult with their local MACs regarding the format 
and process for submission of this information if necessary. We believe 
that this flexibility to maintain electronic documentation of miles 
traveled provides clarity to laboratories about documentation 
requirements for the Medicare CLFS travel allowance for specimen 
collection payment policy.
    Additionally, we have instructed the MACs to identify and adjust 
any paid claims that incorrectly used the previous year's rate, thereby 
addressing the OIG's and commenters' suggestions regarding reprocessing 
using the updated rates through the revision of business requirements 
in the January 14, 2022 RUN CLFS--Medicare Travel Allowance Fees for 
Collection of Specimens CR 12593.\120\ The OIG and commenters alike 
recommended that we update the business requirements outlined in the 
annual Medicare travel allowance CR to require the MACs to search their 
files to adjust claims already paid at the prior year's travel 
allowance amount rather than require action by laboratories. 
Specifically, in the CR, we included the Business Requirement 12593.5, 
which states that ``Contractors shall adjust previously paid travel 
allowance claims with dates of service on or after January 1, 2022, in 
order to apply the updated payment rate and initiate those adjustments 
within 60 days, if claims are paid at the prior year's rates before the 
new rate is entered into the MACs' systems.'' We believe this 
modification to the business requirements will eliminate the need for 
action by laboratories for adjustments to claims and instead provide 
instruction to contractors to review claims and reprocess at the 
updated rates as appropriate.
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    \120\ https://www.cms.gov/files/document/r11184cp.pdf.
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f. Proposed Codification and Modifications of the CLFS Specimen 
Collection Travel Allowance Policy
    In light of the concerns from the public, and in an effort to 
respond to the OIG's recommendation that CMS issue regulations 
regarding certain aspects of

[[Page 46077]]

the travel allowance for specimen collection payment policy, we are 
proposing to codify in our regulations, and make certain modifications 
and clarifications to, the Medicare CLFS travel allowance policies, as 
described below. We believe these proposals would achieve CMS' aims of 
simplifying and clarifying our travel allowance policies. We propose to 
add Sec. 414.523(a)(2), ``Payment for travel allowance,'' to reflect 
the requirements for the travel allowance for specimen collection. 
Specifically, in accordance with section 1833(h)(3)(B) of the Act, we 
are proposing to include in our regulations the following: (1) General 
requirement, (2) travel allowance basis, (3) travel allowance amount, 
and (4) travel allowance amount calculation.
    Section 1833(h)(3)(B) of the Act states that the Secretary shall 
provide for and establish a fee to cover the transportation and 
personnel expenses for trained personnel to travel to the location of 
an individual to collect the sample. We believe this language indicates 
that only instances of specimen collection requiring trained 
technicians \121\ for the purposes of collecting the sample are to be 
included in the travel allowance calculation. Therefore, travel for 
simple pickup of specimens or for specimen collection that does not 
require the services of trained technicians should not be considered in 
the calculation of the travel allowance. This means, the travel 
allowance may be paid only if a specimen collection fee is also 
payable; for example, no travel allowance would be paid if a trained 
technician merely performs a messenger service to pick up a specimen 
drawn by other technicians.
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    \121\ As noted previously in this section of the proposed rule, 
we are proposing to use the term ``trained technician'' for purposes 
of our specimen collection fee and travel allowance policies.
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    The Medicare Claims Processing Manual, chapter 16, Sec.  60.2 
states, ``The additional allowance can be made only where a specimen 
collection fee is also payable, i.e., no travel allowance is made where 
the technician merely performs a messenger service to pick up a 
specimen drawn by a physician or nursing home personnel.'' We propose 
to codify this general requirement at Sec.  414.523(a)(2)(i). This 
provision would state that CMS pays a travel allowance where the 
specimen is one for which a specimen collection fee is paid and would 
make clear that all of the requirements for the specimen collection fee 
to be paid (which are specified in Sec.  414.523(a)(1)) would need to 
be met for the travel allowance to be payable.
    Additionally, section 1833(h)(3)(B) of the Act states that the 
travel allowance may be provided only with respect to an individual who 
is homebound or an inpatient in an inpatient facility (other than a 
hospital). We interpret this statutory language to mean that the fee 
only applies when a trained technician draws a specimen from a patient 
who either is in an inpatient facility that is not a hospital or is a 
homebound patient. (A discussion regarding the definition of a 
homebound patient is provided in section III.B.6.b. of this proposed 
rule.) The Medicare Claims Processing Manual, chapter 16, Sec.  60.2 
states that ``Medicare, under Part B, covers a specimen collection fee 
and travel allowance for a laboratory technician to draw a specimen 
from either a nursing home patient or homebound patient''. We believe 
it is appropriate to codify that the travel allowance is permitted only 
where the individual from whom the specimen is collected is homebound 
or is an inpatient in an inpatient facility (other than a hospital). 
This requirement would be reflected at Sec.  414.523(a)(2), which as we 
note above would require all of the specimen collection fee 
requirements at Sec.  414.523(a)(1) to be met, and which would include 
the proposed requirement at Sec.  414.523(a)(1)(ii) that the specimen 
is collected from a Medicare beneficiary who is homebound as described 
in 42 CFR 424.22(a)(1)(ii) or a non-hospital inpatient.
    In addition to proposing to codify the general requirement for 
travel allowance, we are also proposing to clarify and make 
modifications to the methodology for and the calculation of the CLFS 
travel allowance amounts. In accordance with section 1833(h)(3)(B) of 
the Act, we are proposing to reflect the travel allowance payment 
methodology in the regulations and include the following components: 
(1) travel allowance basis, (2) travel allowance amount, and (3) travel 
allowance amount calculation.
    In Sec.  414.523(a)(2)(ii), we are proposing to codify and clarify 
that CMS pays a travel allowance on the following bases: (1) flat-rate 
travel allowance basis and (2) per-mile travel allowance basis. We 
interpret the statutory language in section 1833(h)(3)(B) of the Act 
that requires us to pay a fee for trained personnel to travel to the 
location of an individual to collect the sample to mean that the travel 
allowance fee is only applicable to travel that is for the purpose of 
collecting the specimen from a Medicare beneficiary. To that end, we 
believe only one travel allowance payment may be made for specimen 
collection for a Medicare beneficiary based on the beneficiary's 
location, and only when a Medicare beneficiary requires the collection 
of a specimen necessary for performance of CDLTs. We believe that non-
Medicare patients should not be included in any portion of the 
calculation of the travel allowance. This interpretation would be a 
modification to existing guidance in the Medicare Claims Processing 
Manual, chapter 16, Sec.  60.2, which states that the travel allowance 
``is to be pro-rated in situations where specimens are drawn or picked 
up from non-Medicare patients in the same trip.'' This modification 
would reflect that we believe only Medicare patients should be 
considered in the calculation and payment of the travel allowance, 
which would more closely align with the statutory language regarding 
``the location of an individual,'' that is, the location of a Medicare 
beneficiary receiving specimen collection services. We also believe 
this modification would address concerns from laboratories, the OIG, 
and other interested parties who requested clarification regarding the 
inclusion of Medicare and non-Medicare beneficiaries in the travel 
allocation calculation.
    We are proposing that, whether a laboratory bills the flat-rate 
travel allowance basis or the per-mile travel allowance basis would 
depend upon the total miles traveled and number of locations. Section 
1833(h)(3)(B) of the Act states, in establishing a fee to cover the 
transportation and personnel expenses for trained personnel to travel 
to the location of an individual to collect a sample, the Secretary 
shall provide a method for computing the fee based on the number of 
miles traveled and the personnel costs associated with the collection 
of each individual sample. Therefore, we believe a key component of the 
travel allowance payment for specimen collection is the number of miles 
traveled for the specimen collection.
    In considering potential methodologies for calculating a travel 
allowance for specimen collection, we conducted an analysis of the 
usage of the existing Per Mile Travel Allowance HCPCS code (P9603) to 
understand the usage of P9603 and analyze the billing of miles related 
to travel allowance for specimen collection. In CY 2019, among 
professional and institutional Medicare claims, there were 
approximately 3.2 million total claim lines billed for HCPCS code P9603 
(per-mile travel allowance). Among the P9603 claim lines, the average 
mileage billed per claim line was 18.8 with a standard

[[Page 46078]]

deviation of 33.4. However, the median distance traveled per line was 7 
miles. Of all P9603 claim lines, 76.3 percent were billed with less 
than 20 miles, and 37.9 percent of all P9603 claim lines were billed 
with less than five miles. The average payment per line for P9603 in CY 
2019 was $18.13; however, the median payment per line was $6.09. 
Additionally, our analysis also shows that 23.7 percent of miles 
traveled were greater than 20 miles, with 150,442 claim lines of the 
approximately 3.2 million total claim lines, or 4.7 percent, logging 
more than 85 miles per trip. We believe that these long-distance trips 
likely reflect specimen collection from beneficiaries in rural areas 
(which are generally underserved zones). Given that the majority of 
P9603 claim lines (76.3 percent) are billed with less than 20 miles, we 
believe that 20 miles would be an appropriate threshold for use in the 
travel allowance bases for specimen collection. In addition, to address 
concerns about administrative complexity, we are proposing that the 
flat-rate travel allowance basis only would be available for trips 
involving one location.
    Specifically, we are proposing in Sec.  414.523(a)(2)(ii)(A) that 
the flat-rate travel allowance basis would apply when the trained 
technician travels 20 eligible miles or less to and from one location 
for specimen collection from one or more Medicare beneficiaries. We 
discuss our proposal for calculating eligible miles below. As discussed 
previously in this section of the proposed rule, we believe that 
section 1833(h)(3) of the Act supports payment for specimen collection 
and travel allowance for only Medicare beneficiaries and should not 
include non-Medicare beneficiaries. Under this proposal, laboratories 
would bill Medicare using existing HCPCS code P9604 to receive payment 
for the flat-rate travel allowance amount, prorated by the number of 
beneficiaries for whom a specimen collection fee is paid, which we 
discuss more fully in the travel allowance amount calculation proposal 
below. We believe that providing payment for the flat-rate travel 
allowance basis we are proposing would serve to simplify the 
administrative requirements for laboratories in terms of billing and 
record-keeping activities. Additionally, our proposed clarification 
regarding requirements for proration would address issues raised by 
interested parties, including the OIG, who expressed concerns regarding 
inconsistencies in current guidance. We are seeking comment on 
considerations related to the flat-rate travel allowance basis, 
including considerations for proposed distance, alternatives for a 
possible flat-rate travel allowance basis, as well as the utility of 
this basis or the potential exclusion of this basis for the purposes of 
the travel allowance for specimen collection.
    In addition to the flat-rate travel allowance basis, we are 
proposing in Sec.  414.523(a)(2)(ii)(B) the per-mile travel allowance 
basis, which would apply when the trained technician travels more than 
20 eligible miles to and from one location for specimen collection from 
one or more beneficiaries or when the trained technician travels to 
more than one location for specimen collection from more than one 
Medicare beneficiary. To be clear, this proposed basis would apply in 
two circumstances--where round trip travel to one location is greater 
than 20 eligible miles and where travel is to more than one location, 
regardless of the number of miles traveled. We are proposing to modify 
our per-mile travel allowance policy in this way for greater clarity, 
administrative simplification, and consistency with statute. Under this 
proposed travel allowance basis, the laboratory would receive payment 
for the total number of miles traveled for specimen collection, which 
would be allocated to each Medicare beneficiary for whom a specimen 
collection fee is paid. We believe this proposal would serve to address 
the OIG's recommendations that CMS clarify various aspects of the 
travel allowance payment policy, including requirements for proration, 
which we discuss more fully in the travel allowance amount calculation 
proposal below. We seek comment on all aspects of the proposed per-mile 
travel allowance basis.
    Additionally, we are proposing to specify travel allowance amount 
requirements pertaining to eligible miles and the travel allowance 
mileage rate. In Sec.  414.523(a)(2)(iii)(A), we propose that eligible 
miles would begin at the laboratory and end at the laboratory where the 
trained technician returns the specimen(s) for testing. We believe the 
laboratory is the most likely place where the trained technician would 
become aware of the laboratory order and acquire the necessary supplies 
to perform the specimen collection. Although we do not believe the 
trained technician would commence travel related to specimen collection 
from a location other than the laboratory, we seek comment as to 
whether there are alternative starting locations we should consider. 
This proposed provision, requiring that the mileage calculation begins 
at a laboratory, would codify existing policy in the Medicare Claims 
Processing Manual, chapter 16, Sec.  60.2, which provides several 
examples of travel allowance scenarios that reference the start of a 
travel allowance route as beginning at a laboratory, and would be 
consistent with section 1833(h)(3)(B) of the Act.
    We are further proposing in Sec.  414.523(a)(2)(iii)(A) that 
eligible miles would not include miles traveled for any purpose 
unrelated to specimen collection, such as collecting specimens from 
non-Medicare beneficiaries or for personal reasons. We believe the 
statutory language in section 1833(h)(3)(B) of the Act supports our 
proposal to exclude from the calculation of eligible miles any miles 
traveled to a location where no specimens are collected, to the 
location of a non-Medicare beneficiary for specimen collection, to a 
Medicare beneficiary where no specimen collection occurs, or for 
personal purposes. This proposed provision would codify the Medicare 
Claims Processing Manual, chapter 16, Sec.  60.2, which states that 
``the travel allowance is intended to cover the estimated travel costs 
of collecting a specimen.''
    In Sec.  414.523(a)(2)(iii)(B), we are proposing to set forth the 
travel allowance mileage rate, which would be used in the travel 
allowance amount calculations discussed below. Section 1833(h)(3)(B) of 
the Act requires the travel allowance to cover both the 
``transportation'' and ``personnel expenses'' for trained personnel to 
travel to the location of an individual to collect a sample. Our 
proposed travel allowance mileage rate therefore would reflect both of 
these components.
    As described previously in this section of the proposed rule, we 
currently issue annual travel allowance amounts through CR 
publications, such as CR 12593.\122\ Currently, CMS adds the Internal 
Revenue Service (IRS) standard mileage rate to an additional $0.45 per 
mile, which is intended to pay for the trained personnel's time, as 
described in CR 12593, where the additional $0.45 per mile addresses 
time and travel costs required by the technician for approximately 15 
minutes of labor. The manual states that this rate is based on the 
assumption that a trip is an average of 15 minutes and up to 10 miles 
one way and uses the Federal mileage rate (as determined by the IRS) 
and a technician's time of $17.66 an hour, including overhead. For CY 
2022, the IRS standard mileage rate is $0.585. That amount plus $0.45 
for the trained personnel's labor yields a

[[Page 46079]]

travel allowance mileage rate of $1.035, which is rounded up to $1.04 
for CY 2022. We are proposing to codify the travel allowance mileage 
rate in regulation as well as modify and clarify certain aspects of it.
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    \122\ https://www.cms.gov/files/document/r11184cp.pdf.
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    The IRS updates and issues standard mileage rates on a periodic 
basis, generally annually.\123\ These rates are used to calculate the 
deductible costs of operating an automobile for business, charitable, 
medical, or moving for the purpose of calculating Federal taxes. We are 
proposing that the ``transportation'' component of the travel allowance 
mileage rate would equal the IRS standard mileage rate, which would be 
consistent with our current policy. We believe using the IRS standard 
mileage rate would continue to be an appropriate way to cover 
transportation as the IRS rate accounts for the costs associated with 
transportation per mile traveled. We seek comment on our proposal to 
use the IRS standard mileage rate to cover the transportation component 
of the travel allowance mileage rate.
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    \123\ https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2022.
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    In addition, we are proposing to include an amount to cover the 
``personnel expenses'' component of the travel allowance mileage rate 
where the trained technician's personnel expenses would be based on a 
wages-per-mile amount. First, we are proposing that personnel expenses 
are wages in this context, where wages would represent the cost of the 
trained technician's time for traveling to collect the sample. We are 
proposing to base the specific wage amount on data from the BLS, which 
publishes salary statistics for occupations in the United States. The 
BLS defines a phlebotomist as a professional who draws blood for tests, 
transfusions, research, or blood donations.\124\ The BLS separately 
defines clinical laboratory technologists and technicians as workers 
who collect samples and perform tests to analyze body fluids, tissue, 
and other substances.\125\ For purposes of the travel allowance, we 
believe the BLS definition of phlebotomist more closely aligns with the 
trained technicians that we believe are providing the types of specimen 
collection services described earlier in this section, as a 
phlebotomist typically draws blood or other specimens, while a 
laboratory technologist may both collect the specimen as well as 
analyze the specimen. We do not believe that trained technicians 
collecting the specimen for the purposes of our specimen collection 
policies are also analyzing the specimens. Therefore, we propose to use 
wage data in the BLS-defined category of phlebotomist to establish the 
personnel expense component of the travel allowance mileage rate.
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    \124\ https://www.bls.gov/ooh/healthcare/phlebotomists.htm.
    \125\ https://www.bls.gov/ooh/healthcare/clinical-laboratory-technologists-and-technicians.htm.
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    For CY 2021, (the latest available information), the BLS states 
that the median pay (or the wage at which half of the workers in the 
occupation earned more than that amount and half earned less) for 
phlebotomists is $17.97 per hour.\126\ To account for the personnel 
expenses associated with travel for specimen collection, we propose to 
use the latest available published figure for the median hourly wage 
amount for phlebotomists, which is published by the BLS, for the 
purposes of annually updating the travel allowance amount for specimen 
collection. We propose to codify this aspect of the travel allowance 
mileage rate at Sec.  414.523(a)(2)(iii)(B) by describing that the 
travel allowance mileage rate includes an amount to cover expenses for 
a trained technician equal to the most recent median hourly rate for 
phlebotomists, as published by the BLS. This approach would be a 
clarification of and modification to current guidance, as CR 12593 
describes that the $0.45 per mile added to the IRS rate is meant to 
address the trained personnel's time and travel costs by the technician 
based on approximately 15 minutes of labor.
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    \126\ https://www.bls.gov/ooh/healthcare/phlebotomists.htm.
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    Next, we would calculate a per-mile amount to derive the 
approximate number of miles traveled by the trained technician each 
hour. To do this, we are proposing to use an average driving speed. The 
average miles-per-hour driving speed would be multiplied by the trained 
technician's estimated wages, as described above, and the result would 
be an amount that represents wages per mile, which would be the 
personnel expenses associated with travel for specimen collection. We 
are proposing to use an average driving speed of 40 miles per hour, as 
we believe most of the travel related to specimen collection would be 
performed in local and residential areas, as our data show that the 
median number of miles traveled for specimen collection is 
approximately 7 miles.
    Therefore, to establish the personnel expenses component of the 
travel allowance mileage rate, which would be a per-mile amount, we 
propose that we would divide the most recent median hourly wage for 
phlebotomists, as published by the BLS, by 40 to represent an average 
miles-per-hour. We propose to codify this aspect of the travel 
allowance mileage rate at Sec.  414.523(a)(2)(iii)(B). For CY 2023, the 
amount would be equal to the most recent BLS median hourly wage for a 
phlebotomist of $17.97 per hour (which is currently the BLS CY 2021 
rate) divided by 40, which is $0.45 per mile. This amount is consistent 
with the amount that we add to the IRS rate under our current travel 
allowance policy.
    In summary, we propose to establish in 414.523(a)(2)(iii)(B) that 
the travel allowance mileage rate is equal to the IRS standard mileage 
rate plus an amount to cover expenses for a trained technician equal to 
the most recent median hourly wage for phlebotomists, as published by 
the BLS, divided by 40 to represent an average miles-per-hour driving 
speed. The travel allowance mileage rate would be updated annually 
using the most recent IRS and BLS information, which we would issue in 
subregulatory guidance annually through CRs.
    We seek comment on all aspects of this proposed travel allowance 
mileage rate, including the use of the IRS standard mileage rate to 
cover transportation, the proposed use of estimated wages and average 
driving speed to cover personnel expenses, and other specific 
considerations or alternatives for establishing this rate.
    Finally, we are proposing to include in Sec.  414.523(a)(2)(iii)(C) 
the travel allowance amount calculations for the flat-rate travel 
allowance basis and the per-mile travel allowance basis discussed 
previously in this section of the proposed rule. We believe that these 
proposed calculations would be a modification to existing guidance, as 
we would clarify and revise the travel allowance amount calculations in 
several respects.
    In our analysis of mileage traveled for the purposes of specimen 
collection, described above, the results indicate that the median 
mileage per trip for specimen collection per Medicare beneficiary is 
approximately 7 miles; therefore, we believe that a reasonable 
approximation of the typical mileage required for specimen collection 
per beneficiary is about 10 miles. As such, for the flat-rate travel 
allowance basis, we are proposing in Sec.  414.523(a)(2)(iii)(C)(1) 
that the travel allowance amount is the travel allowance mileage rate 
described above multiplied by ten (10) (for CY 2023 example purposes, 
this amount would be $10.40) and divided by the number of beneficiaries 
for whom a specimen

[[Page 46080]]

collection fee is paid. Dividing by the number of beneficiaries for 
whom a specimen collection fee is paid would ensure that the flat-rate 
travel allowance amount is apportioned to each beneficiary receiving 
specimen collection services and that payment is calculated in a 
operationally feasible manner, as a laboratory must submit a claim for 
each beneficiary to receive payment for travel allowance; this would 
allow for a fixed payment amount to be straightforwardly apportioned to 
the number of beneficiaries for whom a specimen collection fee is paid 
in a single location. We believe this proposed flat-rate travel 
allowance calculation would simplify payment for travel to one location 
for specimen collection services requiring travel of 20 miles or less, 
which would ease administrative burden.
    Additionally, this proposed methodology would be consistent with 
the existing flat-rate travel allowance payment policy described in CR 
12593 and would clarify the proration methodology.
    For an example of the proposed flat-rate travel allowance 
calculation, consider a situation in which a trained technician travels 
seven (7) miles from the laboratory to a nursing home to collect blood 
specimens collected through venipuncture from five patients, four of 
whom are Medicare beneficiaries. The trained technician collects three 
specimens from Medicare beneficiaries, collects one specimen from the 
non-Medicare patient, and simply picks up a previously collected 
specimen from one Medicare beneficiary. The trained technician then 
drives seven (7) miles back to the laboratory to deliver the specimens 
without making any other stops. The trained technician has provided 
specimen collection services to three Medicare beneficiaries. One 
Medicare beneficiary did not require specimen collection services, and 
therefore, a specimen collection fee would not be payable. In this 
example, the laboratory would use the flat-rate travel allowance basis 
because the trained technician traveled a total of 14 miles. To 
calculate the travel allowance mileage rate, the laboratory would 
divide flat-rate travel allowance amount of $10.40 by the number of 
beneficiaries for whom a specimen collection fee is paid (three 
beneficiaries), which equals $3.47. To bill for the travel allowance, 
the laboratory would submit one claim for each beneficiary for whom a 
specimen collection fee is paid by billing HCPCS code P9604.
    We propose that updates travel allowance mileage rates would be 
issued through subregulatory guidance, specifically the existing CMS 
change request process, on an annual basis. We seek comment on all 
aspects of the proposed calculation of the flat-rate travel allowance 
amount, including considerations for the proposed mileage factor of ten 
(10) and the proposed proration by the number of beneficiaries for whom 
a specimen collection fee is paid.
    We are also proposing to clarify, modify, and codify in regulation 
the calculation for the per-mile travel allowance amount. Under 
proposed Sec.  414.523(a)(2)(iii)(C)(2), the per-mile travel allowance 
amount would equal the number of eligible miles multiplied by the 
travel allowance mileage rate discussed above, divided by the number of 
beneficiaries for whom a specimen collection fee is paid.
    As discussed previously in this section of the proposed rule, we 
believe that section 1833(h)(3) of the Act supports payment for 
specimen collection and travel allowance only for Medicare 
beneficiaries, and we are proposing that the per-mile travel allowance 
amount calculation would only consider the number of Medicare 
beneficiaries from whom specimens are collected in the proration of the 
per-mile travel allowance. As the current policy in manual guidance and 
the CR factor are inconsistent in referring to the number of specimens 
or number of patients, our proposal would be a policy change to clarify 
that only the number of Medicare beneficiaries for whom a specimen 
collection fee is paid should be included in the calculation.
    To calculate the per-mile travel allowance amount, the laboratory 
would first calculate the total number of eligible miles, as set forth 
in proposed Sec.  414.523(a)(2)(iii)(A), the trained technician 
traveled--this would be the total number of miles traveled by the 
trained technician to locations where one or more Medicare 
beneficiaries received specimen collection services and back to the 
laboratory where the technician returns the specimen(s) for testing. 
The eligible miles would be multiplied by the travel allowance mileage 
rate as set forth in proposed Sec.  414.523(a)(2)(iii)(B), then divided 
by the number of beneficiaries for whom a specimen collection fee is 
paid, which would yield a prorated travel allowance amount. Under this 
proposed approach, the laboratory would receive payment for the total 
number of eligible miles traveled for specimen collection, apportioned 
equally to each Medicare beneficiary for whom a specimen collection fee 
is paid. The laboratory would then submit a claim billing HCPCS code 
P9603 for payment of the per-mile travel allowance amount for each 
beneficiary for whom a specimen collection fee is paid. We believe this 
proposed calculation for the per-mile travel allowance basis would 
resolve concerns raised by the public about inconsistent guidance.
    For an example of the per-mile travel allowance amount calculation, 
consider a trained technician traveling 45 miles from a laboratory in a 
city to a rural SNF, collecting blood specimens through venipuncture 
from 6 Medicare beneficiaries, and then driving 45 miles to return to 
the laboratory. In this example, the laboratory would use the per-mile 
travel allowance basis because the trained technician traveled more 
than 20 eligible miles to one location for specimen collection. To 
calculate the per-mile travel allowance amount, the laboratory would 
sum the eligible miles traveled to the location of Medicare 
beneficiaries receiving specimen collection services, which, in this 
case is 45 miles from the laboratory to the SNF and 45 miles from the 
SNF returning to the laboratory, for a total of 90 eligible miles. The 
eligible miles would then be multiplied by the travel allowance mileage 
rate of $1.04, yielding a total of $93.60. This total amount would then 
be prorated by dividing by the number of Medicare beneficiaries for 
whom a specimen collection fee is paid (6), yielding a per-beneficiary 
amount of $15.60 ($93.60/6 = $15.60). To bill for the travel allowance, 
the laboratory would submit one claim for each beneficiary in the 
amount of $15.60 HCPCS code P9603.
    In another example, a trained technician travels 40 miles from a 
laboratory to the location of a Medicare beneficiary to collect a 
specimen, then travels 10 miles to the location of a non-Medicare 
patient to collect a blood specimen through venipuncture, then travels 
20 miles to the location of two Medicare beneficiaries to collect urine 
specimens by catheterization, and then travels 20 miles to return to 
the laboratory. In this example, the laboratory would use the per-mile 
travel allowance basis because the trained technician traveled to more 
than one location for specimen collection. To calculate the per-mile 
travel allowance amount, the laboratory would sum the eligible miles, 
which would include the miles traveled from the laboratory to the 
locations of Medicare beneficiaries to collect specimens plus the miles 
back to the laboratory for specimen drop-off. Eligible miles would not 
would not include the 10 miles traveled to the

[[Page 46081]]

location of the non-Medicare patient to collect a specimen, but would 
include the 40 miles traveled from the laboratory to the location of 
the first Medicare beneficiary, the 20 miles to the location of the two 
Medicare beneficiaries, and the return trip to the laboratory of 20 
miles, for a total of 80 eligible miles. The eligible miles would then 
be multiplied by the travel allowance mileage rate of $1.04, yielding a 
total of $83.20. This total would then be prorated by dividing by three 
(3) Medicare beneficiaries for whom a specimen collection fee is paid, 
yielding an amount of $27.73. The laboratory would then submit a claim 
using HCPCS code P9603 for travel allowance for each of the Medicare 
beneficiaries in the amount of $27.73. Again, the laboratory receives 
payment for the eligible miles traveled by the trained technician, 
apportioned equally to each Medicare beneficiary for whom a specimen 
collection fee is paid.
    In conclusion, the proposed travel allowance payment policies would 
represent both modifications to and clarifications of the specimen 
collection travel allowance payment methodologies currently described 
in guidance. We believe these proposed changes and clarifications, if 
finalized, would improve and simplify the administration of the travel 
allowance payment policy. Laboratories would use HCPCS code P9604 to 
bill for the flat-rate travel allowance basis for shorter trips to one 
location, and HCPCS code P9603 to bill for the per-mile travel 
allowance basis for longer trips to one location and trips to multiple 
locations, which we believe would ensure payment for specimen 
collection services based upon eligible miles required for such travel 
and address concerns of interested parties about the provision of 
specimen collection services for individuals residing in remote 
locations.
    We seek comment on all aspects of this travel allowance proposal, 
including the proposed general requirement, the proposed provisions 
regarding the flat-rate and the per-mile travel allowance bases and the 
utility of having both approaches, the proposed provisions regarding 
eligible miles and the travel allowance mileage rate, as well as 
considerations for the methodologies to calculate the travel allowance 
amounts. We also seek comments on possible alternative considerations 
for the CLFS travel allowance, including suggestions based on private-
payor and/or other approaches for tracking mileage and paying for 
travel allowance, including per-beneficiary per-encounter bases, or 
other approaches for providing payment for travel for specimen 
collection. We note that our proposed regulations would not require 
MACs to calculate travel allowance payments, nor would they reflect the 
MAC flexibilities with respect to travel allowance payment that are 
currently in guidance, such as their discretion to pay the travel 
allowance in circumstances where CDLTs are needed on an emergency 
basis; we seek comment on this issue as well.
    We would make conforming changes to the Claims Processing Manual, 
Chapter 16, section 60 to reflect these proposed travel allowance 
policies, if finalized, including any changes or clarifications. As 
noted previously, we would remove sections of the manual containing 
policies that are no longer applicable.

D. Expansion of Coverage for Colorectal Cancer Screening and Reducing 
Barriers

    Medicare coverage for colorectal cancer (CRC) screening tests under 
Part B are described in statutes (sections 1861(s)(2)(R), 1861(pp), 
1862(a)(1)(H) and 1834(d) of the Act), regulation (42 CFR 410.37), and 
National Coverage Determination (NCD) (Section 210.3 of the Medicare 
National Coverage Determinations Manual). The statute and regulations 
expressly authorize the Secretary to add other tests and procedures 
(and modifications to tests and procedures) for colorectal cancer 
screening with such frequency and payment limits as the Secretary finds 
appropriate based on consultation with appropriate organizations. 
(Section 1861(pp)(1)(D) of the Act; Sec.  410.37(a)(1)(v)). For a 
number of CRC screening tests, the statute at section 1834(d) of the 
Act established frequency and payment limits restricting coverage to 
individuals at least 50 years of age. We are proposing to expand 
Medicare coverage of certain CRC screening tests by reducing the 
minimum age payment limitation to 45 years in our regulations at Sec.  
410.37 and in NCD 210.3. Our proposal would align our coverage with a 
recently revised recommendation by the United States Preventive 
Services Task Force (USPSTF) for certain CRC tests as permitted by 
section 1834(n) of the Act. Moreover, after consulting with appropriate 
organizations, we are also proposing to modify the payment limitation 
for other CRC screening tests identified in Sec.  410.37 and in NCD 
210.3 to permit coverage for individuals to begin at age 45.
    In addition, we propose to expand the regulatory definition of CRC 
screening tests to include a follow-on screening colonoscopy after a 
Medicare covered non-invasive stool-based CRC screening test returns a 
positive result. Historically, CMS has viewed a colonoscopy after a 
positive non-invasive stool-based CRC screening test to be a diagnostic 
colonoscopy. In recent years, the clinical recommendations and guidance 
of medical professional societies and screening experts have evolved 
for stool-based colorectal cancer screening due to a number of factors 
including the relative number of false positive results, low follow-up 
colonoscopy rates and patient access barriers. For example, the 
positive predictive value of a FIT (fecal immunochemical test) (the 
likelihood that an individual with a positive FIT test result actually 
has colorectal cancer) reportedly varies widely from 8 to 21 percent 
depending on the test and testing center.\127\ Importantly, recent 
published evidence has again highlighted that individuals that did not 
get a follow-up colonoscopy were about twice as likely to die of 
colorectal cancer compared to individuals that did have one.\128\ Since 
the overall goal of programmatic cancer screening using any CRC 
screening test is to prevent cancer, allow for early detection and 
treatment and reduce cancer mortality, the follow-up colonoscopy is 
integral to non-invasive stool-based CRC screening since improvements 
in health outcomes would not be possible without the follow-up. Medical 
professional organizations and clinical experts have reached consensus 
based on the evidence on this recommendation. In May 2021 USPSTF 
revised their evidence-based recommendation to include the statement 
``Positive results on stool-based screening tests require follow-up 
colonoscopy for the screening benefits to be achieved.'' \129\ 
Accordingly, we propose to modify CRC screening tests within our 
authority in consultation with appropriate organizations. The outcome 
of our more appropriate and complete approach to CRC screening will be 
that beneficiary cost sharing for the initial screening stool-based 
test and the follow-on screening colonoscopy test would not apply and 
that they are both tests paid at 100 percent (no applicable copayment 
percentage) as specified screening services under the Act. The issue of

[[Page 46082]]

when the follow-on screening colonoscopy involves the removal of tissue 
or other matter or other procedure furnished in connection with, as a 
result of, and in the same clinical encounter as the screening test 
would not change from current policy and is described later in our 
proposal. We believe this new understanding will encourage the wider 
utilization of non-invasive CRC screening tests and reduce barriers to 
screening, prevention and early detection of CRC.
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    \127\ Nielson CM, Petrik AF, Jacob L, et al. Positive predictive 
values of fecal immunochemical tests used in the STOP CRC pragmatic 
trial. Cancer Med. 2018;7(9):4781-4790. doi:10.1002/cam4.1727.
    \128\ Zorzi M, Battagello J, Selby K, et al. Non-compliance with 
colonoscopy after a positive faecal immunochemical test doubles the 
risk of dying from colorectal cancer. Gut. 2022;71(3):561-567. 
doi:10.1136/gutjnl-2020-322192.
    \129\ https://ww.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
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    Our proposals will update Medicare coverage and payment policies to 
align with our new understanding of CRC screening. We believe these 
proposals will expand access to quality care and improve health 
outcomes through prevention, early detection, more effective treatment 
and reduced mortality. Moreover, they would directly advance health 
equity by promoting access and removing barriers for much needed cancer 
prevention and early detection within rural communities and communities 
of color that are especially impacted by the incidence of CRC.
    Our proposals also directly support President Biden's Cancer 
Moonshot Goal to cut age-adjusted death rate from cancer by at least 50 
percent and addresses his recent Proclamation of March as National 
Colorectal Cancer Awareness Month. The proclamation stated that ``early 
stages of colorectal cancer often emerge without symptoms, and it is 
important to begin regular screenings starting at the age of 45.'' It 
goes on to read ``Thanks to the Affordable Care Act, most health 
insurance plans must cover certain preventive services with no out-of-
pocket costs. This coverage now includes colorectal cancer screenings 
for adults over the age of 45, making it easier to get colorectal 
cancer screenings and helping improve access to earlier treatment.'' 
\130\
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    \130\ https://www.whitehouse.gov/briefing-room/presidential-actions/2022/02/28/a-proclamation-on-national-colorectal-cancer-awareness-month-2022/.
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1. Background
    In CY 2019, the last year for which incidence data are available, 
CRC accounted for the 4th highest rate of new cancer cases and 4th 
highest rate of cancer deaths in the United States.\131\ The National 
Cancer Institute estimates that in 2021, 149,500 individuals will be 
newly diagnosed with CRC and 52,980 individuals will die from CRC in 
the United States.\132\ The Center for Disease Control and Prevention 
(CDC) advises, ``Colorectal cancer almost always develops from 
precancerous polyps (abnormal growths) in the colon or rectum. 
Screening tests can find precancerous polyps, so that they can be 
removed before they turn into cancer. Screening tests can also find 
colorectal cancer early, when treatment works best. . . Regular 
screening, beginning at age 45, is the key to preventing colorectal 
cancer and finding it early.'' \133\
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    \131\ https://gis.cdc.gov/Cancer/USCS/#/AtAGlance/.
    \132\ https://seer.cancer.gov/statfacts/html/colorect.html.
    \133\ https://www.cdc.gov/cancer/colorectal/basic_info/screening/.
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    Rural communities and communities of color are especially impacted 
by the incidence of CRC. A CDC study found the death rate of CRC (per 
100,000) to be 17.1 in rural nonmetropolitan counties verses 14.0 in 
metropolitan counties with populations greater than 1 million.\134\ 
African Americans experience both new cases and deaths from colorectal 
cancer at rates significantly above those of all races.\135\ An article 
in the American Journal of Pathology states African Americans also are 
often diagnosed at a younger age (median ages, 66 and 70 years for 
African American men and women compared with 72 and 77 years for white 
men and women, respectively). Moreover, African Americans are two times 
more likely to be diagnosed with CRC before the age of 50 years, which 
justified the recommendation to begin endoscopic screening at the age 
of 45 years instead of 50 years.\136\
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    \134\ Henley SJ, Anderson RN, Thomas CC, Massetti GM, Peaker B, 
Richardson LC. Invasive Cancer Incidence, 2004-2013, and Deaths, 
2006-2015, in Nonmetropolitan and Metropolitan Counties--United 
States. MMWR Surveill Summ 2017;66(No. SS-14):1-13. DOI: http://dx.doi.org/10.15585/mmwr.ss6614a1.
    \135\ https://seer.cancer.gov/statfacts/html/colorect.html.
    \136\ Augustus GJ, Ellis NA. Colorectal Cancer Disparity in 
African Americans: Risk Factors and Carcinogenic Mechanisms. Am J 
Pathol. 2018;188(2):291-303. doi:10.1016/j.ajpath.2017.07.023.
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    In May 2021, the USPSTF issued a revised Final Recommendation 
Statement on CRC Screening. This replaced the prior USPSTF 2016 Final 
Recommendation Statement and included a number of updated policy 
recommendations based on new evidence and understandings of CRC and CRC 
Screening. In terms of health disparities in CRC and CRC screening, the 
May 2021 revised USPSTF statement reads, ``The causes for these health 
disparities are complex; recent evidence points to inequities in the 
access to and utilization and quality of colorectal cancer screening 
and treatment as the primary driver for this health disparity rather 
than genetic differences . . . Black adults across all age groups, 
including those younger than 50 years, continue to have higher 
incidence of and mortality from colorectal cancer than White adults.'' 
\137\
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    \137\ https://www.uspreventiveservicestaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
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    In addition to reducing the minimum age for Medicare payment for 
CRC screening test payment, we are proposing to address a longstanding 
barrier and disincentive to CRC screening using a non-invasive stool-
based test as a first step of a complete screening. Examples of 
Medicare covered non-invasive stool-based CRC screening tests include a 
guaiac-based fecal-occult blood test (gFOBT) described in regulation at 
Sec.  410.37(a)(2)(i) and in National Coverage Determination 210.3 
Colorectal Cancer Screening Tests, as well as immunoassay-based fecal-
occult blood test (iFOBT) and the Cologuard\TM\--Multitarget Stool DNA 
(sDNA) test described in NCD 210.3. For the best health outcomes (CRC 
prevention and early detection), it is important that patients receive 
a complete CRC screening.
    In recent years, government bodies and professional societies have 
reconsidered their understanding of a complete CRC screening and now 
consider CRC screening incomplete for individuals with a positive 
result on a stool-based test until a follow-on screening colonoscopy is 
also completed. The National Colorectal Cancer Roundtable recommends 
that the patient should only be counted as having completed the CRC 
screening process after a colonoscopy is performed.\138\ Under current 
Medicare policies, if a Medicare patient initially receives a positive 
result from a non-invasive and less burdensome screening stool-based 
CRC test, the test would be viewed as showing signs or symptoms of 
colorectal cancer. If a beneficiary received a subsequent colonoscopy, 
we viewed the test as a diagnostic procedure and normal cost sharing 
rules for diagnostic test would apply. Our current policy, however, may 
discourage patients from seeking a follow-on colonoscopy because of the 
Medicare cost-sharing. A 2018 guideline update from the American Cancer 
Society on CRC screening for average-risk adults reads ``Trials 
offering a choice between a stool test and a

[[Page 46083]]

structural examination compared with either test alone have generally 
demonstrated greater uptake when a choice is offered. The best evidence 
in the United States derives from a randomized trial in a safety-net 
population comparing annual gFOBT versus colonoscopy versus choice 
between the 2 in which it was demonstrated that choice was more 
effective than offering colonoscopy alone. In the first year of the 
study, which included patient navigation (year 1 only), the screening 
completion rate was 38% for patients offered colonoscopy, 66 percent 
for those offered gFOBT, and 68 percent for those offered a choice. 
While uptake overall was similar in the gFOBT group versus the choice 
group, it is clear that a ``colonoscopy-only'' referral resulted in 
substantially lower adherence.'' \139\
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    \138\ http://nccrt.org/wp-content/upload/0305.60-Colorectal-Cancer-Manual_FULFILL.pdf.
    \139\ https://acsjournals.onlinelibrary.wiley.com/doi/full/10.3322/caac.21457.
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    One of the goals of CRC screening is to enable the healthcare 
system to identify patients who need treatment early enough to prevent 
or treat the condition most effectively. In order to encourage patients 
to obtain a follow-on colonoscopy, a number of appropriate 
organizations have suggested that we adopt a new approach that looks at 
colorectal cancer screening as a continuum in the scenario where an 
initial stool-based test returns a positive result and includes a 
follow-on screening colonoscopy, when determined appropriate by the 
patient and the healthcare provider. There currently exists a 
misalignment of applicable patient cost sharing for a follow-on 
screening colonoscopy after a positive non-invasive stool-based test as 
Medicare coverage policies have not yet been updated to align to this 
new understanding of a complete CRC screening described earlier. If the 
patient had chosen the more expensive, invasive and burdensome 
screening colonoscopy as the first step in their CRC screening, there 
would be no applicable beneficiary cost sharing for the screening 
colonoscopy. However, under current policy, if the patient initially 
receives a positive result from a non-invasive, less burdensome and 
less expensive stool-based test as the first step in their CRC 
screening, beneficiary cost sharing would not be applicable for the 
initial stool-based test, but would be applicable for the subsequent 
colonoscopy (because it would be considered a diagnostic testing 
service given the presence of signs and symptoms of disease based on 
the result of the initial stool-based test).
2. Statutory Authority
    Section 1861(s)(2)(R) of the Act includes CRC screening tests in 
the definition of medical and other health services that fall within 
the scope of Medicare Part B benefits described in section 1832(a)(1) 
of the Act. Section 1861(pp) of the Act defines ``colorectal cancer 
screening tests'' and specifically names the following tests:
    <bullet> Screening fecal-occult blood test;
    <bullet> Screening flexible sigmoidoscopy; and
    <bullet> Screening colonoscopy.
    Section 1861(pp)(1)(D) of the Act also authorizes the Secretary to 
include in the definition of CRC screening tests other tests or 
procedures and modifications to the tests and procedures described 
under this subsection, with such frequency and payment limits as the 
Secretary determines appropriate, in consultation with appropriate 
organizations. Section 1834(d) of the Act describes limitations for 
payment of CRC screening tests, including that no payment may be made 
for CRC screening tests of screening fecal-occult blood test at section 
1834(d)(1)(B)(i) of the Act and screening flexible sigmoidoscopy at 
section 1834(d)(2)(E)(i) of the Act for patients under the age of 50. 
Section 1834(d) of the Act does not describe a minimum age limit for 
screening colonoscopy.
    Section 1834(n) of the Act, added by section 4105 of the Affordable 
Care Act, grants the Secretary the authority to modify coverage of 
certain preventive services identified in section 1861(ddd)(3) of the 
Act, which in turn cross-references section 1861(ww)(2) of the Act 
(including CRC screening tests at section 1861(ww)(2)(E) of the Act). 
The Secretary may modify coverage to the extent that such modification 
is consistent with the recommendations of the USPSTF, per section 
1834(n)(1)(A) of the Act.
3. Regulatory Authority
    Our implementing regulations for CRC screening are codified at 
Sec.  410.37. Similar to section 1834(d) of the Act, Sec.  410.37 
describes limitations on coverage and provide that payment may not be 
made for screening fecal-occult blood tests at Sec.  410.37(c) or 
screening flexible sigmoidoscopies at Sec.  410.37(e) for individuals 
under the age of 50. Also similar to section 1834(d) of the Act, Sec.  
410.37(g) does not describe a minimum age requirement for screening 
colonoscopies. Section 410.37 also establishes coverage for screening 
barium enemas at paragraph (h) and limits coverage to and individual 50 
years of age or greater for an individual who is not at high risk of 
CRC at paragraph (h). Section 410.37(h) does not describe a minimum age 
limit for coverage of screening barium enemas for individuals who are 
at high risk of CRC.
4. National Coverage Determination
    NCD 210.3 CRC Screening Tests was last revised effective January 
19, 2021, when coverage was expanded to include Blood-based Biomarker 
Tests. NCD 210.3 was previously revised effective October 9, 2014, when 
coverage was expanded to include The CologuardT--Multi-target Stool DNA 
(sDNA) Test. Prior to that, NCD 210.3 was revised effective January 1, 
2004, when coverage was expanded to include immunoassay-based fecal 
occult blood test (iFOBT), which can be used as alternative to existing 
guaiac-based fecal occult blood test (gFOBT). Under NCD 210.3, the 
Blood-based Biomarker Tests, sDNA test, iFOBT and gFOBT tests all 
include a limitation of coverage that the patient be at least 50 years 
of age.
    In the NCD 210.3 Final Decision Memo dated January 19, 2021, we 
noted that multiple commenters provided an alert that a draft USPSTF 
revised CRC recommendation was circulating and which included a 
recommendation that CRC screening begin at age 45 instead of 50. The 
commenters on the draft NCD Decision Memo, in the course of the NCD 
process, also encouraged CMS to align screening age limitations for all 
CRC screening tests. At that time, the draft USPSTF recommendation had 
not been finalized. Therefore, we responded that we are finalizing NCD 
210.3 coverage of CRC screening tests with an age range of 50 to 85 
years of age. That said, if the draft USPSTF recommendation is 
finalized and/or other society guidelines are revised, we may 
reconsider, in consultation with appropriate professional 
organizations, the appropriate CRC screening tests limitations and 
address appropriately in an efficient manner.
5. Proposed Revisions
    In May 2021, the USPSTF issued a revised recommendation (with a 
Grade B) that adults who do not have signs or symptoms of CRC and who 
are at average risk for CRC begin screening at age 45 instead of the 
previous recommendation of age 50.\140\ Accordingly, we propose to 
exercise our authority under section 1834(n) of the Act to modify 
coverage of certain CRC screening tests to begin when the individual is 
age 45 or older. The tests

[[Page 46084]]

included in the May 2021 USPSTF revised recommendation, including 
stool-based tests of gFOBT, iFOBT and sDNA, and direct visualization 
test of flexible sigmoidoscopy. Screening colonoscopy does not have a 
minimum age requirement under Medicare coverage. We invite public 
comment on this proposal.
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    \140\ https://www.uspreventiveservicetaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
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    We also propose to exercise our authority under section 
1861(pp)(1)(D) of the Act to expand coverage of certain CRC screening 
tests to begin for individuals at age 45 for barium enema test 
(coverage described in Sec.  410.37(h)) and blood-based biomarker tests 
(coverage described in NCD 210.3). While these tests were not 
recommended in the earlier mentioned May 2021 revised USPSTF 
recommendation, they are Medicare covered CRC screening tests and would 
be an important alternative to the stool based and direct visualization 
tests, especially for individuals with medical complexity and those in 
rural and underserved communities. We believe that aligning the minimum 
age requirements for certain Medicare covered CRC screening tests 
described in our proposal to consistently begin for individuals at age 
45 would avoid confusion and reduce barriers for beneficiaries and 
healthcare professionals. Our proposal reflects our belief that 
consistent coverage and payment policies will be important in promoting 
CRC screening, which will result in expanded prevention, early 
detection and improved health outcomes.
    Conforming changes for our proposals to reduce the minimum age for 
certain CRC screening tests would be made at Sec.  410.37 and NCD 210.3 
authorities described earlier. We are not proposing to modify existing 
conditions of coverage or payment for maximum age limitations and 
frequency limitations. We also retain the same existing frequency 
limitations except in the instance of a follow-on screening colonoscopy 
after a positive result from a non-invasive stool-based CRC screening 
test described earlier and later in our proposal). We propose to amend 
Sec.  410.37 paragraph (c)(1), by removing the phrase ``under age 50'' 
and adding in its place the phrase ``under age 45'', amend paragraph 
(c)(2), by removing the phrase ``individual 50 years of age'' and 
adding in its place the phrase ``individual 45 years of age'', amend 
paragraph (e)(1), by removing the phrase ``under age 50'' and adding in 
its place the phrase ``under age 45'', amend paragraph (e)(2) by 
removing the phrase ``individual 50 years of age'' and adding in its 
place the phrase ``individual 45 years of age'', and amend paragraph 
(i)(1), by removing the phrase ``individual age 50'' and adding in its 
place the phrase ``individual age 45''. We also propose to issue formal 
instructions that would revise the minimum age for the CRC screening 
tests described in NCD 210.3 from 50 to 45 years.
    We consulted with and reviewed recommendations from the following 
appropriate organizations in our proposal to uniformly reduce the 
minimum age for certain CRC screening tests from 50 to 45. ACS 
recommends that people of average risk of CRC start regular screening 
at age 45 and recommends stool-based tests and visual exam-based 
tests.\141\ The American Society of Colon and Rectal Surgeons (ASCRS) 
recommends CRC screenings for individuals 45 years of age and older and 
identifies barium enema as one of multiple screening options.\142\ The 
U.S. Multi-Society Task Force on Colorectal Cancer, which represents 
the American College of Gastroenterology, the American 
Gastroenterological Association, and the American Society for 
Gastrointestinal Endoscopy, also recently revised their recommendation 
that CRC screening for individuals of average risk of CRC begin at age 
45 instead of 50.\143\ The Centers for Disease Control and Prevention 
(CDC) website advises regular screening, beginning at age 45, is the 
key to preventing colorectal cancer and finding it early. The CDC 
website goes on to describe the earlier mentioned May 2021 revised 
USPSTF recommendations.\144\
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    \141\ https://www.cancer.org/cancer/colon-rectal-cancer/detection-diagnosis-staging/acs-recommendations.html.
    \142\ https://fascrs.org/patients/diseases-and-conditions/frequently-asked-questions-about-colorectal-cancer.
    \143\ Gastroenterology. 2022 Jan; 162(1):285-299. doi: 10.1053/
j-gastr5o.2021.10.007. Epub 2021 Nov 15.
    \144\ https://www.cdc.gov/cancer/colorectal/basic_info/screening/.
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    We considered the importance of aligning the minimum age 
requirement for CRC screening across Medicare covered CRC screening 
tests, as well as private health plans and Medicaid impacted by the May 
2021 revised USPSTF recommendation. We believe consistent policy across 
payers in terms of minimum age limits for CRC screening tests is 
critical to the public's understanding of evolving CRC screening 
recommendations. As added by section 2713 of the ACA, 42 U.S.C 300gg-13 
requires a that group health plan and a health insurance issuer 
offering group or individual health insurance coverage shall, at a 
minimum, provide coverage for and shall not impose any cost sharing 
requirements for evidence-based items or services that have in effect a 
rating of ``A'' or ``B'' by the USPSTF. In addition, we considered that 
section 1905(a)(13) of the Act, added by section 4106 of the ACA, which 
expands Medicaid coverage to include screening services that are 
assigned a grade of A or B by the USPSTF. We believe that expanding 
coverage for barium enema and blood-based biomarker CRC screening tests 
to a minimum age of 45, in alignment with the direct visualization and 
stool-based tests recommended in the May 2021 revised USPSTF 
recommendation, will allow additional, low burden options and 
alternatives that may be preferred by some health professionals and 
patients. While the recommendations from different professional 
societies and other appropriate organizations include varying detail in 
terms of specific tests, we understand the growing consensus in the 
health care community is that the pathology of CRC now requires that 
broad preventative screening should begin for individuals at age 45 
instead of 50. We believe that reducing the minimum age for the 
Medicare covered CRC screening tests barium enema test (coverage 
described in Sec.  410.37(h)) and blood-based biomarker tests (coverage 
described in NCD 210.3) from 50 to 45 years of age, in addition to and 
in alignment with the direct visualization and stool-based tests 
described in the 2021 USPSTF recommendation, is appropriate and 
consistent with our purpose of early detection of colorectal cancer 
described in Sec.  410.37(a)(1). We received public comment broadly 
supportive of reducing the minimum age for certain CRC screening tests 
in both the CY 2022 PFS final rule (86 FR 65179) and in the public 
comments in response to our Proposed Decisions Memo for NCD 210.3 
Screening for Colorectal Cancer--Blood-Based Biomarker Tests (Final 
Decision Memo dated January 19, 2021). We look forward to further 
consultation with the public and appropriate organizations through the 
public comment period for this proposed rule. We invite public comment 
on this proposal.
    We also propose to exercise our authority under section 
1861(pp)(1)(D) of the Act to expand coverage of CRC screening tests to 
include a follow-on screening colonoscopy after a Medicare covered non-
invasive stool-based CRC screening test returns a positive result. In 
this scenario, we now understand the follow-on screening colonoscopy to 
be part of a continuum of a complete CRC

[[Page 46085]]

screening and not a separate diagnostic, therapeutic or other 
procedure. Relatedly, we propose that the frequency limitations 
described for screening colonoscopy in Sec.  410.37(g) would not apply 
in the instance of a follow-on screening colonoscopy test after a 
positive result from a Medicare covered stool-based test. We propose to 
add new paragraph (k) toSec.  410.37 to state that, effective January 
1, 2023, colorectal cancer screening tests include a follow-on 
screening colonoscopy after a Medicare covered non-invasive stool-based 
colorectal cancer screening test returns a positive result. We aim to 
avoid disruption to the existing conditions of coverage and payment for 
CRC screening for this unique scenario and include text noting the 
frequency limitations described for screening colonoscopy in paragraph 
(g) of this section shall not apply in the instance of a follow-on 
screening colonoscopy test described in this paragraph.
    We acknowledge that under current Medicare policy, a colonoscopy 
after a stool-based CRC screening test returns a positive result would 
be subject to beneficiary cost sharing because it would be considered a 
diagnostic, therapeutic or other non-screening procedure. Section 
410.32(a) describes a diagnostic test as an instance when the physician 
who furnishes a consultation or treats a beneficiary for a specific 
medical problem and who uses the results in the management of the 
beneficiary's specific medical problem. Under current policy, a 
positive result from the CRC screening stool-based test would be a sign 
of illness or disease and the subsequent colonoscopy would be for 
treatment and management of that specific medical problem. We now 
believe our current policy of CRC screening to not include a follow-on 
screening colonoscopy after a stool-based test returns a positive 
result is incomplete and not in full support of our definition of CRC 
screening test at Sec.  410.37(a)(1) for the purpose of ``early 
detection of colorectal cancer''.
     Our proposal to expand the definition of CRC screening to include 
a follow-on screening colonoscopy after a stool-based test returns a 
positive result will include implications for beneficiary cost sharing. 
Under our proposal, beneficiary cost sharing (coinsurance and 
deductible) would not be applicable for the stool-based test nor the 
follow-on colonoscopy screening tests, as described at section 
1833(1)(W)(ii) of the Act, as added by section 4104(b) of the 
Affordable Care Act. When the follow-on screening colonoscopy requires 
additional procedures furnished in the same clinical encounter, the 
phased-in Medicare payment percentages for colorectal cancer screening 
services described in regulation at Sec.  410.152(l) and finalized in 
the CY 2022 PFS final rule (86 FR 65177 through 65179) will apply. That 
is, when the follow-on screening colonoscopy includes the removal of 
tissue or other related services during the same clinical encounter the 
beneficiary coinsurance will be reduced over time from 15 percent for 
services furnished during CY 2023 through CY 2026 to 10 percent for 
services furnished during CY 2027 through 2029 to zero percent 
beginning in CY 2030 and thereafter.
     Our goal is that the patient and their healthcare professional 
make the most appropriate choice in CRC screening, which includes 
considerations of the risks, burdens and barriers presented with an 
invasive screening colonoscopy in a clinical setting as their first 
step. CRC screening presents a unique scenario where there are 
significant differences between screening stool-based tests and 
screening colonoscopy tests in terms of invasiveness and burdens to the 
patient and healthcare system. We recognize there are several 
advantages to choosing a non-invasive stool-based CRC screening test as 
a first step compared to a screening colonoscopy, including relative 
ease of administering the test and potentially reducing the experience 
of unnecessary burdensome preparation and invasive procedures. It has 
been reported that a large proportion (46 percent) of screening 
colonoscopies found no polyps\145\ so optimizing use of a non-invasive 
stool-based screening test as a first step (when determined appropriate 
by the patient and their healthcare professional) would benefit the 
patient and also the Medicare program. In many instances, a colonoscopy 
is not the most appropriate first step in colorectal cancer screening 
and would represent an unnecessary burden and over-servicing for both 
the patient and healthcare system. The May 2021 revised USPSTF 
recommendation reads, ``stool-based screening requires persons to 
collect samples directly from their feces, which may be unpleasant for 
some, but the test is quick and noninvasive and can be done at home 
(the sample is mailed to the laboratory for testing), and no bowel 
preparation is needed to perform the screening test.'' \146\ The May 
2021 revised USPSTF recommendation goes on to described that direct 
visualization CRC screening tests such as screening colonoscopy and 
screening flexible sigmoidoscopy must be performed in a clinical 
setting rather than home and require bowel preparation prior to the 
test. In addition, sedation or anesthesia is usually used during 
screening colonoscopy and the patient requires additional recovery time 
and assistance with transportation home.
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    \145\ Lieberman DA, Weiss DG, Bond JH, Ahnen DJ, Garewal H, 
Chejfec G. Use of colonoscopy to screen asymptomatic adults for 
colorectal cancer. Veteran sAffairs Cooperative Study Group 380. N 
Engl J Med. 2000 Jul 20;343(3):162-8. doi:10.1056/
NEJM200007203430301. Erratum in: N Engl J Med 2000 Oct 
19;343(16):1204. PMID: 10900274.
    \146\ https://www.uspreventiveservicetask.org//uspstf/recommendation/colorectal-cancer-screening.
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     We have heard from interested parties that CMS should consider a 
complete CRC screening to include a follow-on screening colonoscopy 
when a non-invasive stool-based test returns a positive result. We 
consulted with and reviewed recommendations from a number of 
professional societies in developing this proposal, including 
supportive letters and communications with representatives from 
American Gastroenterological Association, American Cancer Society 
Cancer Action Network, and Fight Colorectal Cancer. Our proposal 
regarding a new understanding of a complete CRC screening aligns with a 
policy recommendation from the National Colorectal Cancer Roundtable, 
which was ``established by the American Cancer Society (ACS) and the 
Centers for Disease Control and Prevention (CDC) in 1997, is a national 
coalition of public organizations, private organizations, voluntary 
organizations, and invited individuals.'' \147\ Our proposal also 
aligns to a 2018 CRC screening guideline update from the American 
Cancer Society, which reads ``Implementation of the screening options 
included in this guideline is premised on the requirement that the 
appropriate follow-up to a positive (noncolonoscopic) test is a timely 
colonoscopy. The follow-up colonoscopy should not be considered a 
``diagnostic'' colonoscopy but, rather, an integral part of the 
screening process, which is not complete until the colonoscopy is 
performed. The information provided to patients to facilitate a choice 
among tests must include the importance of follow-up of a positive 
(noncolonoscopic) test with colonoscopy. Repeating a positive stool-
based test to determine whether to proceed to colonoscopy is not an 
appropriate screening strategy.'' \148\
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    \147\ https://nccrt.org/about/.
    \148\ https://acsjournals.onlinelibrary.wiley.com/doi/full/10.3322/caac.21457.
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     We also considered the May 2021 revised USPSTF recommendation,

[[Page 46086]]

which includes the statement ``When stool-based tests reveal abnormal 
results, follow-up with colonoscopy is needed for further evaluation . 
. . Positive results on stool-based screening tests require follow-up 
colonoscopy for the screening benefits to be achieved.''\149\ We also 
note that the U.S. Departments of Labor, Health and Human Services 
(HHS), and the Treasury issued a Frequently Asked Questions guidance on 
January 10, 2022 that reads, ``A [non-grandfathered group health] plan 
or [health insurance issuers offering non-grandfathered group or 
individual health insurance coverage] must cover and may not impose 
cost sharing with respect to a colonoscopy conducted after a positive 
non-invasive stool-based screening test or direct visualization 
screening test for colorectal cancer for individuals described in the 
USPSTF recommendation. As stated in the May 18, 2021 USPSTF 
recommendation, the follow-up colonoscopy is an integral part of the 
preventive screening without which the screening would not be 
complete.\150\ The follow-up colonoscopy after a positive non-invasive 
stool-based screening test or direct visualization screening test is 
therefore required to be covered without cost sharing in accordance 
with the requirements of PHS Act section 2713 and its implementing 
regulations.'' \151\
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    \149\ https://www.uspreventiveservicetaskforce.org/uspstf/recommendation/colorectal-cancer-screening.
    \150\ The quoted text from the January 10, 2022 Frequently Asked 
Questions guidance includes a footnote to this portion of the text 
that reads, ``In addition, in its `Supporting Evidence' section, the 
USPSTF Full Recommendation Statement states: `Several comments 
requested that colonoscopy to follow up an abnormal noncolonoscoy 
screening test result be considered part of screening. The USPSTF 
recognizes that the benefits of screening can only be fully achieved 
when follow-up of abnormal screening test results is performed. The 
USPSTF added language to the Practice Considerations section to 
clarify this.' ''
    \151\ https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/FAQs-Part-51.pdf.
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     We believe that our proposal to update our regulations to align to 
our new understanding of a complete CRC screening will address the 
beneficiary cost sharing barrier that currently exists for a subsequent 
colonoscopy after an initial stool-based test returns a positive 
result, would allow more options for healthcare professionals and 
patients, would help optimize non-invasive CRC screening test use, and 
improve health outcomes for Medicare beneficiaries. We received public 
comment supportive of the policy described in our proposal in both the 
CY 2022 PFS final rule (86 FR 65179) and in public comments to our 
Proposed Decision Memo for the NCD 210.3 Screening for Colorectal 
Cancer--Blood-Based Biomarker Tests (Final Decision Memo dated January 
19, 2021).\152\ We look forward to further consultation with the public 
and appropriate organizations through the public comment period for 
this proposed rule. We invite public comment on this proposal.
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    \152\ https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=N&ncaid=299.
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     The scope of our proposals is limited to CRC screening tests and 
do not address the coverage or payment status of other screening 
services or tests recommended by the USPSTF or covered by Medicare.
 6. Summary
    In summary, we propose to exercise our authority in section 1834(n) 
and 1861(pp)(1)(D) of the Act to expand CRC screening coverage by 
reducing the minimum age for CRC screening tests from 50 to 45 years of 
age for certain Medicare covered CRC screening tests that currently 
include a minimum age of 50 as a limitation of payment or coverage. A 
screening colonoscopy would continue to not have a minimum age 
limitation under our proposal. We also propose to exercise our 
authority in section 1861(pp)(1)(D) of the Act to expand coverage of 
CRC screening to include a follow-on screening colonoscopy after a non-
invasive stool-based test returns a positive result. We believe our 
proposals will expand access to quality care and improve health 
outcomes for patients through prevention, early detection, more 
effective treatment and reduced mortality.

E. Removal of Selected National Coverage Determinations

    CMS periodically identifies and proposes to remove National 
Coverage Determinations (NCDs) that no longer contain clinically 
pertinent and current information, in other words those items and 
services that no longer reflect current medical practice, or that 
involve items and services that are used infrequently by beneficiaries. 
Clinical science and technology evolve, and items and services that 
were once considered state-of-the-art or cutting edge and experimental 
may later be established as reasonable and necessary for Medicare 
beneficiaries or replaced by more beneficial technologies or clinical 
paradigms.
    Since the CY 2021 PFS final rule (85 FR 84472), we have used notice 
and comment rulemaking to obtain public comment on removing outdated 
NCDs, replacing the prior subregulatory administrative process used on 
two occasions in 2013 and 2015. Using rulemaking under section 
1871(a)(2) of the Act allows for efficiencies in timing and process to 
consider removal of NCDs, as compared to the public comment process 
established in section 1862(l) of the Act, to be used in making and 
reconsidering individual NCDs through the National Coverage Analysis 
process.
    Eliminating an NCD that provides national coverage for items and 
services means that the item or service will no longer be 
automatically, nationally covered by Medicare (42 CFR 405.1060). 
Instead, the initial coverage determinations for those items and 
services will be made by local Medicare Administrative Contractors 
(MACs). On the other hand, removing an NCD that bars coverage for an 
item or service under title XVIII of the Act (that is, national 
noncoverage NCD), allows MACs to cover the item or service if the MAC 
determines that such action is appropriate under the statute. Removing 
a national non-coverage NCD may permit more immediate access to 
technologies that may now be beneficial for some uses. As the 
scientific community continues to conduct research, which produces new 
evidence, the evidence base we previously reviewed may have evolved to 
support other policy conclusions.
    In the CY 2021 PFS final rule, we did not establish an exclusive 
list of criteria that we would use for identifying and evaluating NCDs 
for removal. Instead, based on recommendations in public comments, and 
to be more flexible and nimble, we added considerations to the six 
factors established in 2013 to guide our decision making process. In 
addition to the six factors listed below, we also consider the general 
age of an NCD, changes in medical practice/standard of care, the pace 
of medical technology development since the last determination, and 
availability and quality of clinical evidence and information to 
support removal of an NCD. We would consider proposing the removal of 
an NCD if any of the following factors are present:
    <bullet> We believe that allowing local contractor discretion to 
make a coverage decision better serves the needs of the Medicare 
program and its beneficiaries.
    <bullet> The technology is generally acknowledged to be obsolete 
and is no longer marketed.
    <bullet> In the case of a noncoverage NCD based on the experimental 
status of an item or service, the item or service in the NCD is no 
longer considered experimental.

[[Page 46087]]

    <bullet> The NCD has been superseded by subsequent Medicare policy.
    <bullet> The national policy does not meet the definition of an 
``NCD'' as defined in sections 1862(l) or 1869(f) of the Act.
    <bullet> The benefit category determination is no longer consistent 
with a category in the statute.
    When we evaluate particular NCDs for removal, we review and 
consider information gathered from interested parties, particularly 
literature or evidence that supports a change in coverage, the Medicare 
claims data for those items and services, and other factors such as 
whether there may be documentation requirements within the NCD that are 
outdated or create a barrier to coverage. The rulemaking process 
provides an opportunity to consider public input before the NCD would 
be removed. We could decide to retain those NCDs after considering 
public comments.
    In addition to conducting an internal review to identify 
appropriate NCDs for removal, we receive removal requests from a 
variety of external interested parties, such as medical specialty 
societies, device manufacturers, beneficiaries, physicians and 
providers, and other interested individuals with many of those requests 
submitted as public comments to the PFS proposed rules. Additionally, 
sometimes topics are brought to our attention by the MAC medical 
directors.
    The following outlines the NCD proposed for removal and provides a 
summary of the rationale for removal. The current NCD below is 
available in the Medicare National Coverage Determinations Manual 
located at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/internet-Only-Manuals-IOMs-Items/CMS014961.
1. NCD 160.22 Ambulatory EEG Monitoring (06/12/1984)
    <bullet> Circumstances/Factor: We believe that allowing local 
contractor discretion to make a coverage decision better serves the 
needs of the Medicare program and its beneficiaries.
    <bullet> Rationale: Ambulatory, or prolonged 
electroencephalographic (EEG) monitoring is a diagnostic test that 
continuously records the brain's electrical activity during a patient's 
routine daily activities and sleep. Ambulatory EEG monitoring may be 
used to diagnose seizure disorders and metabolic, infectious, or 
inflammatory disorders that affect the brain's activity, particularly 
when a resting/routine EEG is not conclusive. The NCD currently defines 
ambulatory EEG monitoring as 24-hour EEG monitoring and provides 
coverage for patients in whom a seizure diathesis is suspected but not 
defined by history, physical or resting EEG. The NCD also provides that 
ambulatory EEG can be utilized in the differential diagnosis of syncope 
and transient ischemic attacks if not elucidated by conventional 
studies. Additionally, the NCD states that ambulatory EEG ``should 
always be preceded by a resting EEG''. External interested parties 
recommended removal of this NCD. The NCD contains outdated language 
that is inconsistent with, and contrary to current standards of care. 
For example, the NCD contains references to cassette tapes. This 
outmoded technology has been supplanted with more modern techniques 
that are more accurate and convenient for monitoring. The document uses 
the word ``ambulatory,'' implying certain sites of service whereas this 
diagnostic test is not site specific. The NCD makes mention of a 24-
hour duration of monitoring. However, the more recent coding structures 
permit monitoring in increments including 36-60 hours, 60-84 hours, and 
>84 hours. Additionally, interested parties stated that the language 
``should always be preceded by a resting EEG'' could potentially create 
waste and a burden. Interested parties indicated that in some clinical 
scenarios, a ``resting/routine'' EEG is unlikely to adequately detect 
seizure or other brain activity that would be useful for diagnostic 
purposes, but would be detected by prolonged EEG testing. Removing the 
outdated NCD will allow MACs to update guidance for this established 
diagnostic test.
    In summary, we solicit comment on the proposal to remove NCD 160.22 
Ambulatory EEG Monitoring. We use the public comments to help inform 
our decision to take one of three actions on the NCD proposed for 
removal:
    <bullet> Remove the NCD, as proposed, allowing for coverage to be 
determined by the MACs.
    <bullet> Retain the current policy as an NCD.
    <bullet> Reconsider the NCD by opening a National Coverage 
Analysis. Comments suggesting that the NCD should be revised, rather 
than eliminated, should include new evidence that was not previously 
available at the time of the original NCD or at the time the NCD was 
last reconsidered, in order to support a change in national coverage.

F. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)

1. Background
    Section 2005 of the Substance Use-Disorder Prevention that Promotes 
Opioid Recovery and Treatment for Patients and Communities (SUPPORT) 
Act established a new Medicare Part B benefit category for OUD 
treatment services furnished by OTPs during an episode of care 
beginning on or after January 1, 2020. In the CY 2020 PFS final rule 
(84 FR 62630 through 62677 and 84 FR 62919 through 62926), we 
implemented Medicare coverage and provider enrollment requirements and 
established a methodology for determining the bundled payments for 
episodes of care for the treatment of OUD furnished by OTPs. We 
established new codes for and finalized bundled payments for weekly 
episodes of care that include methadone, oral buprenorphine, 
implantable buprenorphine, injectable buprenorphine or naltrexone, and 
non-drug episodes of care, as well as add-on codes for intake and 
periodic assessments, take-home dosages for methadone and oral 
buprenorphine, and additional counseling. In the CY 2021 PFS final rule 
(85 FR 84683 through 84692), we adopted new add-on codes for take home 
supplies of nasal naloxone and injectable naloxone. In the CY 2022 PFS 
final rule (86 FR 65340 and 65341), we established a new add-on code 
and payment for a higher dose of nasal naloxone. We also revised the 
regulations at Sec.  410.67(b)(3) and (4) to allow OTPs to furnish 
individual and group therapy and substance use counseling using audio-
only telephone calls rather than two-way interactive audio/video 
communication technology after the conclusion of the PHE for COVID-19 
in cases where audio/video communication is not available to the 
beneficiary, provided all other applicable requirements are met (86 FR 
65342). We are continuing to monitor Medicare enrollment by OTPs and 
utilization of OUD treatment services furnished by OTPs to ensure that 
Medicare beneficiaries have appropriate access to care, as well as 
monitoring for fraud, waste, and abuse. For CY 2023, we are proposing 
several modifications to the regulations and policies governing 
Medicare coverage and payment for OUD treatment services furnished by 
OTPs.
2. Methadone Pricing
    In the CY 2020 PFS final rule (84 FR 62667), we finalized a policy 
in

[[Page 46088]]

Sec.  410.67(d)(2)(i) under which the payment for the drug component of 
episodes of care would be updated annually using the most recent data 
available from the applicable pricing mechanism at the time of 
ratesetting for the applicable calendar year. Under the policy 
finalized at Sec.  410.67(d)(2)(i)(B), for oral medications, if average 
sales price (ASP) data are available, the payment amount is 100 percent 
of ASP, which will be determined based on ASP data that have been 
calculated consistent with the provisions in 42 CFR part 414, subpart J 
and voluntarily-submitted by drug manufacturers. If ASP data are not 
available, the payment amount for methadone will be based on the 
TRICARE rate. Using this established method, we determined that the 
payment amount for methadone furnished by OTPs during an episode of 
care in CY 2021 was $37.38,\153\ which was 100 percent of ASP, as 
determined based on voluntarily-submitted ASP data for methadone.
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    \153\ https://www.cms.gov/files/document/otp-billing-and-payment-fact-sheet.pdf.
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    In early September 2021, while gathering available manufacturer-
reported ASP data for the annual update to the OTP drug pricing for CY 
2022, we found that the volume-weighted ASP for oral methadone had 
decreased by just over 50 percent compared to the CY 2021 rate, from 
$37.38 to $17.64.\154\ This reduction was due to inclusion of newly 
reported ASP data for methadone tablets, whereas previously the 
manufacturer-reported ASP data reflected only sales of the methadone 
oral concentrate. The ASP is volume-weighted; however, ASP reporting is 
not required for oral methadone and only a small subset of methadone 
manufacturers voluntarily submit ASP data. In September 2021, of the 
nearly 50 available NDCs for oral methadone preparations with available 
pricing in the Red Book[supreg] compendia, voluntarily-submitted ASP 
data was available for only three of these NDCs. Pricing for oral 
methadone is distinct from most other drug pricing based on ASP because 
oral methadone is not separately payable as a drug or biological under 
Medicare Part B, and manufacturers are not subject to ASP reporting 
requirements under section 1927(b)(3)(A)(iii) of the Act for those 
NDCs. Additionally, we do not have utilization data on the different 
forms of methadone that can be dispensed or administered at OTPs. That 
is, we do not have data showing whether OTPs utilize oral methadone 
concentrate or tablets more often, or if the two formulations are 
utilized equally. When we researched OTP practice patterns as we were 
preparing to implement the new benefit for OUD treatment services 
furnished by OTPs, we received anecdotal reports that several OTPs used 
the oral concentrate exclusively.
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    \154\ The TRICARE rate for the drug portion of its weekly 
bundled payment for methadone treatment is $24.04 for 2022, which 
would also have been a decrease from the CY 2021 payment rate under 
Medicare and could not be used to set the Medicare payment rate for 
methadone in CY 2022 under Sec.  410.67(d)(2)(i)(B) because ASP data 
was available for methadone.
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    For these reasons, while performing our annual ratesetting exercise 
for CY 2022, we had concerns as to whether the ASP data available to us 
at that time, which reflected voluntarily reported data from only a 
very small subset of methadone manufacturers, was representative of 
utilization of the two forms of oral methadone by the Medicare 
beneficiaries receiving OUD treatment services in OTPs. Additionally, 
given reports regarding the effects of the public health emergency 
(PHE) for COVID-19 on individuals with substance use disorders (SUDs), 
including OUD, and the questions we had related to whether the ASP data 
we had for methadone was reflective of OTP utilization due to the 
distinct nature of methadone pricing, as described above, we believed 
it was in the public's best interest not to implement a significant 
decrease in the payment rate for methadone furnished by OTPs as part of 
OUD treatment services without first having an opportunity to review 
the issue, seek input from the OTP community regarding utilization of 
methadone oral concentrate compared to utilization of methadone 
tablets, and consider how this information should factor into the 
determination of the payment rate for methadone furnished by OTPs. We 
noted that section 1834(w)(2) of the Act allows for flexibility to 
consider the scope of services furnished, the characteristics of the 
individuals receiving services, and such other factors as the Secretary 
determines appropriate, in determining the rates paid to OTPs under 
Medicare.
    Therefore, we issued the ``Medicare Program; Opioid Treatment 
Programs: CY 2022 Methadone Payment Exception'' interim final rule with 
comment period (IFC) (hereafter referred to as ``Methadone IFC''), 
which appeared in the November 19, 2021 Federal Register (86 FR 66031 
through 66036). In the Methadone IFC, we established a limited 
exception to the methodology for determining the payment amount for the 
drug component of an episode of care in order to freeze the payment 
amount for methadone furnished during an episode of care in CY 2022 at 
the $37.38 payment amount that was determined for CY 2021. We also 
revised the regulation at Sec.  410.67(d)(2)(i)(B), which governs the 
determination of the payment amount for oral medications, to reflect 
this exception for CY 2022 and to make a conforming change to the 
reference to 42 CFR part 414, subpart J.
    Under this exception, the payment amount for the drug component of 
the methadone bundle described by HCPCS code G2067 (Medication assisted 
treatment, methadone; weekly bundle including dispensing and/or 
administration, substance use counseling, individual and group therapy, 
and toxicology testing, if performed (provision of the services by a 
Medicare-enrolled Opioid Treatment Program)) and the methadone add-on 
code described by HCPCS code G2078 (Take-home supply of methadone; up 
to 7 additional day supply (provision of the services by a Medicare-
enrolled Opioid Treatment Program); List separately in addition to code 
for primary procedure) was maintained at the CY 2021 rate of $37.38 for 
the duration of CY 2022. We also applied the annual update to the non-
drug component of HCPCS G2067 for CY 2022 as required under Sec.  
410.67(d)(4)(iii). We stated that we believed maintaining the payment 
amount for methadone at the CY 2021 rate during CY 2022 would allow 
time for CMS to study the issue further and, if appropriate, to develop 
an alternative payment methodology for methadone that could be proposed 
through notice-and-comment rulemaking for CY 2023 (86 FR 66033). We 
solicited comments on this exception to the payment methodology for the 
drug component of an episode of care in order to maintain the payment 
rate for methadone at the CY 2021 payment amount during CY 2022. In 
addition, we sought comments on OTP utilization patterns for methadone, 
particularly the frequency with which methadone oral concentrate is 
used compared to methadone tablets in the OTP setting, including any 
applicable data on this topic. We also stated that we would consider 
the comments received in determining how best to determine the payment 
rate for methadone in CY 2023, including whether we should propose 
changes to the structure of OTP coding and payment in order to account 
for differences in pricing and utilization of the different 
formulations of methadone.
    We received several comments in response to the Methadone IFC from 
medical associations, national associations representing OTPs, and

[[Page 46089]]

individual commenters that expressed strong support for stabilizing the 
payment rate for methadone. One commenter stated cutting reimbursements 
to providers who specialize in treatment for OUD in the middle of an 
OUD epidemic that has been exacerbated by the COVID-19 pandemic could 
have harmful consequences for beneficiaries and cited that the HHS 
Office of Inspector General (OIG) expressed concern that Medicare 
beneficiaries face challenges accessing OUD treatment. The commenter 
also stated that if Medicare reimbursements for methadone fall well 
below OTPs' costs of acquiring and administering the medication, OTPs 
may have no choice but to prescribe a much more expensive medication 
(buprenorphine or naloxone) as part of medication-assisted treatment 
(MAT)/Medications for Opioid Use Disorder (MOUD), which would result in 
higher costs for the Medicare program and taxpayers, while not 
necessarily improving care. For example, methadone is often more ideal 
for severe dependence or if there is a high risk of divergence, while 
buprenorphine may be more advantageous for mild to moderate dependence 
and when extensive supervision by a practitioner is not needed.\155\ 
Another commenter stated that it is possible that freezing the payment 
rate for methadone at the current level could still result in some 
negative outcomes, as supply chain and logistics issues have generally 
resulted in increased prices across the country such that a payment 
rate increase may be necessary, but thought that freezing the rate at 
the current level was a prudent solution for 2022. A commenter 
representing a large number of OTPs across the country stated that OTPs 
rarely dispense methadone tablets and instead administer the oral 
concentrate formulation. This commenter stated that methadone oral 
concentrate is more expensive to acquire and administer than the tablet 
form, but that it has been shown to lead to better clinical outcomes 
for their patients, which is why it is their doctors' formulation of 
choice. This commenter went on to state that the existing methodology 
to calculate the payment rate for the drug component of the methadone 
weekly bundle does not accurately capture the extra costs associated 
with administration of the oral concentrate, explaining that oral 
concentrate formulations require careful measurement in addition to 
maintaining electric pumps and updating computer software. The 
commenter also noted that it is expensive to employ the necessary 
nursing staff, and stated that a number of States require full-time 
pharmacists for the dispensing and administration of medication. 
Another commenter noted that the National Association of State Alcohol 
and Drug Abuse Directors (NASADAD), in conjunction with the State 
Opioid Treatment Authorities (SOTAs), conducted a survey that was 
distributed to the 1,800 OTPs throughout the United States. As of 
December 31, 2021, NASADAD and the SOTAs had collected data from 1,550 
OTPs. These data include the number of patients being treated at OTPs 
as of January 1, 2021, including the number of patients using one of 
the three FDA-approved medications to treat opioid use disorder 
(methadone, buprenorphine, and extended-release naltrexone) and the 
specific forms of the medication being used.
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    \155\ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3271614/.
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    We appreciate the feedback received in response to the Methadone 
IFC. We agree with commenters that decreasing the payment amount for 
methadone in the middle of an OUD epidemic that has been exacerbated by 
the COVID-19 pandemic could have harmful consequences for beneficiaries 
as we discussed in the Methadone IFC (86 FR 66032). We are also looking 
forward to seeing the results of the survey initiated by NASADAD and 
the SOTA, so that we can better understand the utilization of methadone 
tablets and oral concentrate in OTPs.
    In light of the comments received, we have considered how best to 
maintain access to treatment with methadone in the OTP setting for 
Medicare beneficiaries. We considered splitting the methadone bundled 
payment code into two codes--one for oral concentrate and one for the 
tablet. This would allow us to track Medicare utilization of each 
formulation. However, because of the inconsistency in available ASP 
data for orally administered methadone due to the fact that 
manufacturer reporting of sales data for these dosage forms of 
methadone is voluntary, (that is, orally administered methadone is not 
a drug that falls under the ASP reporting requirements under sections 
1927(b)(3)(A)(iii) or 1847A(f)(2)(A) of the Act), we do not believe 
that voluntary reporting of ASP data for either form of orally 
administered methadone (oral concentrate or tablet) currently provides 
a reliable source for pricing the methadone codes. For example, for the 
first quarter of 2022, there was no ASP data reported for orally 
administered methadone. Under the policy at Sec.  
410.67(d)(2)(i)(B)(1), when ASP data are not available for methadone, 
we would base the payment amount for methadone on the TRICARE rate. We 
found that the applicable TRICARE payment amount for methadone for CY 
2022 would be $24.04. Using the TRICARE payment amount for methadone 
for CY 2023 would result in a decrease of $13.34 compared to the rate 
that applied in CY 2021 and CY 2022. We believe that this decrease 
would be problematic for all of the reasons that we expressed in the 
Methadone IFC (86 FR 66034 through 66035). For these reasons, we 
believe that it is appropriate to propose an alternate methodology for 
pricing the drug component of the methadone bundle and the methadone 
add-on code in order to maintain payment stability, and therefore, 
maintain appropriate access to OUD treatment services furnished at OTPs 
for Medicare beneficiaries.
    In the CY 2020 PFS final rule (84 FR 62667), we discussed the 
methods we had considered for providing an update each year to the drug 
component of the OTP bundled payment rates. We stated that we 
considered annually updating the pricing of the drug component of the 
OUD treatment services payment rate via an established update factor 
such as the Producer Price Index (PPI) for chemicals and allied 
products, analgesics (WPU06380202). We explained that the PPI for 
chemicals and allied products, analgesics is a subset of the PPI 
produced by the Bureau of Labor Statistics (BLS). We solicited comments 
on this approach but did not receive any comments. Ultimately, we 
decided against proposing to update the pricing of the drug component 
of the OUD treatment services payment rate via an established update 
factor, such as the PPI, in favor of an update using the most recently 
available ASP data at the time of ratesetting for the applicable 
calendar year. We explained that we believed an ASP-based approach 
would update the pricing of the drug component of the OUD treatment 
services payment rate in a manner that would be more consistent with 
other Medicare payments under Part B.
    Because we do not believe that ASP data can provide an appropriate 
reflection of the changes in methadone costs for OTPs until such a time 
that more complete and reliable ASP data are available for methadone, 
we are reconsidering the use of the PPI to update the payment rate for 
methadone. According to the U.S. BLS,\156\ the PPI program measures the 
average change over time in the selling prices received

[[Page 46090]]

by domestic producers for their output. The application of an annual 
adjustment factor would be consistent with Medicare payment policy in 
other areas, such as the outpatient prospective payment system, which 
updates the conversion factor used to set payment rates under that 
payment system by applying the outpatient department fee schedule 
increase factor, which is equal to the percentage change in the 
hospital inpatient market basket (86 FR 63498 through 63500). The 
percentage change in the market basket reflects the average change in 
the price of goods and services hospitals purchase to provide inpatient 
care.
---------------------------------------------------------------------------

    \156\ https://www.bls.gov/ppi/.
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    The PPI for Pharmaceuticals for Human Use (Prescription) 
(WPUSI07003) reflects price changes associated with the average mix of 
all pharmaceuticals in the overall economy and is both publicly 
available and regularly published. We believe that this PPI would be an 
appropriate factor to adjust the payment rate for methadone to reflect 
the changes in methadone costs for OTPs over time. Methadone is an 
established drug in the drug supply chain, and we believe that an 
overall price trend that incorporates price changes for prescription 
pharmaceuticals would provide an appropriate update to reflect any 
increase in the costs incurred by OTPs in furnishing methadone during 
episodes of care.
    Accordingly, for CY 2023 and subsequent years, we are proposing to 
revise our methodology for pricing the drug component of the methadone 
weekly bundle and the add-on code for take-home supplies of methadone. 
Under this proposal, we would base the payment amount for the drug 
component of HCPCS codes G2067 and G2078 for CY 2023 and subsequent 
years on the payment amount for methadone in CY 2021 and update this 
amount annually to account for inflation using the PPI for 
Pharmaceuticals for Human Use (Prescription). We propose to update the 
methadone payment amount for CY 2023 based on the projected increase in 
the PPI for Pharmaceuticals for Human Use (Prescription) to reflect the 
forecasted price growth for prescription drugs for the 2-year period 
from CY 2021 to 2022 and from CY 2022 to 2023. Because we froze the 
payment amount for methadone at the 2021 amount for CY 2022, we propose 
to account for the inflation for both CY 2022 and CY 2023 in setting 
the payment rate for CY 2023. Based on the 2022 Q1 forecast from IHS 
Global Inc. (IGI) the proposed CY 2023 methadone payment amount would 
be $39.29, which is the CY 2022 payment amount of $37.38 increased by a 
projected 5.1 percent growth in the PPI for Pharmaceuticals for Human 
Use (Prescription) from CY 2021 to CY 2023 ($37.38 * 1.051 = $39.29). 
IGI is a nationally recognized economic and financial forecasting firm 
that contracts with CMS to forecast various price proxies used in the 
CMS market baskets. Additionally, we are proposing that if more recent 
data become subsequently available (for example, a more recent estimate 
of the PPI), we would use such data in the final rule to determine the 
final CY 2023 methadone payment amount. For subsequent years, we are 
proposing to continue to update this rate annually using the PPI for 
Pharmaceuticals for Human Use (Prescription). We note that under this 
proposal, we would continue to monitor methadone pricing in order to 
determine whether we may need to propose additional changes to this 
methodology through future rulemaking to account for any significant 
changes in the acquisition costs for methadone. We may also revisit 
this policy in the event that new or more reliable data on methadone 
pricing become available. We also solicit public comment on other 
potential data sources that could be used to estimate an OTP's cost for 
acquiring methadone.
    Accordingly, we are proposing to revise the regulation at Sec.  
410.67(d)(2)(i)(B)(2) to state that for CY 2023 and subsequent years, 
the payment amount for methadone will be based on the payment amount 
for methadone in CY 2021 as determined under Sec.  
410.67(d)(2)(i)(B)(1) and updated by the PPI for Pharmaceuticals for 
Human Use (Prescription). Under this proposal, the TRICARE rate would 
no longer be an alternative pricing methodology for methadone. As part 
of this proposal, we would also correct an inadvertent error in the 
text of the current regulation at Sec.  410.67(d)(2)(i)(B)(2), which 
includes an inaccurate cross-reference to paragraph (d)(2)(i)(B)(1).
3. Proposed Changes to the Rate for Individual Therapy in the Bundled 
Rate
    In the CY 2020 PFS final rule (84 FR 62658), we finalized a payment 
rate for the non-drug component of the bundled payment for episodes of 
care that was calculated using a building block methodology in which we 
took the sum of rates for similar services paid under the PFS. The 
payment rate for individual therapy included in the non-drug component 
of the bundled payment for an episode of care is currently based on a 
crosswalk to CPT code 90832, which describes 30 minutes of 
psychotherapy.
    In its December 2021 report,\157\ titled ``Many Medicare 
Beneficiaries Are Not Receiving Medication to Treat Their Opioid Use 
Disorder,'' OIG indicated that approximately one million Medicare 
beneficiaries were diagnosed with OUD in 2020, but less than 16 percent 
of those beneficiaries received medication to treat OUD (in any 
setting), raising concerns that beneficiaries face challenges accessing 
treatment. In this report, OIG also stated that in 2020, less than 4 
percent of Medicare beneficiaries with OUD received treatment from 
OTPs. We note that 2020 was the first year of the Medicare OTP benefit 
and that OTPs had to submit applications for enrollment with Medicare 
and have those applications approved prior to billing services to 
Medicare. As a result, we expect these numbers to improve in future 
years. However, CMS has been working to identify and track drivers of 
disparities in the treatment of OUD.
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    \157\ https://oig.hhs.gov/oei/reports/OEI-02-20-00390.pdf.
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    Additionally, we have received feedback from interested parties, 
including associations and groups that represent OTPs, indicating that 
the current rate for individual therapy provided as part of the weekly 
bundle may not accurately reflect the resource costs involved with 
furnishing this service in the OTP setting and that for the first 
several months of treatment, patients typically receive weekly 50-
minute individual therapy sessions. Now that we have 2 years of 
utilization data, we have reviewed how we implemented the OTP benefit 
to determine whether refinements to the bundled rate may be warranted 
to reflect more accurately the level of services furnished by OTPs.
    We believe that the severity of needs of the patient population 
diagnosed with OUD and receiving services in the OTP setting is 
generally greater than that of patients receiving 30-minute 
psychotherapy services paid under the PFS. For example, co-occurring 
substance use and mental health disorders are common among adults with 
OUD.\158\ Individuals with co-occurring SUD and mental health disorders 
likely have complex treatment needs and may have different patterns of 
treatment than individuals diagnosed with a single condition.\159\ 
During the first few months of treatment at an OTP, patients generally 
receive care at the OTP on a daily basis. Based on the generally 
greater severity of needs of the patient population receiving services 
at

[[Page 46091]]

OTPs compared to patients receiving psychotherapy services billed under 
CPT code 90382 and paid under the PFS, and therefore, the greater 
intensity of the work, we believe it is appropriate to re-visit the 
rate for individual therapy that is included in the non-drug component 
of the weekly episodes of care.
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    \158\ https://www.sciencedirect.com/science/article/pii/S0376871618305209.
    \159\ https://www.sciencedirect.com/science/article/pii/S0740547218304781.
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    Accordingly, we are proposing to modify the payment rate for the 
non-drug component of the bundled payment for an episode of care to 
base the rate for individual therapy on a crosswalk to CPT code 90834 
(Psychotherapy, 45 minutes with patient), instead of a crosswalk to CPT 
code 90832 (Psychotherapy, 30 minutes with patient), as is our current 
policy. We believe CPT code 90834 most closely corresponds to a 50-
minute therapy session, which interested parties have indicated is the 
typical amount of therapy received by patients in the first few months 
of treatment at an OTP. In the CY 2020 PFS final rule (84 FR 62658), we 
stated that we based the rate for individual therapy in the bundled 
payment on the 2019 non-facility payment rate for CPT code 90832, which 
was $68.47. Therefore, in order to change the rate for individual 
therapy, we are proposing to substitute the 2019 rate for CPT code 
90832 included in the non-drug component of each of the bundled 
payments for an episode of care with the 2019 PFS non-facility payment 
rate for CPT code 90834, which was $91.18, to determine an adjusted 
payment rate for CY 2020 for the non-drug component of each applicable 
HCPCS code. As described in Sec.  410.67(d)(4)(iii), we would then 
apply the Medicare Economic Index (MEI) updates for 2021, 2022, and 
2023 to these adjusted payment rates to determine the CY 2023 payment 
amounts for the non-drug component of the bundled payments for an 
episode of care. In section II.M. of this proposed rule, we are 
proposing to rebase and revise the MEI from a 2006-base year to a 2017-
base year. The MEI for CY 2023 is currently projected to be 3.8 percent 
based on the proposed 2017-based MEI, and is based on the most current 
forecast of the percentage increase of the proposed 2017-based MEI for 
the second quarter of 2022 (4.2 percent), and the most recent estimate 
of the historical productivity adjustment for calendar year 2021 (0.4 
percent). The MEI for CY 2023 will be revised for the final rule based 
on the historical data through the second quarter 2022 and the most 
recently available total factor productivity data.
    We note that in the CY 2020 PFS final rule (84 FR 62644), we also 
finalized an adjustment to the bundled payment rates through the use of 
an add-on code to account for instances in which effective treatment 
requires additional counseling or group or individual therapy to be 
furnished for a particular patient that substantially exceeds the 
amount specified in the patient's individualized treatment plan. This 
adjustment is described by HCPCS code G2080 (Each additional 30 minutes 
of counseling or group or individual therapy in a week of medication 
assisted treatment, (provision of the services by a Medicare enrolled 
Opioid Treatment Program); List separately in addition to code for 
primary procedure.). We are not proposing any changes to HCPCS code 
G2080. We believe that our proposal to update the crosswalk we use to 
calculate the individual therapy portion of the non-drug component of 
the bundled payment to reflect 45 minutes of psychotherapy does not 
duplicate the add-on code for additional counseling. Rather, we believe 
that our proposal to update the crosswalk for individual therapy will 
ensure that the payment for the non-drug component of the bundled 
payment is more representative of the typical case in the OTP setting 
and better reflects the resource costs involved in furnishing this 
service in the OTP setting compared to the current crosswalk.
    Accordingly, we are proposing to revise the regulation text at 
Sec.  410.67(d)(2) to adjust the payment for the non-drug component of 
the bundled payment for an episode of care to reflect 45 minutes of 
psychotherapy beginning in CY 2023. We welcome comments on this 
proposal.
 4. Mobile Components Operated by OTPs
    Effective July 28, 2021, the Drug Enforcement Administration (DEA) 
issued a final rule (86 FR 33861) that authorized OTPs to add a 
``mobile component'' to their existing registration, which eliminated a 
requirement for mobile medication units of OTPs to have a separate 
registration. Additionally, we note that SAMHSA has issued guidance to 
OTP Directors, State Opioid Treatment Authorities (SOTAs), and State 
Directors that revised and superseded related portions of SAMHSA's 2015 
Federal Guidelines for OTPs by clarifying the range of services that 
can be provided by mobile units.\160\
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    \160\ https://www.samhsa.gov/sites/default/files/2021-letter-mobile-component.pdf.
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    In light of the new SAMHSA guidance, we wish to clarify that 
services furnished via OTP mobile units will be considered for purposes 
of determining payments to OTPs under the Medicare OTP bundled payment 
codes and/or add-on codes to the extent that the services are medically 
reasonable and necessary and are furnished in accordance with SAMHSA 
and DEA guidance. We believe that allowing OTPs to bill Medicare for 
services furnished via mobile units is an opportunity to expand access 
to medications for treatment of OUD for Medicare beneficiaries by 
extending the reach of OTPs, particularly in remote or underserved 
areas. Because OTPs receive a bundled payment, we believe it would be 
appropriate to apply locality adjustments for services furnished via 
mobile units as if the service were furnished at the OTP registered 
with DEA and certified by SAMHSA. We anticipate that for beneficiaries 
receiving OUD treatment services from a mobile unit, some services 
included in the bundle for a given week may still be provided at the 
OTP, while some may be furnished via the mobile unit, which would make 
it difficult to determine which geographic locality adjustment to apply 
to the weekly bundle if the OTP and the location served by the mobile 
unit are subject to different geographic locality adjustments. 
Additionally, when services are furnished from a mobile unit, the OTP 
still incurs the cost of rent, staffing, supplies, etc. at the location 
of the OTP; therefore, we believe it is appropriate to apply the 
geographic locality adjustment as if the service were furnished at the 
OTP. Accordingly, we are proposing to amend the regulation at Sec.  
410.67(d)(4)(ii) to clarify that for purposes of the geographic 
adjustment OUD treatment services furnished via an OTP mobile unit will 
be treated as if the services were furnished at the physical location 
of the OTP registered with DEA and certified by SAMHSA. As stated in 
the CY 2020 PFS final rule, because HCPCS codes G2067-G2075 cover 
episodes of care of 7 contiguous days, OTPs should not bill any of 
these codes for the same beneficiary more than once per 7 contiguous 
day period, with limited exceptions (84 FR 62649), and we are not 
proposing any changes to this policy, regardless of the location(s) at 
which the services are provided. As noted previously, we will continue 
monitoring the benefit for OUD treatment services furnished by OTPs, 
including services furnished by mobile units, for fraud, waste, and 
abuse, and will use existing administrative authorities to take 
necessary action, as appropriate.

[[Page 46092]]

5. Flexibilities for OTPs to Use Telecommunications for Initiation of 
Treatment With Buprenorphine
    We have finalized several flexibilities for OTPs regarding the use 
of telecommunications, both during the PHE for COVID-19 and outside of 
the PHE. In the CY 2020 PFS final rule, we finalized a policy allowing 
OTPs to furnish substance use counseling and individual and group 
therapy via two-way interactive audio-video communication technology. 
In the IFC entitled ``Medicare and Medicaid Programs: Policy and 
Regulatory Revisions in Response to the COVID-19 Public Health 
Emergency,'' which appeared in the April 6, 2020 Federal Register (85 
FR 19258), we revised Sec.  410.67(b)(3) and (4) on an interim final 
basis to allow the therapy and counseling portions of the weekly 
bundles, as well as the add-on code for additional counseling or 
therapy, to be furnished using audio-only telephone calls rather than 
via two-way interactive audio-video communication technology during the 
PHE for the COVID-19 if beneficiaries do not have access to two-way 
audio/video communications technology, provided all other applicable 
requirements are met. In the CY 2022 PFS final rule (86 FR 65341 
through 65343), we finalized that after the conclusion of the PHE for 
COVID-19, OTPs are permitted to furnish substance use counseling and 
individual and group therapy via audio-only telephone calls when the 
beneficiary cannot access or does not consent to the use of audio and 
video.
    In the IFC entitled ``Medicare and Medicaid Programs, Basic Health 
Program, and Exchanges; Additional Policy and Regulatory Revisions in 
Response to the COVID-19 Public Health Emergency and Delay of Certain 
Reporting Requirements for the Skilled Nursing Facility Quality 
Reporting Program,'' which appeared in the May 8, 2020 Federal Register 
(85 FR 27558), we revised Sec.  410.67(b)(7) on an interim final basis 
to allow periodic assessments to be furnished during the PHE for COVID-
19 via two-way interactive audio-video communication technology and, in 
cases where beneficiaries do not have access to two-way audio-video 
communication technology, to permit the periodic assessments to be 
furnished using audio-only telephone calls rather than via two-way 
interactive audio-video communication technology, provided all other 
applicable requirements are met. In the CY 2021 PFS final rule (85 FR 
84690), we finalized our proposal to revise Sec.  410.67(b)(7) to 
provide that periodic assessments (HCPCS code G2077) must be furnished 
during a face-to-face encounter, which includes services furnished via 
two-way interactive audio-video communication technology, as clinically 
appropriate, provided all other applicable requirements are met, on a 
permanent basis. However, the flexibility for OTPs to furnish periodic 
assessments via audio-only communication is limited to the duration of 
the PHE for COVID-19. There are currently no flexibilities under 
Medicare for OTPs to furnish the intake add-on code via communication 
technology.
    SAMHSA regulations under 42 CFR 8.12(f)(2) require a complete 
physical evaluation before a patient begins treatment at an OTP. 
However, during the PHE, DEA and SAMHSA have allowed OTPs to initiate 
treatment with buprenorphine via audio-video and audio-only 
communication without first conducting an in-person evaluation.\161\ 
According to guidance issued by SAMHSA \162\ regarding the treatment of 
OUD during the PHE, SAMHSA made the decision to exercise its authority 
to exempt OTPs from the requirement to perform an in-person physical 
evaluation (under 42 CFR 8.12(f)(2)) for any patient who will be 
treated by the OTP with buprenorphine if a program physician, primary 
care physician, or an authorized healthcare professional under the 
supervision of a program physician, determines that an adequate 
evaluation of the patient can be accomplished via telehealth. This 
exemption applies exclusively to OTP patients treated with 
buprenorphine and does not apply to new patients treated with 
methadone. This exemption will continue only for the duration of the 
declared PHE for COVID-19 unless regulations are issued making this 
flexibility permanent.
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    \161\ https://www.deadiversion.usdoj.gov/coronavirus.html.
    \162\ https://www.samhsa.gov/sites/default/files/faqs-for-oud-prescribing-and-dispensing.pdf.
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    For services paid under the PFS, Medicare telehealth services fall 
under the authority of section 1834(m) of the Act, which generally 
limits payment for telehealth services to those furnished to patients 
located in specified types of medical care settings in mostly rural 
locations. The codes describing new patient office/outpatient visits 
(CPT codes 99202 through 99205) are on the Medicare Telehealth list. As 
discussed in the CY 2019 PFS final rule (83 FR 59496), section 2001(a) 
of the SUPPORT Act (Pub. L. 115-271, October 24, 2018) amended section 
1834(m) of the Act, adding a new paragraph (7) that removed the 
geographic limitations for telehealth services furnished on or after 
July 1, 2019, to individuals with a diagnosed SUD for the purpose of 
treating the SUD or a co-occurring mental health disorder. Section 
1834(m)(7) of the Act also allows telehealth services for treatment of 
a diagnosed SUD or co-occurring mental health disorder to be furnished 
to individuals at any telehealth originating site (other than a renal 
dialysis facility), including in a patient's home. In addition, as 
discussed in the CY 2022 PFS final rule (86 FR 65055), section 123 of 
the Consolidated Appropriations Act, 2021 (CAA 2021) (Pub. L. 116-260, 
December 27, 2020) modified the circumstances under which Medicare 
makes payment under the PFS for mental health services furnished via 
telehealth following the PHE. Specifically, it removed the geographic 
originating site restrictions and added the home of the individual as a 
permissible originating site for telehealth services when furnished for 
the purposes of diagnosis, evaluation, or treatment of a mental health 
disorder. In addition to the flexibilities authorized by section 
2001(a) of the SUPPORT Act and section 123 of the CAA 2021, in the CY 
2022 PFS final rule (86 FR 65055), for services for the diagnosis, 
evaluation or treatment of mental health conditions, including SUDs, 
CMS revised the regulatory definition of an ``interactive 
telecommunications system'' to permit the use of audio-only 
communications technology for mental health telehealth services under 
certain conditions when provided to beneficiaries located in their 
home.
    Given these flexibilities for the treatment, diagnosis, or 
evaluation of mental health disorders, including SUDs, under the PFS, 
we are proposing to allow the OTP intake add-on code to be furnished 
via two-way audio-video communications technology when billed for the 
initiation of treatment with buprenorphine, to the extent that the use 
of audio-video telecommunications technology to initiate treatment with 
buprenorphine is authorized by DEA and SAMHSA at the time the service 
is furnished. We are also proposing to permit the use of audio-only 
communication technology to initiate treatment with buprenorphine in 
cases where audio-video technology is not available to the beneficiary. 
As we explained in the CY 2022 PFS final rule (86 FR 65342), we 
interpret the requirement that audio/video technology is ``not 
available to the beneficiary'' to include circumstances in which the 
beneficiary is not capable of

[[Page 46093]]

or has not consented to the use of devices that permit a two-way, 
audio/video interaction because in each of these instances audio/video 
communication technology is not able to be used in furnishing services 
to the beneficiary. We note under this proposal, the initiation of 
treatment with buprenorphine using telecommunications technology would 
be considered an intake activity for purposes of Sec.  410.67(b)(6) 
only to the extent that the use of such telecommunications technology 
is permitted under the applicable DEA and SAMHSA regulations and 
guidance at the time the services are furnished.
    Accordingly, we are proposing to revise the regulation at Sec.  
410.67(b)(6) to state that services to initiate treatment with 
buprenorphine may be furnished via two-way interactive audio-video 
communication technology, as clinically appropriate, and in compliance 
with all applicable requirements. In cases where two-way audio-video 
communications technology is not available to the beneficiary, services 
to initiate treatment with buprenorphine can be furnished using audio-
only telephone calls if all other applicable requirements are met.
    Finally, we are seeking comment on whether we should allow periodic 
assessments to continue to be furnished using audio-only communication 
technology following the end of the PHE for COVID-19 for patients who 
are receiving treatment via buprenorphine, and if this flexibility 
should also continue to apply to patients receiving methadone or 
naltrexone.

G. Medicare Shared Savings Program

1. Executive Summary and Background
a. Purpose
    As of January 1, 2022, over 11 million people with Medicare receive 
care from one of the 528,966 health care providers in the 483 
accountable care organizations (ACOs) participating in the Medicare 
Shared Savings Program (Shared Savings Program), the largest value-
based purchasing program in the country.\163\ Eligible groups of 
providers and suppliers, including physicians, hospitals, and other 
healthcare providers, may participate in the Shared Savings Program by 
forming or joining an ACO and in so doing agree to become accountable 
for the total cost and quality of care provided under Traditional 
Medicare to an assigned population of Medicare fee-for-service 
beneficiaries. Under the Shared Savings Program, providers and 
suppliers that participate in an ACO continue to receive traditional 
Medicare FFS payments under Parts A and B, and the ACO may be eligible 
to receive a shared savings payment if it meets specified quality and 
savings requirements, and in some instances may be required to share in 
losses if it increases health care spending. The proposed changes to 
the Shared Savings Program described in this section of this proposed 
rule, and the topics on which we seek comment, are intended to advance 
Medicare's value-based care strategy of growth, alignment, and equity, 
with many proposals overlapping these categories.
---------------------------------------------------------------------------

    \163\ Refer to CMS, Shared Savings Program Fast Facts--As of 
January 1, 2022, available at https://www.cms.gov/sites/default/files/2022-01/2022_Shared_Savings_Program_Fast_Facts.pdf.
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    The Shared Savings Program offers different participation options 
(tracks) that allow ACOs to assume various levels of risk. The BASIC 
track offers a glide path for eligible ACOs to transition from a one-
sided shared savings-only model to progressively higher increments of 
financial risk and potential reward under two-sided shared savings and 
shared losses models \164\ within a single 5-year agreement 
period.\165\ ACOs that enter the ENHANCED track accept greater 
financial risk for their assigned beneficiaries in exchange for 
potentially higher financial rewards. For the performance year 
beginning on January 1, 2022, 59 percent of Shared Savings Program ACOs 
are under two-sided models. Historically, we have observed that ACOs in 
performance-based risk tracks have better financial performance than 
ACOs in shared savings only tracks and that low revenue ACOs (which may 
tend to be small, physician only ACOs) have better financial 
performance than high revenue ACOs (whose composition likely includes 
institutional providers, particularly hospitals and health 
systems).\166\ We have also observed that the highest earning ACOs had 
a higher proportion of beneficiaries that were members of racial and 
ethnic minority communities and included a greater proportion of ESRD, 
disabled, and aged/dual eligible Medicare and Medicaid beneficiaries 
than the lowest earning ACOs.
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    \164\ As explained in earlier rulemaking, we have tended to use 
the terms ``two-sided model'' and ``performance-based risk'' 
interchangeably, considering them to be synonymous when describing 
payment models offered under the Shared Savings Program and Medicare 
ACO initiatives more broadly (83 FR 67827).
    \165\ As explained in earlier rulemaking (for example, 83 FR 
67844), the BASIC track's glide path includes 5 levels: a one-sided 
model available only for the first 2 consecutive performance years 
of a 5-year agreement period, each year of which is identified as a 
separate level (Levels A and B); and three levels of progressively 
higher risk and potential reward in performance years 3 through 5 of 
the agreement period (Levels C, D, and E).
    \166\ See for example, 83 FR 67820.
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    Through the changes we are proposing in this proposed rule, we also 
seek to reverse certain recent trends <SUP>167 168</SUP> in the Shared 
Savings Program: in recent years growth in the number of beneficiaries 
assigned to ACOs has plateaued; higher spending populations are 
increasingly underrepresented in the program since the change to 
regionally-adjusted benchmarks; and access to ACOs appears inequitable 
as shown by data indicating that Black (or African American), Hispanic, 
Asian/Pacific Islander, and American Indian/Alaska Native beneficiaries 
are less likely to be assigned to a Shared Savings Program ACO than 
their Non-Hispanic White counterparts.
---------------------------------------------------------------------------

    \167\ Refer to the ``Shared Savings Program Fast Facts--As of 
January 1, 2022'' available at https://www.cms.gov/sites/default/files/2022-01/2022_Shared_Savings_Program_Fast_Facts.pdf.
    \168\ Refer to the ``Performance Year Financial and Quality 
Results'' Public Use Files available at https://data.cms.gov/medicare-shared-savings-program/performance-year-financial-and-quality-results.
---------------------------------------------------------------------------

    Several of the proposals we are making in this proposed rule are 
expected to advance equity within the Shared Savings Program. Based on 
feedback from health care providers treating underserved populations 
that they require upfront capital to make the necessary investments to 
succeed in accountable care and may also need additional time under a 
one-sided model before transitioning to performance-based risk, we are 
proposing to provide advance shared savings payments to low revenue 
ACOs that are inexperienced with performance-based risk Medicare ACO 
initiatives, that are new to the Shared Savings Program (that is, not a 
renewing ACO or a re-entering ACO), and that serve underserved 
populations. These advance investment payments (AIPs) would increase 
when more beneficiaries who are dually eligible for Medicare and 
Medicaid or who live in areas with high deprivation (measured by the 
area deprivation index (ADI)), or both, are assigned to the ACO. 
Subject to certain limitations, these funds would be available to 
address the social needs of people with Medicare, as well as health 
care provider staffing and infrastructure. We are also proposing other 
modifications to certain existing policies under the Shared Savings 
Program to support organizations new to accountable care by providing 
greater flexibility in the progression to performance-based risk, 
allowing these organizations more time to redesign

[[Page 46094]]

their care processes to be successful under risk arrangements. We are 
proposing a health equity adjustment that would upwardly adjust ACOs' 
quality performance scores to continue encouraging high ACO quality 
performance, transition ACOs to all-payer eCQMs/MIPS CQMs, and support 
those ACOs serving a high proportion of underserved beneficiaries while 
also encouraging all ACOs to treat underserved populations. Finally, we 
are proposing certain changes to our benchmarking methodologies that 
are designed to encourage participation by health care providers who 
care for populations that include a high percentage of beneficiaries 
with high clinical risk factors and beneficiaries dually eligible for 
Medicare and Medicaid.
    Many of these proposals are the result of our efforts to align 
policies under the Shared Savings Program and under the Innovation 
Center's ACO models. For example, the proposed AIPs are derived from 
learnings from the ACO Investment Model (AIM), an Innovation Center 
model that tested the effects of making advanced payments to certain 
ACOs participating in the Shared Savings Program. This proposal to 
incorporate AIPs into the Shared Savings Program payment methodology is 
an example of how our larger ACO strategy of having the Innovation 
Center test new payment and service delivery models on the Shared 
Savings Program ``chassis'' can better harmonize policies across 
Medicare ACO initiatives and enable us to scale any findings.
    The Innovation Center recently announced the elimination of the ACO 
Track of the Community Health and Rural Transformation (CHART) Model, 
which would have provided advance shared savings payments to new rural 
ACOs participating in SSP, similar to AIM. We believe the proposal to 
incorporate AIPs into the Shared Savings Program will make the Shared 
Savings Program attractive to organizations that were previously 
considering participation in the ACO Track of the Community Health and 
Rural Transformation (CHART) Model. The CHART Model ACO Track 
specifically targeted ACOs whose providers and suppliers were located 
in rural areas. We believe the proposed methodology to determine 
payments based upon a beneficiary's risk factors-based score will allow 
for greater reach to ACOs operating in under-resourced communities and 
encourage providers and suppliers in rural areas to form ACOs.
    As we seek to increase the percentage of people with Medicare in 
accountable care arrangements, we are balancing incentives and 
participation options to serve a dual purpose of sustaining 
participation by existing ACOs and increasing program growth, 
recognizing that ACOs vary in their composition of providers/suppliers, 
the needs of the populations they serve, and have varying degrees of 
efficiency relative to their region and experience with accountable 
care initiatives. In this proposed rule, we are building on the 
existing Shared Savings Program benchmarking methodology by proposing 
modifications to strengthen financial incentives for long term 
participation by reducing the impact of ACOs' performance on their 
benchmarks, to address the impact of ACO market penetration on regional 
expenditures used to adjust and update benchmarks, and to support the 
business case for ACOs serving high risk and high dually eligible 
populations to participate, which will help sustain participation and 
grow the program. Additionally, we are proposing modifications to the 
benchmarking methodology to mitigate bias in regional expenditure 
calculations that benefits ACOs electing prospective assignment. The 
changes we are proposing to the benchmarking methodology used in the 
Shared Savings Program would align with our consideration of more long-
term benchmarking concepts that would move toward the use of 
administratively set benchmarks in order to grow and sustain long term 
program participation as discussed in the Request for Information. We 
are also proposing to expand opportunities for certain low revenue ACOs 
participating in the BASIC track to share in savings even if they do 
not meet the minimum savings rate (MSR) to allow for investments in 
care redesign and quality improvement activities among less capitalized 
ACOs.
    We are proposing changes to the quality reporting and the quality 
performance requirements that are responsive to interested parties' 
feedback, and designed to support the transition of ACOs to all payer 
quality measure reporting. These proposals include reinstitution of a 
sliding scale reflecting an ACO's quality performance for use in 
determining shared savings for ACOs, regardless of how they report 
quality data, and to revise the approach for determining shared losses 
for ENHANCED track ACOs. We are proposing to implement a health equity 
adjustment to an ACO's quality performance score to recognize high 
quality performance by ACOs with high underserved populations. We are 
also proposing to extend the incentive for reporting eCQMs/MIPS CQMs 
through performance year 2024 to align with the sunsetting of the CMS 
Web Interface reporting option. We are soliciting input from interested 
parties to inform future rulemaking through requests for information 
addressing social determinants of health in ACO populations, and the 
addition of new Consumer Assessment of Healthcare Providers and Systems 
(CAHPS) for the Merit-based Incentive Payment System (MIPS) survey 
questions. We are also proposing to resolve a gap in our current policy 
for benchmarking quality measures reported through the CMS Web 
Interface.
    We are proposing changes that are important for improved operations 
of the Shared Savings Program, including policies to reduce ACO 
administrative burden. Specifically, we are proposing to eliminate the 
requirement for an ACO to submit marketing materials to CMS for review 
and approval prior to disseminating materials to beneficiaries and ACO 
participants, and modifications to streamline the SNF 3-day rule waiver 
application review process. We are also proposing modifications to the 
beneficiary notification requirements, including to reduce the 
frequency with which beneficiary information notices are provided to 
beneficiaries from annually to a minimum of once per agreement period, 
with a proposed follow-up beneficiary communication serving to promote 
beneficiary comprehension of the standardized written notice. Further, 
we are proposing to revise the data sharing requirements to recognize 
ACOs structured as organized health care arrangements (OHCAs) for data 
sharing purposes.
b. Statutory and Regulatory Background on the Shared Savings Program
    On March 23, 2010, the Patient Protection and Affordable Care Act 
(Pub. L. 111-148) was enacted, followed by enactment of the Health Care 
and Education Reconciliation Act of 2010 (Pub. L. 111-152) on March 30, 
2010, which amended certain provisions of the Patient Protection and 
Affordable Care Act (hereinafter collectively referred to as ``the 
Affordable Care Act''). Section 3022 of the Affordable Care Act amended 
Title XVIII of the Act (42 U.S.C. 1395 et seq.) by adding section 1899 
of the Act to establish the Medicare Shared Savings Program (Shared 
Savings Program) to facilitate coordination and cooperation among 
healthcare providers to improve the quality of care for Medicare FFS 
beneficiaries and reduce the rate of

[[Page 46095]]

growth in expenditures under Medicare Parts A and B. (See 42 U.S.C. 
1395jjj.)
    Section 1899 of the Act has been amended through subsequent 
legislation. The requirements for assignment of Medicare FFS 
beneficiaries to ACOs participating under the program were amended by 
the 21st Century Cures Act (the CURES Act) (Pub. L. 114-255, December 
13, 2016). The Bipartisan Budget Act of 2018 (Pub. L. 115-123, February 
9, 2018), further amended section 1899 of the Act to provide for the 
following: expanded use of telehealth services by physicians or 
practitioners participating in an applicable ACO to furnish services to 
prospectively assigned beneficiaries; greater flexibility in the 
assignment of Medicare FFS beneficiaries to ACOs by allowing ACOs in 
tracks under retrospective beneficiary assignment a choice of 
prospective assignment for the agreement period; permitting Medicare 
FFS beneficiaries to voluntarily identify an ACO professional as their 
primary care provider and requiring that such beneficiaries be notified 
of the ability to make and change such identification, and mandating 
that any such voluntary identification will supersede claims-based 
assignment; and allowing ACOs under certain two-sided models to 
establish CMS-approved beneficiary incentive programs.
    The Shared Savings Program regulations are codified at 42 CFR part 
425. The final rule establishing the Shared Savings Program appeared in 
the November 2, 2011 Federal Register (Medicare Program; Medicare 
Shared Savings Program: Accountable Care Organizations; final rule (76 
FR 67802) (hereinafter referred to as the ``November 2011 final 
rule'')). A subsequent major update to the program rules appeared in 
the June 9, 2015 Federal Register (Medicare Program; Medicare Shared 
Savings Program: Accountable Care Organizations; final rule (80 FR 
32692) (hereinafter referred to as the ``June 2015 final rule'')). The 
final rule entitled, ``Medicare Program; Medicare Shared Savings 
Program; Accountable Care Organizations-Revised Benchmark Rebasing 
Methodology, Facilitating Transition to Performance-Based Risk, and 
Administrative Finality of Financial Calculations,'' which addressed 
changes related to the program's financial benchmark methodology, 
appeared in the June 10, 2016 Federal Register (81 FR 37950) 
(hereinafter referred to as the ``June 2016 final rule''). A final 
rule, ``Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule and Other Revisions to Part B for CY 2019; 
Medicare Shared Savings Program Requirements; Quality Payment Program; 
Medicaid Promoting Interoperability Program; Quality Payment Program--
Extreme and Uncontrollable Circumstance Policy for the 2019 MIPS 
Payment Year; Provisions From the Medicare Shared Savings Program--
Accountable Care Organizations--Pathways to Success; and Expanding the 
Use of Telehealth Services for the Treatment of Opioid Use Disorder 
Under the Substance Use-Disorder Prevention That Promotes Opioid 
Recovery and Treatment (SUPPORT) for Patients and Communities Act'', 
appeared in the November 23, 2018 Federal Register (83 FR 59452) 
(hereinafter referred to as the ``November 2018 final rule'' or the 
``CY 2019 PFS final rule''). In the November 2018 final rule, we 
finalized a voluntary 6-month extension for existing ACOs whose 
participation agreements would otherwise expire on December 31, 2018; 
allowed beneficiaries greater flexibility in designating their primary 
care provider and in the use of that designation for purposes of 
assigning the beneficiary to an ACO if the clinician they align with is 
participating in an ACO; revised the definition of primary care 
services used in beneficiary assignment; provided relief for ACOs and 
their clinicians impacted by extreme and uncontrollable circumstances 
in performance year 2018 and subsequent years; established a new 
Certified Electronic Health Record Technology (CEHRT) use threshold 
requirement; and reduced the Shared Savings Program quality measure set 
from 31 to 23 measures (83 FR 59940 through 59990 and 59707 through 
59715).
    A final rule redesigning the Shared Savings Program appeared in the 
December 31, 2018 Federal Register (Medicare Program: Medicare Shared 
Savings Program; Accountable Care Organizations--Pathways to Success 
and Uncontrollable Circumstances Policies for Performance Year 2017; 
final rule) (83 FR 67816) (hereinafter referred to as the ``December 
2018 final rule''). In the December 2018 final rule, we finalized a 
number of policies for the Shared Savings Program, including a redesign 
of the participation options available under the program to encourage 
ACOs to transition to two-sided models; new tools to support 
coordination of care across settings and strengthen beneficiary 
engagement; and revisions to ensure rigorous benchmarking.
    In the interim final rule with comment period (IFC) entitled 
``Medicare and Medicaid Programs; Policy and Regulatory Revisions in 
Response to the COVID-19 Public Health Emergency'', which was effective 
on the March 31, 2020 date of display and appeared in the April 6, 2020 
Federal Register (85 FR 19230) (hereinafter referred to as the ``March 
31, 2020 COVID-19 IFC''), we removed the restriction which prevented 
the application of the Shared Savings Program extreme and 
uncontrollable circumstances policy for disasters that occur during the 
quality reporting period if the reporting period is extended, to offer 
relief under the Shared Savings Program to all ACOs that may be unable 
to completely and accurately report quality data for 2019 due to the 
PHE for COVID-19 (85 FR 19267 and 19268).
    In the IFC entitled ``Medicare and Medicaid Programs; Basic Health 
Program, and Exchanges; Additional Policy and Regulatory Revisions in 
Response to the COVID-19 Public Health Emergency and Delay of Certain 
Reporting Requirements for the Skilled Nursing Facility Quality 
Reporting Program'' which was effective on May 8, 2020, and appeared in 
the May 8, 2020 Federal Register (85 FR 27573 through 27587) 
(hereinafter referred to as the ``May 8, 2020 COVID-19 IFC''), we 
modified Shared Savings Program policies to: (1) allow ACOs whose 
agreement periods expired on December 31, 2020, the option to extend 
their existing agreement period by 1-year, and allow ACOs in the BASIC 
track's glide path the option to elect to maintain their current level 
of participation for performance year 2021; (2) adjust program 
calculations to remove payment amounts for episodes of care for 
treatment of COVID-19; and (3) expand the definition of primary care 
services for purposes of determining beneficiary assignment to include 
telehealth codes for virtual check-ins, e-visits, and telephonic 
communication. We also clarified the applicability of the program's 
extreme and uncontrollable circumstances policy to mitigate shared 
losses for the period of the PHE for COVID-19 starting in January 2020.
    We have also made use of the annual CY PFS rules to address quality 
reporting for the Shared Savings Program and certain other issues. 
Refer to the CY 2020 PFS final rule and the CY 2022 PFS final rule for 
a summary of policies finalized in prior PFS rules (84 FR 40705 and 86 
FR 65253). In the CY 2022 PFS final rule (86 FR 65253 through 65306), 
we finalized changes to Shared Savings Program policies, including to 
amend the reporting requirements under the APM Performance Pathway 
(APP) for performance year 2022 and subsequent

[[Page 46096]]

performance years, to freeze the quality performance standard at the 
30th percentile MIPS Quality performance category score for performance 
year 2023, to update the definition of primary care services used in 
beneficiary assignment at Sec.  425.400(c), to revise the repayment 
mechanism arrangement policy, to streamline the application process, 
and to amend the beneficiary notification process.
    Policies applicable to Shared Savings Program ACOs for purposes of 
reporting for other programs have also continued to evolve based on 
changes in the statute. The Medicare Access and CHIP Reauthorization 
Act of 2015 (MACRA) (Pub. L. 114-10, April 16, 2015) established the 
Quality Payment Program. In the CY 2017 Quality Payment Program final 
rule with comment period (81 FR 77008), we established regulations for 
the Merit-Based Incentive Payment System (MIPS) and Advanced APMs and 
related policies applicable to eligible clinicians who participate in 
APMs, including the Shared Savings Program. We have also made updates 
to policies under the Quality Payment Program through the annual CY PFS 
rules.
c. Summary of Shared Savings Program Proposals
    In sections III.G.2. through III.G.6. of this proposed rule, we 
propose modifications to the Shared Savings Program's policies. As a 
general summary, we are proposing the following changes to Shared 
Savings Program policies to:
    <bullet> Allow low revenue ACOs, inexperienced with performance-
based risk Medicare ACO initiatives, that are new to the Shared Savings 
Program (that is, not a renewing or re-entering ACO) to receive AIPs 
based on assigned beneficiary dual eligibility status and ADI national 
percentile rank of the census block group in which the beneficiary 
resides (section III.G.2.a. of this proposed rule). Advance investment 
payments would include a one-time fixed payment of $250,000 and 
quarterly payments for the first 2 years of an ACO's 5-year agreement 
period. Quarterly payments would be based on a risk factors-based score 
set to 100 if the beneficiary is dually eligible for Medicare and 
Medicaid or set to the ADI national percentile rank (an integer between 
1 and 100) of the census block group in which the beneficiary resides 
if the beneficiary is not dually eligible, with higher payment amounts 
for assigned beneficiaries with a higher risk factors-based score.
    <bullet> Allow ACOs applying to the program that are inexperienced 
with performance-based risk to participate in one 5-year agreement 
under a one-sided shared savings model, in order to provide these ACOs 
more time to invest in infrastructure and redesigned care processes for 
high quality and efficient health care service delivery before 
transitioning to performance-based risk (section III.G.2.b.(2) of this 
proposed rule).
    <bullet> Revise the limitation on the number of agreement periods 
an ACO can participate in BASIC track Level E (section III.G.2.b.(3) of 
this proposed rule).
    <bullet> Revise the policies for determining beneficiary assignment 
(section III.G.3. of this proposed rule).
    ++ Update the definition of primary care services used in 
beneficiary assignment at Sec.  425.400(c).
    ++ Identify how CMS certification numbers will be used in 
beneficiary assignment.
    <bullet> Revise the quality reporting and the quality performance 
requirements for performance year 2023 and subsequent performance years 
(section III.G.4. of this proposed rule).
    ++ Establish an alternative quality performance standard for ACOs 
that do not meet the quality performance standard to share in savings 
at the maximum rate by reinstating a sliding scale approach for 
determining shared savings for ACOs, regardless of how they report 
quality data and revise the approach for determining shared losses for 
ENHANCED track ACOs.
    ++ Establish a health equity adjustment that would upwardly adjust 
an ACO's quality performance score, to reward ACOs that report all-
payer eCQMs/MIPS CQMs, that are high performing on quality, and serve a 
high proportion of underserved beneficiaries. This proposed adjustment 
would add up to 10 bonus points to the ACO's MIPS quality performance 
category score. The resulting health equity adjusted quality 
performance score would be used to determine whether the ACO meets the 
quality performance standard set at the 30th percentile (for 
performance year 2023) or 40th percentile (for performance year 2024 
and subsequent years) across all MIPS quality performance category 
scores; the final sharing rate for calculating shared savings payments 
under the BASIC track and the ENHANCED track for an ACO that meets the 
proposed alternative quality performance standard allowing for 
application of a sliding scale based on quality performance; and the 
shared loss rate for calculating shared losses under the ENHANCED track 
under the proposed modified approach to scaling shared losses. It would 
also be used when applying the extreme and uncontrollable circumstances 
policy for ACOs that report quality data via the APP and meet data 
completeness and case minimum requirements.
    ++ Extend the incentive for reporting eCQMs/MIPS CQMs through 
performance year 2024 to align with the sunsetting of the CMS Web 
Interface reporting option.
    ++ Change the nomenclature of the administrative claims measure 
Risk Standardized, All-Cause Unplanned Admissions for Multiple Chronic 
Conditions for MIPS to Clinician and Clinician Group Risk-standardized 
Hospital Admission Rates for Patients with Multiple Chronic Conditions 
to align with the MIPS program.
    ++ Clarify use of unweighted MIPS Quality performance category 
scores to determine the quality performance standard under the Shared 
Savings Program.
    ++ Clarify our policies on reopenings to address changes to MIPS 
quality performance category scores.
    ++ Establish policies for benchmarking quality measures reported 
through the CMS Web Interface for performance year 2022 through 
performance year 2024.
    <bullet> Revise the benchmarking methodology to reduce the effect 
of ACO performance on ACO historical benchmarks, increase opportunities 
for ACOs caring for medically complex, high cost beneficiaries, and 
strengthen incentives for ACOs to enter and remain in the Shared 
Savings Program, and meet the programmatic goals of improving quality 
of care and lowering growth in FFS expenditures:
    ++ Incorporate a prospectively projected administrative growth 
factor, a variant of the United States Per Capita Cost (USPCC) referred 
to in this proposed rule as the Accountable Care Prospective Trend 
(ACPT), into a three-way blend with national and regional growth rates 
to update an ACO's historical benchmark and address increasing market 
saturation by ACOs in a regional service area (section III.G.5.c.(3) of 
this proposed rule).
    ++ Adjust benchmarks to account for prior savings, helping to 
mitigate lowering of an ACO's benchmark over time by returning to an 
ACO's benchmark an amount that reflects its success in lowering growth 
in expenditures from the previous agreement period (section 
III.G.5.c.(4) of this proposed rule).
    ++ Reduce the impact of negative regional adjustments on ACO 
benchmarks by reducing the cap on negative regional adjustments and 
gradually decreasing the negative

[[Page 46097]]

regional adjustment amount as an ACO's weighted-average prospective HCC 
risk score increases, or the proportion of dually eligible Medicare and 
Medicaid beneficiaries increases, or both (section III.G.5.c.(5) of 
this proposed rule).
    <bullet> Change how we calculate regional factors used in 
benchmarking to increase internal consistency of benchmark calculations 
for ACOs under prospective beneficiary assignment by using an 
assignment window that is consistent with an ACO's selected assignment 
methodology to identify the assignable population used to calculate 
regional FFS expenditures (section III.G.5.d. of this proposed rule).
    <bullet> Revise how we apply the existing 3 percent cap on positive 
prospective HCC risk score growth to better account for medically 
complex, high cost populations while continuing to guard against coding 
initiatives (section III.G.5.e. of this proposed rule).
    <bullet> Increase opportunities for low revenue ACOs participating 
in the BASIC track to share in savings by expanding the criteria ACOs 
can meet to qualify for shared savings payments as described in Sec.  
425.605 (section III.G.5.f. of this proposed rule).
    <bullet> Discuss ongoing considerations regarding the impact of the 
PHE for COVID-19 on ACO expenditures (section III.G.5.g. of this 
proposed rule), although there are no associated proposed revisions to 
the regulations at this time.
    <bullet> Exclude the proposed new supplemental payment under the 
Medicare Hospital Inpatient Prospective Payment System (IPPS) for 
Indian Health Service (IHS)/Tribal hospitals and hospitals located in 
Puerto Rico from the determination of Medicare Parts A and B 
expenditures for purposes of calculations under the Shared Savings 
Program (section III.G.5.h. of this proposed rule).
    <bullet> Remove the requirement to submit marketing materials prior 
to use (section III.G.6.b. of this proposed rule). ACOs would be 
required to submit marketing materials only upon request from CMS, but 
we would retain the requirement that an ACO must discontinue use of any 
marketing materials or activities for which CMS has issued a notice of 
disapproval.
    <bullet> Amend the beneficiary notification requirements to reduce 
the frequency with which beneficiary information notices are provided 
to beneficiaries from annually to a minimum of once per agreement 
period, with a follow up beneficiary communication serving to promote 
beneficiary comprehension of the standardized written notice and 
occurring no later than 180 days following the date that the 
standardized written notice was provided to the beneficiary (section 
III.G.6.c. of this proposed rule).
    <bullet> Amend the beneficiary notification requirements to clarify 
that ACOs and ACO participants are required to post signs in all 
facilities and make standardized written notices available upon request 
in all settings in which beneficiaries receive primary care services 
(section III.G.6.c. of this proposed rule).
    <bullet> Remove the requirement for an ACO to submit certain 
narratives when applying for the SNF 3-day rule waiver and replace with 
a requirement that an ACO submit an attestation that it has established 
the narratives and will make them available to CMS upon request 
(section III.G.6.d. of this proposed rule).
    <bullet> Amend regulations to recognize ACOs structured as OHCAs 
for data sharing purposes (section III.G.6.e. of this proposed rule).
    We also describe several comment solicitations:
    <bullet> As discussed in section III.G.4. of this proposed rule and 
elsewhere in this proposed rule, we are seeking comment on two 
potential social determinants of health (SDOH) measures for future 
measure development, and the addition of new Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for the Merit-based Incentive 
Payment System (MIPS) Survey Questions.
    <bullet> In section III.G.7. of this proposed rule, we seek comment 
on an alternative approach to calculating ACO historical benchmarks 
that would use administratively-set benchmarks that are decoupled from 
ongoing observed FFS spending.
    In combination, the Shared Savings Program proposals are 
anticipated to grow participation particularly from ACOs serving 
beneficiaries with greater needs and higher baseline spending. The 
incentive for ACOs to reduce spending over multiple agreement periods 
is also expected to be bolstered, for example by reducing the weighting 
on the regional component of the benchmark update and by providing a 
prior savings adjustment at rebasing. A further change will prevent an 
assignment bias from inflating benchmark adjustments for ACOs electing 
prospective assignment. In summary, we project a $15.5 billion decrease 
in spending on benefits (that is, savings from efficiency) and $650 
million in higher net shared savings payments to ACOs, or $14.8 billion 
lower overall spending compared to the program baseline (which would 
have been projected to be a $4.2 billion net cost absent these 
changes).
    Certain policies, including both existing policies and the proposed 
new policies described in this proposed rule, rely upon the authority 
granted in section 1899(i)(3) of the Act to use other payment models 
that the Secretary determines will improve the quality and efficiency 
of items and services furnished under the Medicare program, and that do 
not result in program expenditures greater than those that would result 
under the statutory payment model. The following proposals require the 
use of our authority under section 1899(i) of the Act: allowing for 
AIPs as described in section III.G.2. of this proposed rule: the 
proposed modifications to the calculation of the shared loss rate under 
the ENHANCED track to allow for a sliding scale based on an alternative 
quality performance standard as described in section III.G.4. of this 
proposed rule; use of the ACPT/national-regional three-way blended 
benchmark update factor as described in section III.G.5.c.(3) of this 
proposed rule; the expansion of the criteria for certain low revenue 
ACOs participating in the BASIC track to qualify for shared savings in 
the event the ACO does not meet the MSR as required under section 
1899(d)(1)(B)(i) of the Act as described in section III.G.5.f. of this 
proposed rule; and the exclusion of the proposed new supplemental 
payment for IHS/Tribal hospitals and Puerto Rico hospitals from the 
determination of Medicare Parts A and B expenditures used in certain 
financial calculations under the Shared Savings Program as described in 
section III.G.5.h. of this proposed rule. As described in the 
Regulatory Impact Analysis in section VII. and elsewhere in this 
proposed rule, these proposed changes to our payment methodology are 
expected to improve the quality and efficiency of care and are not 
expected to result in a situation in which the payment methodology 
under the Shared Savings Program, including all policies adopted under 
the authority of section 1899(i) of the Act, results in more spending 
under the program than would have resulted under the statutory payment 
methodology in section 1899(d) of the Act. We will continue to 
reexamine this projection in the future to ensure that the requirement 
under section 1899(i)(3)(B) of the Act that an alternative payment 
model not result in additional program expenditures continues to be 
satisfied. In the event that we later determine that the payment model 
that includes policies established under section 1899(i)(3) of

[[Page 46098]]

the Act no longer meets this requirement, we would undertake additional 
notice and comment rulemaking to make adjustments to the payment model 
to assure continued compliance with the statutory requirements.
2. Shared Savings Program Participation Options
a. Increasing Participation in Accountable Care Models in Underserved 
Communities by Providing an Option for Advance Investment Payments to 
Certain ACOs
(1) Background
    In the November 2011 final rule (76 FR 67969), we estimated an 
average of $0.58 million for the start-up investment costs and $1.27 
million in ongoing annual operating costs for an ACO participating in 
the Shared Savings Program. This can be a substantial investment 
particularly for a small organization or an organization caring for 
underserved or more medically complex patients. The CMS Innovation 
Center has tested two models designed to support new ACOs in joining 
and succeeding in the Shared Savings Program. The Advance Payment (AP) 
ACO Model operated from 2012 to 2015, and the AIM operated from 2015 to 
2018. The models tested whether up-front payments would increase 
participation in the Shared Savings Program by ACOs serving rural or 
underserved regions. The models also tested whether such payments would 
improve quality or reduce Medicare spending without negatively 
affecting quality.\169\ Both models operated by pre-paying shared 
savings to ACOs participating in the Shared Savings Program and later 
recouping such amounts from earned shared savings.
---------------------------------------------------------------------------

    \169\ Centers for Medicare & Medicaid Services, Advance Payment 
Accountable Care Organization (ACO) Model (updated January 10, 
2013), available at https://innovation.cms.gov/files/fact-sheet/advanced-payment-aco-model-fact-sheet.pdf; Centers for Medicare & 
Medicaid Services, Accountable Care Organization Investment Model 
(AIM) Request for Applications (October 14, 2014), available at 
https://innovation.cms.gov/files/x/aim-rfa.pdf.
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    The AP ACO model tested whether the pre-payment of shared savings 
would increase participation in the Shared Savings Program by smaller 
providers and suppliers in rural and underserved areas, and whether 
these payments would allow ACOs to improve care for beneficiaries, 
generate Medicare savings more quickly, and increase the amount of 
total Medicare savings.\170\ The eligibility standards for the AP ACO 
model required that an ACO enter the Shared Savings Program in April 
2012 or July 2012. The ACO also had to meet one of the following 
standards: (1) not include any inpatient facilities and have less than 
$50 million in total annual revenue; or (2) not include any inpatient 
facilities other than critical access hospitals (CAHs) and/or Medicare 
low-volume rural hospitals and have less than $80 million in total 
annual revenue.\171\ Prepaid shared savings included an up-front 
payment of $250,000 and a one-time payment of $36 per beneficiary, 
followed by an $8 per beneficiary per month payment for 2 years. AP 
ACOs received between $1.3-$2.7M in total prepaid shared savings.\172\ 
CMS recovered pre-paid shared savings from an ACO's earned shared 
savings only if the ACO terminated before 3 years, in which case the 
ACO was required to immediately repay its prepaid shared savings 
payments in full.\173\
---------------------------------------------------------------------------

    \170\ Centers for Medicare & Medicaid Services, Advance Payment 
Accountable Care Organization (ACO) Model (updated January 10, 
2013), available at https://innovation.cms.gov/files/fact-sheet/advanced-payment-aco-model-fact-sheet.pdf.
    \171\ Centers for Medicare & Medicaid Services, Advance Payment 
Accountable Care Organization (ACO) Model Application Process 
(updated January 5, 2012), available at https://innovation.cms.gov/files/slides/advance-payment-model-aco-odf-application-process-slides.pdf.
    \172\ L&M Policy Research, Evaluation of CMMI Accountable Care 
Organization Initiatives: Advance Payment ACO Final Report 39-41 
(November 25, 2016), available at https://innovation.cms.gov/files/reports/advpayaco-fnevalrpt.pdf.
    \173\ Ibid at 14.
---------------------------------------------------------------------------

    AIM tested whether the pre-payment of shared savings helped to 
recruit and accelerated favorable outcomes for new ACOs in the Shared 
Savings Program from rural, low-penetration and underserved 
geographies.\174\ There were two cohorts of AIM, referred to as Test 1 
and Test 2. The eligibility standards to join Test 1 of AIM required 
that an ACO be: (1) new to the Shared Savings Program; (2) not include 
a hospital unless it was a critical access hospital or a small 
Inpatient Prospective Payment System (IPPS) hospital; and (3) not owned 
or operated by a health plan.\175\ The prepaid shared savings amounts 
were distributed and recouped in the same amounts and manner as the AP 
ACO model for the majority of model participants.\176\ ACOs joining 
Test 2 of AIM were not new to the Shared Savings Program and were 
required to directly repay any unrecouped prepaid shared savings at the 
end of their second Shared Savings Program agreement period. 
Conclusions from Test 2 of AIM were unable to be drawn due to low 
participation.\177\ All further references to AIM refer to Test 1 of 
the model, unless otherwise specified.
---------------------------------------------------------------------------

    \174\ Centers for Medicare & Medicaid Services, Accountable Care 
Organization Investment Model (AIM) Request for Applications 
(October 14, 2014), available at https://innovation.cms.gov/files/x/aim-rfa.pdf.
    \175\ Ibid.
    \176\ Ibid.
    \177\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model Final Report 20 (September 2020), 
available at https://innovation.cms.gov/data-and-reports/2020/aim-final-annrpt.
---------------------------------------------------------------------------

    The results of the Innovation Center's evaluation of the AP ACO 
Model were inconclusive regarding the impact on quality or cost of 
care. While most ACOs included in the test continued to participate in 
the Shared Savings Program after the AP ACO Model ended, the Model did 
not significantly improve the quality or cost of care when compared to 
care provided outside the Shared Savings Program.\178\ The results of 
the evaluation of AIM, however, found that the model was successful in 
meeting both its goals. AIM successfully encouraged ACOs to form in 
areas where ACOs may not have otherwise formed and where other Medicare 
payment and delivery innovations were less likely to be present.\179\ 
The AIM Model also generated an estimated net aggregate reduction in 
spending by Medicare of $381.5 million after accounting for Medicare's 
payment of AIM funds and ACOs' earned shared savings.\180\ AIM did not 
reduce the quality of care provided to beneficiaries.\181\
---------------------------------------------------------------------------

    \178\ L&M Policy Research, Evaluation of CMMI Accountable Care 
Organization Initiatives: Advance Payment ACO Final Report 39-41 
(November 25, 2016), available at https://innovation.cms.gov/files/reports/advpayaco-fnevalrpt.pdf.
    \179\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model Final Report 20 (September 2020), 
available at https://innovation.cms.gov/data-and-reports/2020/aim-final-annrpt.
    \180\ Ibid. at 39.
    \181\ Ibid. at 57-60.
---------------------------------------------------------------------------

    We have received continued interest in the AIM and AP ACO models 
and ongoing requests to implement policies with similar up-front and 
ongoing payments for ACOs newly participating in the Shared Savings 
Program. Interested parties believe these models were valuable for 
transitioning small and rural practices into ACOs and believe there is 
ongoing need for this type of support. We agree, and we also believe 
that the Shared Savings Program should provide an entry point for all 
willing organizations who wish to move towards providing value-driven 
healthcare.
    Section 1899(i) of the Act authorizes the Secretary to use other 
payment models instead of the one-sided model described in section 
1899(d) of the Act

[[Page 46099]]

so long as the Secretary determines that the other payment model will 
improve the quality and efficiency of items and services furnished to 
Medicare beneficiaries without additional program expenditures. We are 
interested in using the learnings from AIM and incorporating critical 
design features of AIM into the Shared Savings Program more broadly 
with the goals of increasing participation in the program by easing up-
front costs for inexperienced, low revenue ACOs and supporting these 
ACOs in providing accountable care for underserved beneficiaries. We 
believe that advance payments of shared savings will improve health 
equity outcomes for Medicare beneficiaries by increasing Shared Savings 
Program participation in underserved regions and improving the success 
of ACOs in achieving shared savings and meeting quality metrics. 
Consequently, in accordance with the authority provided to the 
Secretary by section 1899(i) of the Act, we are proposing to make 
advance shared savings payments, referred to herein as advance 
investment payments (AIPs), to certain ACOs participating in the Shared 
Savings Program to improve the quality and efficiency of items and 
services furnished to Medicare beneficiaries by enhancing the 
accessibility of the Shared Savings Program. Such payments would be 
made pursuant to the standards we propose to establish in new Sec.  
425.630.
    We envision that this new payment option would distribute AIPs to 
ACOs for 2 years in order to reduce the financial barriers encountered 
by small providers and suppliers as they join the Shared Savings 
Program. These payments would be recouped from any shared savings the 
ACO earned. Funding the ACOs for 2 years would align with the policy in 
AIM. The AIPs are designed to reduce up-front costs that prevent 
providers and suppliers from forming ACOs, caring for beneficiaries in 
underserved communities, and achieving long term success in the Shared 
Savings Program.
    Section 1899(i)(3)(A) of the Act requires CMS to determine that 
AIPs will improve the quality and efficiency of items furnished to 
Medicare in order to make such payments. We believe that AIPs meet this 
standard because such payments would be modeled on the AIM payments, 
which were shown to improve the quality and efficiency of care. The AIM 
evaluation report concluded that AIM successfully encouraged ACOs to 
form in geographic areas where ACOs may not otherwise have formed, the 
up-front funding provided by CMS assisted in the formation of the ACOs, 
and there was a reduction in Medicare spending and utilization without 
a reduction in the quality of care provided or patient and caregiver 
experiences.\182\ The AIM evaluation found that, across all AIM Test 1 
ACOs, the model reduced per beneficiary per month (PBPM) total Medicare 
spending by an estimated $28.21 in PY1, $36.94 in PY2, and $38.73 in 
PY3 compared to beneficiaries in the AIM ACOs' non-ACO FFS market 
comparison group.\183\ The estimates translated to an aggregate 
Medicare spending reduction of $131.0M in 2016, $187.7M in 2017, and 
$207.7 in 2018.\184\
---------------------------------------------------------------------------

    \182\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model Final Report 2-3 (September 2020), 
available at https://innovation.cms.gov/data-and-reports/2020/aim-final-annrpt.
    \183\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model Final Report 2 (September 2020), 
available at https://innovation.cms.gov/data-and-reports/2020/aim-final-annrpt.
    \184\ Ibid. at 41.
---------------------------------------------------------------------------

    Section 1899(i)(3)(B) of the Act requires CMS to determine that 
AIPs, when implemented in combination with existing modifications made 
to the Shared Savings Program payment model specified in section 
1899(d) of the Act, will not result in additional program expenditures. 
The addition of AIP meets this standard. Please review section VI.E.7 
of this proposed rule for a fuller discussion of the financial impact 
of the Shared Savings Program payment model, including the findings 
necessary to demonstrate compliance with section 1899(i)(3)(B) of the 
Act.
    We intend to periodically reassess whether a payment model 
established under section 1899(i)(3) of the Act, including the payment 
of advance investments, continues to improve the quality and efficiency 
of items and services furnished to Medicare beneficiaries without 
resulting in additional program expenditures. If we determine that the 
payment model no longer satisfies the requirements of section 
1899(i)(3) of the Act, for example if the payment model results in net 
program costs, we would undertake additional notice and comment 
rulemaking to make adjustments to our payment methodology to assure 
continued compliance with the statutory requirements.
(2) Eligibility
    In October of 2021, CMS outlined a renewed vision and strategy for 
how the Innovation Center will drive health system transformation to 
achieve equitable outcomes through high-quality, affordable, person-
centered care for all beneficiaries.\185\ We believe accountable care 
reduces fragmentation in patient care and lowers costs by giving 
providers and suppliers the incentives and tools to deliver high-
quality, coordinated, team-based care. In partnership with the 
Innovation Center and in support of our shared goal of increasing the 
number of beneficiaries in a care relationship with accountability for 
quality and total cost of care, we are proposing broad eligibility 
requirements for AIPs that will lower the barrier of entry to the 
Shared Savings Program for low revenue ACOs who are inexperienced with 
risk.
---------------------------------------------------------------------------

    \185\ https://innovation.cms.gov/strategic-direction.
---------------------------------------------------------------------------

    As discussed above, the AIPs are designed to assist ACOs that face 
difficulty funding the start-up costs for forming ACOs, caring for 
beneficiaries in underserved communities, and achieving long term 
success in the Shared Savings Program. Building upon AIM's success with 
new ACOs and ACOs inexperienced with performance-based risk Medicare 
ACO initiatives, we propose to limit the eligibility for these AIPs to 
these same groups. Our experience administering the Shared Savings 
Program suggests that re-entering and renewing ACOs have APM experience 
and would not need, or benefit as significantly from, the start-up 
funds that AIPs provide because they have already invested in creating 
an ACO. Additionally, we do not have data from our experience with AIM 
to conclude that previously established ACOs need or benefit from up-
front shared savings. The final evaluation report for AIM could not 
draw conclusions for AIM Test 2 ACOs, which involved only previously 
established ACOs, because of the small number of AIM Test 2 ACOs and 
the variation in results between them. Six AIM Test 2 ACOs started AIM 
in April 2015 or January 2016. Two AIM Test 2 ACOs ceased participating 
in the Shared Savings Program at the end of 2015, leaving four AIM Test 
2 ACOs evaluated in each of three performance years.\186\
---------------------------------------------------------------------------

    \186\ Centers for Medicare & Medicaid Services, ACO Investment 
Model (AIM) Final Evaluation Report (September 2020) available at 
https://innovation.cms.gov/data-and-reports/2020/aim-finalannrpt-perspective.
---------------------------------------------------------------------------

    We are proposing eligibility criteria modified from the AIM 
eligibility criteria. The eligibility standards to join Test 1 of AIM 
required that an ACO be: (1) new to the Shared Savings Program; (2) not 
include a hospital unless it was a critical access hospital or a small 
IPPS hospital; and (3) not owned or operated by a health plan.\187\ The 
model also

[[Page 46100]]

prioritized ACOs in rural locations and those in locations with low ACO 
penetration through the use of scoring criteria.\188\ We believe 
certain eligibility modifications are necessary to scale advance 
payments from a model to a regular component of the Shared Savings 
Program and to align with the Innovation Center's stated vision for 
health care transformation. As AIM was only available to a limited 
number of ACOs, it relied on scoring criteria in addition to its 
eligibility standards to select the highest scoring applicants. The 
Shared Savings Program does not have a similar limitation; therefore, 
we are proposing more inclusive eligibility criteria.
---------------------------------------------------------------------------

    \187\ Centers for Medicare & Medicaid Services, Accountable Care 
Organization Investment Model (AIM) Request for Applications 
(October 14, 2014), available at https://innovation.cms.gov/files/x/aim-rfa.pdf.
    \188\ Ibid.
---------------------------------------------------------------------------

    We are also broadening the eligibility criteria compared to AIM to 
reflect our belief that it is important to provide an incentive for 
providers and suppliers who serve high need beneficiaries in all areas 
to form ACOs. Similar to AIM, the Shared Savings Program intends to 
encourage the formation of new ACOs in rural areas; however, unlike AIM 
we also want to recognize that there are underserved beneficiaries who 
reside in urban areas who can also benefit from the high-quality 
coordinated care an ACO can provide. Additionally, underserved 
beneficiaries may receive care from providers and suppliers within a 
geographic area with high alternative payment model (APM) penetration. 
Generally, such providers and suppliers and the beneficiaries they 
serve are not or have not been part of an ACO previously. Therefore, we 
do not believe we should limit the opportunity for an ACO to receive 
AIPs to ACOs in only rural communities or in areas with low ACO 
penetration.
    We propose to establish the eligibility criteria for AIPs in Sec.  
425.630(b). Specifically, we propose that CMS must determine that an 
ACO meets all of the following criteria for the ACO to be eligible to 
begin receiving AIPs:
    <bullet> The ACO is not a renewing ACO or re-entering ACO (as such 
terms are defined under Sec.  425.20).
    <bullet> The ACO has applied to participate in the Shared Savings 
Program under any level of the BASIC track glide path and is eligible 
to participate in the Shared Savings Program.
    <bullet> The ACO is inexperienced with performance-based risk 
Medicare ACO initiatives.
    <bullet> The ACO is a low revenue ACO.
    AIM required applicants to demonstrate an exceptional need for 
prepaid shared savings. In the Shared Savings Program, the definition 
of low revenue is a similar criterion for determining ACO funding 
needs. Under Sec.  425.20, a low revenue ACO means an ACO whose total 
Medicare Parts A and B fee-for-service revenue of its ACO participants 
based on revenue for the most recent calendar year for which 12 months 
of data are available, is less than 35 percent of the total Medicare 
Parts A and B fee-for-service expenditures for the ACO's assigned 
beneficiaries based on expenditures for the most recent calendar year 
for which 12 months of data are available. Low revenue ACOs tend to be 
small, physician-only ACOs that are less well capitalized 
organizations. These ACOs may be encouraged to participate and remain 
in the program based on the availability of additional incentives, such 
as the opportunity to receive AIPs.
    We are proposing conforming changes to Sec.  425.611(c)(4) to limit 
eligibility to low revenue ACOs. In accordance with Sec.  
425.611(c)(4), we adjust Shared Savings Program calculations to exclude 
all Parts A and B fee-for-service payment amounts for a beneficiary's 
episodes of care for treatment of COVID-19 from expenditure and revenue 
calculations for purposes of identifying whether an ACO is a high 
revenue ACO or low revenue ACO and determining an ACO's eligibility for 
participation options. We are proposing to revise Sec.  425.611(c)(4) 
to exclude all Parts A and B fee-for-service payment amounts for a 
beneficiary's episodes of care for treatment of COVID-19 from 
expenditure and revenue calculations for purposes of determining an 
ACO's eligibility to receive AIPs.
    We propose to limit eligibility to ACOs applying to participate 
under any level of the BASIC track glide path because this 
participation option is indicative of an ACO's inexperience with 
performance-based risk. ACOs in the BASIC track are typically less 
experienced with risk and are more likely to benefit from up-front 
funding or ongoing financial assistance.
    In summary, we are proposing to create a new paragraph in Sec.  
425.100(d) to establish that an ACO may receive AIPs. We are also 
proposing in Sec.  425.630(b) to specify the eligibility criteria for 
an ACO to begin receiving receive AIPs, and we are proposing conforming 
changes to Sec.  425.630(c)(4). We seek comments on these proposals.
(3) Application Procedure & Contents
    We propose to address the process for an ACO to apply for AIPs in 
Sec.  425.630(c). Specifically, we propose that, to obtain a 
determination regarding whether an ACO may receive AIPs, the ACO must 
submit, as part of its application to participate in the Shared Savings 
Program, complete supplemental application information in the form and 
manner and by a deadline specified by CMS. The application cycle for 
AIPs would be conducted as part of and in conjunction with the Shared 
Savings Program application process under Sec.  425.202 with 
instructions and timeline published through the Shared Savings Program 
website. We propose the initial application cycle to apply for AIPs 
would be for a January 1, 2024, start date. As noted in section 
III.G.2.a.(2) of this proposed rule, ACOs currently participating in 
the Shared Savings Program or applying to renew their participation 
agreement would not be eligible to apply. We intend to provide further 
information regarding the process, including the application and 
specific requirements such as the deadline for submitting applications, 
through subregulatory guidance and will also provide a feedback process 
to afford an opportunity for the applicant to clarify or revise its 
application.
    We propose in Sec.  425.630(d)(1) that an ACO must submit 
sufficient information for CMS to determine whether the ACO is eligible 
to receive such payments. CMS would provide preliminary information to 
the applicant ACO about its eligibility to receive AIPs during the 
Phase 1 application cycle requests for information, and a final 
determination about its eligibility to receive AIPs at the time of 
final application dispositions. For example, we would provide 
preliminary information identifying whether an ACO is low revenue and 
inexperienced with performance-based risk through the ACO's application 
to participate in the Shared Savings Program.
    We further propose at Sec.  425.630(d)(1) that an ACO would be 
required to submit a spend plan as part of its application for AIPs. At 
Sec.  425.630(d)(2), we propose content requirements for spend plans. 
We propose that the plan must identify how the ACO will spend the AIPs 
during the agreement period to build care coordination capabilities 
(including coordination with community-based organizations, as 
appropriate), address specific health disparities, and meet other 
criteria under Sec.  425.630. In addition, we propose that the spend 
plan must identify the categories of goods and services that will be 
purchased, the dollar amounts to be spent on the various categories, 
and such other information as may be specified by CMS. As more fully 
explained in section III.G.2.a.(4) of this proposed rule, we are

[[Page 46101]]

proposing at Sec.  425.630(e)(4) to require ACOs to segregate AIPs from 
all other revenues by establishing and maintaining a separate account 
into which the ACO must immediately deposit all AIPs. Accordingly, we 
are also proposing at Sec.  425.630(d)(2)(iii) that the spend plan must 
include a statement that the ACO has established a separate designated 
account for the deposit and expenditure of all AIPs in accordance with 
Sec.  425.630(e)(4).
    We do not intend for the proposed spend plan to create a benchmark 
requirement against which we would hold the ACO accountable. Instead, 
we intend it to aid CMS in tracking ACO progress toward implementing 
their spend plan and any challenges or changes in strategy that occur 
following their receipt of AIPs. We believe that ACOs have the 
flexibility to better understand their needs over time and evolve their 
spending accordingly.
    While we do not intend an ACO's spend plan to limit it to specific 
uses of AIPs within the broad categories of acceptable uses, we would 
reserve the right to terminate an ACO's ability to receive the advance 
incentive payments if it is not in compliance with requirements of the 
Shared Savings Program (see our proposal described in section 
III.G.2.a.(7).(b) of this proposed rule). In addition, by certifying 
its application under Sec.  425.202(a)(2), the ACO certifies that the 
information contained in the application, including the information 
necessary to determine eligibility for AIPs, is accurate, complete, and 
truthful.
    We propose at Sec.  425.630(d)(3) that we would review the 
information submitted in the ACO's application to determine whether an 
ACO meets the eligibility criteria and other requirements for AIP and 
would approve or deny the application for AIPs accordingly. We would 
review the ACO's Shared Savings Program application simultaneously with 
the supplemental information in its AIP application. We note that the 
denial of an AIP application would be subject to reconsideration review 
in accordance with the standards specified in subpart I of part 425.
    In addition, we are proposing at Sec.  425.630(d)(3) that CMS may 
review the spend plan at any time and require the ACO to make changes 
to its spend plan comply with Sec.  425.630(e)(1) as a result of that 
review. Examples of permitted uses are described in section 
III.G.2.a.(4) of this proposed rule. Under our proposal, if the ACO 
fails to provide a spend plan that complies with Sec.  425.630(e), CMS 
could terminate the ACO's AIPs pursuant to Sec.  425.630(h)(1)(i) and 
take other remedial action under Sec.  425.216 or Sec.  425.218.
    As discussed in section III.G.2.a.(7).(a) of this proposed rule, we 
are also proposing to update our public reporting requirements under 
Sec.  425.308 by adding new paragraph (b)(8) to require an ACO to 
publicly report its spend plan. We propose to require that the ACO post 
on its dedicated public reporting web page: (1) the total amount of 
AIPs received from CMS for each performance year; (2) the ACO's spend 
plan; and (3) an itemization of how the AIPs were actually spent during 
the year, including expenditure categories, the dollar amounts spent on 
the various categories, any changes to the spend plan as submitted 
under Sec.  425.630(d)(1), and such other information as may be 
specified by CMS. The public reporting template that CMS provides to 
ACOs annually would be updated to reflect the new information 
categories that an ACO must report.
    We propose to add Sec.  425.630(c) and (d) to establish standards 
for the contents of an application to be determined eligible for AIPs 
as well as the procedures for filing such an application. We solicit 
comments on these proposals.
(4) Use and Management of Payments
    Under section Sec.  425.308(b)(4), ACOs are required to publicly 
report the total proportion of shared savings invested in 
infrastructure, redesigned care processes, and other resources required 
to support the goals of better health for populations, better care for 
individuals, and lower growth in expenditures, including the proportion 
of shared savings distributed among ACO participants. Although ACOs are 
required to report this information, our regulations do not require an 
ACO to spend its shared savings in any particular way. However, given 
the purpose of AIPs, the fact that they are made before any shared 
savings are actually earned by an ACO, and our proposed limitations on 
the recovery of these funds in the absence of any earned shared 
savings, we propose at Sec.  425.630(e) to specify how an ACO may use 
AIPs.
    Similar to our experience with AIM, AIPs are intended to provide 
the means to build the ACO's population health management capabilities, 
including the provision of accountable care for underserved 
beneficiaries. AIPs are not intended to sit idle in an investment 
account or to serve purposes unrelated to the goals of AIPs. We propose 
at Sec.  425.630(e) that AIPs must be used to improve the quality and 
efficiency of items and services furnished to beneficiaries by 
investing in increased staffing, health care infrastructure, and the 
provision of accountable care for underserved beneficiaries, which may 
include addressing social determinants of health. We emphasize, 
however, that AIP amounts are advance shared savings, and not payment 
or reimbursement for items or services under the three specified 
categories. We propose that expenditures of AIPs must comply with the 
beneficiary incentive provision at Sec.  425.304 and all other 
applicable laws and regulations. Our proposal is intended to provide 
ACOs with flexibility to use payments within three specified categories 
of allowable uses. We solicit comment on whether there are additional 
categories of expenses that should be permitted in light of the 
purposes of AIPs. We will monitor how ACOs are spending these funds and 
will revisit these categories in future rulemaking if additional 
flexibilities or boundaries are required.
    We recognize that there are many ways to improve population health 
management and support the provision of accountable care for 
underserved beneficiaries. The most effective ways will vary by ACO. We 
believe ACOs know best the needs of their populations and how to use 
funds to meet program goals. We offer the following examples of 
permitted uses within the three categories:
    <bullet> Increased staffing. Hiring nurse case managers or other 
relevant support staff to implement screening for social determinants 
of health (SDOH); hiring community health workers, certified peer 
recovery specialists, other health care professionals with training in 
delivering culturally and linguistically tailored services; hiring a 
health equity officer; hiring behavioral health clinicians and case 
managers to integrate behavioral health treatment into the primary care 
setting; hiring oral health providers to integrate dental services into 
the primary care setting; or encouraging partnerships with healthcare 
systems and local, community-based organizations to increase 
organizational capacity to identify and address SDOH and connect 
individuals with culturally and linguistically tailored, accessible 
health care services, supports, and information at an appropriate 
literacy level.
    <bullet> SDOH strategies. Examples include developing or securing 
transportation services; housing-related services to address housing 
insecurity or homelessness, home or environmental modifications to 
support a healthy lifestyle, legal aid services to help patients' 
address social needs, employment-related services, food-

[[Page 46102]]

related services, utilities-related supports, services to support 
personal safety, services to reduce social isolation, services to help 
patients cope with or address financial strain or poverty, patient 
caregiver supports, providing remote access technologies, 
telemonitoring, and meals; ensuring individuals are able to access 
culturally and linguistically tailored, accessible health care services 
and supports that meet their needs, partnering with community-based 
organizations such as Area Agencies on Aging or Centers for Independent 
Living to address SDOH needs; or implementing systems to provide and 
track patient referrals to available community-based social services 
that assess and address social needs, as well as enable coordination 
and measurement of health and social care across the community where 
beneficiaries reside. CMS reserves the right to review any SDOH 
strategies and require that the ACO make changes as a result of that 
review.
    <bullet> Health Care Provider Infrastructure. Examples include 
investment in certified electronic health record technology (CEHRT) 
(including system enhancements and upgrades), connections to clinical 
data registries and networks that support health information exchange 
across disparate providers and systems involved in patient care, 
integration of ACO participant systems including tools to share and 
analyze operational and quality data, remote access technologies, 
telemonitoring, screening tools, case management or practice management 
systems to improve care coordination operations across the health and 
social care continuum, physical accessibility improvements, and tools 
to further integrate behavioral health or dental services into primary 
care settings.
    Where we refer to community-based organizations, we mean public or 
private not-for-profit entities that provide specific services to the 
community or targeted populations in the community to address the 
health and social needs of those populations. Such organizations are 
trusted entities that know the populations they serve and their 
communities, want to be engaged, and may have the infrastructure or 
systems in place to help coordinate supportive services that address 
social determinants of health or serve as a trusted source to share 
information.\189\ They may include community-action agencies, housing 
agencies, area agencies on aging, or other non-profits that apply for 
grants to perform social services. They may receive grants from other 
agencies in the U.S. Department of Health and Human Services, including 
Federal grants administered by the Administration for Children and 
Families (ACF), Administration for Community Living (ACL), or the 
Centers for Disease Control, or other State-funded grants to provide 
social services. If an ACO wishes to address a social need, it is 
important for health providers who may not have expertise in providing 
social services to work with those community-based organizations that 
do have such expertise.
---------------------------------------------------------------------------

    \189\ https://www.phe.gov/emergency/events/COVID19/atrisk/returning-to-work/Pages/default.aspx.
---------------------------------------------------------------------------

    We note that the Shared Savings Program does not prohibit ACOs from 
partnering with community-based organizations. Currently, if a 
community-based organization is enrolled in Medicare, they may already 
be an ACO participant or ACO provider or supplier. We believe 
community-based organizations play an important role in identifying and 
addressing gaps in health equity. We hope to encourage more ACOs to 
partner with community-based organizations whether they provide items 
and services reimbursed by Medicare or not.
    Regarding investments in networks that support health information 
exchange, we encourage ACOs to review the request for information in 
section II.A.3.B of this proposed rule regarding the recently released 
Trusted Exchange Framework and Common Agreement or TEFCA,\190\ which 
includes discussion about how connecting to entities exchanging 
information under TEFCA can help to support health information exchange 
for a variety of use cases that may be relevant to ACOs.
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    \190\ For more information, see https://www.healthit.gov/topic/interoperability/trusted-exchange-framework-and-common-agreement-tefca.
---------------------------------------------------------------------------

    We propose in Sec.  425.630(e)(2) to prohibit the use of AIPs for 
any expenses that would not constitute a permitted use of the funds. 
Similar to the AIM model, we intend for advance investment payments to 
encourage the formation of new ACOs that provide care to underserved 
beneficiaries, not simply to fund another business venture of an 
established company or to furnish items or services unrelated to the 
ACO or the beneficiaries it serves.
    Examples of prohibited uses of AIPs would include management 
company or parent company profit, performance bonuses, other provider 
salary augmentation, provision of medical services covered by Medicare, 
or items or activities unrelated to ACO operations that improve the 
quality and efficiency of items and services furnished to 
beneficiaries. However, performance bonuses could be tied to successful 
implementation of SDOH screenings or care management guidelines, or 
ACOs could pay a higher salary as necessary to retain a clinician who 
treats underserved beneficiaries. We solicit comment on these examples 
of prohibited uses and whether there are additional categories of 
expenses that should be prohibited in light of the purposes of AIPs. We 
will monitor how ACOs are spending these funds and will revisit these 
categories in future rulemaking if additional flexibilities or 
boundaries are required.
    Additionally, we propose that an ACO participating in Level E of 
the BASIC track may not use any advance shared savings payments to pay 
back any shared losses that it would have incurred as specified in a 
written notice from CMS under Sec.  425.605(e)(2). To ensure 
compliance, we propose updating the annual certification requirements 
under Sec.  425.302(a)(3) to require that the ACO certify that the 
payments were disbursed only for allowable uses. Level E of the BASIC 
track is currently an Advanced APM, and we expect it to remain an 
Advanced APM in future years. The level of risk in an Advanced APM is, 
by definition at Sec.  414.1415(c), greater than a nominal amount; 
therefore, we are proposing that an ACO eligible to receive advance 
shared savings payments that is willing to take on such additional risk 
must remain liable for any losses incurred regardless of advance 
payments received.
    We propose at Sec.  425.630(e)(4) to require ACOs to segregate AIPs 
from all other revenues by establishing and maintaining a separate 
account into which the ACO must immediately deposit all AIPs and from 
which all disbursements of such funds are made only for allowable uses. 
This would allow us to monitor whether the funds are used only for 
allowable uses and to ensure that AIPs do not pay for any prohibited 
uses under Sec.  425.630(e)(2). We note that CMS would deposit AIPs 
into the same account used for the deposit of shared savings payments; 
that account must be specified in an ACO's Electronic Funds Transfer 
form submitted with its application. We propose that, upon receipt of 
AIPs, the ACO must immediately deposit the funds into the separate 
account designated for maintaining AIPs.
    As noted in section III.G.2.a.(4) of this proposed rule, we propose 
that the ACO's spend plan must also include a statement that the ACO 
has established a separate account for purposes of

[[Page 46103]]

segregating AIPs. Additionally, we propose to update our annual 
certification requirements under Sec.  425.302 by adding new paragraph 
(a)(3)(iv) to require an ACO to certify at the end of each performance 
year that it has moved all AIPs received during that performance year 
into a designated AIP account, where the funds remained until spent as 
required under Sec.  425.630(d).
(5) Advance Investment Payment Methodology
    In AIM, prepaid shared savings included an up-front payment of 
$250,000 and a one-time payment of $36 per beneficiary, followed by a 
monthly payment of $8 per beneficiary per month for the first 2 
performance years of an AIM ACO's agreement period. According to the 
AIM evaluation, AIM ACO leadership conveyed through interviews and the 
ACO Web survey that they wanted to join the Shared Savings Program to 
gain experience in delivering value-based care and remain independent, 
and that AIM funds were critical to building the infrastructure needed 
to implement their ACOs.\191\ The evaluation also found that these new 
AIM ACOs consistently demonstrated greater reductions in key Medicare 
spending categories and related utilization compared to similar non-AIM 
Shared Savings Program ACOs.\192\ Furthermore, there were greater 
reductions in all components of Medicare spending examined, including 
acute inpatient hospitalizations, outpatient visits, skilled nursing 
facility care, and home health use. The evaluation did not find 
reductions in Medicare spending and utilization to be offset by 
reductions in the quality of care provided or patient and caregiver 
experiences.
---------------------------------------------------------------------------

    \191\ Abt Associates, Evaluation of the Accountable Care 
Organization Investment Model Final Report 20 (Sep. 2020), available 
at https://innovation.cms.gov/data-and-reports/2020/aim-final/annrpt.
    \192\ Ibid.
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    We are proposing to provide an ACO that CMS determines meets the 
eligibility criteria described in section III.G.2.a.(2) of this 
proposed rule with AIPs during the first 2 performance years of the 
ACO's participation agreement. We are proposing that AIPs are comprised 
of two types of payments: a one-time payment of $250,000 and eight 
quarterly payments based on the number of assigned beneficiaries, 
capped at 10,000 beneficiaries.
    The proposed $250,000 one-time payment is informed by the AIM 
payment structure, which offered a $250,000 up-front fixed payment to 
new AIM ACO participants starting in the Shared Savings Program in 2015 
and 2016. Under the model, the upfront fixed payment reflected the 
estimated upfront investment requirements to establish ACOs. Here, we 
are proposing a $250,000 one-time AIP because we believe that such a 
payment would similarly support an ACO in addressing the upfront 
investment requirements for a new, low revenue and inexperienced ACO to 
join the Shared Savings Program. We have experience with a fixed 
$250,000 upfront payment from AIM, which served ACOs that are similar 
in many ways to ACOs that would be served by the proposed AIPs. 
Furthermore, we believe that initial ACO start-up costs do not vary 
significantly by the size of an ACO or by the underlying level of risk 
of an assigned beneficiary population. However, we are considering 
alternative values of the one-time payment, such as allowing the one-
time payment to vary by ACO based on the number of assigned 
beneficiaries, the risk factors of the ACO's assigned beneficiary 
population, or both. We seek comment on the proposal to provide ACOs 
with a one-time payment of $250,000, as well as these alternatives.
    The quarterly payments are informed by our experience in AIM where 
ACO participants had variable costs for clinical care management 
activities, such as clinical staff, which were supported by the per 
beneficiary per month payments offered to them in the model.
    We are proposing to make payments on a quarterly basis to balance 
providing ACOs with predictable cash flow to participate in the Shared 
Savings Program and simplifying operations for CMS. We considered other 
options for the frequency of the payments, such as monthly payments as 
were tested in AIM, or annual payments. Making more frequent payments, 
such as on a monthly basis, would result in additional operational 
burden for CMS because we would need to calculate the payments more 
frequently. Because the Shared Savings Program operates on a larger 
scale than AIM did, the burden of administering monthly advance 
payments is not feasible. Moreover, we believe that monthly payments 
offer little additional benefit to ACOs relative to quarterly payments. 
We are not proposing a single annual payment as we believe the benefit 
to ACOs of consistent payments on a quarterly basis outweighs the 
administrative costs of calculating quarterly payments. We seek comment 
on the proposed schedule of the AIPs to ACOs.
    We propose to determine the value of an ACO's upcoming quarterly 
payment amount prior to the start of the quarter based on the latest 
available assignment list for the performance year (see Table 40). We 
believe it is important to use the latest available assignment list 
because under current regulation the individual beneficiaries assigned 
to the ACO may change between annual and quarterly assignment runs. For 
ACOs under preliminary prospective assignment with retrospective 
reconciliation as described at Sec.  425.400(a)(2) the assignment list 
is updated quarterly based on the most recent 12 months of data. For 
ACOs under prospective assignment as described at Sec.  425.400(a)(3), 
the assignment list is updated quarterly to exclude beneficiaries that 
meet any of the exclusion criteria during the performance year. 
Therefore, we believe that using the latest available assignment list 
to determine the upcoming quarterly payment will best reflect the 
attributes of the ACO's assigned population.
[GRAPHIC] [TIFF OMITTED] TP29JY22.080


[[Page 46104]]


    We are also considering an alternative proposal for the timing of 
the quarterly payments calculation. Under this alternative, we would 
determine the ACO's quarterly payment at the start of the performance 
year based on the beneficiaries assigned to the ACO at the beginning of 
a performance year. The quarterly payment amount determined at the 
beginning of a performance year could remain fixed for the duration of 
that performance year. The total payments ACOs would receive over the 
course of a performance year would be known by the ACO at the start of 
that performance year. However, this alternative also carries the risk 
that CMS would underpay or overpay an ACO relative to an approach of 
redetermining the quarterly payment amount prior to the start of each 
quarter. We seek comment on this alternative proposal.
    We are proposing that the quarterly payments made to ACOs would be 
equal to the sum of per beneficiary payments for up to 10,000 
beneficiaries. The per beneficiary payment amount would vary for each 
beneficiary based on a risk factors-based score that we would calculate 
for the beneficiary. The risk factors-based score would be informed by 
the beneficiary's dual eligibility status and the ADI national 
percentile ranking of the census block group of the beneficiary's 
primary address, described in further detail later in this section. The 
quarterly payments reflect expected variable ongoing operating costs 
that are related to the number and risk factors of the ACO's assigned 
beneficiaries.
    We propose to add a new Sec.  425.630(f) to establish the frequency 
and payment methodology for AIPs. Specifically, we propose a one-time 
payment for ACOs at or near the beginning of PY 1 of the ACO's 
agreement period. Quarterly payments would be made each quarter for the 
first 2 performance years of the ACO's agreement period. We would 
complete the following steps to calculate the ACO's quarterly payment 
amount:
    <bullet> Step 1: Determine the ACO's assigned beneficiary 
population. The assigned beneficiaries used in determining the 
quarterly payment amount would be the beneficiaries most recently 
assigned to the ACO under Sec.  425.400(a)(2) (for ACOs under 
preliminary prospective assignment with retrospective reconciliation) 
or Sec.  425.400(a)(3) (for ACOs under prospective assignment), based 
on the certified ACO participant list for the relevant performance 
year.
    <bullet> Step 2: Assign each beneficiary a risk factors-based 
score. For each beneficiary in the assigned population identified in 
Step 1, CMS would do the following:
    ++ If the beneficiary is dually eligible for Medicare and Medicaid, 
assign a risk factors-based score of 100.\193\
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    \193\ A beneficiary is considered dually eligible if they were 
dually eligible for Medicare and Medicaid in any of the 12 months 
that correspond with the window used for assigning beneficiaries 
under the preliminary prospective assignment methodology. The 12-
month window is described in further detail elsewhere in this 
section.
---------------------------------------------------------------------------

    ++ If the beneficiary is not dually eligible, assign a risk 
factors-based score equal to the ADI national percentile rank of the 
census block group corresponding with the beneficiary's primary mailing 
address.
    ++ If the beneficiary is not dually eligible but cannot be matched 
with an ADI national percentile rank due to insufficient data, impute a 
risk factors-based score of 50.\194\
---------------------------------------------------------------------------

    \194\ The imputed score of 50 is described in further detail 
elsewhere in his section.
---------------------------------------------------------------------------

    <bullet> Step 3: Determine a beneficiary's payment amount. For each 
beneficiary in the assigned population, CMS would determine the payment 
amount that corresponds to the beneficiary's risk factors-based score 
according to the per beneficiary payment amounts specified by CMS 
elsewhere in this section (refer to Table 42).
    <bullet> Step 4: Calculate the ACO's total quarterly payment 
amount. The ACO's quarterly payment amount would be the sum of the 
payment amounts corresponding to each assigned beneficiary's risk 
factors-based score, capped at 10,000 beneficiaries. If the ACO has 
more than 10,000 assigned beneficiaries, CMS would calculate the 
quarterly payment amount based on the 10,000 assigned beneficiaries 
with the highest risk factors-based scores.
    As described earlier, a goal of AIPs is to reduce financial 
barriers for new, low revenue and inexperienced ACOs to join the Shared 
Savings Program. In addition to bringing ACOs into the program, as part 
of the Agency's goals to advance health equity, we are interested in 
using the AIPs to support ACOs in improving the care received by 
underserved beneficiaries. We believe that we will further the Agency's 
goal to advance health equity by basing the ACO's quarterly payment 
amount on the sum of per beneficiary payments that vary by a 
beneficiary's risk factors-based score, as informed by the ADI national 
percentile rank of the beneficiary's census block group and the 
beneficiary's dual eligibility status. We believe the ADI national 
percentile rank of the beneficiary's census block group and dual 
eligibility are good indicators of beneficiaries with high needs. The 
ADI measure is intended to capture local socioeconomic factors 
correlated with medical disparities and underservice, while the 
beneficiary level measure of dual eligibility is intended to capture 
socioeconomic challenges that could affect a beneficiary's ability to 
access care.
    The ADI was developed by researchers at the National Institutes of 
Health with the goal of quantifying and comparing social disadvantage 
across geographic neighborhoods. It is a composite measure derived 
through a combination of 17 input variables from census data. The 17 
input variables across four domains are shown in Table 41.

[[Page 46105]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.081

    The ADI is calculated at the census block group level through the 
US Census Bureau's American Community Survey. Census blocks, the 
smallest geographic area for which the Bureau of the Census collects 
and tabulates decennial census data, are formed by streets, roads, 
railroads, streams and other bodies of water, other visible physical 
and cultural features, and the legal boundaries shown on Census Bureau 
maps. A census block group is the next level above census blocks in the 
geographic hierarchy and is a combination of census blocks that is a 
subdivision of a census tract or block numbering area. The census block 
group typically contains 600 to 3,000 people and is the smallest 
geographic entity for which the decennial census tabulates and 
publishes sample data. Files containing the ADI of U.S. census block 
groups is publicly available through the Neighborhood Atlas from the 
University of Wisconsin.\195\ It is a relative measure that is reported 
at the individual block group level, typically reported by nationwide 
percentile (1-100) or Statewide decile (1-10), with a higher percentile 
indicating greater disadvantage. The relative measure reported at the 
census block group level is referred to as the ADI national percentile 
rank.
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    \195\ The ADI data files are publicly available for download at 
https://www.neighborhoodatlas.medicine.wisc.edu/.
---------------------------------------------------------------------------

    We are proposing to use the ADI national percentile rank for the 
census block group in which a beneficiary resides for that 
beneficiary's risk factors-based score if the beneficiary is not dually 
eligible for Medicare and Medicaid. Specifically, we are proposing to 
establish the ADI national percentile rank of the beneficiary's census 
block group derived from the beneficiary's latest mailing address in 
CMS data systems at the time of the calculation. Furthermore, we are 
proposing to use the most recently available version of the ADI. At the 
time of this proposed rule, the latest version available was the 2019 
ADI which was based on the 2015-2019 ACS Five Year Estimates. The ADI 
data files are publicly available for download at https://www.neighborhoodatlas.medicine.wisc.edu/.
    We are proposing to use the beneficiary's dual eligibility status 
to inform the risk factors-based score. Specifically, we are proposing 
that if a beneficiary is dually eligible, the beneficiary's risk 
factors-based score would be 100. A score of 100 would ensure that the 
ACO receives the maximum payment amount for each beneficiary dually 
enrolled in Medicare and Medicaid, which would further the Agency's 
goal to ensure beneficiaries with dual eligibility have full access to 
seamless, high quality health care.
    To determine a beneficiary's dual eligibility status, we would 
consider the beneficiary's enrollment status in each month of a 12-
month window. The 12-month window would correspond with the assignment 
window used for preliminary prospective assignment with retrospective 
reconciliation for that particular assignment run. For example, we are 
proposing to use PY1 Quarter 1 assignment to inform the quarterly 
payment we would make to the ACO in July of PY1; the preliminary 
prospective assignment window for that assignment run would be April 1 
of the prior calendar year through March 30 of the current calendar 
year. Therefore, we would consider the beneficiary's dual eligibility 
status in each of those 12 months. If a beneficiary had zero months of 
dual enrollment, we would consider the beneficiary not dually enrolled. 
If the beneficiary had at least one month of dual enrollment in 
Medicare and Medicaid, we would consider the beneficiary dually 
enrolled.
    We are considering alternatives to assigning 100 points to the 
beneficiary for dual eligibility status. One alternative we are 
considering is to calculate a beneficiary's risk factors-based score as 
the sum of the ADI national percentile rank of the beneficiary's census 
block group and 25 points if the beneficiary is dually eligible for 
Medicare and Medicaid. The maximum risk factors-based score would 
therefore be 125, and we would revise the payment amount ranges to 
account for a higher maximum score. We are considering 25 points for 
dual status because through preliminary analysis we observed that the 
median ADI score for the population that was aligned to Direct 
Contracting Entities in PY 2021 was 42 with a standard deviation of 25. 
Furthermore, given the

[[Page 46106]]

fact that the ADI score is a variable value and the bonus points for 
dual eligibility status would be fixed at 25 points, the relative 
weight of the 25 points is lower for beneficiaries living in a 
relatively highly deprived area and higher for beneficiaries in a 
relatively advantaged area. For example, consider one dual eligible 
beneficiary and one non-dual eligible beneficiary, both living in a 
census block group with an ADI national percentile rank of 50 (the U.S. 
median). The dual eligible beneficiary would receive a risk factors-
based score of 75 (50 plus 25), which is 50 percent higher than the 
risk factors-based score of the non-dual eligible beneficiary. For a 
dual eligible beneficiary who lives in a census block group with an ADI 
national percentile rank of 70 (more deprived than the median), 25 
points would increase their score by 36 percent. There are many people 
who do not qualify for Medicaid but still face systemic and structural 
barriers to care. Therefore, we believe it would be reasonable to add a 
relatively moderate bonus to the beneficiary's ADI national percentile 
rank to calculate a combined risk factors-based score that values both 
dual status and other structural barriers to care that also may require 
upfront investments by an ACO to help their assigned beneficiaries 
overcome. We are seeking comment on an alternative proposal to 
calculate the beneficiary's risk factors-based score by taking the sum 
of the ADI national percentile rank where the beneficiary lives and 25 
points if the beneficiary is dually eligible for Medicare and Medicaid.
    We are proposing per beneficiary payment amounts that increase as a 
beneficiary's risk factors-based score increases. The proposed per 
beneficiary payment amounts by range are shown in Table 42. A dually 
eligible beneficiary would receive a risk factors-based score of 100, 
which corresponds to a quarterly payment amount of $45. A beneficiary 
not dually eligible and residing in a census block group with an ADI in 
the 75th percentile would receive a risk factors-based score of 75 
which corresponds to a quarterly payment amount of $40.
[GRAPHIC] [TIFF OMITTED] TP29JY22.082

    We calibrated the proposed per beneficiary payment amounts against 
the distribution of risk factors-based scores for beneficiaries 
assigned to ACOs in PY 2020, such that the average ACO participating in 
PY2020 would have received approximately the same payment value across 
2 performance years as the average ACO that participated in AIM. The 
payments would begin at $20 and would be scaled upward by increments of 
4-5 dollars as the risk factors-based score increases. We are proposing 
that a beneficiary with a risk factors-based score of less than 25 
would have a corresponding payment of $0, as a goal of the AIPs option 
is to encourage formation of new ACOs that serve underserved 
beneficiaries. A beneficiary risk factors-based score of less than 25 
would indicate that the beneficiary is not dually eligible for Medicare 
and Medicaid and is residing in a census block group with low area 
deprivation. We are proposing that any beneficiary with a risk factors-
based score of 85 or higher would receive the maximum payment of $45. 
These beneficiaries either have dual eligibility or reside in a census 
block group with high area deprivation; we consider beneficiaries with 
these factors to represent the highest need for upfront investments in 
care coordination interventions by ACOs. As we gain more experience 
with AIPs, we would reevaluate the effectiveness of the payment amounts 
in Table 42 and may propose modifications in future rulemaking.
    We are proposing to calculate the quarterly payment as the sum of 
the per beneficiary payment amounts corresponding to each assigned 
beneficiary, capped at 10,000 beneficiaries. The proposed 10,000 
beneficiary cap is similar to what was tested in AIM. We believe a cap 
is necessary to insulate the Trust Funds from making extremely large 
quarterly payments to large ACOs. Also similar to AIM, we propose that 
if an ACO has more than 10,000 assigned beneficiaries, we would 
calculate the quarterly payment based on the 10,000 assigned 
beneficiaries with the highest risk factors-based scores, which would 
maximize the quarterly payment for the ACO.
    We are proposing under the new Sec.  425.630(f) that CMS notifies 
in writing each ACO of its determination of the amount of AIP. If CMS 
does not make any AIP, the notice will specify the reason(s) why and 
inform the ACO of its right to request reconsideration review in 
accordance with the standards specified in subpart I of our 
regulations. Thus, with each quarterly payment we are proposing to 
provide the ACO with a report that shows our calculation of the ACO's 
quarterly payment amount, including the risk factors-based score we 
assigned to each beneficiary used as part of the calculation, and the 
per beneficiary payment that corresponds to that score.
    We are considering alternative methodologies to calculating an 
ACO's quarterly payment. We are considering an approach of determining 
an ACO's average risk factors-based score based on all of the ACO's 
assigned beneficiaries. That is, we would take the sum of the risk 
factors-based scores for each of the ACO's assigned beneficiaries and 
divide by the total number of the ACO's assigned beneficiaries. In this 
alternative, ACOs with an average risk factors-based score above the 
median would have their per beneficiary payment amount scaled upward 
and those with an average risk factors-based score below the median 
would have their per beneficiary payment amount scaled downward. An ACO 
with an average risk factors-based score of the median would have their 
per beneficiary payment amount set to $30. An ACO with an average risk 
factors-based score greater than the median would have their per 
beneficiary payment amount increased by the percentage difference of 
the score compared to the median. For example, if the median is 50, an 
ACO with an average risk factors-based score of 70 would have their per 
beneficiary payment amount increased by 20 percent to $36 and an ACO 
with an average risk factors-based score of 32 would have their per 
beneficiary payment amount reduced by 18 percent

[[Page 46107]]

to $24.60. The quarterly payment would equal the per beneficiary per 
quarter payment amount multiplied by the number of assigned 
beneficiaries, capped at 10,000 beneficiaries. This alternative 
approach would allow us to consider the risk factors-based scores of 
all of an ACO's assigned beneficiaries, not only the 10,000 assigned 
beneficiaries with the highest risk factors-based scores, in 
determining the ACO's quarterly payment. We seek comment on this 
alternative methodology.
    We also are considering an alternative proposal to identify 
underserved beneficiaries based on whether their mailing address is 
located in a Health Professional Shortage Area (HPSA) for primary care 
instead of the beneficiary's mailing address' ADI percentile rank. As 
part of the Health Resources and Services Administration's (HRSA) 
cooperative agreement with the State Primary Care Offices, the State 
Primary Care Offices conduct needs assessment in their States, 
determine what areas are eligible for designations, and submit 
designation applications to HRSA. HRSA reviews the HPSA applications 
submitted by the State Primary Care Offices, and--if they meet the 
designation eligibility criteria for the type of HPSA the application 
is for--designates a HPSA. HPSAs are defined under section 332(a) of 
the Public Health Service Act. HPSA designations identify geographic 
areas, population groups, or facilities within the United States that 
are experiencing a shortage of health care professionals. Geographic 
HPSAs are defined as having a shortage of providers services for the 
entire population within an established geographic area; population 
HPSAs, in which there is a shortage of providers services for a 
specific population subset within an established geographic area; and 
facility HPSAs, in which there is a shortage of providers for that 
include certain categories of facilities. The Health Resources and 
Services Administration (HRSA) is responsible for making these HPSA 
designations in accordance with section 332(a) of the Public Health 
Service Act. Under this alternative, the risk factor-based score would 
be based on the sum of points assigned based on whether an assigned 
beneficiary is residing in an area designated as a geographic HPSA, as 
determined by the beneficiary's mailing address, and whether a 
beneficiary is dually eligible for Medicare and Medicaid. As a result, 
there would be three different per beneficiary payment amounts based on 
whether an assigned beneficiary is: (1) both residing in a geographic 
HPSA and dually eligible for Medicare and Medicaid; (2) residing in a 
geographic HPSA only; or (3) dually eligible for Medicare and Medicaid 
only. Under this alternative, we would not provide a per beneficiary 
payment amount if the assigned beneficiary is not in a geographic HPSA 
and not dually eligible for Medicare and Medicaid. As we believe the 
ADI metric can support identification of beneficiaries who face a 
variety of social determinants to health, not only health provider 
shortages, we are proposing to use ADI. However, we are seeking comment 
on an alternative methodology of using HPSA scores.
    We are also considering an alternative methodology that 
additionally considers whether a beneficiary receives a Part D low 
income subsidy from Medicare in CMS' calculation of the quarterly 
payment amount.\196\ In this alternative, the risk factors-based score 
would be equal to the assigned beneficiary's ADI national percentile or 
100 points if the beneficiary is dually enrolled in Medicare and 
Medicaid or receives a Part D low income subsidy from Medicare. We are 
seeking comment on this alternative methodology.
---------------------------------------------------------------------------

    \196\ The low-income subsidy helps people with Medicare pay for 
prescription drugs, and lowers the cost of Medicare prescription 
drug coverage. For more information about the LIS, refer to https://www.cms.gov/Medicare/Prescription-Drug-Coverage/LimitedIncomeandResources.
---------------------------------------------------------------------------

    There are circumstances where a beneficiary may not have an ADI 
national percentile rank. In the cases where Medicare beneficiaries 
have a missing or partial address in our database, we will not be able 
to match them with a census block group. In a preliminary review of 
Medicare beneficiary information, less than 2 percent of beneficiaries 
could not be matched to a census block group due to missing or 
insufficient mailing address data. Additionally, under the ADI 
methodology approximately 2 percent of U.S. census block groups do not 
receive an ADI national percentile rank due to data suppression 
criteria. These suppression criteria include: fewer than 100 people, 
fewer than 30 housing units, or more than 33 percent of the population 
living in group quarters or missing core component variables. In our 
preliminary review of Medicare beneficiary information, approximately 1 
percent of Medicare beneficiaries had sufficient address data, but were 
in a U.S. census block group without a national percentile rank due to 
data suppression criteria. For beneficiaries with no ADI national 
percentile rank due to missing or insufficient mailing address data or 
data suppression criteria, and are not automatically receiving a score 
of 100 for being a beneficiary who is dually eligible for Medicare and 
Medicaid, we propose to impute a value of 50 in place of the ADI 
national percentile rank for the purposes of determining an assigned 
beneficiary's risk factors-based score and per beneficiary payment 
amount. An imputed ADI ranking of 50 corresponds to the average 
national ADI ranking and would thus be the most neutral imputed value. 
This would avoid biasing an ACO's payments in either direction due to 
missing information. We seek comment on this proposal to impute a value 
in place of the ADI national percentile rank to address missing 
beneficiary information when calculating the risk factors-based score.
    To summarize, we are proposing to provide an ACO with a one-time 
payment of $250,000 prior to the start of the ACO's first performance 
year. We are additionally proposing to calculate an ACO's upcoming 
quarterly payment prior to the start of the quarter, using the latest 
available assignment list. We would calculate an ACO's quarterly 
payment amount based on risk factors-based scores of up to 10,000 
beneficiaries assigned to the ACO prior to the start of the performance 
year, and ACOs with more than 10,000 beneficiaries would have a 
quarterly payment calculated based on the 10,000 beneficiaries assigned 
to the ACO with the highest risk factors-based scores. We are proposing 
to assign a risk factors-based score for each beneficiary using the ADI 
national percentile rank of the beneficiary's census block group or 
assigning 100 points if the beneficiary is dually eligible for Medicare 
and Medicaid. We are proposing to impute a value of 50 in place of an 
ADI national percentile rank if the beneficiary is not dually eligible 
for Medicare and Medicaid and cannot be matched with an ADI national 
percentile rank due to insufficient data. Finally, we are proposing 
dollar value amounts that vary by risk factors-based score, in that the 
amounts gradually increase as the risk factors-based score increases. 
We seek comment on each of these proposals.
(6) Duration of Advance Investment Payment
    In AIM, ACOs in the model participated in 3-year agreements in the 
Shared Savings Program, and they received prepaid shared savings for 
the first 2 years of their participation and were allowed to spend that 
funding over their entire 3-year agreement period. In AIM, we observed 
that many ACO

[[Page 46108]]

model participants needed the entire agreement period to be able to 
spend the prepaid shared savings they received under the model. Based 
on our experience with AIM, we are proposing that the ACOs would 
receive AIPs (meaning one-time payment plus quarterly payments) in the 
first 2 years of their participation agreement and would be permitted 
to spend the AIPs over their entire 5-year agreement period. The 
requirement that funds be spent during the agreement period furthers 
our goals of supporting the establishment of ACOs and delivering care 
to beneficiaries in a prompt manner. We are seeking public comments on 
our proposal to provide AIPs to ACOs for the first 2 years of the ACO's 
performance period, to allow ACOs to spend those payments over the 
duration of their 5-year agreement period, and to send a demand letter 
for any unspent funds at the end of the ACO's agreement period. We are 
proposing at Sec.  425.630(e)(3) that an ACO may spend an AIP over its 
entire agreement period and must repay CMS any unspent funds at the end 
of its agreement period. CMS will issue a demand letter for any such 
amounts.
(7) Compliance and Monitoring
(a) Public Reporting and Monitoring of Spend Plan
    We propose to monitor the spending of AIPs to provide CMS with a 
clear indication of how ACOs intend to spend AIPs, provide adequate 
protection to the Medicare Trust Funds, and to prevent funds from being 
misdirected or appropriated for activities that do not constitute a 
permitted use of the funds. We would do so by comparing the anticipated 
spending as set forth in the spend plan submitted with an ACO's 
application against the actual spending as reported on the ACO's public 
reporting webpage, including any expenditures not identified in the 
spend plan. The reported annual spending must include any expenditures 
of AIPs on items not identified in the spend plan. ACOs would be 
required to annually report their actual expenditures via an updated 
spend plan on their public reporting webpage.
    We believe that transparency of information in the health care 
sector facilitates more informed patient choice and offers incentives 
and feedback that help improve the quality and lower the cost of care 
and improve oversight with respect to program integrity. As CMS has 
discussed in previous final rules, improved transparency supports a 
number of program requirements. In particular, increased transparency 
is consistent with and supports the requirement under section 
1899(b)(2)(A) of the Act for an ACO to be willing to ``become 
accountable for the quality, cost, and overall care'' of the Medicare 
beneficiaries assigned to it.
    Therefore, we believe it is desirable and consistent with section 
1899(b)(2)(A) of the Act for several aspects of an ACO's use of AIPs to 
be available to the public. Making this information available will 
provide both Medicare beneficiaries and the general public with insight 
into the use of AIP funds by an ACO. Accordingly, we are proposing to 
modify Sec.  425.308 to require that an ACO annually report on its 
public reporting webpage information regarding AIPs. Specifically, 
under proposed new Sec.  425.308(b)(8), we are proposing that, for each 
performance year, an ACO would be required to report (in a standardized 
format specified by CMS) its spend plan, the total amount of AIPs 
received, and an itemization of how any AIPs were actually spent during 
the year, including expenditure categories, the dollar amounts spent on 
the various categories, any changes to the spend plan as submitted 
under Sec.  425.630(d)(1), and such other information as may be 
specified by CMS. We propose that this itemization would include 
expenditures not identified or anticipated in the ACO's submitted spend 
plan, and any amounts remaining unspent. Under this proposal, if CMS 
determined that an ACO had disbursed AIPs for a prohibited use under 
proposed Sec.  425.630(e)(2), CMS could terminate the ACO's receipt of 
AIPs under proposed Sec.  425.630(h), as discussed later in this 
section. Any AIPs that are unspent at the end of the ACO's agreement 
period must be repaid to CMS under proposed Sec.  425.630(e)(3), as 
discussed above. Additionally, CMS could take compliance action as 
specified in Sec. Sec.  425.216 and 425.218 if an ACO spent the funds 
on a prohibited use or if have unspent funds at the end of the 
agreement period. We seek comment on all aspects of this proposal.
    We note that under existing Sec.  425.314, ACOs would be required 
to retain adequate books and records to ensure that CMS has the 
information necessary to conduct appropriate monitoring and oversight 
of ACOs' use of AIPs (for example, invoices, receipts, and other 
supporting documentation of AIP disbursements). To protect the program 
and the Medicare Trust Funds, we may use our authority under Sec. Sec.  
425.314 and 425.316 to audit ACO compliance with Shared Savings Program 
requirements and to monitor the performance of ACOs, respectively. We 
will conduct audits as necessary to monitor and assess an ACO's use of 
AIPs and compliance with other requirements related to such payments.
 (b) Monitoring for Changes in ACO Experience With Risk and ACO Revenue
    As described in section III.G.2.a.(2) of this proposed rule, under 
the new Sec.  425.630(b) ACOs must meet the following basic criteria to 
be eligible for AIPs:
    <bullet> The ACO is not a renewing or re-entering ACO, as defined 
under Sec.  425.20.
    <bullet> The ACO is applying to participate under any level of the 
BASIC track glide path as specified under Sec.  425.600(a)(4)(i)(A).
    <bullet> The ACO must be inexperienced with performance-based risk 
Medicare ACO initiatives, as defined by Sec.  425.20.
    <bullet> The ACO must be a low revenue ACO, as defined by Sec.  
425.20.
    Based on our program experience, the inexperienced/experienced and 
low/high revenue ACO determination could be affected by changes in the 
ACO participant list that are made during the course of the agreement 
period, where the changes are not motivated by the ACO's desire to 
avoid program requirements regarding participation options. ACO 
participant list changes during the agreement period could affect the 
categorization of ACOs, particularly for ACOs close to the threshold 
percentage. We considered that an ACO may change its composition of ACO 
participants each performance year. Any approach under which we would 
apply different policies to ACOs based on a determination of ACO 
participant prior experience under performance-based risk would need to 
recognize the potential for an ACO to add or remove ACO participants 
which could affect whether an ACO meets the definition of experienced 
with performance-based risk Medicare ACO initiatives. We are concerned 
about the possibility that an ACO may be eligible to receive AIPs and 
then quickly thereafter seek to add ACO participants experienced with 
performance-based risk, thereby avoiding these inexperience and low 
revenue eligibility requirements.
    To identify and address these circumstances, we propose at Sec.  
425.316(e)(1) that CMS will monitor ACOs that receive AIPs to determine 
if they remain low revenue ACOs that are inexperienced with 
performance-based risk. We would monitor ACOs for changes in the risk 
experience of ACO participants that would cause an ACO to be considered 
experienced with performance-based risk or a high

[[Page 46109]]

revenue ACO and therefore ineligible for AIPs.
    We propose at Sec.  425.316(e)(2) to specify that if an ACO that 
receives AIPs and becomes experienced with performance-based risk 
Medicare ACO initiatives or becomes a high revenue ACO during any 
performance year of the agreement period, CMS will cease paying the ACO 
AIPs starting the quarter after the ACO became experienced with 
performance-based risk Medicare ACO initiatives or became a high 
revenue ACO and may take compliance action as specified in Sec. Sec.  
425.216 and 425.218.
    Under proposed Sec.  425.316(e)(3), the ACO would be obligated to 
repay spent and unspent AIPs if CMS takes pre-termination action under 
Sec.  425.216 and the ACO continues to be experienced with performance-
based risk Medicare ACO initiatives or a high revenue ACO after a 
deadline specified by CMS pursuant to such compliance action (for 
example, the next deadline for updating the ACO participant list). To 
retain its AIP, an ACO that CMS determines to be experienced with 
performance-based risk or a high revenue ACO would be required to 
remedy the issue by the deadline specified by CMS. For example, if the 
ACO participants' total Medicare Parts A and B FFS revenue has 
increased in relation to total Medicare Parts A and B FFS expenditures 
for the ACO's assigned beneficiaries, the ACO could remove an ACO 
participant from its ACO participant list so that the ACO could meet 
the definition of a low revenue ACO. If the ACO fails to respond to 
compliance action under Sec.  425.216 or otherwise fails to remedy the 
eligibility issue by the applicable deadline, the ACO would be required 
to repay all AIPs it had received. CMS will provide written 
notification to the ACO of the amount due, and the ACO must pay such 
amount no later than 90 days after the receipt of notification. CMS may 
recover the amount owed by reducing the amount of any shared savings.
    To aid us in determining whether it would be appropriate for us to 
recoup AIP funds from an ACO, we further propose to update the 
definitions of ``inexperienced with performance-based risk Medicare ACO 
initiatives'' and ``experienced with performance-based risk Medicare 
ACO initiatives'' under Sec.  425.20 to allow for a rolling lookback 
period of the 5 most recent performance years beginning from the 
current performance year being monitored. This would be applicable to 
both ongoing compliance determinations and the assessment of an ACO's 
application to participate under a participation option for an 
agreement period under proposed Sec.  425.600(h). We provide ACOs with 
preliminary participation options reports throughout the application 
and ACO participant list change request cycles so ACOs can be fully 
informed of the impact of becoming experienced with performance-based 
risk or high revenue for the upcoming performance year.
(c) Termination of Advance Investment Payments
    Under Sec. Sec.  425.216 and 425.218, CMS can terminate an ACO or 
take pre-termination actions (such as requesting a corrective action 
plan) if CMS determines that an ACO is not in compliance with 
eligibility or other Shared Savings Program requirements. Accordingly, 
if we finalize our proposal to implement AIPs, CMS could take remedial 
action under those provisions if an ACO receiving such payments becomes 
experienced with performance-based risk Medicare ACO initiatives, 
becomes a high revenue ACO, spends AIPs for a prohibited use, fails to 
comply with other AIP requirements, or meets any of the grounds for ACO 
termination set forth in Sec.  425.218(b). Where appropriate, we would 
work with the ACO to understand why the noncompliance with AIP 
requirements had occurred so that we could develop an effective plan of 
action and monitoring technique. However, our existing pre-termination 
actions do not include the cessation of payments to an ACO. To protect 
the Trust Funds, encourage speedy resolution of noncompliance, and 
provide an added safeguard against abuse, we propose at Sec.  
425.630(h) that CMS may terminate an ACO's receipt of AIPs if the ACO 
ceases to meet the eligibility requirements specified in proposed Sec.  
425.630(b)(3) and (4), fails to comply with other AIP requirements, or 
meets any of the grounds for termination set forth at Sec.  425.218(b). 
For the same reasons, we further propose under Sec.  425.630(h)(3) that 
CMS may immediately terminate an ACO's AIPs without taking any of the 
pre-termination actions set forth in Sec.  425.216. We expect that 
immediate termination of AIPs would be invoked only in cases of serious 
noncompliance or when the ACO's actions or inaction poses a risk of 
harm to beneficiaries or negatively affects access to care.
(8) Recoupment
    In AIM, we recouped prepaid shared savings from any shared savings 
earned by an ACO in its current agreement period, and if necessary, 
future agreement periods. If the ACO did not achieve shared savings, 
then the prepaid shared savings were not recouped. Additionally, the 
balance of funding was not recouped if the ACO completed the agreement 
period and decided not to reenroll in a second agreement period. If the 
ACO terminated prior to the end of its 3-year agreement period, the 
remaining balance was required to be repaid in full. During the model, 
we observed that offering new small ACOs prepaid shared savings that 
they were not at risk of being forced to repay if they did not achieve 
savings was a critical incentive for small providers and suppliers to 
form ACOs to join AIM and the Shared Savings Program. Based on our 
experience in AIM, we are proposing at Sec.  425.630(g) a policy for 
recoupment of the AIPs from an ACO. The Shared Savings Program now has 
5-year agreement periods instead of 3-year agreement periods that were 
in effect during AIM, so some timing adjustments to the recoupment 
policy are necessary, but the majority of the proposed policy aligns 
with AIM recoupment policy.
    We are proposing at Sec.  425.630(g)(1) to recoup AIPs from any 
shared savings, as defined in Sec.  425.20, earned by the ACO in any 
performance year until CMS has recouped all AIPs. We further propose 
that if there are insufficient shared savings to recoup the AIPs made 
to an ACO for a performance year, we would carry forward that remaining 
balance owed to the subsequent performance year(s) in which the ACO 
achieves shared savings, including any performance year(s) in a 
subsequent agreement period.
    Under new Sec.  425.630(g)(2), we propose that in circumstances 
where the amount of shared savings earned by the ACO is revised upward 
by CMS for any reason, we would reduce the redetermined amount of 
shared savings by the amount of AIPs made to the ACO as of the date of 
the redetermination. If the amount of shared savings earned by the ACO 
is revised downward by CMS for any reason, we propose that the ACO 
would not receive a refund of any portion of the AIPs previously 
recouped or otherwise repaid.
    We propose under Sec.  425.630(g)(3) that for each performance 
year, we would not recoup an amount of AIPs greater than the shared 
savings earned by an ACO for that performance year. Thus, if an ACO 
does not earn shared savings in its agreement period or a renewed 
agreement period, we would not recoup any of the AIPs from the ACO.
    For example, if an ACO received $300,000 in AIPs and achieved 
shared savings of $500,000 for the first performance year, we would 
recoup $300,000 and pay $200,000 in shared

[[Page 46110]]

savings to the ACO. Alternatively, if an ACO received $300,000 in AIPs 
and achieved shared savings of $200,000 for the first performance year, 
we would recoup only $200,000 and not pay any shared savings to the 
ACO. The outstanding balance of $100,000 would be carried forward, to 
be recouped in a future performance year in which the ACO achieves 
shared savings. Under a third scenario, if the ACO does not achieve 
shared savings in all 5 performance years of its agreement period and 
does not renew for another agreement period in the Shared Savings 
Program, we would not recoup any AIPs made to the ACO. However, to 
protect the program from abuse, CMS would recoup any outstanding 
balance from a re-entering ACO determined to be experienced with 
performance-based risk Medicare ACO initiatives. We note that a ``re-
entering ACO,'' as defined at Sec.  425.20, includes an ACO that is a 
new legal entity that is applying to participate in the program and 
more than 50 percent of its ACO participants were included on the ACO 
participant list of the same ACO in any of the 5 most recent 
performance years.
     Under the new Sec.  425.630(g)(4), we propose that if an ACO 
terminates its participation agreement during the agreement period in 
which it received an AIP, the ACO must repay all AIPs it received. In 
such a case, CMS would provide written notification to the ACO of the 
amount due and the ACO must pay such amount no later than 90 days after 
the receipt of notification. This proposal ensures that AIPs are used 
by ACOs that complete their agreement period and reduces the risk of 
ACOs using termination to avoid repayment of the AIPs.
     As described in section III.G.2.a.(2) of this proposed rule, we 
have proposed that an ACO is not eligible for AIPs unless it is a low 
revenue ACO, as defined at Sec.  425.20, and inexperienced with 
performance-based risk Medicare ACO initiatives, as defined at Sec.  
425.20. A goal of the AIPs is to encourage the formation of ACOs, and 
based on experience in AIM, we recognize that new, smaller ACOs need 
start-up funding to join the Shared Savings Program and to continue 
care coordination over the agreement period.
    As described earlier in section III.G.2.a.(7).(b) of this proposed 
rule, we have proposed to monitor and notify ACOs if they become high 
revenue or experienced with performance-based risk during a performance 
year so they may choose to modify their ACO participant lists for the 
next performance year to maintain their low revenue and inexperienced 
status. Under our proposal at Sec.  425.316(e), if CMS determines that 
an ACO is experienced with performance-based risk Medicare ACO 
initiatives or is a high revenue ACO, CMS will cease payment of AIPs 
starting the quarter after the ACO became experienced with performance-
based risk or became a high revenue ACO, and CMS may take compliance 
action as specified in Sec. Sec.  425.216 and 425.218. For example, if 
CMS determines that an ACO became experienced with performance-based 
risk Medicare ACO initiatives or became a high revenue ACO during the 
first performance year of the agreement period, CMS will not pay to the 
ACO additional AIPs, effective the next quarterly payment after the ACO 
became experienced with performance-based risk Medicare ACO initiatives 
or a high revenue ACO, which would be January 1 of the second 
performance year. In addition, CMS could take compliance action as 
specified in Sec. Sec.  425.216 and 425.218. If CMS determines after 
all AIPs have been paid (for example, during the third performance year 
of the agreement period) that an ACO became experienced with 
performance-based risk Medicare ACO initiatives, CMS may take 
compliance action as specified in Sec.  425.216. For example, CMS could 
issue a request for a corrective action plan, and the ACO would be 
required to come back into compliance the following performance year. 
If an ACO remains noncompliant after the compliance deadline specified 
by CMS, we will provide written notification to the ACO of the amount 
due and the ACO must pay such amount no later than 90 days after the 
receipt of such notification. To achieve the goal of AIPs and ensure 
the payments support new, smaller ACOs, we are proposing at Sec.  
425.316(e) that if CMS determines during the agreement period in which 
an ACO received an AIP that the ACO became a high revenue ACO or became 
experienced with performance-based risk Medicare ACO initiatives, the 
ACO may be required to repay all AIPs it received during the agreement 
period. We propose to provide written notification to the ACO of the 
amount due and to require the ACO to pay such amount no later than 90 
days after the receipt of notification.
    We are proposing at Sec.  425.630(g)(5) that if an ACO that 
received AIPs enters into proceedings relating to bankruptcy, whether 
voluntary or involuntary, the ACO must provide written notice of the 
bankruptcy to CMS and to the U.S. Attorney's Office in the district 
where the bankruptcy was filed, unless final payment for the agreement 
period has been made by either CMS or the administrative or judicial 
review proceedings relating to any payments under the Shared Savings 
Program have been fully and finally resolved. We propose that the 
notice of bankruptcy must be sent by certified mail no later than 5 
days after the petition has been filed and must contain a copy of the 
filed bankruptcy petition (including its docket number). We propose 
that the notice to CMS must be addressed to the CMS Office of Financial 
Management at 7500 Security Boulevard, Mailstop C3-01-24, Baltimore, MD 
21244 or such other address as may be specified on the CMS website for 
purposes of receiving such notices. This proposal is consistent with 
the AIM model participation agreement and ensures that CMS can recover 
AIPs if an ACO files for bankruptcy.
    We are seeking comment on all aspects of our proposals for 
recoupment of the AIPs made to ACOs.
b. Smoothing the Transition to Performance-Based Risk
(1) Background
     Since its inception in 2012, the Shared Savings Program has 
included both one-sided financial models (shared savings only) and two-
sided financial models (shared savings and shared losses) for ACOs to 
select based on the arrangement that makes the most sense for their 
organization. Over the years, we have modified available financial 
models (participation options) providing ``on-ramps'' to attract both 
providers and suppliers that are new to value-based purchasing, as well 
as more experienced entities that are ready to accept two-sided risk. 
We have modified these participation options to adjust the maximum 
level of risk that must be assumed under two-sided models and to smooth 
the transition to two-sided models, including modifying eligibility 
criteria and adding flexibility for more advanced ACOs to transition to 
risk-based arrangements more quickly. These participation option 
modifications have been informed by lessons learned from CMS' 
experience with the program, testing through other initiatives 
conducted by the CMS Innovation Center under section 1115A of the Act 
(the Pioneer ACO Model, the Next Generation ACO Model and the Medicare 
ACO Track 1+ Model), and feedback from interested parties.
    In the November 2011 final rule (76 FR 67904), we stated our belief 
that a one-sided model would have the potential to attract a large 
number of participants to the program and broadly

[[Page 46111]]

introduce value-based purchasing to providers and suppliers, many of 
whom may not have participated in a value-based purchasing initiative 
before. Another reason we included the option for a one-sided track 
with no downside risk was that this model would be accessible to and 
likely to attract small, rural, safety net, and physician-only ACOs. 
However, we also noted that while a one-sided model could provide 
incentives for participants to improve quality, it might not be 
sufficient incentive for participants to improve the efficiency and 
cost of healthcare delivery (76 FR 67904). Thus, in the November 2011 
final rule, we created two tracks in which ACOs could choose to 
participate. The one-sided risk model (Track 1) incorporated the 
statutory payment methodology under section 1899(d) of the Act, and the 
two-sided model (Track 2) was also based on the payment methodology 
under section 1899(d) of the Act but incorporated performance-based 
risk using the authority under section 1899(i)(3) of the Act to use 
other payment models. Track 1 was available for an ACO's initial 
agreement period, and all ACOs were required to transition to Track 2 
to continue participating in subsequent agreement periods. (76 FR 67904 
through 670909).
    In the June 2015 final rule (80 FR 32759), we reiterated our intent 
to continue to encourage ACOs' forward movement up the ramp from the 
one-sided model to performance-based risk. The June 2015 final rule 
discussed policy changes that would allow ACOs not yet ready to 
transition to performance-based risk a second agreement period under 
the one-sided model, while also encouraging ACOs to enter performance-
based risk models by lowering the risk under the existing Track 2 and 
offering an additional two-sided model (Track 3) that was based on the 
payment methodology under Track 2 but incorporated different elements 
intended to make it more attractive for entities to accept increased 
performance-based risk. (80 FR 32759 through 32780).
    In 2017, the Innovation Center designed an additional option for 
eligible Track 1 ACOs, referred to as the Track 1+ ACO Model, to 
facilitate ACOs' transition to performance-based risk. The Track 1+ ACO 
Model was a time-limited model that began on January 1, 2018; it was 
based on Shared Savings Program Track 1 but tested a payment design 
that incorporated more limited downside risk, as compared to Track 2 
and Track 3. Our early experience with the design of the Track 1+ ACO 
Model demonstrated that the availability of a lower-risk, two-sided 
model is an effective way to encourage ACOs in one-sided models 
(including ACOs within a current agreement period, initial program 
entrants (that is, new ACO legal entities), and renewing ACOs to 
progress more rapidly to performance-based risk.
    Most recently, in the December 2018 final rule (83 FR 67822), CMS 
redesigned the participation options available under the program to 
encourage ACOs to transition more rapidly to two-sided models under two 
tracks, a BASIC track and an ENHANCED track. Both tracks are designed 
for 5-year agreement periods. The BASIC track includes a glide path 
with 5 Levels (A through E) that allows eligible ACOs to begin under a 
one-sided model for 2 years (each year of which is identified as a 
separate level (Levels A and B)) and advance to a two-sided model that 
includes incrementally higher levels of risk and reward (Levels C, D, 
and E) for the remaining 3 years of the agreement period.\197\ We 
allowed additional flexibility for new ACO legal entities that qualify 
as low revenue ACOs inexperienced with performance-based risk Medicare 
ACO initiatives to participate for up to 3 performance years under a 
one-sided model (4 performance years in the case of ACOs entering an 
agreement period beginning on July 1, 2019) of the BASIC track's glide 
path before transitioning to the highest level of risk and potential 
reward under the BASIC track (Level E) for the final 2 years of the 
agreement period.
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    \197\ For more information on shared savings and shared losses 
for each level, see Shared Savings Program Participation Options for 
Performance Year 2022, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/ssp-aco-participation-options.pdf.
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    Based on a combination of factors, CMS determines an ACO's 
eligibility for participation options in the BASIC track and ENHANCED 
track along with the number of agreement periods that the ACO may 
participate in the BASIC track. These factors include the degree to 
which the ACO's ACO participants control total Medicare Parts A and B 
fee-for-service (FFS) expenditures for the ACO's assigned beneficiaries 
(low revenue ACOs versus high revenue ACOs), and the ACO's experience 
and its ACO participants' experience with the Shared Savings Program 
and other performance-based risk Medicare ACO initiatives. As noted in 
the December 2018 final rule (83 FR 67826), these policies were 
designed to increase savings for the Medicare Trust Funds and mitigate 
losses, reduce gaming opportunities, and promote regulatory flexibility 
and free-market principles.
    An ACO's ability to participate in the BASIC track is limited, and 
all ACOs eventually must transition to participation in the ENHANCED 
track to continue in the program. High revenue ACOs are limited to, at 
most, a single agreement period under the BASIC track prior to 
transitioning to participation under the ENHANCED track. Low revenue 
ACOs are limited to, at most, 2 agreement periods for a total of 10 
performance years under the BASIC track (or 11 performance years in the 
case of an ACO that participates in an agreement period that began on 
July 1, 2019, and spans a total of 6 performance years). These 
agreement periods do not need to be sequential. The regulations at 
Sec.  425.600(e) also require that should a low revenue ACO, identified 
as experienced with performance-based risk Medicare ACO initiatives, 
have changes in the revenue of its ACO participants that would cause 
the ACO to be considered a high revenue ACO (as these terms are defined 
in Sec.  425.20) for a given performance year, the ACO must take 
corrective action or terminate its participation under the BASIC track 
by the end of the current performance year (83 FR 67877 and 67878).
    As discussed in the December 2018 final rule (83 FR 67881), many 
commenters who addressed the proposed changes to the participation 
options disagreed with the more aggressive transition of ACOs to 
performance-based risk under the proposed program redesign. Some 
commenters cautioned that although the proposed requirement that all 
ACOs undertake two-sided risk at some point during their first 
agreement period might improve the performance of the ACOs that 
continue to participate in the Shared Savings Program, it might also 
reduce ACO participation in the program. Several commenters expressed 
concern that the change in program requirements might cause ACOs to end 
their participation in the Shared Savings Program and create a barrier 
to entry for ACOs to join the program. One commenter recommended that 
CMS carefully monitor Shared Savings Program participation and change 
course if participation falls precipitously. As discussed in the 
Regulatory Impact Analysis section below, AIM participants--a subset of 
Track 1 ACOs that meaningfully outperformed peer ACOs in reducing 
spending and earning shared savings over the period from 2016 through 
2018--dropped out at an elevated frequency before even attempting to 
enter the one-sided model (upside-only)

[[Page 46112]]

portion of the BASIC track glide path, where spending reductions were 
found to be similar regardless of an AIM ACO's decision to continue or 
exit the program.\198\ This suggests both that, while an upside-only 
participation option with a lower shared savings rate can be a highly 
effective incentive for smaller, low-revenue ACOs targeted by AIM, such 
ACOs also likely feel a correspondingly-magnified disincentive to 
accept exposure to even the limited downside risk presented by the 
current BASIC track glide path, and not even superior performance under 
Track 1 appears to provide enough confidence for such ACOs to 
consistently move into participation options leading to assumption of 
two-sided risk.
---------------------------------------------------------------------------

    \198\ Trombley, M.J., et al. ACO Investment Model Produced 
Savings, But the Majority of Participants Exited when Faced with 
Downside Risk. Health Affairs. 2020; 138-146. doi:10.1377/
hlthaff.2020.01819.
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    Several commenters expressed concern that requiring the rapid 
assumption of significant levels of risk by ACOs would discourage new 
participants and impede current ACOs' ability to make patient-centered 
infrastructure investments that are necessary for successful 
participation. Another commenter believed that reducing the amount of 
time permitted under the one-sided model was ill-advised and would 
jeopardize ACOs' continued participation. Our response to these 
comments included our commitment to continue to monitor program 
participation and consider further refinements to the program's 
participation options as we gained experience with implementing the 
redesigned program (83 FR 67835).
    Most commenters on the proposed participation options that were 
finalized in the December 2018 final rule recommended that CMS extend 
the time any ACO can participate in a one-sided model to 3 performance 
years, as opposed to the 2 performance years proposed for ACOs eligible 
to participate under the BASIC track with participation agreements 
beginning on or after January 1, 2020 that do not qualify for a third 
year under the one-sided model under the exception in Sec.  
425.600(a)(4)(i)(B)(2)(ii), stating that it takes longer than 2 
performance years to implement meaningful changes in a healthcare 
delivery model and among healthcare provider and patient populations. 
Other commenters believed that the progression to two-sided risk that 
we proposed and ultimately finalized was far too aggressive and would 
deter participation. These commenters generally suggested allowing for 
4 or 5 performance years (or a full agreement period) under a one-sided 
model. Some commenters suggested that rural ACOs should be allowed at 
least two, 5-year agreement periods under a one-sided model (83 FR 
67847). At the time of the December 2018 final rule, we disagreed with 
suggestions to allow ACOs to remain under the one-sided model for an 
extended time because our experience suggested that the availability of 
6 performance years of one-sided risk under Track 1 and the ability to 
benefit from significant waivers available in the program could be 
leading to the formation of one-sided ACOs that were not making serious 
efforts to improve quality and reduce spending, potentially crowding 
out the formation of more effective ACOs.
    The design of the current Shared Savings Program participation 
options, including a BASIC track glide path incorporating more limited 
downside risk as compared to the ENHANCED track, demonstrates that the 
availability of a lower-risk, two-sided model is an effective way to 
encourage ACOs (including ACOs within a current agreement period, 
initial program entrants, re-entering ACOs, and renewing ACOs) to 
progress more rapidly to performance-based risk. For PY 2022, a 
majority of the 483 ACOs (284 (59 percent)) that currently participate 
in the Shared Savings Program, selected a two-sided model. Refer to 
Table 43.
[GRAPHIC] [TIFF OMITTED] TP29JY22.083

    While many ACOs have agreed to participate under a two-sided model, 
not all ACOs appear to be ready to take on performance-based risk. In 
2020 and 2021, due to the PHE for COVID-19, as defined in Sec.  
400.200, we provided additional participation option flexibilities, 
allowing ACOs participating in the BASIC track's glide path the option 
to elect to forgo automatic advancement and ``freeze'' their 
participation for PY 2021 and PY 2022 at their PY 2020 and 2021 levels, 
respectively. (See May 2020 Interim Final Rule with comment period 
(IFC) (85 FR 27575 and 27576), CY 2021 PFS final rule (85 FR 84767 
through 84769), and CY 2022 Hospital Inpatient Prospective Payment 
Systems final rule (86 FR 45502 through 45506)). Thus, eligible ACOs 
may have elected to remain in the same level of the BASIC track's glide 
path in which they participated during PY 2020 and PY 2021 once again, 
for PY 2022. As specified in the fiscal year (FY) 2022 Medicare 
Hospital Inpatient Prospective Payment System (IPPS) / Long-Term Care 
Hospital (LTCH) Prospective Payment System (PPS) final rule (86 FR 
45503 through 45506), for PY 2023, an ACO that elected one or both of 
these advancement deferral options will be automatically advanced to 
the level of the BASIC track's glide path in which it would have 
participated during PY 2023 if the ACO had advanced automatically to 
the required level of the BASIC track's glide path for PY 2021 and PY 
2022, as applicable (unless the ACO elects to advance more quickly 
before the start of PY 2023). For ACOs that continued their 
participation in the Shared Savings Program into the next performance 
year, when given the

[[Page 46113]]

opportunity to freeze at the ACO's current BASIC track level on the 
glide path, most eligible ACOs under a one-side model (Level A or Level 
B) chose to remain in a one-sided model:
    <bullet> 140/157 (89 percent) currently participating ACOs chose to 
maintain their participation in a one-sided model rather than move to 
risk for PY 2021.
    <bullet> 103/140 (74 percent) chose to maintain their participation 
in a one-sided model rather than move to risk for PY 2022.
    As we have addressed several times through previous rulemakings, an 
ongoing consideration for CMS is how long ACOs should be allowed to 
participate under a one-sided model. We have to balance our goal of 
driving the greatest possible shift to high-value care delivery, which 
we believe may be incentivized most effectively under a two-sided 
model, with concern that requiring ACOs to take on too much downside 
risk too quickly will disincentivize program participation and reduce 
the program's potential to positively affect the quality and cost of 
care furnished to beneficiaries. Although we continue to believe there 
are stronger incentives for increased efficiency when ACOs are in a 
two-sided risk track, ACOs continue to report that they are constrained 
by the current participation options and need more time to invest in 
infrastructure and redesigned care processes for high quality and 
efficient health care service delivery before transitioning to 
performance-based risk. Additionally, some ACOs have reported that the 
ENHANCED track is too risky, and therefore, requiring ACOs to 
eventually move to ENHANCED may hinder continued participation. 
Therefore, we believe it would be prudent to provide greater 
flexibility for ACOs to join the program under one-sided risk and to 
remain in the program under lower levels of performance-based risk in 
order to balance our desire to see more ACOs participate under 
performance-based risk while also working towards our goal of 
increasing overall Shared Savings Program participation and improving 
outcomes for beneficiaries, including high need beneficiaries with 
complex health and social needs who may most benefit from ACOs' linked 
networks of clinicians with incentives, to close inequitable gaps in 
care associated with poorer health outcomes.<SUP>199 200</SUP>
---------------------------------------------------------------------------

    \199\ McWilliams JM, Landon BE, Chernew ME, Zaslavsky AM. 
Changes in patients' experiences in Medicare accountable care 
organizations. N Engl Med. 2014;371(18):1715-1724. doi:10.1056/
NEJMsa1406552.
    \200\ Seshamani M, Jacobs DB. Leveraging Medicare to Advance 
Health Equity. JAMA. 2022;327(18):1757-1758. doi:10.1001/
jama.2022.6613.
---------------------------------------------------------------------------

    We note that the Shared Savings Program was established as, and 
remains, a voluntary program for providers and suppliers that choose to 
participate in an ACO and to become accountable for the quality and 
cost of care for an assigned population of Medicare FFS beneficiaries. 
Thus, to promote the program's goal of ACO accountability for the 
quality and cost of care furnished to assigned beneficiaries, we 
believe it would be appropriate to allow certain ACOs in their first 
agreement period in the program to maintain participation in a one-
sided model (with a lower sharing rate) for a longer period of time, 
rather than risk having those ACOs leave the program altogether to 
avoid transitioning to two-sided risk before the ACO is confident it 
has been able to implement the systemic changes necessary to deliver 
high quality, value-based care. Even if an ACO does not earn shared 
savings, ACOs have demonstrated that they are likely saving Trust Fund 
dollars by modifying their ACO participants' behavior to coordinate 
care and carry out other interventions to improve quality and financial 
performance. In particular, ACOs with average to above-average baseline 
spending may decide that a benchmark with a neutral or negative 
regional adjustment presents too much exposure to performance-based 
risk if they are also required to participate under a two-sided model, 
but they may otherwise elect to participate and begin to reduce 
spending if permitted to join and remain under a one-sided model.
    In light of these considerations, we are concerned that our current 
policy of considering an ACO's status as a high- or low revenue ACO (as 
these terms are defined in Sec.  425.20) in determining the 
participation options available to the ACO may disincentivize certain 
providers and suppliers from forming ACOs or joining existing ACOs. At 
the start of July 1, 2019, 52 percent of the participating ACOs met the 
definition of ``high revenue ACO.'' For PY 2020, 48 percent of 
participating ACOs were high revenue ACOs, for PY 2021, 46 percent of 
participating ACOs were high revenue ACOs, and for PY 2022, 44 percent 
of participating ACOs are high revenue. In all, the share of 
participating ACOs that meet the definition of high revenue ACO has 
decreased by 8 percentage points over three participation years in a 
consistent downward trajectory.
    It is not our intent to incentivize ACOs to exclude high cost 
providers and suppliers from their ACO participant lists to avoid 
meeting the definition of high-revenue ACO. We believe participation in 
the Shared Savings Program encourages providers and suppliers to 
provide better coordinated, more efficient care for beneficiaries and 
results in savings for the Trust Funds. High revenue ACOs, which 
typically include hospitals as ACO participants, have a greater 
opportunity to control assigned beneficiaries' total Medicare Parts A 
and B FFS expenditures, as they coordinate a larger portion of the 
assigned beneficiaries' care across care settings (83 FR 41916 through 
41918). As a result, we believe it is important to provide 
participation options that will encourage more providers and suppliers, 
including those with high revenues, to participate in the Shared 
Savings Program.
    In addition, given the feedback we have received from ACOs and 
other interested parties, as well as our observation of trends in ACO 
participation, we believe ACOs inexperienced with performance-based 
risk Medicare ACO initiatives, regardless of their status as a high- or 
low revenue ACO, may be more likely to participate in the program if 
they are allowed more time under a one-sided model than is currently 
allowed under the available participation options. As discussed in the 
December 2018 final rule, some commenters opposed limiting high revenue 
ACOs to one agreement period in the BASIC track. Given that high 
revenue ACOs are responsible for a greater share of Medicare Part A and 
Part B FFS spending than low revenue ACOs, one commenter agreed that it 
is reasonable to ask high revenue ACOs to assume greater levels of risk 
and/or at a faster pace than low revenue ACOs. But this commenter also 
suggested that CMS should take into account that larger health systems 
must invest in change across a much broader delivery 
<gr-thn-eq>footprint<gr-thn-eq> and so may require additional 
investments over multiple years to make transformative system changes, 
and also need a longer time to recoup investments (such as in the form 
of shared savings). Similarly, we heard from at least one interested 
party that high revenue ACOs need more of an on-ramp to meaningful 
levels of two-sided risk because there are bigger systemic policies in 
place that take time to modify in order to create changes within the 
organization that focus on providing value-based care.

[[Page 46114]]

    As noted above in section G.2.a.(2), CMS has outlined a renewed 
vision and strategy for how the Innovation Center will drive health 
system transformation to achieve equitable outcomes through high-
quality, affordable, person-centered care for all beneficiaries. 
Further, in a January 2022 article, CMS stated our goal that 100 
percent of people with Original Medicare will be in a care relationship 
with accountability for quality and total cost of care by 2030.\201\ 
The Shared Savings Program is the largest Medicare alternative payment 
model with 483 ACOs participating in PY 2022 and 11 million assigned 
beneficiaries.\202\ As a result, the Shared Savings Program will play 
an important role in achieving the goal of creating care relationships 
with accountability for quality and costs for all Medicare FFS 
beneficiaries.
---------------------------------------------------------------------------

    \201\ Seshamani, M., Fowler E., Brooks-LaSure C. et al. Building 
On The CMS Strategic Vision: Working Together For A Stronger 
Medicare. Health Affairs. January 11, 2022. Available at https://www.healthaffairs.org/do/10.1377/forefront.20220110.198444.22 
January. doi:10.1377/forefront.20220110.198444.
    \202\ See Medicare Shared Savings Program Fast Facts (January 
2022), available at https://www.cms.gov/files/document/2022-shared-savings-program-fast-facts.pdf.
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    We believe APMs are well positioned to close gaps in health equity. 
Under the Shared Savings Program, ACOs are incentivized to provide high 
quality care while reducing unnecessary duplication of services and 
preventing medical errors. We believe it is important to encourage 
providers and suppliers who are providing care to high needs 
beneficiaries to join and/or form ACOs to help close gaps in health 
equity. We also believe flexibility with respect to the timeline for 
progression to two-sided risk is important in the Shared Savings 
Program to encourage small, rural, safety-net providers to form ACOs or 
to join larger, more urban practices to share resources. Both of these 
strategies can be utilized to help provide high need beneficiaries 
served by small, rural, safety-net providers with the resources to 
better coordinate their care and improve outcomes.
(2) Proposal for a 5-Year Agreement Period Under a One-Sided Model for 
Eligible ACOs
    We are proposing to allow certain ACOs more time under a one-sided 
model and more flexibility in transitioning to higher levels of risk 
and potential reward by modifying the participation options available 
under the Shared Savings Program. While the proposal for currently 
participating ACOs to elect to maintain their participation at Level A 
or Level B for the remainder of their current agreement period would 
apply beginning January 1, 2023, we are proposing to make all other 
policies outlined in this section effective for agreement periods 
starting on or after January 1, 2024, rather than January 1, 2023, 
because the majority of the application cycle for the 2023 performance 
year will occur before this rule is finalized. Establishing a January 
1, 2024 start date for these changes would allow ACOs time to 
understand the scope of the proposed changes more fully before making 
decisions related to their participation, and would allow CMS adequate 
time to update its processes and application-related guidance documents 
for the new participation options, if they are finalized.
    First, we propose to add a new Sec.  425.600(a)(4)(i)(C)(3) to 
allow an ACO that enters the BASIC track's glide path at Level A under 
Sec.  425.600(a)(4)(i)(A)(1) and is currently at Level A to elect to 
remain in Level A under Sec.  425.600(a)(4)(i)(A)(1) for all subsequent 
performance years of the agreement period, for agreement periods 
beginning on or after January 1, 2024. Per the newly proposed Sec.  
425.600(a)(4)(i)(C)(3)(i), in order to be eligible to participate under 
Level A of the BASIC track for subsequent years of the agreement period 
as described in Sec.  425.600(a)(4)(i)(C)(3), an ACO must meet the 
following requirements: the ACO is participating in its first agreement 
period under the BASIC track under Sec.  425.600(a)(4), and is not 
participating in an agreement period under the BASIC track as a 
renewing ACO (as defined in Sec.  425.20) or a re-entering ACO (as 
defined in Sec.  425.20) that previously participated in the BASIC 
track's glide path under Sec.  425.600(a)(4); and the ACO is 
inexperienced with performance-based risk Medicare ACO initiatives (as 
defined in Sec.  425.20). We propose to extend this participation 
option to re-entering former Track 1 ACOs, because they have not 
previously participated in the BASIC track glide path and we would like 
to encourage them to begin participating in the program again. 
Eligibility for this participation option would not consider the ACO's 
revenue status.
    For eligible ACOs, prior to the automatic advancement of the ACO to 
Level B, the ACO could elect to remain in Level A for all subsequent 
performance years of the agreement period. Under the new Sec.  
425.600(a)(4)(i)(C)(3)(ii), we propose to require that this voluntary 
election by an ACO to remain in Level A for the entirety of its first 
agreement period be made in the form and manner and by a deadline 
established by CMS. In the case of an ACO that elects to remain in 
Level A for the entirety of its first agreement period, the ACO 
generally would be eligible to enter into a subsequent agreement period 
under the BASIC track's glide path, giving the ACO 2 additional years 
of one-sided risk. If an eligible ACO made this election and did not 
elect faster advancement to a higher level of risk and potential 
reward, the ACO would have 7 years under one-sided risk, whereas a new 
ACO entering under the BASIC track's glide path may be eligible for as 
few as 2 performance years under one-sided risk under the current 
participation options. We believe that allowing a maximum of 7 years 
under one-sided risk would strike a more appropriate balance within the 
current structure of 5 performance year agreement periods and the BASIC 
track glide path, which provides for 2 years under the one-sided model. 
Currently, ACOs inexperienced with performance-based risk Medicare ACO 
initiatives generally are limited to 2 years under a one-sided model, 
which ACOs have informed us is not enough time before transitioning to 
risk. We believe giving ACOs longer than the proposed 7 years or 
potentially unlimited time under a one-sided model would dilute the 
program's ability to meaningfully influence expenditures and quality 
through the incentives provided by ACO risk assumption. This proposed 
change to extend the time eligible ACOs may remain under a one-sided 
model would allow ACOs more time to make investments in care 
improvement and to capitalize on those investments, while still working 
to lower costs and improve care quality for their assigned 
beneficiaries.
    Although we are proposing to increase the potential time certain 
ACOs may spend in one-sided risk, our proposal includes a pathway to 
transition these ACOs into two-sided risk. We continue to recognize 
that ACOs are best able to select their participation options to meet 
the needs of their organizations, including when to time their 
transition to performance-based risk, including within an agreement 
period. We propose to add a new Sec.  425.600(g)(1)(i) to provide that 
an ACO that is inexperienced with performance-based risk Medicare ACO 
initiatives may participate in the BASIC track glide path for a maximum 
of 2 agreement periods (once at Level A for all 5 performance years and 
a second time in progression on the glide path). Furthermore, the 
ability to enter a

[[Page 46115]]

second agreement period in the BASIC track's glide path would be 
limited by the proposed new Sec.  425.600(g)(1)(ii), which would 
provide that an ACO that enters an agreement at either Level A or Level 
B is deemed to have completed one agreement under the BASIC track's 
glide path and is only eligible to enter a second agreement under the 
BASIC track's glide path if the ACO continues to meet the definition of 
inexperienced with performance-based risk Medicare ACO initiatives and 
satisfies either of the following: The ACO is the same legal entity as 
a current or previous ACO that previously entered into a participation 
agreement for participation in the BASIC track's glide path only one 
time; or for a new ACO identified as a re-entering ACO, the ACO in 
which the majority of the new ACO's participants were participating 
previously entered into a participation agreement for participation in 
the BASIC track's glide path only one time. In new paragraph 
(g)(1)(iii), we propose that an ACO that is determined to be 
inexperienced with performance-based risk Medicare ACO initiatives but 
is not eligible to enter the BASIC track's glide path may enter either 
the BASIC track Level E for all performance years of the agreement 
period, or the ENHANCED track. For example, an ACO that voluntarily 
terminates its participation agreement during its first agreement under 
Level A of the BASIC track's glide path and chooses to re-enter the 
BASIC track under the proposed new Sec.  425.600(g)(1)(ii) would be re-
entering a second agreement and, if continuing to meet the definition 
of inexperienced with performance-based risk Medicare ACO initiatives, 
could progress along the BASIC track glide path for this second 
agreement period. For its third agreement, the ACO would be required to 
enter the BASIC track at Level E for all years of the agreement period, 
or the ENHANCED track. These provisions would prevent ACOs from 
terminating their participation agreement before transitioning to two-
sided risk in order to stay under the one-sided model, potentially 
indefinitely.
    We also propose to add a new Sec.  425.600(a)(4)(i)(B)(2)(vi) to 
allow currently participating ACOs that are participating in the BASIC 
track at Level A or Level B for performance year 2022 to elect to 
continue in their current level of the BASIC track glide path for 
performance year 2023 and continuing for the remainder of the agreement 
period. If the ACO does not elect to remain under Level A or Level B, 
for performance year 2023, the ACO would be automatically advanced to 
the next level of the BASIC track's glide path to which the ACO would 
have automatically advanced absent any election to maintain its 
participation level for performance year 2022 and, if applicable, the 
election to maintain its participation level for performance year 2021 
under Sec.  425.600(a)(4)(i)(B)(2)(iii), unless the ACO elects to 
transition to a higher level of risk and potential reward within the 
BASIC track's glide path as provided in Sec.  425.226(a)(2)(i). We 
propose to modify Sec.  425.600(a)(4)(i)(B)(2)(iv) to account for the 
proposed new election option under paragraph (vi). We also propose to 
add a new Sec.  425.600(a)(4)(i)(B)(2)(vii) to extend this 
participation option to eligible ACOs that begin an agreement period in 
Level A or Level B on January 1, 2023.
    We recognize we are proposing to implement participation option 
changes in the middle of an agreement period for currently 
participating ACOs in the BASIC track Level A or Level B. However, we 
are proposing to allow these ACOs to elect to remain at the level in 
which they are currently participating for PY 2022 for the remainder of 
their current agreement period, and to offer a similar option to ACOs 
that enter an agreement period starting under Level A or Level B of the 
BASIC track glide path beginning on January 1, 2023, because we wish to 
encourage continuity of participation in the program and do not see any 
advantage to excluding currently participating ACOs and ACOs with 
participation agreements beginning on January 1, 2023, from the same 
participation option that we are proposing to make available to newly 
participating ACOs inexperienced with performance-based risk Medicare 
ACO initiatives that begin a new agreement period on or after January 
1, 2024. We propose that, in the case of a currently participating ACO 
that elects to remain in Level A or Level B under proposed Sec.  
425.600(a)(4)(i)(B)(2)(vi) or (vii) for the remainder of its current 
agreement period, the ACO would be eligible to enter into a subsequent 
agreement period under the BASIC track's glide path pursuant to Sec.  
425.600(g)(1)(ii), giving the ACO an opportunity to participate for up 
to 2 additional years under one-sided risk. For performance year 3 of 
this subsequent agreement period, the ACO would be automatically 
advanced to Level C and to each successive level of risk and potential 
reward for each performance year thereafter, unless the ACO elects to 
transition to a higher level of risk and potential reward within the 
BASIC track's glide path as provided in Sec.  425.226(a)(2)(i). We 
propose to require that this voluntary election by an ACO to remain in 
one-sided risk in Level A or Level B for the remainder of its current 
agreement period be made in the form and manner and by a deadline 
established by CMS.
    Consistent with our proposal to expand the participation options 
for renewing and re-entering ACOs, we propose to make changes to the 
definition of Performance-based risk Medicare ACO initiative in Sec.  
425.20 and to the regulation at Sec.  425.224(a)(4) to allow a renewing 
or re-entering ACO that was previously under a one-sided model of the 
BASIC track's glide path (Level A or B) to reapply for participation in 
the BASIC track's glide path, provided the ACO is not identified as 
having also participated previously under a two-sided model. The 
proposed change to the definition of Performance-based risk Medicare 
ACO initiative in Sec.  425.20 would be effective for performance years 
beginning on January 1, 2023 and for subsequent years. Specifically, we 
propose to amend paragraph (1)(i) of the definition of Performance-
based risk Medicare ACO initiative in Sec.  425.20 to include only 
Levels C through E of the BASIC track, and to remove the one-sided 
Levels A and B from the definition. Similarly, in Sec.  425.224(a)(4), 
we propose to remove the reference to ``a one-sided model of the BASIC 
track's glide path (Level A or Level B),'' so that renewing and re-
entering ACOs that previously participated in a one-sided model of the 
BASIC track's glide path but that are not identified as having 
participated in a two-sided model, are not limited to reapplying for 
participation in a two-sided model.
    We recognize that the annual application and change request cycle 
will begin before the CY 2023 PFS final rule is issued. Accordingly, we 
will give ACOs currently participating in Level A or B of the BASIC 
track glide path the opportunity during the change request cycle to 
indicate whether they are interested in maintaining their participation 
at Level A or Level B under this proposed policy, should it be 
finalized. ACOs expressing such an interest would not be required to 
submit a repayment mechanism at that time. In the event this proposed 
policy is not finalized in the CY 2023 PFS final rule, ACOs that are 
required under Sec.  425.600(a)(4)(i)(B)(2) to advance from Level A or 
Level B to a two-sided risk model for PY 2023 would have a limited 
opportunity to submit a repayment mechanism, resolve any deficiencies, 
and have it approved in time for the

[[Page 46116]]

start of the performance year. ACOs that fail to establish a repayment 
mechanism that complies with the requirements of Sec.  425.204(f) by 
the deadline specified by CMS would be terminated as required under 
Sec.  425.600(a)(4)(i)(B)(3).
    In order to determine an ACO's eligibility to participate under the 
proposed new participation options, we are proposing to consider an 
ACO's experience with performance-based Medicare ACO initiatives only, 
rather than also considering the ACO's status as a high- or low revenue 
ACO. Our proposal would make the ENHANCED track optional for all ACOs, 
regardless of experience with performance-based risk Medicare ACO 
initiatives. As discussed above, because we do not wish to 
disincentivize the formation of ACOs that include high-cost providers 
(that is, high revenue ACOs), we propose not to use revenue status for 
determining ACO participation options. This proposal also would 
simplify the determination of which participation options are available 
to a particular ACO and would reduce burden on ACOs (in terms of 
ascertaining likely available participation options) and CMS (in terms 
of determining ACO eligibility for its selected participation option). 
We propose to modify the regulations in Sec.  425.600(a)(4)(i)(B), 
Sec.  425.600(d), and Sec.  425.600(e) to apply only to agreement 
periods beginning on or after July 1, 2019, and before January 1, 2024, 
because these complex provisions depend on the ACO's status as a high- 
or low revenue ACO. For agreement periods beginning on or after January 
1, 2024, we propose to streamline the specification of the BASIC track 
glide path in Sec.  425.600(a)(4)(i)(C) and eligibility for 
participation options in Sec.  425.600(g), which would define an ACO's 
participation options based solely on the ACO's level of experience 
with performance-based risk Medicare ACO initiatives.
    We believe that the determination of whether an ACO is 
inexperienced or experienced with performance-based risk Medicare ACO 
initiatives (as defined in Sec.  425.20) could be affected by changes 
made by an ACO to its ACO participant list during the course of an 
agreement period, particularly for ACOs that are determined to be 
inexperienced when their agreement period begins but are close to the 
threshold percentage of forty percent of ACO participants having 
participated in a performance-based risk Medicare ACO initiative in any 
of the 5 most recent performance years prior to the agreement start 
date. Any approach under which we would apply different policies to 
ACOs based on the prior experience of an ACO's ACO participants with 
performance-based risk Medicare ACO initiatives would need to recognize 
the potential for an ACO to add or remove ACO participants during the 
course of the agreement period, which could affect whether the ACO 
meets the definition of experienced with performance-based risk 
Medicare ACO initiatives. We are concerned about the possibility that 
an ACO may begin participating under a one-sided, shared savings-only 
level of the BASIC track based on a determination that the ACO is 
inexperienced with performance-based risk Medicare ACO initiatives, and 
then quickly thereafter seek to add ACO participants experienced with 
performance-based risk, thereby avoiding the limitations under our 
proposed participation options regarding the availability of the one-
sided model for experienced ACOs.
    To protect against this circumstance, we propose adding a new 
provision at Sec.  425.600(h), which would provide that for performance 
years beginning on or after January 1, 2024, CMS will monitor ACOs 
identified as inexperienced with performance-based risk Medicare ACO 
initiatives and participating in the BASIC track under a one-sided 
model during an agreement period pursuant to a voluntary election under 
Sec.  425.600(a)(4)(i)(B)(2)(vi), (a)(4)(i)(B)(2)(vii), or 
(a)(4)(i)(C)(3) for changes to their ACO participant list that would 
cause an ACO to be considered experienced with performance-based risk 
Medicare ACO initiatives and ineligible for participation in a one-
sided model.
    We further propose to update the definitions of inexperienced with 
performance-based risk Medicare ACO initiatives and experienced with 
performance-based risk Medicare ACO initiatives under Sec.  425.20 to 
allow for a rolling lookback period (applicable to both the assessment 
of an ACO's application to participate under a participation option for 
an agreement period and to ongoing compliance determinations under 
proposed Sec.  425.600(h)) of the 5 most recent performance years 
beginning from the current performance year being monitored. If an ACO 
meets the definition of experienced with performance-based risk 
Medicare ACO initiatives (as specified in Sec.  425.20), we propose 
under the new provision at Sec.  425.600(h)(2)(i) that the ACO would be 
permitted to complete the remainder of its current performance year in 
a one-sided model of the BASIC track, but would be ineligible to 
continue participation in the one-sided model after the end of that 
performance year if it continues to meet the definition of experienced 
with performance-based risk Medicare ACO initiatives and would be 
automatically advanced to Level E of the BASIC track at the start of 
the next performance year. As specified under the proposed new 
provision at Sec.  425.600(h)(2)(ii), the ACO would be required to meet 
all requirements to participate under performance-based risk, including 
establishing an adequate repayment mechanism as specified under Sec.  
425.204(f) and selecting a MSR/MLR from the options specified under 
Sec.  425.605(b), in accordance with Sec.  425.600(a)(4)(i)(B)(2)(v) or 
Sec.  425.600(a)(4)(i)(C)(4), as applicable. If the ACO fails to meet 
the requirements to participate under performance-based risk, its 
agreement would be terminated in accordance with Sec.  
425.600(a)(4)(i)(B)(3) or Sec.  425.600(a)(4)(i)(C)(5), as applicable.
     An eligible ACO that enters a new agreement period beginning on or 
after January 1, 2024, at Level A of the BASIC track would be permitted 
to elect to remain in Level A for the next performance year and remain 
at Level A for all subsequent performance years of the agreement period 
under the proposed new provision at Sec.  425.600(a)(4)(i)(C)(3). We 
would review the ACO's proposed ACO participant list for each 
subsequent performance year and provide feedback to allow the ACO to 
assess if the proposed changes to its ACO participant list (if any) 
would yield a determination that the ACO qualifies as experienced with 
performance-based risk Medicare ACO initiatives based on the 5 most 
recent performance years prior to the performance year under review 
(for example, PY 2020 through PY 2024, if PY 2025 were under review). 
CMS would perform the same monitoring activity ahead of all subsequent 
performance years of the agreement period in which the ACO elected to 
remain in Level A under the proposed new provision at Sec.  
425.600(a)(4)(i)(C)(3).
    If the ACO were to meet the definition of experienced with 
performance-based risk Medicare ACO initiatives based on the proposed 
ACO participant list for the performance year under review, the ACO 
would still be permitted to complete that performance year in Level A 
of the BASIC track. CMS would then reassess the proposed ACO 
participant list for the subsequent performance year. If at that point 
the ACO has made changes to its ACO participant list such that it no 
longer meets the definition of experienced with performance-based risk 
Medicare ACO initiatives, the ACO would be permitted to complete that

[[Page 46117]]

subsequent performance year in Level A of the BASIC track. But if the 
ACO continues to meet the definition of performance-based risk Medicare 
ACO initiatives based on its proposed ACO participant list for the 
subsequent performance year, the ACO would be automatically advanced to 
Level E of the BASIC track for that performance year, provided the ACO 
met all requirements to participate under performance-based risk. If 
the ACO did not meet all requirements to participate under performance-
based risk, including establishment of an adequate repayment mechanism 
and selection of an available MSR/MLR, the ACO's participation 
agreement would be terminated.
    This proposed policy is illustrated in Table 44. There, 
hypothetical ACOs A and B begin a Shared Savings Program agreement 
period on January 1, 2024, and are determined for that performance year 
to be inexperienced with performance-based risk Medicare ACO 
initiatives. Both ACOs are monitored ahead of PY 2025 as proposed, and 
both continue to meet the definition of inexperience with performance-
based risk Medicare ACO initiatives based on their proposed ACO 
participant lists for PY 2025. Consistent with their status as 
inexperienced with performance-based risk Medicare ACO initiatives, 
both ACO A and ACO B elect to maintain their participation at level A 
of the BASIC track for all years of the agreement period, as proposed 
in Sec.  425.600(a)(4)(i)(C)(3). Ahead of PY 2026, both ACOs are 
determined to be experienced with performance-based risk Medicare ACO 
initiatives based on their proposed ACO participant lists for PY 2026. 
Both ACOs are permitted to remain at Level A of the BASIC track for PY 
2026, but will continue to be monitored by CMS. Ahead of PY 2027, the 
proposed ACO participant list for ACO A for PY 2027 is reviewed and the 
ACO is determined to be inexperienced with performance-based risk 
Medicare ACO initiatives, and ACO A is thus permitted to continue its 
agreement under Level A of the BASIC track for PY 2027. However, ACO B 
is determined to continue to meet the definition of experienced with 
performance-based risk Medicare ACO initiatives based on its proposed 
ACO participant list for PY 2027, and therefore is advanced to Level E 
of the BASIC track for PY 2027 and must remain there for the remainder 
of its agreement period.
[GRAPHIC] [TIFF OMITTED] TP29JY22.084

    Our intention with the policies proposed in this section is to 
provide ACOs with a more gradual on-ramp to taking on two-sided risk 
and to allow them the flexibility they need to best ensure their 
readiness to take on two-sided risk. We believe our proposals would 
encourage more ACOs to form and join the program as well as encourage 
currently participating ACOs to remain in the program. Additionally, we 
believe our proposals would help to increase our participation options 
so that an ACO has more flexibility to select the option that best fits 
its circumstances when applying to participate in the Shared Savings 
Program.
    Increasing the participation options in the program by expanding 
the flexibilities for participation in the one-sided model would also 
be expected to promote health equity for underserved and vulnerable 
beneficiaries by providing ACOs and their ACO participants with an 
additional opportunity to close gaps in care for underserved 
populations before they are required to transition to performance-based 
risk. These additional flexibilities would also afford ACOs that serve 
high need beneficiaries or face greater start-up costs with more time 
to prepare to take on two-sided risk, as well as allowing ACOs to 
balance their response to the COVID-19 pandemic, while also managing 
normal operations, implementing care redesigns and improving the 
quality of care provided to beneficiaries.
    We seek comment on the foregoing proposals for ACO participation 
options in the Shared Savings Program.
    We also seek comment on whether to extend the proposed option for 
certain ACOs inexperienced with performance-based risk Medicare ACO 
initiatives to spend an entire five-year agreement period under the 
one-sided model of the BASIC track for an additional agreement period 
for low revenue ACOs that enter the BASIC track as a new legal entity 
(that has never before participated in the Shared Savings Program and 
is not identified as a renewing or re-entering ACO), so that these ACOs 
would be eligible for a second one-sided only agreement period followed 
by a third agreement period in the BASIC track glide path, which would 
include an additional 2 years under the one-sided model (for a total of 
12 years under the one-sided model) before progressing to two-sided 
risk. We are considering extending this participation option only to 
low revenue ACOs that enter the BASIC track as a new legal entity 
because other ACOs have already had time under one-sided risk and 
therefore do not need a second agreement period in one-sided only. 
Although, as we noted previously, using revenue status in determining 
the participation options available to ACOs may disincentivize certain 
providers and suppliers from forming ACOs or joining existing ACOs, we 
have observed that there are differences in financial performance 
outcomes based on revenue status. An independent study found the first 
three entry cohorts of physician-group ACOs

[[Page 46118]]

(ACOs whose core medical groups for beneficiary attribution were not 
associated with hospitals, which are generally low revenue) 
consistently reduced spending as their first agreement periods 
progressed such that average per beneficiary benefit spending was 
reduced by $300 in 2015 compared to only $37 lower for hospital-
integrated ACOs (ACOs whose core medical groups for beneficiary 
attribution were part of larger organizations or health systems that 
included hospitals).\203\ We therefore estimate that this alternative 
could increase program retention for the type of ACO that, as a group, 
has demonstrated greater program savings under an upside-only incentive 
in the past (that is, low revenue ACOs inexperienced with performance-
based risk Medicare ACO initiatives) and increase program savings (net 
of shared savings payments) by at least $1 billion.
---------------------------------------------------------------------------

    \203\ McWilliams JM, et al. Medicare Spending After 3 Years of 
the Medicare Shared Savings Program. New England Journal of 
Medicine. Sept. 2018. 379: 1139-1149. DOI: 10.1056/NEJMsa1803388.
---------------------------------------------------------------------------

    Under this alternative, a voluntary election by a qualifying ACO to 
remain in Level A for the entirety of its second agreement period in 
the BASIC track would be made in the form and manner and by a deadline 
established by CMS. In the case of a qualifying ACO that elects to 
remain in Level A for the entirety of its second agreement period in 
the BASIC track that is determined to be low revenue at the time of 
application for renewal to a third agreement period in the BASIC track, 
the ACO generally would be eligible to enter into this subsequent 
agreement period under the BASIC track's glide path, giving the ACO 2 
additional years of one-sided risk. If an eligible ACO made this 
election and did not elect faster advancement to a higher level of risk 
and potential reward, the ACO would have a total of 12 years under one-
sided risk in the BASIC track.
    If we were to adopt this alternative, we are concerned about the 
possibility that an ACO may be found eligible to continue for a full 
second agreement period under a one-sided model of the BASIC track 
because of a determination that it is an inexperienced, low revenue ACO 
at the time of application, and then quickly thereafter seek to add 
experienced and/or higher-revenue ACO participants, thereby avoiding 
the requirement under our proposed participation options to move to the 
glide path for the second agreement period under the BASIC track if it 
did not meet the eligibility requirements to continue under the one-
sided model for the entire agreement period. To protect against these 
circumstances, we would continue monitoring for experience with 
performance-based risk Medicare ACO initiatives. Thus, we would 
establish a monitoring policy to monitor for changes to revenue status 
during the ACO's second agreement period in the one-sided only model of 
the BASIC track, to ensure that the ACO continues to meet the 
definition of a low revenue ACO (as well as an ACO inexperienced with 
performance-based risk Medicare ACO initiatives). We would take the 
following approach to ensuring continued compliance of ACOs with the 
eligibility requirements for this alternative participation option. 
When an ACO applies for a second agreement period entirely under the 
one-sided model of the BASIC track, we would determine whether the ACO 
would be a high- or low revenue ACO (and an ACO inexperienced or 
experienced with performance-based risk Medicare ACO initiatives) as 
defined under Sec.  425.20, using the ACO's ACO participant list for 
the first performance year of the new agreement period. Only low 
revenue ACOs would be eligible to elect this participation option to 
remain in Level A for the entirety of their second agreement period 
under the BASIC track, and we would continue to monitor for revenue 
status (as well as experience with performance-based risk Medicare ACO 
initiatives) during the second agreement period. If, during the second 
agreement period, the ACO began to meet the definition of a high 
revenue ACO (or an ACO experienced with performance-based risk Medicare 
ACO initiatives), we propose that the ACO would be permitted to 
complete the remainder of its current performance year under Level A, 
but the ACO would be ineligible to continue participation in Level A 
after the end of that performance year unless it took corrective 
action. For example, if the ACO participants' total Medicare Parts A 
and B FFS revenue increased in relation to total Medicare Parts A and B 
FFS expenditures for the ACO's assigned beneficiaries, the ACO could 
remove an ACO participant from its ACO participant list, so that the 
ACO could continue to meet the definition of low revenue ACO. In the 
event the ACO does not take steps to maintain its status as a low 
revenue ACO, we would take compliance action, up to and including 
termination of the participation agreement, as specified in Sec. Sec.  
425.216 and 425.218, to ensure the ACO did not continue in Level A for 
subsequent performance years of the agreement period. For example, we 
would send the ACO a request for a corrective action plan to resolve 
their change in revenue status, which would allow the ACO time to 
modify its ACO participant list or PECOS enrollment data such that the 
ACO could continue to meet the definition of a low revenue ACO. If the 
ACO continued to meet the definition of a high-revenue ACO at the end 
of the next performance year (that is, based on the ACO's proposed ACO 
participant list for the following performance year), we propose that 
the ACO would be required to move to the level of the BASIC track's 
glide path in which the ACO would be participating for the following 
performance year if it had begun the agreement period in the BASIC 
track's glide path instead of under the one-sided model-only path. This 
includes meeting the applicable requirements prior to entering 
performance-based risk, such as establishing an adequate repayment 
mechanism as specified under Sec.  425.204(f) and selecting a MSR/MLR 
from the options specified under Sec.  425.605(b). Under this 
alternative, if an ACO remains either high revenue or experienced with 
performance-based risk Medicare ACO initiatives based on the ACO's 
proposed ACO participant list for the following performance year, the 
ACO would be required to move to Level E, as discussed in the earlier 
proposal for monitoring for changes in risk experience.
    When the ACO applies for a third agreement period under the BASIC 
track, we would determine revenue status at the time of application. 
Only low revenue ACOs that continued to be inexperienced with 
performance-based risk Medicare ACO initiatives and had entered into a 
participation agreement under the BASIC track only twice would be 
eligible to enter the BASIC track glide path. If at time of application 
CMS determined the ACO was a high revenue ACO as defined under Sec.  
425.20 (or if the ACO met the definition of experienced with 
performance-based risk Medicare ACO initiatives), then it would be 
required to participate in Level E of the BASIC track (or the ENHANCED 
track) for the agreement period, rather than entering the BASIC track 
glide path. If at any time during the ACO's third agreement period CMS 
determined the ACO had begun to meet the definition of a high revenue 
ACO (or of an ACO experienced with performance-based risk Medicare ACO 
initiatives), the ACO would be permitted to complete the remainder of 
the current performance year under the ACO's current level of the glide 
path, but would be ineligible to continue participation in the glide 
path after the end of that performance

[[Page 46119]]

year and would be moved to Level E of the BASIC track unless the ACO 
took corrective action to modify its ACO participant list as described 
above.
(3) Proposal To Remove the Limitation on the Number of Agreement 
Periods an ACO Can Participate in Level E of the BASIC Track
    Currently, there are limitations on how long ACOs may participate 
in the BASIC track, including at Level E, the BASIC track's highest 
level of risk and potential reward. Under Sec.  425.600(d)(1)(ii), high 
revenue ACOs experienced with performance-based risk Medicare ACO 
initiatives may not participate in the BASIC track at all unless they 
meet the limited criteria in Sec.  425.600(d)(1)(ii)(B). Under Sec.  
425.600(d)(2)(ii), low revenue ACOs experienced with performance-based 
risk Medicare ACO initiatives may enter the program under the BASIC 
track Level E and remain in the BASIC track at that level for up to 2 
agreement periods. Under Sec.  425.600(d)(3), low revenue ACOs may 
participate under the BASIC track for a maximum of 2 agreement periods, 
after which they must move to the ENHANCED track to continue 
participating in the program. A low revenue ACO may only participate in 
the BASIC track for a second agreement period if it satisfies either of 
the following: (i) the ACO is the same legal entity as a current or 
previous ACO that previously entered into a participation agreement for 
participation in the BASIC track only one time; or (ii) for a new ACO 
identified as a re-entering ACO, the ACO in which the majority of the 
new ACO's participants were participating previously entered into a 
participation agreement for participation in the BASIC track only one 
time.
    Some ACOs have reported that they would rather leave the program 
than be required to move to the ENHANCED track and have requested that 
CMS make the ENHANCED track optional for ACOs. In our implementation of 
the Shared Savings Program, we intend to achieve larger programmatic 
goals by encouraging ACO participation and thereby promoting high 
quality, value-based care for Medicare FFS beneficiaries. As discussed 
above, we continuously seek, based on experience and feedback, to 
balance creating sufficient incentives for participation in a voluntary 
program, with ensuring that our policies achieve program goals to 
increase quality of care for Medicare beneficiaries and reduce 
expenditure growth to protect the Trust Funds. Accordingly, we now 
believe it would be in the best interest of the program and Medicare 
FFS beneficiaries to permit eligible ACOs to continue participating 
under the BASIC track Level E, rather than risk significant numbers of 
experienced, successful ACOs terminating their participation in the 
program instead of progressing to the higher level of risk and 
potential reward under the ENHANCED track. Our experience shows that 
ACOs in the BASIC Track Level E and ACOs in the ENHANCED Track have 
similar performance results. Therefore, we propose to add a new Sec.  
425.600(g)(2) to specify that if an ACO is determined to be experienced 
with performance-based risk Medicare ACO initiatives, the ACO may enter 
BASIC track Level E under Sec.  425.600(a)(4)(i)(A)(5) for all 
performance years of the agreement period, or the ENHANCED track under 
Sec.  425.600(a)(3). These options would be available without regard to 
the ACO's status as a high- or low revenue ACO. We also propose that 
all ACOs would be permitted to participate indefinitely under the BASIC 
track, Level E, or the ENHANCED track. This would include ACOs 
currently in the ENHANCED track or that participate under the ENHANCED 
track in the future. These ACOs would be permitted to enter a new 
participation agreement under Level E of the BASIC track. We believe it 
is important to offer this option to encourage ACOs that believe they 
may be ready to take on the higher level of risk and potential reward 
under the ENHANCED track to progress to that participation option, 
secure in the knowledge that the more moderate level of risk and 
potential reward under Level E of the BASIC track would be available to 
the ACO in the future if the ACO concludes based on experience that 
that participation option is more appropriate for the ACO than the 
ENHANCED track. We anticipate providing education and offering outreach 
to ACOs on the available participation options through various methods 
available, including ACO Coordinators, guidance documents, tip sheets, 
FAQs, and a bi-weekly newsletter to assist ACOs as they navigate to 
higher levels of risk and potential reward throughout their 
participation in the program.
    In conjunction with these proposed changes to the participation 
options available under the program, we are proposing to make several 
technical and conforming changes to the existing regulations. We 
propose to modify Sec.  425.600(a)(4)(ii) to reference the new 
paragraph Sec.  425.600(g)(2) in addition to the currently identified 
paragraph (d). We propose to add new Sec.  425.605(b)(2)(ii)(E) to 
include a provision for an ACO to select its MSR/MLR if it 
automatically transitions from Level A to Level E of the BASIC track's 
glide path under the new Sec.  425.600(h)(2). Lastly, we propose to 
modify Sec.  425.605(d)(1) and (d)(2) to reference the new paragraph 
Sec.  425.600(g) in addition to the current reference to Sec.  
425.600(d).
    We invite comments on all proposals described in this section 
III.G.2. of this proposed rule, and related issues, including the 
alternative approach under which we would permit low revenue ACOs to 
remain in a one-sided only model of the BASIC Track for a second 
agreement period before entering the BASIC Track glide path in their 
third agreement. Please refer to Table 45, which summarizes the 
participation option policies we are proposing, and to Table 46, which 
summarizes the alternative participation option policy.
BILLING CODE 4120-01-P

[[Page 46120]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.085


[[Page 46121]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.086

BILLING CODE 4120-01-C
3. Determining Beneficiary Assignment Under the Shared Savings Program
a. Proposed Revisions to the Definition of Primary Care Services Used 
in Shared Savings Program Beneficiary Assignment
(1) Background
    Section 1899(c)(1) of the Act, as amended by the CURES Act and the 
Bipartisan Budget Act of 2018, provides that for performance years 
beginning on or after January 1, 2019, the Secretary shall assign 
beneficiaries to an ACO based on their utilization of primary care 
services provided by a physician who is an ACO professional and all 
services furnished by Rural Health Clinics (RHCs) and Federally 
Qualified Health Centers (FQHCs). However, the statute does not specify 
a list of services considered to be primary care services for purposes 
of beneficiary assignment.
     In the November 2011 final rule (76 FR 67853), we established the 
initial list of services, identified by Current Procedural Terminology 
(CPT) and Healthcare Common Procedure Coding System (HCPCS) codes, that 
we considered to be primary care services. In that final rule, we 
indicated that we intended to monitor CPT and HCPCS codes and would 
consider making changes to the definition of primary care services to 
add or delete codes used to identify primary care services, if there 
were sufficient evidence that revisions were warranted. We have updated 
the list of primary care service codes in subsequent rulemaking (refer 
to 80 FR 32746 through 32748; 80 FR 71270 through 71273; 82 FR 53212 
and 53213; 83 FR 59964 through 59968; 85 FR 27582 through 27586; 85 FR 
84747 through 84756; 85 FR 84785 through 84793; 86 FR 65273 through 
65279) to reflect additions or modifications to the codes that have 
been recognized for payment under the PFS and to incorporate other 
changes to the definition of primary care services for purposes of the 
Shared Savings Program.
    For the performance year beginning on January 1, 2022, and 
subsequent performance years, we defined primary care services in Sec.  
425.400(c)(1)(vi) for purposes of assigning beneficiaries to ACOs under 
Sec.  425.402 as the set of services identified by the following HCPCS/
CPT codes:
    (A) CPT codes:
    (1) 96160 and 96161 (codes for administration of health risk 
assessment).
    (2) 99201 through 99215 (codes for office or other outpatient visit 
for the evaluation and management of a patient).
    (3) 99304 through 99318 (codes for professional services furnished 
in a nursing facility; professional services or services reported on an 
FQHC or RHC claim identified by these codes are excluded when furnished 
in a SNF).
    (4) 99319 through 99340 (codes for patient domiciliary, rest home, 
or custodial care visit).
    (5) 99341 through 99350 (codes for evaluation and management 
services furnished in a patient's home for claims identified by place 
of service modifier 12).
    (6) 99354 and 99355 (add-on codes, for prolonged evaluation and 
management or psychotherapy services beyond the typical service time of 
the primary procedure; when the base code is also a primary care 
service code under this paragraph (c)(1)(vi)).
    (7) 99421, 99422, and 99423 (codes for online digital evaluation 
and management).
    (8) 99424, 99425, 99426, and 99427 (codes for principal care 
management services).
    (9) 99437, 99487, 99489, 99490 and 99491 (codes for chronic care 
management).
    (10) 99439 (code for non-complex chronic care management).
    (11) 99483 (code for assessment of and care planning for patients 
with cognitive impairment).
    (12) 99484, 99492, 99493 and 99494 (codes for behavioral health 
integration services).
    (13) 99495 and 99496 (codes for transitional care management 
services).
    (14) 99497 and 99498 (codes for advance care planning; services

[[Page 46122]]

identified by these codes furnished in an inpatient setting are 
excluded).
    (B) HCPCS codes:
    (1) G0402 (code for the Welcome to Medicare visit).
    (2) G0438 and G0439 (codes for the annual wellness visits).
    (3) G0442 (code for alcohol misuse screening service).
    (4) G0443 (code for alcohol misuse counseling service).
    (5) G0444 (code for annual depression screening service).
    (6) G0463 (code for services furnished in ETA hospitals).
    (7) G0506 (code for chronic care management).
    (8) G2010 (code for the remote evaluation of patient video/images).
    (9) G2012 and G2252 (codes for virtual check-in).
    (10) G2058 (code for non-complex chronic care management).
    (11) G2064 and G2065 (codes for principal care management 
services).
    (12) G2212 (code for prolonged office or other outpatient visit for 
the evaluation and management of a patient).
    (13) G2214 (code for psychiatric collaborative care model).
    (C) Primary care service codes include any CPT code identified by 
CMS that directly replaces a CPT code specified in paragraph 
(c)(1)(vi)(A) of this section or a HCPCS code specified in paragraph 
(c)(1)(vi)(B) of this section, when the assignment window (as defined 
in Sec.  425.20) for a benchmark or performance year includes any day 
on or after the effective date of the replacement code for payment 
purposes under FFS Medicare.
 (2) Proposed Revisions
(a) HCPCS and CPT Codes Used in Assignment
     Based on feedback from ACOs and our further review of the HCPCS 
and CPT codes that are currently recognized for payment under the PFS 
or that we are proposing to recognize for payment starting in CY 2023, 
we believe it would be appropriate to amend the definition of primary 
care services used in the Shared Savings Program assignment methodology 
to include certain additional codes and to make other technical changes 
to the definition of primary care services for use in determining 
beneficiary assignment for the performance year starting on January 1, 
2023, and subsequent performance years in order to remain consistent 
with billing and coding guidance under the PFS.
     We propose to revise the definition of primary care services used 
for assignment in the Shared Savings Program regulations to include the 
following additions: (1) Prolonged services HCPCS codes GXXX2 and 
GXXX3, if finalized; and (2) Chronic Pain Management HCPCS codes GYYY1 
and GYYY2, if finalized. The following provides additional information 
about the HCPCS codes that we are proposing to add to the definition of 
primary care services used in assignment:
    <bullet> Prolonged Services Codes GXXX2 and GXXX3: In section II.F 
of this proposed rule, we are proposing that prolonged nursing facility 
services furnished by a physician or non-physician practitioner (NPP) 
would be reportable under GXXX2, which would be used when the total 
time for the primary service is exceeded by 15 or more minutes to 
account for the additional time spent. The long descriptor would be 
GXXX2 (Prolonged nursing facility evaluation and management service(s) 
beyond the total time for the primary service (when the primary service 
has been selected using time on the date of the primary service); each 
additional 15 minutes by the physician or qualified healthcare 
professional, with or without direct patient contact (list separately 
in addition to CPT codes 99306, 99310 for nursing facility evaluation 
and management services). (Do not report GXXX2 on the same date of 
service as other prolonged services for evaluation and management 
99358, 99359, 993X0). (Do not report GXXX2 for any time unit less than 
15 minutes)). Prolonged physician or NPP nursing facility (NF) services 
would be reportable once 95 minutes are spent for initial NF visits, 
and once 85 minutes are spent for subsequent NF visits, and for each 
additional 15 minutes furnished thereafter. Because GXXX2 would be 
reportable for each additional 15-minute increment of time beyond the 
total time for CPT codes 99306 and 99310, which are included in the 
Shared Savings Program definition of primary care services for purposes 
of beneficiary assignment, we believe GXXX2 should also be included in 
the definition of primary care services under Sec.  425.400(c) for the 
performance year starting on January 1, 2023, and subsequent 
performance years, if payment for the code is made permanent through 
the CY 2023 PFS rulemaking, since this code would represent the 
provision of services that are already included in the definition of 
primary care services for a longer period of time.
    We are additionally proposing that prolonged home or residence 
services by a physician or NPP would be reportable under GXXX3 
(Prolonged home or residence evaluation and management service(s) 
beyond the total time for the primary service (when the primary service 
has been selected using time on the date of the primary service); each 
additional 15 minutes by the physician or qualified healthcare 
professional, with or without direct patient contact (list separately 
in addition to CPT codes 99345, 99350 for home or residence evaluation 
and management services). (Do not report GXXX3 on the same date of 
service as other prolonged services for evaluation and management 
99358, 99359, 99417). (Do not report GXXX3 for any time unit less than 
15 minutes)). Because code GXXX3 would be reportable as an add-on code 
to CPT codes 99345 or 99350 once the practitioner spends 15+ minutes 
beyond the total time finalized for the primary service, and CPT codes 
99345 and 99350 are included in the Shared Savings Program definition 
of primary care services for purposes of beneficiary assignment, we 
believe GXXX3 should also be included in the definition of primary care 
services under Sec.  425.400(c) for the performance year starting on 
January 1, 2023, and subsequent performance years, if payment for the 
code is made permanent through the CY 2023 PFS rulemaking, since this 
code would represent the provision of services that are already 
included in the definition of primary care services for a longer period 
of time.
    <bullet> Chronic Pain Management (CPM) HCPCS codes GYYY1 and GYYY2: 
In section II.E this proposed rule, we are proposing two new HCPCS 
codes for CPM services, beginning January 1, 2023. We recognize that 
there is no existing code that specifically describes the work of the 
clinician involved in performing the tasks necessary to perform 
holistic, CPM under current Medicare payment policy. These new HCPCS 
codes would be analogous to Chronic Care Management (CCM) services and 
Principal Care Management (PCM) services because GYYY1 would include 
similar care plan, medication management, unusually complex clinical 
management; care coordination between relevant practitioners furnishing 
care; and time for care provided personally by a physician or other 
qualified health care professional, as described in CPT code 99424; and 
GYYY2 would include similar activities as described in CPT code 99425, 
both of which already are included in the Shared Savings Program 
definition of primary care services used in assignment. Additionally, 
we expect that most of these services would be

[[Page 46123]]

billed by primary care practitioners who are focused on long-term 
management of their patients with chronic pain and we expect the 
billing practitioner to demonstrate in the Medicare patient's record 
when there is coordination or continuity of care between a specialist 
or other relevant practitioner, such as a physical therapist or 
occupational therapist, which we believe supports the inclusion of the 
services described by these HCPCS codes in our definition of primary 
care services for purposes of beneficiary assignment under the Shared 
Savings Program. Under the Shared Savings Program, CCM services 
reported using CPT codes 99437, 99439, 99487, 99489, 99490 and 99491 
and HCPCS code G2058 and PCM services reported using CPT Codes 99424, 
99425, 99426, and 99427 and HCPCS codes G2064 and G2065 currently are 
included in the definition of primary care services for purposes of 
beneficiary assignment (refer to 85 FR 84749 and 86 FR 65274 through 
65275) and as such, to remain consistent with updates to the scope of 
care management services payable under the PFS, we are proposing to 
include these CPM services codes, if finalized, in the definition of 
primary care services used for beneficiary assignment. Accordingly, we 
propose to include HCPCS code GYYY1 (Chronic pain management and 
treatment, monthly bundle including, diagnosis; assessment and 
monitoring; administration of a validated pain rating scale or tool; 
the development, implementation, revision, and maintenance of a person-
centered care plan that includes strengths, goals, clinical needs, and 
desired outcomes; overall treatment management; facilitation and 
coordination of any necessary behavioral health treatment; medication 
management; pain and health literacy counseling; any necessary chronic 
pain related crisis care; and ongoing communication and care 
coordination between relevant practitioners furnishing care, e.g. 
physical therapy and occupational therapy, and community-based care, as 
appropriate. Required initial face-to-face visit at least 30 minutes 
provided by a physician or other qualified health professional; first 
30 minutes personally provided by physician or other qualified health 
care professional, per calendar month. (When using GYYY1 30 minutes 
must be met or exceeded.)) and GYYY2 (Each additional 15 minutes of 
chronic pain management and treatment by a physician or other qualified 
health care professional, per calendar month (List separately in 
addition to code for GYYY1). When using GYYY2 15 minutes must be met or 
exceeded.) because GYYY2 is similar in scope as GYYY1, just for 
additional duration, in the definition of primary care services under 
Sec.  425.400(c) for the performance year starting on January 1, 2023, 
and subsequent performance years, if payment for these codes is made 
permanent through the CY 2023 PFS rulemaking. Refer to other sections 
of this proposed rule for detailed, technical discussion regarding the 
proposed description, payment, and utilization of these HCPCS and CPT 
codes.
(b) Technical Update to the Description of CPT Codes 99341 through 
99350
     In the CY 2019 PFS final rule (83 FR 60093), we updated our 
regulations at Sec.  400(c)(1)(iv)(A)(4) by adding the descriptor 
``codes for evaluation and management services furnished in a patients' 
[sic] home for claims identified by place of service modifier 12'' to 
CPT codes 99341 through 99350, as used in the definition of primary 
care services used in assignment for performance years (or a 
performance period) starting during 2019 and performance year 2020. 
This descriptor, slightly modified to correct a typographical error, 
also applied for the performance year starting on January 1, 2021, 
under Sec.  425.400(c)(1)(v)(A)(5) and continues to apply for the 
performance year starting on January 1, 2022, and subsequent 
performance years, under Sec.  425.400(c)(1)(vi)(A)(5).
    On March 17, 2021, the AMA updated the CPT[reg] Editorial summary 
of Panel Actions for February 2021 (https://www.ama-assn.org/system/files/2021-03/february-2021-summary-panel-actions.pdf). This summary 
describes revisions made to Home and Residence Services to revise the 
guidelines for CPT codes 99341 through 99350 to include services 
provided in assisted living facilities, group homes, custodial care 
facilities, and residential substance use treatment facilities. As 
discussed in section II.C of this proposed rule, we are proposing to 
adopt these changes under Medicare Fee for Service payment policies and 
as such, we are proposing conforming changes to omit the reference to 
``for claims identified by place of service modifier 12'' from the 
description for CPT codes 99341 through 99350. This proposed 
modification would be reflected in the proposed definition of primary 
care services used in assignment for the performance year starting on 
January 1, 2023, and subsequent performance years, in a new provision 
of the regulations at Sec.  425.400(c)(1)(vii)(A)(7).
    In this proposed provision, CPT codes 99341 through 99350 would be 
described as codes for evaluation and management services furnished in 
a patient's home, without the place of service 12 identifier. The place 
of service logic is included in claims processing algorithms and 
therefore accounted for in paid claims used by the Shared Savings 
Program in determining beneficiary assignment. As described in Medicare 
Claims Processing Manual, Publication 100-04, Chapter 26, place of 
service codes are two-digit codes placed on health care professional 
claims to indicate the setting in which a service was provided. Claims 
submitted for services that are allowable when provided in certain 
settings will process only when the appropriate place of service is 
included on the claim. Place of service 12 is defined as ``location, 
other than a hospital or other facility, where the patient receives 
care in a private residence.'' In previous rulemaking, we updated the 
reference to CPT codes 99341 through 99350 in the definition of primary 
care services at Sec.  425.400(c) to include place of service 12 for 
clarity; however, we now believe it is no longer accurate as these 
codes have been revised to include multiple places of service, any of 
which we would consider to be the patient's home.
(c) Rural Emergency Hospitals
    The Consolidated Appropriations Act (CAA) of 2021, was signed into 
law on December 27, 2020. In this legislation, Congress established a 
new rural Medicare provider type: Rural Emergency Hospitals (REHs). 
These providers will furnish emergency department and observation care, 
and other specified outpatient medical and health services, if elected 
by the REH, that do not exceed an annual per patient average of 24 
hours. Hospitals that were CAHs or rural hospitals with not more than 
50 beds, participating in Medicare, as of the date of enactment of the 
CAA, are eligible to seek conversion to an REH. REHs are expected to 
help address the barriers in access to health care, particularly 
emergency services and other outpatient services that result from rural 
hospital closures, and by doing so, may help address observed 
inequities in health care in rural areas. Section 1861(kkk)(1)(A) of 
the Act defines the term ``REH services'' as emergency department and 
observation services, as well as other medical and health services 
furnished on an outpatient basis as specified by the Secretary
    Under section 1861(k)(10) of the Act, payments will be made for REH 
services

[[Page 46124]]

furnished on or after January 1, 2023. We expect that REHs will submit 
claims in a similar manner to hospital outpatient departments paid 
under the OPPS. As a result, we do not believe that we need to propose 
special policies regarding the treatment of services furnished in REHs 
for purposes of beneficiary assignment under the Shared Savings 
Program. Rather, we would consider services furnished in REHs in the 
same manner that we currently consider services furnished in hospital 
outpatient departments for purposes of conducting assignment under the 
Shared Savings Program. However, we will continue to monitor the 
development of payment policy for REHs to determine whether any 
adjustments to our assignment policies may be necessary to account for 
services furnished in REHs and will consider whether any findings may 
warrant changes through future notice and comment rulemaking. In 
addition, we note that in section III.G.3.b. of this proposed rule, we 
are proposing to include on an ACO's ACO provider/supplier list any 
CCNs that may be deactivated and then reactivated, or disenrolled as 
one facility type but re-enrolled as another facility type, which would 
include any CAHs that elect to re-enroll as rural emergency hospitals.
    We propose to specify a revised definition of primary care services 
in a new provision of the Shared Savings Program regulations at Sec.  
425.400(c)(1)(vii) to include the list of HCPCS and CPT codes specified 
in Sec.  425.400(c)(1)(vi) along with the proposed additional HCPCS 
codes GXXX2 and GXXX3, and GYYY1 and GYYY2, if these additional codes 
are finalized through the CY 2023 PFS rulemaking. We further propose to 
omit from the description for CPT codes 99341 through 99350, the 
reference to ``for claims identified by place of service modifier 12.'' 
We propose that the new provision at Sec.  425.400(c)(1)(vii) would be 
applicable for use in determining beneficiary assignment for the 
performance year starting on January 1, 2023, and subsequent 
performance years. Further, we propose technical modifications to the 
introductory text in Sec.  425.400(c)(1)(vi) to limit the applicability 
of this provision to the performance year starting on January 1, 2022.
    We seek comment on these proposed changes to the definition of 
primary care services used for assigning beneficiaries to Shared 
Savings Program ACOs for the performance year starting on January 1, 
2023, and subsequent performance years. We also welcome comments on any 
other existing HCPCS or CPT codes and new HCPCS or CPT codes proposed 
elsewhere in this proposed rule, that we should consider adding to the 
definition of primary care services for purposes of assignment in 
future rulemaking.
b. Proposal on Identifying how CMS Certification Numbers Will Be 
Included and Used in Beneficiary Assignment
(1) Background
    Under the Shared Savings Program, ACOs are accountable for the 
quality, cost, and overall care of the Medicare FFS beneficiaries that 
are assigned to the ACO (Sec.  425.100(a)). ACOs are formed by one or 
more ``ACO participants,'' which are responsible for managing and 
coordinating care for the assigned beneficiary population. The Shared 
Savings Program regulations define ``ACO participant'' at Sec.  425.20 
as an entity identified by a Medicare-enrolled billing Taxpayer 
Identification Number (TIN) through which one or more ``ACO providers/
suppliers'' bill Medicare, that alone or together with one or more 
other ACO participants compose an ACO, and that is included on the list 
of ACO participants that is required under Sec.  425.118 (herein ``ACO 
participant list''). An ``ACO provider/supplier'' is an individual or 
entity that: (1) is a provider (as defined at Sec.  400.202) or 
supplier (as defined at Sec.  400.202); (2) is enrolled in Medicare; 
(3) bills for items and services furnished to Medicare FFS 
beneficiaries during the agreement period under a Medicare billing 
number assigned to the TIN of an ACO participant in accordance with 
applicable Medicare regulations; and (4) is included on the list of ACO 
providers/suppliers that is required under Sec.  425.118 (herein ``ACO 
provider/supplier list''). CMS requires each ACO to execute contractual 
agreements with each of its ACO participants (``ACO participant 
agreements''), to ensure that the ACO participant and each ACO 
provider/supplier billing through the TIN of the ACO participant agree 
to the requirements of the Shared Savings Program.
    Under Sec.  425.118(a), an ACO must maintain, update, and submit to 
CMS an accurate and complete list identifying each ACO participant 
(including its Medicare-enrolled TIN) and each ACO provider/supplier 
(including its National Provider Identifier (NPI), CCN, or other 
identifier). All Medicare-enrolled individuals and entities that have 
reassigned their right to receive Medicare payment to the TIN of an ACO 
participant must be included on the ACO provider/supplier list (Sec.  
425.118(a)(4)).
(a) Development and Maintenance of the ACO Participant List
    An ACO must submit a draft ACO participant list before the start of 
an agreement period and before each performance year thereafter. CMS 
reviews the draft list, conducts a program integrity screening on the 
individuals and entities identified on the list, approves or rejects 
each entry on the list, and informs the ACO of the contents of the 
resulting ACO participant list. In accordance with Sec.  425.118(a)(3), 
the ACO must certify the accuracy of its ACO participant list before 
the start of its agreement period and before each performance year 
thereafter.
    An ACO must maintain and periodically update its ACO participant 
list. An ACO is required to notify CMS no later than 30 days after an 
entity ceases to be an ACO participant. The entity is deleted from the 
ACO participant list as of the termination date of the entity's ACO 
participant agreement. Absent unusual circumstances, the ACO 
participant's data will continue to be utilized for certain operational 
purposes. CMS does not make adjustments during the performance year to 
the ACO's assignment, historical benchmark, performance year financial 
calculations, or the obligation of the ACO to report on behalf of 
eligible clinicians who bill under the TIN of an ACO participant for 
certain CMS quality initiatives, to reflect the deletion of entities 
from the ACO participant list that become effective during the 
performance year.
    If the ACO wishes to add an entity to its ACO participant list, it 
must submit a request to CMS. If CMS approves the request, the addition 
becomes effective on January 1 of the next performance year. ACO 
participants may not be added during a performance year.
    The ACO participant list is critical to Shared Savings Program 
operations. CMS uses the ACO participant list to identify which 
entities are in the ACO, generate the ACO provider/supplier list, 
determine which Medicare FFS beneficiaries will be assigned to an ACO, 
establish the historical benchmark, perform financial calculations, and 
coordinate among CMS quality reporting initiatives.
(b) Development and Maintenance of the ACO Provider/Supplier List
    In accordance with Sec.  425.118, ACOs must submit to CMS before 
the start of an agreement period and before each performance year 
thereafter an accurate and complete list identifying each ACO provider/
supplier (including its NPI,

[[Page 46125]]

CCN, or other identifier). In accordance with Sec.  425.118(a)(3), the 
ACO must certify the accuracy of its ACO provider/supplier list. In 
addition, ACOs are required to notify CMS of any changes in their ACO 
provider/supplier list in accordance with Sec.  425.118(c). 
Specifically, an ACO must notify CMS within 30 days after an individual 
or entity becomes or ceases to be a Medicare-enrolled provider or 
supplier that bills for items and services it furnishes to Medicare 
fee-for-service beneficiaries under a billing number assigned to the 
TIN of an ACO participant (Sec.  425.118(c)).
    For performance years starting on January 1, 2019, and subsequent 
performance years, CMS creates the initial ACO provider/supplier list 
for a performance year by using the Provider Enrollment, Chain, and 
Ownership System (PECOS) to identify by CCN and NPI all of the 
providers and suppliers, respectively, that have reassigned their right 
to receive Medicare payment to the TIN of an ACO participant. As with 
its ACO participant list, each ACO must review that initial list, make 
any necessary corrections, and certify the resulting ACO provider/
supplier list prior to the start of a performance year and at such 
other times as specified by CMS.
(c) Use of Lists in Beneficiary Assignment
    For performance years 2012 through 2018, ACOs were required to 
identify on their ACO participant list the CCNs for certain provider 
types (FQHCs, RHCs, Electing Teaching Amendment (ETA) hospitals, and 
Method II Critical Access Hospitals (CAHs)) as well as the ACO 
participant TIN under which the CCN was enrolled in Medicare. CMS 
required ACOs to identify CCNs and their associated TIN information 
because otherwise it would not be possible to identify the 
institutional claims billed by those providers for purposes of 
beneficiary assignment since TINs are not retained in the CMS 
Integrated Data Repository (IDR) for the claims submitted by FQHCs, 
RHCs, ETA hospitals, and Method II CAHs.
    Additionally, ACOs that included FQHCs and/or RHCs on their ACO 
participant list were also required to identify, through an 
attestation, a list of physicians who directly provided primary care 
services in each FQHC or RHC (herein ``attestation list'') in 
accordance with Sec.  425.404(a). The linkage of the physicians to the 
FQHCs and RHCs provided via the attestation list was necessary because 
physicians and other individual practitioners cannot reassign their 
Medicare billing rights to an FQHC or RHC CCN. Therefore, although 
FQHCs, RHCs, physicians, and other individual practitioners are all 
listed in PECOS, the PECOS reassignment data used to generate the ACO 
provider/supplier list could not have linked the NPI of a physician or 
other practitioner to the CCN of an FQHC or RHC and, in turn, to an ACO 
participant TIN. This attestation list was collected through the ACO's 
application to the Shared Savings Program and could be updated annually 
with changes, if any, which would take effect January 1 of the next 
performance year.
    In accordance with Sec.  425.404(b), for performance years starting 
on January 1, 2019, and subsequent years, under the assignment 
methodology in Sec.  425.402, CMS treats a service reported on an FQHC/
RHC claim, identified using the CCN as a unique identifier for an 
individual FQHC/RHC, as a primary care service performed by a primary 
care physician. For performance years starting on January 1, 2019, and 
subsequent performance years, CMS uses PECOS to identify the CCN or NPI 
of each ACO provider/supplier enrolled under an ACO participant TIN. 
Specifically, CMS uses PECOS data to identify the following: (i) all 
Medicare enrolled entities (as identified by a CCN) that have enrolled 
under the TIN of an ACO participant; and (ii) all individual 
practitioners (as identified by an NPI) who have reassigned their right 
to receive Medicare payment to the TIN of an ACO participant. The 
resulting initial ACO provider/supplier list reflects PECOS enrollment 
information at a single point in time. An ACO may need to add or remove 
a provider or supplier who has reassigned his or her right to receive 
Medicare payment to the TIN of an ACO participant after the ACO 
certified its ACO provider/supplier list for the performance year. An 
ACO that needs to make a change to its certified ACO provider/supplier 
list must notify CMS within 30 days of the change.
    For purposes of beneficiary assignment, we identify claims for 
services furnished by Method II CAHs, ETA hospitals, FQHCs, and RHCs 
using the CCN assigned to the facility. In general, ACO participants 
are identified by TINs. However, the TINs for Method II CAHs, FQHCs, 
RHCs, and ETA hospitals are not included in the National Claims History 
and IDR claims files, so we use the CCN as the unique identifier to 
identify services furnished by these entities. Thus, for these 
providers, we use TINs from the certified ACO participant list and the 
associated CCNs sourced from PECOS as the basis for beneficiary 
assignment. We also use claims from participant TINs on the certified 
ACO participant list and the CCNs from the initial ACO provider/
supplier list in the determination of whether an ACO is a high revenue 
ACO or low revenue ACO, as defined at Sec.  425.20, and in the 
determination of beneficiary assignment upon which benchmark and 
performance year expenditure calculations are determined.
    This approach allows CMS to identify ACO participant TINs and 
associated CCNs for the downstream operations necessary to prepare for 
the start of the performance year on January 1, including producing the 
ACO's list of prospectively assigned or preliminarily prospectively 
assigned beneficiaries, as applicable, at the start of each performance 
year.
    Although the CCNs enrolled under a TIN may change during the course 
of an ACO's performance year, CMS' current operational process 
identifies any related CCN changes, through use of PECOS, only during 
the application process or the annual change request cycle. As with the 
certified ACO participant list, the CCNs used for purposes of 
beneficiary assignment and other operations are those that appear on 
the initial ACO provider/supplier list that is developed before the 
start of a performance year, and those CCNs remain applicable for the 
duration of the performance year. Any new CCNs that are established 
during a performance year are not used for purposes of beneficiary 
assignment and other operations until the start of the next performance 
year. The same applies to CCNs that become deactivated or change their 
TIN affiliation (that is, enroll under a different TIN) in PECOS during 
a performance year; those changes are not reflected in beneficiary 
assignment and other operations until the start of the next performance 
year. In PECOS, a ``deactivated'' enrollment status includes providers 
or suppliers whose Medicare billing privileges have been deactivated 
under Sec.  424.540 as well as providers and suppliers that have 
voluntarily terminated their enrollment.
(2) Proposed Revisions
    In order to administer the Shared Savings Program, we need to 
accurately identify all ACO participant TINs and ACO providers/
suppliers that participate in the program. An accurate identification 
of the ACO participants and the CCNs that are ACO providers/suppliers 
in an ACO is critical for assignment of beneficiaries to the ACO, as 
well as for assessing the quality of care provided by the ACO to its

[[Page 46126]]

assigned beneficiaries. An accurate identification of the individuals 
and entities participating in the ACO is also critical for ensuring 
compliance with program rules and equally important for the ACO and its 
own operational and compliance purposes. Thus, both CMS and the ACO 
need to have a common understanding of the individuals and entities 
that compose the ACO. We obtain this common understanding by requiring 
per Sec.  425.118 that the ACO certify the accuracy of its ACO 
participant and ACO provider/supplier lists prior to the start of each 
performance year. In addition, we require the ACO to notify CMS of any 
changes to its ACO participant list and ACO provider/supplier list 
throughout the performance year. Because we rely on these lists for 
operational purposes, we must have a transparent process that results 
in the accurate identification of all ACO participants and ACO 
providers/suppliers, including CCNs, that compose each ACO in the 
Shared Savings Program.
    Based on our operational experience, we have determined that our 
current process, wherein we use an ACO's certified ACO participant list 
and data from PECOS to generate the initial ACO provider/supplier list 
prior to the start of the performance year and to identify the CCNs 
used for purposes of beneficiary assignment and other operations, may 
not capture all changes to providers and suppliers that participate in 
an ACO during the performance year. Specifically, our current processes 
do not capture: (a) new CCNs that are enrolled in Medicare under ACO 
participant TINs after the initial ACO provider/supplier list for a 
performance year is generated; or (b) CCNs that are in a deactivated 
status as listed in PECOS at the time the initial ACO provider/supplier 
list for a performance year is generated.
    A CCN enrollment can become active or be deactivated in PECOS at 
any time, and a CCN can change TIN affiliations over time, including 
during the course of an ACO's performance year. Developing the initial 
ACO provider/supplier list, including the CCNs used for purposes of 
beneficiary assignment and other operations, before the start of a new 
performance year, and having that list remain applicable for the 
duration of the performance year, prevents us from later capturing 
during the performance year any newly-enrolled CCNs affiliated with ACO 
participant TINs.
    Not recognizing new CCNs that enroll under an ACO participant TIN 
after the initial ACO provider/supplier list is generated impacts the 
determination of beneficiary assignment, expenditure and revenue 
calculations, and coordination among CMS quality reporting initiatives. 
Analysis based on PY 2019, 2019A, 2020, and 2021 data has shown that 
considering only the CCNs on the ACO provider/supplier list that is 
established prior to the start of the performance year, has a 
significant impact on assignment for some ACOs that include FQHCs, 
RHCs, ETA hospitals, and Method II CAHs. We found that 555 CCNs newly 
enrolled or re-enrolled during the course of PY 2020. CCNs were added 
across 143 (28 percent) of the 517 participating ACOs. Among the 344 
ACOs under preliminary prospective assignment with retrospective 
reconciliation, 96 ACOs (28 percent) would have been impacted if the 
newly-enrolled CCNs were added to the ACO's ACO provider/supplier list 
during the 2020 performance year. An estimated 42,000 additional 
beneficiaries could have been assigned based on primary care services 
provided by CCNs enrolled during the performance year. Over 80 percent 
(that is, approximately 28,000) of these additional beneficiaries would 
have been concentrated among 12 ACOs under preliminary prospective 
assignment with retrospective reconciliation.
    Accordingly, we propose to add a new provision at Sec.  425.402(f) 
to reflect how CCNs are used in assignment. Under proposed Sec.  
425.402(f)(1), we state that prior to the start of the performance year 
and periodically during the performance year, CMS will determine the 
CCNs for all FQHCs, RHCs, Method II CAHs, and ETA hospitals enrolled 
under the TIN of an ACO participant, including all CCNs with an active 
enrollment in Medicare and all CCNs with a deactivated enrollment 
status. Under proposed Sec.  425.402(f)(2), we would use those CCNs in 
determining assignment for the performance year.
    Under Sec.  425.402(f)(3), we set forth how we would account for 
changes in CCN enrollment status during a performance year. Under our 
proposal, CCNs that enroll under an ACO participant TIN during the 
performance year would be reflected in program operations, including 
but not limited to: beneficiary assignment and revenue and expenditure 
calculations performed quarterly and during financial reconciliation 
for ACOs under preliminary prospective assignment with retrospective 
reconciliation. Specifically, if a new CCN with no prior Medicare 
claims experience enrolls under the TIN of an ACO participant after the 
ACO certifies its ACO participant list for a performance year as 
required under Sec.  425.118(a)(3), CMS would consider services 
furnished by that CCN in determining assignment to the ACO for the 
applicable performance year if the ACO has selected preliminary 
prospective assignment with retrospective reconciliation. We believe it 
is important to limit these updates to newly-enrolled CCNs during the 
performance year in order to ensure equivalency between historical 
benchmark expenditures and performance year expenditures. We propose to 
codify this change in the regulations at Sec.  425.402(f)(3)(i).
    We further propose that services furnished by a CCN with a 
deactivated enrollment status prior to that CCN becoming deactivated 
that is enrolled under the TIN of an ACO participant at the start of a 
performance year will be considered in determining beneficiary 
assignment to the ACO for the applicable performance year or benchmark 
year. For purposes of this policy, we would use PECOS data to determine 
whether a CCN has a deactivated enrollment status. In the case of a CCN 
with a deactivated enrollment status that had multiple TIN affiliations 
prior to its deactivation, we propose to use the TIN with which the CCN 
was most recently enrolled to identify the appropriate ACO participant, 
if any, to which services furnished by the CCN should be attributed. We 
believe that the inclusion of CCNs with a deactivated enrollment status 
in PECOS is consistent with our policy on the consideration of claims 
billed by merged/acquired TINs as discussed in the June 2015 Final Rule 
(80 FR 32715). We believe that our rationale for the merged/acquired 
TIN policy also applies to CCNs with a deactivated enrollment status--
namely, that (a) it is likely that the physicians and other 
practitioners furnishing primary care services billed via the CCN will 
continue to serve the same patient population that they served before 
the CCN deactivated its enrollment and (b) their patients may appear on 
the ACO's list of assigned beneficiaries at the end of the performance 
year. We believe this proposed change is important to maintain accuracy 
and comparability with regard to historical benchmark and performance 
year expenditure calculations. We propose to codify this change in the 
regulations at Sec.  425.402(f)(3)(ii).
    The policy under proposed Sec.  425.402(f)(3)(ii) would apply to 
CCNs that are deactivated but later reactivated, or that are 
disenrolled as one facility type but later re-enrolled as another type 
of ACO provider/supplier. For example, if a CCN for a Method II

[[Page 46127]]

CAH was deactivated during PY 2022 and later re-enrolled as another 
facility type during PY2023, the services furnished by the deactivated 
CCN would be considered in determining the ACO's assigned beneficiary 
population and historical benchmark expenditures for PY 2023, which is 
not the case under current policy. Similarly, if a CCN for a Method II 
CAH was deactivated during PY 2022 and later re-enrolled as an REH with 
a new CCN in CY 2023, the services furnished by the deactivated CCN 
would be considered in determining the ACO's assigned beneficiary 
population and historical benchmark expenditures for PY 2023, which is 
not the case under current policy. By considering both the deactivated 
CCN and the new REH CCN in determining the ACO's assigned beneficiary 
population, we would ensure parity between historical benchmark 
expenditures and performance year expenditures.
    We note that while we are proposing a specific policy to include 
deactivated CCNs in assignment, a similar policy is not needed for 
deactivated NPIs. During the performance and benchmark years, 
deactivated NPIs are included in assignment by default if they are 
included on a claim during the applicable assignment window.
    We believe it is necessary to continue our current operational 
process, to not allow CCNs to switch between ACOs during the 
performance year. That is, if a CCN that was enrolled under the TIN of 
one ACO participant enrolls under a different TIN during a performance 
year, we would continue to treat services billed by the CCN as services 
furnished by the original ACO participant TIN under which the CCN was 
enrolled. We believe it is most appropriate to continue our current 
process and operationally treat CCNs in a similar fashion to ACO 
participant TINs and not allow a CCN to switch between ACOs during the 
performance year, rather than treating them in a similar fashion to an 
NPI that would be allowed to switch between ACOs during a performance 
year due to the relative magnitude of services provided by and 
assignment associated with a CCN, as compared to a much smaller amount 
of services and assignment associated with a single NPI, as described 
above. This operational approach would limit the potential for large 
impacts on performance year expenditure calculations and reduce the 
potential for gaming opportunities. Including services billed by the 
CCN as services furnished by the ACO participant is consistent with our 
policy on the treatment of ACO participant TINs included on the ACO 
participant list, wherein an entity is deleted from the ACO participant 
list as of the termination of its ACO participant agreement but claims 
billed under the ACO participant TIN continue to be included in program 
operations until the end of the performance year. We propose to codify 
this approach for CCNs in the regulations at Sec.  425.402(f)(3)(iii).
    We propose to identify all CCNs associated with ACO participant 
TINs as determined by the methodology described in the preceding 
paragraphs for use in assignment and other operations prior to 
determining historical benchmarks, running quarterly assignment, and 
financial reconciliation. We also intend to develop a mechanism for 
reporting to ACOs all CCNs used in assignment and for purposes of 
program operations to provide for a transparent process. This CCN 
information would be provided to ACOs on a periodic basis for 
informational purposes, and this information will not need to be 
certified by the ACO.
    We propose that this revised approach to the treatment of CCNs 
would be applicable for purposes of all program operations for the 
performance year starting on January 1, 2023, and subsequent 
performance years. We seek comment on all aspects of this proposal.
4. Quality Performance Standard and Reporting
a. Background
    Section 1899(b)(3)(C) of the Act states that the Secretary shall 
establish quality performance standards to assess the quality of care 
furnished by ACOs and seek to improve the quality of care furnished by 
ACOs over time by specifying higher standards, new measures, or both 
for purposes of assessing such quality of care. As we stated in the 
November 2011 final rule establishing the Shared Savings Program (76 FR 
67872), our principal goal in selecting quality measures for ACOs has 
been to identify measures of success in the delivery of high-quality 
health care at the individual and population levels. In the November 
2011 final rule, we established a quality measure set spanning four 
domains: patient experience of care, care coordination/patient safety, 
preventative health, and at-risk population (76 FR 67872 through 
67891). We have subsequently updated the measures that comprise the 
quality performance measure set for the Shared Savings Program through 
rulemaking in the CY 2015, 2016, 2017, and 2019 PFS final rules (79 FR 
67907 through 67920, 80 FR 71263 through 71268, 81 FR 80484 through 
80489, 83 FR 59707 through 59715 respectively).
b. Revising the Shared Savings Program Quality Performance Standard
    As discussed in this section of this proposed rule, we are 
proposing to further refine the quality performance standard for 
performance year 2023 and subsequent performance years through a 
combination of modifications. Specifically, we are concerned that the 
current structure of the quality performance standard creates a cliff 
of ``all-or-nothing'' scoring where an ACO may be ineligible to share 
in savings due to a minor difference between its MIPS Quality 
performance category score and the quality performance standard 
required to share in savings at the maximum sharing rate for the 
applicable performance year. We propose to adopt an alternative quality 
performance standard that incorporates a sliding scale to avoid this 
cliff. This flexibility would be even more important as ACOs transition 
to eCQM/MIPS CQM reporting and when the quality performance standard 
under the Shared Saving Program increases to the 40th percentile across 
all MIPS Quality performance category scores starting in performance 
year 2024. Additionally, we are proposing to modify our approach for 
determining shared losses for ACOs in the ENHANCED track that would 
allow more ACOs to receive a shared loss rate based on a sliding scale 
rather than automatically being subject to the maximum loss rate of 75 
percent. We are not proposing to change the current requirements for 
ACOs to be eligible to share in savings at the maximum sharing rate.
    Second, we are proposing to extend the incentive for reporting 
eCQMs/MIPS CQMs through performance year 2024 to align with the 
sunsetting of the CMS Web Interface reporting option.
    Third, we are proposing to establish a health equity adjustment 
that would upwardly adjust an ACO's quality performance score when it 
delivers high quality care to underserved populations in order to 
support those ACOs serving a high proportion of underserved 
individuals, while also encouraging all ACOs to treat underserved 
populations.
    We conclude the discussion with a summary of the proposals within 
this section of this proposed rule.
(1) Current Policy
    In the CY 2021 PFS final rule, we finalized new Shared Savings 
Program quality reporting requirements that align with the Alternative 
Payment Model (APM) Performance Pathway (APP) under the Quality Payment 
Program and

[[Page 46128]]

revised the quality performance standard under the Shared Savings 
Program for performance years beginning on or after January 1, 2021, to 
reduce reporting burden and focus on patient outcomes. We also 
finalized a gradual phase-in of the increase in the level of quality 
performance that would be required for all ACOs to meet the Shared 
Savings Program quality performance standard. Specifically, for 
performance years 2021 and 2022, an ACO would be required to achieve a 
quality performance score that is equivalent to or higher than the 30th 
percentile across all MIPS Quality performance category scores to be 
eligible to share in any savings generated, and for 2023 and subsequent 
performance years, an ACO would be required to achieve a quality 
performance score that is equivalent to or higher than the 40th 
percentile across all MIPS Quality performance category scores to be 
eligible to share in savings (85 FR 84719 through 84736).
    We also finalized modifications to the Shared Savings Program 
regulations on the use of ACO quality performance in determining shared 
savings and shared losses (85 FR 84736 through 84740). We explained 
that section 1899(d)(1)(A) of the Act specifies that an ACO is eligible 
to receive a shared savings payment for a portion of the savings 
generated for Medicare, provided that the ACO meets both the quality 
performance standards established by the Secretary and achieves the 
required level of savings against its historical benchmark. Section 
1899(d)(2) of the Act authorizes payments of shared savings under the 
Shared Savings Program. Specifically, if an ACO meets the quality 
performance standards established by the Secretary (according to 
section 1899(b)(3) of the Act) and meets the savings requirements, a 
percent (as determined appropriate by the Secretary) of the difference 
between the estimated average per capita Medicare expenditures in the 
year, adjusted for beneficiary characteristics, and the benchmark for 
the ACO, may be paid to the ACO as shared savings and the remainder of 
the difference shall be retained by the Medicare program. Section 
1899(d)(2) of the Act also requires the Secretary to establish limits 
on the total amount of shared savings paid to an ACO. We have also 
incorporated performance-based risk in the form of shared losses into 
certain financial models under the Shared Savings Program using the 
authority under section 1899(i)(3) of the Act to use other payment 
models.
    In the CY 2021 PFS final rule, we finalized an approach to 
incorporating ACO quality performance in determining shared savings 
that would allow ACOs to maximize the potential shared savings they 
could earn across the Shared Savings Program's financial models. 
Specifically, we replaced the previous sliding scale approach with an 
all-or-nothing approach to determining shared savings based on quality 
performance (85 FR 84735).\204\ Thus, under the current regulations, 
for performance years beginning on or after January 1, 2021, if an ACO 
that is otherwise eligible to share in savings meets the quality 
performance standard established under Sec.  425.512, the ACO will 
share in any savings generated at the maximum sharing rate according to 
the applicable financial model, up to the performance payment limit. If 
the ACO fails to meet the quality performance standard, the ACO will be 
ineligible to share in savings. Further, we finalized an approach that 
continued to allow CMS to take into consideration an ACO's quality 
performance score in calculating the amount of shared losses for 
certain two-sided models (85 FR 84740).\205\ We finalized the following 
approach to determining the shared loss rate for ACOs participating in 
the ENHANCED track for performance years beginning on or after January 
1, 2021, as specified under Sec.  425.610(f)(2). If the ACO meets the 
quality performance standard established in Sec.  425.512, CMS 
determines the shared loss rate as follows:
---------------------------------------------------------------------------

    \204\ We finalized modifications to the regulations to reflect 
this approach for Track 1 (under Sec.  425.604), Levels A through E 
of the BASIC track (under Sec.  425.605), Track 2 (under Sec.  
425.606), and the ENHANCED track (under Sec.  425.610). The 
modifications to the regulations under Sec.  425.604(d) governing 
the determination of the final sharing rate for Track 1 ACOs also 
applied to Track 1+ Model ACOs (85 FR 84763). We note that 
participation in Track 1, Track 2 and the Track 1+ Model concluded 
at the end of performance year 2021.
    \205\ This approach continued to allow use of the ACO's quality 
score in determining the shared loss rate under Track 2 (Sec.  
425.606) and the ENHANCED track (Sec.  425.610). ACOs participating 
in the Track 1+ Model, and Level C, D, or E of the BASIC track 
continued to be subject to a fixed shared loss rate of 30 percent 
regardless of quality performance. As noted previously, 
participation in Track 2 and the Track 1+ Model concluded at the end 
of performance year 2021.
---------------------------------------------------------------------------

    <bullet> Step 1: Calculate the quotient of the MIPS Quality 
performance category points earned divided by the total MIPS Quality 
performance category points available.
    <bullet> Step 2: Calculate the product of the quotient described in 
step 1 and the sharing rate of 75 percent under the ENHANCED track.
    <bullet> Step 3: Calculate the shared loss rate as 1 minus the 
product determined in step 2. The shared loss rate may not exceed 75 
percent and may not be less than 40 percent. If the ACO fails to meet 
the quality performance standard, the shared loss rate will be 75 
percent.
    In the CY 2022 PFS final rule, we finalized an extended phase-in of 
the modified quality performance standard under the Shared Savings 
Program. Specifically, we extended the phase-in of the quality 
performance standard for an additional performance year (30th 
percentile for performance years 2021, 2022, and 2023). We also 
finalized that, for performance years 2022 and 2023, ACOs choosing to 
report on the 3 eCQMs/MIPS CQMs (meeting data completeness and case 
minimum requirements for all 3 measures) would meet the quality 
performance standard if they achieve a Quality performance category 
score equivalent to or higher than the 10th percentile of the 
performance benchmark on at least 1 of the 4 outcome measures in the 
APP measure set and achieve a Quality performance category score 
equivalent to or higher than the 30th percentile of the performance 
benchmark on at least 1 of the remaining 5 measures in the APP measure 
set (86 FR 65253 through 65272).
    In summary, pursuant to the policies finalized in the CY 2022 PFS 
final rule (86 FR 65266 through 65270), a Shared Savings Program ACO, 
with the exception of an ACO in the first performance year of its first 
agreement period, will be eligible to share in savings at the maximum 
sharing rate if it:
    <bullet> For performance year 2023:
    ++ Achieves a quality performance score that is equivalent to or 
higher than the 30th percentile across all MIPS Quality performance 
category scores, excluding entities/providers eligible for facility-
based scoring, or
    ++ If the ACO reports the three eCQMs/MIPS CQMs, meeting the data 
completeness requirement at Sec.  414.1340 and the case minimum 
requirement at Sec.  414.1380 for all three measures, and achieves a 
quality performance score equivalent to or higher than the 10th 
percentile of the performance benchmark on at least one of the four 
outcome measures in the APP measure set and a quality performance score 
equivalent to or higher than the 30th percentile of the performance 
benchmark on at least one of the remaining five measures in the APP 
measure set. Consequently, the ACO would be required to meet the 
performance benchmark on either 2 outcome measures (one measure at the 
10th percentile and the other at the 30th percentile), or 1 outcome 
measure at the 10th percentile and any other measure in the APP measure 
set at the 30th

[[Page 46129]]

percentile. The outcome measures in the APP measure set are listed in 
Table 52.
    <bullet> For performance year 2024 and subsequent performance 
years: Achieves a quality performance score that is equivalent to or 
higher than the 40th percentile across all MIPS Quality performance 
category scores, excluding entities/providers eligible for facility-
based scoring.
    We noted in the CY 2022 PFS final rule that we had received several 
comments suggesting that we revert to the previous sliding scale 
methodology used prior to the alignment with the APP for determining if 
an ACO has met the quality performance standard (86 FR 65268 and 
65269). We stated in the CY 2022 PFS final rule in response to these 
comments that we would consider proposing to reinstate the sliding 
scale methodology for determining shared savings and shared losses in 
the CY 2023 PFS proposed rule for ACOs that report on the three eCQMs/
MIPS CQMs. We stated that under such a proposed sliding scale 
methodology, we would multiply the ACO's MIPS Quality performance 
category score, based on the ACO's performance on the three eCQMs/MIPS 
CQMs as reported by the ACO, the two claims-based measures calculated 
by CMS, and the CAHPS for MIPS survey, by the sharing rate for the 
ACO's track (or payment model within a track) to determine the ACO's 
shared savings (86 FR 65269).
(2) Proposals to Scale Shared Savings Based on Quality Performance
    In light of the comments received during the public comment period 
for the CY 2022 PFS proposed rule, we are now proposing to reinstate a 
modified sliding scale approach for determining shared savings for all 
ACOs regardless of how they report quality data. In particular, 
commenters shared their concern that ACOs are now shifting from being 
compared against other ACOs to broadening this comparison to include 
all MIPS eligible clinicians (86 FR 65260). We also continue to hear 
this same concern from a number of interested parties. In addition, if 
this proposal were limited to eCQM/MIPS CQM reporting, it would require 
additional complexity specific to the requirements for scaled shared 
savings and scaled shared losses of the ENHANCED track. Please also 
refer to section III.G.4.b.(5) of this proposed rule for additional 
rationale on our proposal to apply the sliding scale approach to all 
ACOs regardless of how they report quality data.
    We propose in Sec.  425.512(a)(4)(ii) and (a)(5)(ii) that, 
beginning with performance year 2023 and for subsequent performance 
years, if an ACO fails to meet the existing criteria under the quality 
performance standard to qualify for the maximum sharing rate but the 
ACO achieves a quality performance score equivalent to or higher than 
the 10th percentile of the performance benchmark on at least one of the 
four outcome measures in the APP measure set then the ACO would share 
in savings (if otherwise eligible) at a lower rate that reflects the 
ACO's quality performance score. Specifically, the ACO's final sharing 
rate would be a scaled rate that is calculated by multiplying the 
maximum sharing rate for the ACO's track (or payment model within a 
track) by the ACO's quality performance score. The ACO's quality 
performance score used in this calculation would reflect the ACO's MIPS 
Quality performance category score plus any health equity adjustment 
bonus points the ACO is eligible to receive (referred to as the health 
equity adjusted quality performance score) based on our proposal 
described in section III.G.4.b.(7) of this proposed rule, if finalized.
    For an example of this proposed sliding scale approach for 
determining shared savings, consider a hypothetical ACO in Level B of 
the BASIC track in performance year 2023 that met the MSR to qualify 
for shared savings and achieved a health equity adjusted quality 
performance score of 45 which is less than the 30th percentile MIPS 
Quality performance category score based on the unweighted 
distribution. However, the ACO achieved a quality performance score 
equivalent to or higher than the 10th percentile of the performance 
benchmark on one of the four outcome measures in the APP measure set. 
In this example, the ACO would share in savings (if otherwise eligible) 
at a lower rate that is scaled by the ACO's health equity adjusted 
quality performance score. We would calculate the scaled final sharing 
rate for this ACO by multiplying the maximum sharing rate for an ACO in 
Level B of the BASIC track of 40 percent by the ACO's health equity 
adjusted quality performance score of 45 (expressed as a percentage) 
(that is, 40 percent x 45 percent) to obtain a final sharing rate of 18 
percent. We would then multiply the final sharing rate by the ACO's 
total savings (measured on a first dollar basis) to calculate the ACO's 
shared savings amount before considering the performance payment limit.
    We believe the proposed sliding scale approach meets the statutory 
requirements of section 1899(b)(3)(C) of the Act, which requires the 
Secretary to establish quality performance standards to assess the 
quality of care furnished by ACOs and to seek to improve the quality of 
care furnished by ACOs over time by specifying higher standards, new 
measures, or both for purposes of assessing such quality of care. Under 
our proposal, ACOs would still transition to a higher quality 
performance standard equivalent to or higher than the 40th percentile 
to share in savings at the maximum savings rate for their track 
beginning with performance year 2024. Still, this proposal to reinstate 
a sliding scale approach for determining shared savings for ACOs would 
allow for flexibility in order to avoid the all-or-nothing approach as 
the Shared Savings Program transitions to required reporting of eCQMs/
MIPS CQMs beginning with performance year 2025 after the sunsetting of 
the CMS Web Interface measure set. As recently as performance year 
2021, only 12 ACOs reported eCQMs/MIPS CQMs, indicating that most ACOs 
are still developing their strategy and workflows to combine data 
across their EHR systems in advance of the requirement to report eCQM/
MIPS CQMs beginning in performance year 2025. We believe that the 
sunsetting of the CMS Web Interface collection, the requirement to 
report eCQMs/MIPS CQMs beginning in performance year 2025, and the 
increase in the quality performance standard to share in savings at the 
maximum savings rate starting in performance year 2024 will increase 
the stringency of the quality performance requirements under the Shared 
Savings Program as contemplated under section 1899(b)(3)(C) of the Act.
    We believe a scaled approach to the quality performance standard, 
and thus to the determination of shared savings, would be beneficial 
because small differences in the distribution of ACOs' MIPS Quality 
performance category scores and other MIPS reporters' scores for a 
performance year may result in a large difference in the number of ACOs 
that fail to meet the quality performance standard as currently 
defined. Moving away from an all-or-nothing approach to a sliding scale 
approach to determine shared savings based on ACO quality performance 
would help to minimize the impact of these fluctuations by allowing 
ACOs that are close to, but do not achieve the health equity adjusted 
quality performance score required to share in savings at the maximum 
sharing rate under their track, to receive some shared savings.
    In summary, to implement this proposal, we are proposing to revise 
the provisions governing the quality performance standard at Sec.  
425.512(a)(4)

[[Page 46130]]

and (5) to reflect the proposed alternative quality performance 
standard. Specifically, we propose to revise Sec.  425.512(a)(4) and 
(5) to provide for a quality performance standard that an ACO must meet 
in order to share in savings at the maximum sharing rate under its 
track (or payment model within a track) and an alternative quality 
performance standard that an ACO would be required to meet in order to 
share in savings on a sliding scale. We also are proposing to make 
conforming changes to the methodologies for calculating shared savings 
under the BASIC track and the ENHANCED track, as specified in Sec.  
425.605 and Sec.  425.610, respectively to reflect the proposed sliding 
scale approach.
    We reiterate our statement in the CY 2022 PFS final rule that for 
performance years 2022, 2023 and 2024 if an ACO: (1) does not report 
any of the 10 CMS Web Interface measures or any of the 3 eCQMs/MIPS 
CQMs; and (2) does not administer a CAHPS for MIPS survey under the 
APP, the ACO will not meet the quality performance standard (86 FR 
65261). We are proposing that, for performance years 2023 and 2024, an 
ACO that does not meet these requirements would also not meet the 
proposed alternative quality performance standard. For performance 
years 2025 and subsequent performance years, we finalized that if an 
ACO does not report any of the 3 eCQMs/MIPS CQMs and does not 
administer a CAHPS for MIPS survey under the APP, the ACO will not meet 
the quality performance standard (86 FR 65262). We are also proposing 
that, for performance years 2025 and subsequent performance years, an 
ACO that does not meet these requirements would also not meet the 
proposed alternative quality performance standard. These proposals are 
reflected in our proposed revisions to Sec.  425.512(a)(4) and (5).
(3) Proposal To Modify Methodology for Determining Scaled Shared Losses 
for the ENHANCED Track Based on Quality Performance
    We are also proposing a modification to the methodology used to 
determine shared losses for ACOs in the ENHANCED track. Under our 
current regulations at Sec.  425.610(f)(2), for performance years 
beginning on or after January 1, 2021, an ACO in the ENHANCED track 
must meet the quality performance standard in order to have its shared 
losses scaled based on its quality performance and avoid automatically 
facing the maximum shared loss rate of 75 percent. We are proposing 
that for performance year 2023, and subsequent performance years, we 
would determine the ACO's shared loss rate using a sliding scale 
approach for an ACO that has losses that exceed its minimum loss rate 
and either meets the existing quality performance standard applicable 
for the performance year (that is, an ACO that would currently be 
eligible for shared losses scaled based on quality performance) or that 
does not meet that standard but achieves a quality performance score 
equivalent to or higher than the 10th percentile of the performance 
benchmark on at least one of the four outcome measures in the APP 
measure set. Under this proposal, an ACO that meets the existing 
quality performance standard or that meets the new alternative standard 
would be subject to a scaled shared loss rate equal to 1 minus the 
product of the maximum sharing rate for the ENHANCED track (75 percent) 
and the ACO's quality performance score. The ACO's quality performance 
score used in this calculation would reflect the ACO's MIPS Quality 
performance category score plus any health equity adjustment bonus 
points the ACO is eligible to receive (referred to as the health equity 
adjusted quality performance score) based on our proposal described in 
section III.G.4.b.(7) of this proposed rule. The scaled shared loss 
rate would be subject to a minimum of 40 percent and a maximum of 75 
percent. An ACO that fails to achieve a quality performance score 
equivalent to or higher than the 10th percentile of the performance 
benchmark on at least one of the four outcome measures in the APP 
measure set would continue to automatically share in losses at the 
maximum shared loss rate of 75 percent. Likewise, an ACO that fails to 
achieve the proposed alternative quality performance standard because 
it (1) does not report any of the ten CMS Web Interface Measures (for 
performance year 2023 or 2024) or any of the three eCQMs/MIPS CQMs (for 
performance year 2025 or subsequent performance year) and (2) does not 
administer a CAHPS for MIPS survey under the APP as described in 
section III.G.4.b.(2) of this proposed rule would also automatically 
share in losses at the maximum rate.
    This proposal would, by itself, not materially change the current 
methodology for determining shared losses for ENHANCED track ACOs that 
meet the existing quality performance standard (or would meet the 
criteria for the eCQM/MIPS CQM incentive), but would newly allow for 
the application of a scaled shared loss rate for ENHANCED track ACOs 
that achieve a quality performance score equivalent to or higher than 
the 10th percentile of the performance benchmark on at least one of the 
four outcome measures in the APP measure set, as opposed to these ACOs 
automatically receiving the maximum shared loss rate under the ENHANCED 
track of 75 percent as required under the current regulations at Sec.  
425.610(f)(2)(ii). That is, more ACOs would have the opportunity to 
lower their shared loss rate below the maximum rate based on their 
quality performance.
    In practice, an ACO would need to achieve a health equity adjusted 
quality performance score of higher than 33 and one-third in order to 
have a shared loss rate below 75 percent under the proposed approach. 
That is, a score greater than 33\1/3\ is needed for the scaled shared 
loss rate formula to yield a value less than 75 percent. For an ACO 
with a score of exactly 33 and one-third, the shared loss rate 
calculated by the formula would equal 75 percent. For an ACO with a 
score below 33 and one-third, the calculated rate would be greater than 
75 percent, triggering the application of the maximum shared loss rate 
of 75 percent.
    We note that our proposal to determine the shared loss rate using 
the ACO's health equity adjusted quality performance score uses 
language that is different from the phrasing used in the current 
regulation at Sec.  425.610(f)(2), which describes the shared loss rate 
as being calculated using ``the quotient of the MIPS Quality 
performance category points earned divided by the total MIPS Quality 
performance category points available.'' As indicated in the CY 2021 
PFS final rule, this approach allowed CMS to continue to scale shared 
losses by the ACO's quality score under the Shared Savings Program's 
two-sided models with the highest levels of risk and potential reward, 
the ENHANCED track and the Track 2 (although performance year 2021 was 
last year in which ACOs participated under this financial model) (85 FR 
84736 through 84740). The phrasing ``the quotient of the MIPS Quality 
performance category points earned divided by the total MIPS Quality 
performance category points available'' represents a mechanical 
description of how the score is calculated to clarify that the scaling 
factor represented a value between 0 and 1 which, in turn, would ensure 
that the shared loss rate falls between 0 and 100 percent (before the 
application of the minimum or maximum shared loss rate). However, upon 
further consideration, we believe that this phrasing may cause 
unnecessary

[[Page 46131]]

confusion. For example, it does not clarify whether or how applicable 
MIPS bonus points or quality improvement points would be incorporated 
or how the calculation would be impacted if the ACO is subject to the 
extreme and uncontrollable circumstances policy described in Sec.  
425.512(b). Furthermore, it does not address the treatment of health 
equity adjustment bonus points, if the proposed health equity 
adjustment described in section III.G.4.b.(7) of this proposed rule is 
finalized. As we have described in prior rulemaking (85 FR 84735), the 
ACO's MIPS Quality performance category score accounts for any MIPS 
bonus points and quality improvement points and the extreme and 
uncontrollable circumstances policy in Sec.  425.512(b), which we are 
proposing to re-designate as Sec.  425.512(c), indicates how an ACO's 
quality performance score will be determined if the ACO is affected by 
an extreme and uncontrollable circumstance. Furthermore, an ACO's 
health equity adjusted quality performance score would always take on a 
value between 0 and 100 as the MIPS Quality performance category score 
itself will always fall between 0 and 100 and the application of the 
proposed health equity adjustment, if finalized, would be restricted 
from raising the health equity adjusted quality performance score above 
100. As a result, an ACO's health equity adjusted quality performance 
score could be expressed as a percentage that would also ensure that 
the scaled shared loss rate falls between 0 and 100 percent (before the 
application of the minimum or maximum shared loss rate). Therefore, we 
favor using the phrasing ``health equity adjusted quality performance 
score'' in describing our proposed methodology for determining the 
shared loss rate for ENHANCED track ACOs for performance year 2023 
onward, and we also note that this phrasing would align with the 
terminology used in the description of the proposed sliding scale 
approach for determining shared savings.
    For an example of the sliding scale approach for determining shared 
losses, consider a hypothetical ACO participating in the ENHANCED track 
in PY 2023 that had total losses above its minimum loss rate and 
achieved a health equity adjusted quality performance score of 45, 
which is less than the 30th percentile MIPS Quality performance 
category score based on the unweighted distribution. If the ACO 
achieves a quality performance score equivalent to or higher than the 
10th percentile of the performance benchmark on at least one of the 
four outcome measures in the APP measure set, it would share in losses 
at a rate that is scaled by the ACO's quality performance score. We 
would calculate the scaled shared loss rate for this ACO as 1 minus the 
maximum shared loss rate for the ENHANCED track of 75 percent 
multiplied by the ACO's health equity adjusted quality performance 
score of 45 (expressed as a percentage) [1 - (45 percent x 75 percent)] 
to obtain a shared loss rate of 66.25 percent. We would then multiply 
this shared loss rate by the ACO's total losses (measured on a first 
dollar basis) to calculate the ACO's shared losses before consideration 
of the loss recoupment limit.
    We propose to revise the regulatory text in Sec.  425.610(f) to 
provide for this scaled approach to the determination of shared losses.
(4) Additional Considerations Related to Proposed Modifications to 
Advanced APM Criteria
    Section 414.1415(b)(1) through (3) require that to be an Advanced 
APM, an APM must include quality measure performance as a factor when 
determining payment to Advanced APM participants. Specifically, Sec.  
414.1415(b)(1) through (3) require, in relevant part, that two quality 
measures, one of which is an outcome measure, be a factor when 
determining payment to Advanced APM participants. In the Shared Savings 
Program, the ENHANCED track and Level E of the BASIC track are 
currently Advanced APMs, and we expect them to be Advanced APMs in the 
future. As part of our proposal to permit ACOs that fail to meet the 
existing criteria under the quality performance standard to share in 
savings at a lower rate (if otherwise eligible), we are proposing that 
an ACO must achieve a quality performance score equivalent to or higher 
than the 10th percentile of the performance benchmark on at least one 
of the four outcome measures in the APP measure set. This proposed 
approach would not meet the current requirements for an Advanced APM at 
Sec.  414.1415(b)(2) and (b)(3). This is because the proposal permits 
the use of a single outcome measure as a factor when determining 
payment. We note that in section IV.A.4.a of this proposed rule, there 
is a proposal to modify the Advanced APM criteria to allow for a single 
quality measure to be used to meet both quality measure criteria at 
Sec.  414.1415(b)(2) and (b)(3). We are aligning our proposal with the 
proposed modifications to Sec.  414.1415(b)(2) and (b)(3). As such, we 
are proposing in Sec.  425.512(a)(4)(ii) and (a)(5)(ii) to require that 
an ACO meet only one of the four outcome measures for the ACO to be 
eligible to share in savings at a lower rate.
    Should the proposal under section IV.A.4.a of this proposed rule 
not be finalized, we would consider finalizing the following alternate 
policy based on comments received. Beginning with performance year 2023 
and for subsequent performance years, if an ACO fails to meet the 
existing criteria under the quality performance standard to qualify for 
the maximum sharing rate, but the ACO achieves a quality performance 
score equivalent to or higher than the 10th percentile of the 
performance benchmark on at least one of the four outcome measures in 
the APP measure set and a quality performance score equivalent to or 
higher than the 30th percentile of the performance benchmark on at 
least one of the remaining measures in the APP measure set, then the 
ACO would share in savings (if otherwise eligible) at a lower rate that 
reflects the ACO's health equity adjusted quality performance score. 
The ACO would consequently be required to meet the performance 
benchmark on either 2 outcome measures (one outcome measure at the 10th 
percentile and another measure at the 30th percentile), or 1 outcome 
measure at the 10th percentile and any other measure in the APP measure 
set at the 30th percentile to maintain consistency with the 
requirements of Sec.  414.1415(b)(1) through (3).
    With respect to shared losses for ACOs in the ENHANCED track, we 
would consider finalizing a parallel approach that would allow for 
application of a scaled shared loss rate for ENHANCED track ACOs that 
achieve a quality performance score equivalent to or higher than the 
10th percentile of the performance benchmark on at least one of the 
four outcome measures in the APP measure set and a quality performance 
score equivalent to or higher than the 30th percentile of the 
performance benchmark on at least one of the remaining measures in the 
APP measure set.
(5) Broad Applicability of the Proposal To Apply the Sliding Scale 
Approach To Determining Shared Savings for ACOs
    We are proposing to apply the sliding scale approach to determine 
shared savings for all qualifying ACOs and to determine shared losses 
for ENHANCED track ACOs regardless of how they report quality data to 
CMS in order to maintain consistency in the treatment of quality 
performance across all ACOs.

[[Page 46132]]

We believe inclusion of all qualifying ACOs in this proposal regardless 
of reporting method would be responsive to the concerns expressed by 
interested parties regarding the perceived inequality in comparing MIPS 
quality scores between the Shared Savings Program and the traditional 
MIPS program. Specifically, ACOs have indicated they are limited to 
reporting the measures included under the APP, whereas traditional MIPS 
participants have a broader range of measures to select and report (86 
FR 65268). Our proposal to implement the sliding scale methodology 
would allow ACOs that otherwise would not have received any shared 
savings, but perform well on quality to share in a portion of the 
savings they achieve, but at a lower rate. This policy would also 
potentially allow ACOs to make a greater investment in the 
infrastructure necessary for transitioning to eCQM/MIPS CQM reporting 
in performance year 2025 or earlier by enabling certain ACOs to receive 
shared savings that they otherwise would not have received under the 
current quality performance standard policies. Furthermore, if we were 
to finalize this proposal, these ACOs would have additional funds 
available that they could choose to invest in advancing health equity.
    We seek comments on all aspects of the proposals to scale shared 
savings and shared losses discussed in sections III.G.4.b.(2) through 
(5) of this proposed rule, including the alternative approach if the 
proposed changes to Sec.  414.1415(b)(2) and (b)(3) are not finalized.
(6) Extension of eCQM/MIPS CQM Incentive
    We are separately proposing to revise Sec.  425.512(a)(4) and (5) 
to extend the incentive for reporting eCQMs/MIPS CQMs through 
performance year 2024 to align with the timeline for sunsetting of the 
CMS Web Interface reporting option and to allow ACOs an additional year 
to gauge their performance on the eCQM/MIPS CQMs before full reporting 
of the measures are required beginning in performance year 2025. We 
originally adopted this incentive in the CY 2022 PFS final rule to 
encourage ACOs to begin the transition to eCQM/MIPS CQM reporting in 
PYs 2022 and 2023 (86 FR 65269). Under the current incentive:
    <bullet> If an ACO reports the three eCQMs/MIPS CQMs, meets the 
data completeness requirement at Sec.  414.1340 and the case minimum 
requirement at Sec.  414.1380 for all three eCQMs/MIPS CQMs, and:
    <bullet> Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP measure set and;
    <bullet> A quality performance score equivalent to or higher than 
the 30th percentile of the performance benchmark on at least one of the 
remaining five measures in the APP measure set, the ACO will meet the 
quality performance standard used to determine eligibility for shared 
savings and to avoid maximum shared losses, if applicable.
    In the CY 2022 PFS final rule, we finalized our proposal to freeze 
the quality performance standard at the 30th percentile across all MIPS 
Quality performance category scores for performance year 2023 (86 FR 
65269). Therefore, under the current regulations, beginning with 
performance year 2024 and subsequent performance years, an ACO must 
achieve a quality performance score that is equivalent to or higher 
than the 40th percentile across all MIPS Quality performance category 
scores, excluding entities/providers eligible for facility-based 
scoring (86 FR 65270). To align with the finalized policy from the CY 
2022 PFS final rule, we are proposing to update the eCQM/MIPS CQM 
incentive for performance year 2024 to include this requirement. Under 
this proposed update to the incentive for performance year 2024:
    <bullet> If an ACO reports the three eCQMs/MIPS CQMs, meets the 
data completeness requirement at Sec.  414.1340 and the case minimum 
requirement at Sec.  414.1380 for all three eCQMs/MIPS CQMs, and;
    <bullet> Achieves a quality performance score equivalent to or 
higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP measure set and;
    <bullet> A quality performance score equivalent to or higher than 
the 40th percentile of the performance benchmark on at least one of the 
remaining five measures in the APP measure set, the ACO will meet the 
quality performance standard used to determine eligibility for shared 
savings and to avoid maximum shared losses, if applicable.
    We seek comment on this proposal.
    <bullet> In addition, we are seeking comment on whether CMS should 
incorporate the proposed amendments to Sec.  414.1415(b)(2) and (b)(3) 
described in section IV.A.4.a into the eCQM/MIPS CQM incentive. 
Incorporating that proposal would result in an ACO only having to 
achieve a quality performance score equivalent to or higher than the 
10th percentile of the performance benchmark on at least one of the 
four outcome measures to qualify for the incentive in performance year 
2023 and performance year 2024.
    If we were to modify the eCQM/MIPS CQM incentive to align with the 
proposed modifications to Sec.  414.1415(b)(2) and (b)(3), we would 
make corresponding changes to the proposed regulatory text at Sec.  
425.512(a)(5)(i)(A)(2) by removing the requirement that an ACO achieve 
a quality performance score equivalent to or higher than the 30th 
percentile of the performance benchmark on at least one of the 
remaining five measures in the APP measure set in order to meet the 
quality performance standard used to determine eligibility for shared 
savings and to avoid maximum shared losses, if applicable. In addition, 
we would make corresponding changes to the regulatory text governing 
the eCQM/MIPS CQM incentive for PY 2023 at Sec.  425.512(a)(4)(i)(B). 
We note that the requirements to qualify for the eCQM/MIPS CQM 
incentive for PY 2022 would not be affected by the proposed 
modifications to Sec.  414.1415(b)(2) and (b)(3).
(7) Health Equity Adjustment for ACOs That Report All-Payer eCQMs/MIPS 
CQMs, and Are High Performing on Quality, and Serve a High Proportion 
of Underserved Beneficiaries
(a) Background and Overview
    Health care outcome inequalities exist among patients throughout 
the United States, and empirical research has found that certain 
patient characteristics are associated with worse health outcomes. 
Patients experiencing worse health outcomes often face barriers to 
accessing health care services and have access to fewer health care 
providers. This research also provides evidence of the relationships 
between socioeconomic status/social risk factors and health care 
outcomes. Section 2(d) of the Improving Medicare Post-Acute Care 
Transformation (IMPACT) Act of 2014 (Pub. L. 113-183) called for the 
Secretary of Health and Human Services (HHS) to conduct a study 
evaluating the effect of individuals' socioeconomic status (SES) on 
quality measures and measures of resource use under the Medicare 
program. The Office of the Assistant Secretary for Planning and 
Education's (ASPE) March 2020 Report to Congress: Social Risk Factors 
and Performance in Medicare's Value-Based Purchasing (VBP) Program, 
provides insight into whether and how value-based programs should 
account for

[[Page 46133]]

beneficiaries' social risk factors such as income, housing, 
transportation, and nutrition that might adversely affect their access 
to health care services or health outcomes. A key finding is that dual 
enrollment status is a strong predictor of poorer health care quality 
measure outcomes in Medicare's VBP programs, even when accounting for 
other social and functional risk factors.\206\ In addition, several 
peer-reviewed research studies demonstrate that neighborhood-level 
factors for those residing in disadvantaged neighborhoods also have a 
relationship to worse health outcomes for these residents. Living in an 
area with an ADI score of 85 or above, a validated measure of 
neighborhood disadvantage, is shown to be a predictor of 30-day 
readmission rates, lower rates of cancer survival, poor end of life 
care for patients with heart failure, and longer lengths of stay and 
fewer home discharges post-knee surgery even after accounting for 
individual social and economic risk 
factors.<SUP>207 208 209 210 211</SUP>
---------------------------------------------------------------------------

    \206\ U.S. Department of Health & Human Services, ``Executive 
Summary: Report to Congress: Social Risk Factors and Performance in 
Medicare's Value-Based Purchasing Program,'' Office of the Assistant 
Secretary for Planning and Evaluation, March 2020. Available at 
https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//195046/Social-Risk-in-Medicare%E2%80%99s-VBP-2nd-Report-Executive-Summary.pdf.
    \207\ Kind AJ, et al., ``Neighborhood socioeconomic disadvantage 
and 30-day rehospitalization: a retrospective cohort study.'' Annals 
of Internal Medicine. No. 161(11), pp 765-74, doi: 10.7326/M13-2946 
(December 2, 2014), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4251560/.
    \208\ Jencks SF, et al., ``Safety-Net Hospitals, Neighborhood 
Disadvantage, and Readmissions Under Maryland's All-Payer Program.'' 
Annals of Internal Medicine. No. 171, pp 91-98, doi:10.7326/M16-2671 
(2019), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6736732/.
    \209\ Cheng E, et al., ``Neighborhood and individual 
Socioeconomic Disadvantage and Survival Among Patients With 
Nonmetastatic Common Cancers.'' JAMA Network Open Oncology. No. 
4(12), pp 1-17. doi: 10.1001/jamanetworkopen.2021.39593 (2021), 
available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8683967/.
    \210\ Hutchinson RN, et al., ``Rural disparities in end-of-life 
care for patients with heart failure: Are they due to geography or 
socioeconomic disparity?'' The Journal of Rural Health, No. 38, pp 
457-463, doi: 10.1111/jrh.12597 (2022), available at https://onlinelibrary.wiley.com/doi/epdf/10.1111/jrh.12597.
    \211\ Khlopas A, et al., ``Neighborhood Socioeconomic 
Disadvantages Associated With Prolonged Lengths of Stay, Nonhome 
Discharges, and 90-Day Readmissions After Total Knee Arthroplasty.'' 
The Journal of Arthroplasty. No. 37(6), pp S37-S43, doi: 10.1016/
j.arth.2022.01.032 (June 2022), available https://www.sciencedirect.com/science/article/pii/S0883540322000493.
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    Many rural areas also have relatively high levels of neighborhood 
disadvantage and high ADI levels. We believe dual Medicare and Medicaid 
eligibility and ADI score are good indicators of beneficiaries with 
high needs. Dual eligibility, an indicator at the beneficiary level, is 
intended to capture socioeconomic challenges that could affect a 
beneficiary's ability to access care, while ADI, a neighborhood-level 
indicator, is intended to capture local socioeconomic factors 
correlated with medical disparities and underservice. We refer readers 
to the CY 2022 PFS final rule (86 FR 65382 through 65384) for a 
detailed review of the literature on health care outcome inequalities. 
The information included in these articles and reports informed our 
decision to propose a health equity adjustment in connection with ACO 
quality performance and our consideration of the appropriate criteria 
for determining ACO eligibility for the adjustment.
    As discussed in section III.G.4.f. of this proposed rule, health 
equity, addressing health disparities, and closing the performance gap 
on the quality of care provided to underserved populations continue to 
be high priorities for the Agency through inclusion of health equity 
initiatives in CMS programs, and better addressing the social needs of 
people with Medicare is an important part of this strategy. We are 
committed to achieving health equity for Medicare beneficiaries by 
supporting ACOs in quality improvement activities to reduce health 
disparities, enabling Medicare beneficiaries to make more informed 
decisions, and promoting provider accountability for health care 
disparities.<SUP>212 213</SUP> Further, CMS has set forth a goal that 
100 percent of people with Original Medicare will be in a care 
relationship with accountability for quality and total cost of care by 
2030, and is focused on expanding the reach of ACOs into rural and 
other underserved communities. Among other considerations for reaching 
this goal, CMS is examining the use of incentives to close gaps in 
outcomes for Medicare beneficiaries.\214\ In section III.G.2.a. of this 
proposed rule, we are proposing to provide advance shared savings in 
the form of AIPs to certain ACOs participating in the Shared Savings 
Program using beneficiary dual eligibility status and ADI data to 
determine the amount of quarterly payments. To align with these goals, 
we are proposing a health equity adjustment that would upwardly adjust 
quality performance scores for ACOs that serve a high proportion of 
underserved individuals and achieve high quality performance.
---------------------------------------------------------------------------

    \212\ CMS website, ``What is the CMS National Quality 
Strategy?'' https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Legacy-Quality-Strategy (last accessed June 10, 2022).
    \213\ CMS Fact Sheet, ``CMS National Quality Strategy,'' April 
2022, available at https://www.cms.gov/files/document/cms-national-quality-strategy-fact-sheet-april-2022.pdf.
    \214\ Jacobs D, Rawal P, Fowler L, Seshamani M, ``Perspective: 
Expanding Accountable Care's Reach among Medicare Beneficiaries.`` 
New England Journal of Medicine (April 27, 2022), https://www.nejm.org/doi/full/10.1056/NEJMp2202991.
---------------------------------------------------------------------------

    As discussed in section III.G.4.a. of this proposed rule, section 
1899(b)(3)(C) of the Act states that the Secretary shall establish 
quality performance standards to assess the quality of care furnished 
by ACOs, while section 1899(b)(3)(A) of the Act provides that that the 
Secretary shall determine appropriate measures to assess the quality of 
care furnished by the ACO. We are concerned that our current quality 
performance standard and the quality performance measures we have 
adopted do not adequately assess the quality of care provided by ACOs 
with clinicians who serve a high proportion of underserved individuals. 
We are similarly concerned that the current quality performance 
standard and quality measures set do not adequately incentivize all 
ACOs to provide high quality care to underserved beneficiaries nor do 
we want to create an incentive for ACOs to avoid underserved 
populations as we transition to all payer eCQMs/MIPS CQMs because 
patients with social risk factors tend to have worse quality scores 
overall. The concern about lower quality scores for underserved 
populations is magnified in eCQMs compared to reporting via the CMS Web 
Interface, because all-payer reporting in eCQMs includes quality scores 
for people with Medicaid (correlating with low-levels of income and 
increased prevalence social risk factors when compared to people with 
Medicare); whereas, historical reporting via the CMS Web Interface has 
only included those quality scores for people with Medicare. Therefore, 
ACOs that serve a higher proportion of Medicaid enrollees may receive 
lower quality scores during the switch to eCQMs without an adjustment. 
In turn, without an adjustment during the switch to eCQMs, ACOs that 
serve a higher proportion of people with Medicaid or other underserved 
populations outside of Medicare could be incentivized to avoid 
underserved populations, delay switching to eCQMs for as long as 
possible, or even cease participation in the Shared Savings Program 
altogether. This concern has been raised by interested parties serving 
large proportions of underserved populations.
    We have previously been urged to adopt risk-adjusted quality 
measures that account for beneficiary

[[Page 46134]]

characteristics such as geographic location, socioeconomic status, 
education, race, ethnicity, gender, preferred language, disability 
status, or health literacy (76 FR 67873). A number of our measures do 
adjust for certain beneficiary characteristics, such as age and gender; 
however, we do not broadly adjust measure performance on the numerous 
demographic characteristics listed. Quality performance approaches 
based on risk adjustment that are intended to promote equity can mask 
real differences in quality and make it more difficult to identify and 
address disparities where they exist. Risk adjustment for social risk 
factors may also have the unintended effect of setting lower quality 
standards for underserved populations, rather than ensuring high 
quality standards for all populations receiving care that is 
established in the move to eCQMs/MIPS CQM all payer quality measures.
    In considering how to modify the existing quality performance 
requirements under the Shared Savings Program to more fully assess the 
quality of care furnished by ACOs that serve a high proportion of 
underserved individuals, we believe that rather than risk adjusting for 
disparities in the health status of underserved populations, it would 
be more appropriate to adopt an approach that rewards high quality 
performance across all populations served by an ACO. For this reason, 
we are now proposing to revise how we assess the quality of care 
furnished by ACOs through the creation of a health equity adjustment 
designed to support those ACOs serving a high proportion of underserved 
individuals while also mitigating disparities in health care by 
encouraging all ACOs to treat underserved populations. We believe the 
proposed approach would also continue encouraging high ACO quality 
performance, reinforce ACOs' transition to reporting all-payer eCQMs/
MIPS CQMs, and provide an incentive for ACOs to provide high quality 
care to all of the populations they serve. Additionally, because every 
year a greater proportion of ACOs are making the switch to eCQMs, 
instituting a health equity adjustment for those ACOs making the switch 
to eCQMs will allow us to study the impacts and make refinements during 
subsequent rulemaking.
    As described within this section of this proposed rule, we propose 
that the health equity adjustment would be available for performance 
year 2023 and for subsequent performance years to an ACO that reports 
the three eCQMs/MIPS CQMs in the APP measure set, meeting the data 
completeness requirement at Sec.  414.1340 for all three eCQMs/MIPS 
CQMs, and administers the CAHPS for MIPS survey. We propose such ACOs 
may receive up to a maximum of 10 additional points added to their MIPS 
Quality performance category score. The level of the adjustment would 
be determined based on the joint consideration of an ACO's performance 
on quality measures and the population served by the ACO, such that 
ACOs that perform well on quality measures and serve a higher 
proportion of beneficiaries who are from underserved neighborhoods 
(residing in census block group with an ADI national percentile rank of 
85 or higher) or are dually eligible for Medicare and Medicaid would 
receive a higher number of bonus points.
(b) Application of the Adjustment
    We propose to apply the health equity adjustment in the form of 
bonus points added to the ACO's MIPS Quality performance category 
score. Under this proposed approach, the ACO's health equity adjusted 
quality performance score would be the sum of the ACO's MIPS Quality 
performance category score for all measures in the APP measure set and 
the ACO's health equity adjustment bonus points, if applicable. This 
proposal would not change the current policy for determining and 
calculating an ACO's MIPS Quality performance category score.
    Under the existing regulations at Sec.  425.512 and under the 
proposed modifications to the quality performance standard described 
elsewhere within this proposed rule, there are specific programmatic 
uses of the ACO's MIPS Quality performance category score. In applying 
the proposed health equity adjustment to the ACO's MIPS Quality 
performance category score, which constitutes the ACOs' aggregate, or 
overall score, across the APP measure set, we propose to limit the 
application of the health equity adjustment to certain specified Shared 
Savings Program determinations and calculations. The use of the ACO's 
health equity adjusted quality performance score in these calculations 
would allow ACOs that report the eCQMs/MIPS CQMs and provide high 
quality care to underserved beneficiaries to share in savings at 
relatively higher sharing rates, or in the case of ENHANCED track ACOs 
that owe shared losses, to reduce the shared loss rate used to 
calculate the amount of shared losses owed to CMS. We believe this 
approach would serve as a means to incentivize ACOs by offering a 
financial reward for providing high quality care to underserved 
beneficiaries, further financially support ACOs that serve underserved 
beneficiaries, encourage ACOs to add ACO participants in underserved 
areas, and avoid creating adverse incentives for ACOs to avoid 
underserved populations or the health care providers serving those 
populations.
    We propose to apply an ACO's health equity adjusted quality 
performance score in determining whether the ACO met the quality 
performance standard set at the 30th percentile for performance year 
2023 as specified under Sec.  425.512(a)(4)(i)(A), or the 40th 
percentile for performance year 2024 and subsequent performance years, 
as specified in the proposed revised regulations at Sec.  
425.512(a)(5)(i)(A)(1) and Sec.  425.512(a)(5)(i)(B), respectively. Use 
of the ACO's health equity adjusted quality performance score in making 
this determination would potentially allow more ACOs that provide high 
quality care to underserved beneficiaries to meet the quality 
performance standard. Under the Shared Savings Program's current 
policies, ACOs that meet this quality performance standard share in any 
savings generated at the maximum sharing rate under their track (or 
payment model within a track), up to the performance payment limit. For 
ENHANCED track ACOs that meet the quality performance standard, the 
ACO's shared losses are scaled based on its quality performance.
    We further propose to apply an ACO's health equity adjusted quality 
performance score in the determining shared savings and losses as 
specified in certain existing provisions of the Shared Savings Program 
regulations and under proposed modifications to the regulations as 
described elsewhere within this proposed rule.
    We propose to use an ACO's health equity adjusted quality 
performance score to determine the final sharing rate for calculating 
shared savings payments under the BASIC track (under Sec.  425.605(d)) 
and the ENHANCED track (under Sec.  425.610(d)) for an ACO that meets 
the proposed alternative quality performance standard allowing for 
application of a sliding scale based on quality performance, as 
specified in proposed modifications to Sec.  425.512(a)(4)(ii) and 
(a)(5)(ii). Among ACOs whose shared savings would be determined 
according to the sliding scale approach (described in sections 
III.G.4.b.(2) and (3) of this proposed rule), the application of the 
proposed health equity adjustment would allow for relatively higher 
quality performance scores in calculating the final sharing rate and 
make it possible for an ACO to share in savings at a relatively higher

[[Page 46135]]

final sharing rate under its track (or payment model within a track).
    For ENHANCED track ACOs that owe shared losses, we propose to apply 
the health equity adjustment to the ACO's quality performance score 
used in calculating the ACO's shared loss rate, to allow the ACO to 
share in losses at a relatively lower rate, based on its quality 
performance. Specifically, we propose to use an ENHANCED track ACO's 
health equity adjusted quality performance score in calculating shared 
losses under Sec.  425.610(f) when the ACO meets the quality 
performance standard specified under Sec.  425.512(a)(4)(i) or 
(a)(5)(i) (which includes the incentive for reporting eCQMs/MIPS CQMs 
for PY 2023 and the proposed extension of the incentive for PY 2024) or 
meets the proposed alternative quality performance standard under Sec.  
425.512(a)(4)(ii) and (a)(5)(ii) allowing for the application of a 
sliding scale based on quality performance. For an ENHANCED track ACO 
in the first performance year of its first agreement period that meets 
the quality performance standard by reporting data via the APP and 
meeting the data completeness and case minimum requirements in 
accordance with Sec.  425.512(a)(2), the ACO's quality performance 
score is utilized in calculating any shared losses under Sec.  
425.610(f). Therefore, we also propose to use the ACO's health equity 
adjusted quality performance score to determine the shared loss rate 
for such ACOs.
    Further, we propose to apply the health equity adjustment in 
calculating the ACO's quality performance score for an ACO affected by 
extreme and uncontrollable circumstances if the ACO is able to report 
quality data via the APP and meet data completeness and case minimum 
requirements, as provided in Sec.  425.512(b)(3) in the current 
regulations. As discussed in section III.G.4.b.(8) of this proposed 
rule, the proposed approach of using an ACO's health equity adjusted 
quality performance score to determine the ``higher of'' score under 
the extreme and uncontrollable circumstances policy would have no 
practical impact on the sharing rate for an ACO that is eligible to 
share in savings. For an ACO participating in the ENHANCED track that 
is liable for shared losses, the proposed application of the health 
equity adjustment could increase the ACO's quality performance score 
used to determine the ACO's shared loss rate, and thus potentially 
reduce the amount of shared losses owed to CMS.
(c) Identifying Top Quality Performance Among ACOs reporting eCQMs/MIPS 
CQMs; Determining the Measure Performance Scaler
    We propose the health equity adjustment would be available to an 
ACO that reports the three eCQMs/MIPS CQMs in the APP measure set and 
meeting the data completeness requirement at Sec.  414.1340 for all 
three eCQMs/MIPS CQMs, and administers the CAHPS for MIPS survey.
    We believe that limiting the proposed health equity adjustment to 
ACOs reporting all-payer measures (eCQMs/MIPS CQMs) would further 
encourage ACOs to report all-payer measures in performance year 2023 
(while the Web Interface is still an available reporting option). ACOs 
may opt to report eCQMs/MIPS CQMs in order to have the benefit of the 
application of the health equity adjustment. As stated previously, the 
concern about lower quality scores for underserved populations is 
magnified in eCQMs compared to reporting via the CMS Web Interface, 
because all-payer reporting in eCQMs includes quality scores for people 
with Medicaid (correlating with low-levels of income and increased 
prevalence social risk factors when compared to people with Medicare). 
ThereforeIn addition, offering a health equity adjustment to ACOs who 
report all three eCQMs/MIPS CQMs would support ACOs that are serving 
greater proportions of underserved populations as the shift to all-
payer reporting takes place. ACOs not yet familiar with their 
performance on these measures or how they may be impacted by the change 
to all-payer populations may be incentivized by this proposal to begin 
reporting these measures before the full transition occurs.
    This proposal takes into account interested parties' concerns 
regarding challenges in improving quality of care for underserved 
populations, while recognizing ACOs that provide high quality of care 
for this population. It also helps address the concerns that we have 
heard from ACOs that serve higher proportions of people with Medicaid 
and other underserved populations with regards to all-payer quality 
reporting during the switch to eCQMs/ MIPS CQMs. As we have noted 
previously in this section of the proposed rule, social risk factors 
may adversely affect access to health care services or preferred health 
outcomes, and dual-enrollment status is a strong predictor of poorer 
health care quality measure outcomes in Medicare's VBP programs. We 
acknowledge that using the all payer quality measures as well as 
outcome measures may make it even more difficult for ACOs that serve 
underserved populations to achieve the quality performance standard, 
since all-payer reporting will newly include people with Medicaid as 
part of quality reporting, and people with Medicaid tend to have a 
higher amount of social risk factors and lower quality scores. As we 
discussed in section III.G.4.b(2) of this proposed rule, most ACOs are 
still developing strategies and workflows to combine data across EHR 
systems in advance of requirements to report eCQMs/MIPS CQMs. Adding 
health equity adjustment bonus points to the ACO's MIPS Quality 
performance category score could allow more ACOs that care for 
underserved populations to potentially meet the quality performance 
standard set at the 30th percentile (for performance year 2023) or 40th 
percentile (for performance year 2024 and subsequent performance years) 
across all MIPS Quality performance category scores, and therefore 
support these ACOs reporting eCQMs / MIPS CQMs.
    We propose to consider the ACO's performance on all measures in the 
APP measure set in calculating the health equity adjustment. Refer to 
Table 53 for the proposed APP measure set for eCQM/MIPS CQM reporting 
for performance year 2023. To determine an ACO's performance on quality 
for the purpose of calculating health equity adjustment bonus points, 
we propose to create three groups based on measure performance (or 
``performance groups''): (1) a group comprised of the top third 
performing ACOs; (2) a group comprised of the middle third performing 
ACOs; and (3) a group comprised of the bottom third performing ACOs. 
These groups would be created for each of the six measures 
independently such that an ACO in the top group based on performance on 
one measure may be in the bottom group based on performance on another 
measure. Consistent with current implementation of eCQMs and MIPS CQMs, 
the three groups would be created by reporting mechanism so that ACOs 
that report eCQMs would have each measure grouped into a top, middle, 
and bottom third based on the performance of other ACOs that also 
report eCQMs. The same methodology would be used for ACOs that report 
the MIPS CQMs. For the CAHPS for MIPS survey and claims-based measures, 
ACOs would be compared to all ACOs with data on those measures 
(including those that reported via the Web Interface, eCQMs, or MIPS 
CQMs).
    We propose to assign to an ACO a value of four for each measure for 
which its performance places it in the top

[[Page 46136]]

performance group, a value of two for each measure for which its 
performance places it in the middle performance group, and a value of 
zero for each measure for which its performance places it in the bottom 
performance group. We would sum the values assigned to each measure in 
the APP measure set to determine an ACO's total assigned value, which 
we refer to as the ACO's ``measure performance scaler.'' Under this 
approach, an ACO could have a measure performance scaler of up to 24 if 
it is among the top performance group for each measure and thereby 
received a value of four for each of six measures.
    We would assign a value of zero to a measure in certain cases when 
we would not evaluate the ACO's performance on a measure. For purposes 
of calculating the health equity adjustment, an ACO would receive zero 
for a claims-based measure or an eCQM/MIPS CQM for which the ACO does 
not meet the case minimum requirements at Sec.  414.1380. Similarly, an 
ACO would receive zero for the CAHPS for MIPS survey in the event it 
does not meet the minimum sample size requirements. An ACO that cannot 
meet case minimum requirements or does not have a sufficient sample 
size to administer the CAHPS for MIPS survey would still qualify to 
receive the health equity adjustment bonus for those measures that were 
accurately and completely reported and provided the ACO met the data 
completeness requirement at Sec.  414.1340 for all three eCQMs/MIPS 
CQMs.
    We also considered and analyzed scaling quality performance for the 
bottom, middle, and top third of measure performance by different 
values to evaluate how these values interact with the underserved 
multiplier (described in detail below) to calculate ACOs' health equity 
adjustment bonus points. Specifically, we also analyzed assigning a 
value of 0, 1, and 2 for the bottom, middle, and top third of measure 
performance, respectively, and decided on proposing 0, 2, and 4 
instead. The proposed scaling would allow ACOs that have high levels of 
an underserved multiplier and high quality performance on most or all 
measures to receive near or at the maximum of 10 health equity 
adjustment bonus points. That is, an ACO with an underserved multiplier 
of 0.45 (or 45 percent) that achieved a measure performance scalar of 
24 would receive the maximum of 10 health equity adjustment bonus 
points. With the alternate scaling approach, this ACO would achieve a 
measure performance scalar of 12 (that is, a value of 2 for each 
measure in the top third x 6 measures) but would not receive the 
maximum of 10 health equity adjustment bonus points even though the ACO 
would have achieved high-quality while caring for a large proportion of 
underserved beneficiaries (that is, measure performance scalar of 12 x 
an underserved multiplier of 0.45 = 5.4 points). Thus, the proposed 
scaling is consistent with CMS' goal to incentivize greater inclusion 
of underserved populations and the delivery of high quality care.
(d) Identifying ACOs Serving High Proportions of Underserved 
Beneficiaries; Determining the Underserved Multiplier
    Through the proposed health equity adjustment we seek to improve 
health equity outcomes by providing incentives to ACOs and their ACO 
participants and ACO providers/suppliers to achieve high levels of 
performance on all-payer and outcome focused Medicare quality measures 
for underserved populations, given the concerns we have heard regarding 
reporting eCQMs/ MIPS CQMs, which require reporting of data on all 
patients and are considered all-payer measures. We propose to award 
higher positive adjustments to ACOs providing higher quality of care to 
underserved populations, with the amount of the adjustment increasing 
as an ACO's proportion of underserved beneficiaries increases. Such an 
approach would support ACOs currently serving a high proportion of 
underserved individuals while also encouraging all ACOs to treat 
underserved populations.
    We propose to identify ACOs serving larger proportions of 
underserved beneficiaries, by considering the proportion of dually 
eligible Medicare and Medicaid beneficiaries and the proportion of 
beneficiaries residing in areas of high socioeconomic disadvantage 
within the ACO's performance year assigned beneficiary population. We 
propose to calculate an ``underserved multiplier'' for each ACO that 
would be determined using the higher value of either the proportion of 
an ACO's assigned beneficiary population that is considered underserved 
based on beneficiaries who are from underserved neighborhoods, 
identified using ADI data, or the proportion of an ACO's assigned 
beneficiary population that are dually eligible for Medicare and 
Medicaid. As noted above, dual eligibility status and ADI are good 
indicators of socioeconomical disadvantages, with ADI associated with 
medical disparities and underservice and dual eligibility associated 
with beneficiary's inability to access care. We would then multiply 
this underserved multiplier by the aforementioned measure performance 
scaler to determine the ACO's health equity adjustment bonus points.
    We refer readers to the discussion in section III.G.2.a. of this 
proposed rule for a general description of the ADI data, including the 
17 input variables from census data that make up the ADI composite 
measure. Each census block group's ADI score is ranked nationally, with 
higher national percentile ranks corresponding to more 
socioeconomically disadvantaged areas. Census block group's have been 
found to have stronger associations with hospitalization rates than 
larger areas used to create ADIs.\215\ For each ACO, we would create an 
underserved multiplier that ranges from zero to one and is based on the 
higher value of either the proportion of the ACO's performance year 
assigned beneficiary population residing in a census block group with 
an ADI national percentile rank of at least 85 or the proportion of the 
ACO's performance year assigned beneficiaries that are dually eligible 
for Medicare and Medicaid (including dually eligible ESRD, disabled, 
and aged beneficiaries).\216\ An ADI national percentile rank of at 
least 85 or above is being used as a cutoff because this is the value 
at which some empiric studies have demonstrated worse outcomes. In 
particular, one study demonstrated that 30-day rehospitalization rates 
did not vary significantly across the least disadvantaged 85 percent of 
neighborhoods, but hospitalizations within the most disadvantaged 15 
percent persons increased with worsening ADI, with a pattern that was 
similar amongst individuals with congestive heart failure, acute 
myocardial infarction, and pneumonia.\217\ Under the proposed approach, 
an ACO serving mostly beneficiaries residing in areas of high 
socioeconomic disadvantage or serving

[[Page 46137]]

a larger proportion of dually eligible Medicare and Medicaid 
beneficiaries would receive a multiplier value closer to one and a 
larger health equity adjustment to its quality performance score, all 
else equal. An ACO serving mostly beneficiaries from areas that are not 
considered to be of low socioeconomic disadvantages and serving a 
smaller proportion of dually eligible Medicare and Medicaid 
beneficiaries would not likely receive an underserved multiplier value 
that meets the proposed floor of 20 percent (described in section 
III.G.4.b.(7)(e) of this proposed rule), and therefore, would not 
receive health equity adjustment bonus points. Thus, the result of the 
underserved multiplier would be that ACOs serving a higher proportion 
of underserved beneficiaries would be eligible for a greater number of 
bonus points, assuming they achieve high quality performance. 
Therefore, the use of the underserved multiplier, combined with the 
proposed floor to receive any bonus points, is consistent with our goal 
of rewarding ACOs that include a higher proportion of underserved 
beneficiaries while delivering high quality care.
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    \215\ Maroko AR, et al., ``Integrating Social Determinants of 
Health With Treatment and Prevention: A New Tool to Assess Local 
Area Deprivation. Preventing Chronic Disease,'' No. 13(E128), pp.1-
5, doi: 10.5888/pcd13.160221 (September 2016), available at https://www.cdc.gov/pcd/issues/2016/16_0221.htm.
    \216\ In computing this proportion, we would use for each 
beneficiary the fraction of the year (referred to as person years) 
in which they were eligible for the aged/dual eligible enrollment 
type or for which they were eligible for the ESRD or disabled 
enrollment type and dually eligible for Medicare and Medicaid.
    \217\ Kind AJ, et al., ``Neighborhood socioeconomic disadvantage 
and 30-day rehospitalization: a retrospective cohort study.'' Annals 
of Internal Medicine. No. 161(11), pp 765-74, doi: 10.7326/M13-2946 
(December 2, 2014), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4251560/.
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    The proposed use of ADI and Medicare and Medicaid dually eligible 
status to assess underserved populations in the health equity 
adjustment allows CMS to consider both broader neighborhood level 
characteristics and individual characteristics among CMS beneficiaries. 
As described elsewhere in this proposed rule, we are proposing to use 
ADI and dual eligibility status to determine levels of quarterly AIPs 
for eligible Shared Savings Program ACOs (see section III.G.2.a. of 
this proposed rule). These two factors reflect different types of 
characteristics, which may relate to patient populations differently. 
An ADI is a multidimensional evaluation of the socioeconomic 
characteristics of the neighborhoods the beneficiaries live in, and 
incorporates domains such as education, income, employment, housing, 
and household characteristics. It also reflects neighborhood factors 
that may influence health, health care, and care delivery regardless of 
individual circumstance. Dual Medicare and Medicaid eligibility status 
is a direct measure of the beneficiary, reflecting their individual 
income status, and has been shown to be a predicator of worse health 
outcomes. While there is some overlap between ADI and dual eligibility, 
we propose to utilize both because they can be used to identify 
complementary populations that may not be fully recognized using only 
one of the factors, by taking the higher of the ACO's proportion of 
assigned beneficiaries residing in a census block group with an ADI 
national percentile rank of at least 85 or the ACO's proportion 
assigned beneficiaries that are dually eligible for Medicare and 
Medicaid, to determine an ACO's underserved multiplier for calculating 
health equity adjustment bonus points. Our proposal for the underserved 
multiplier used for calculating the health equity adjustment and our 
proposal for calculating quarterly AIPs are directionally aligned in 
that they both seek to provide greater benefit to ACOs that are serving 
underserved populations. For the health equity adjustment, we believe 
use of ACO-level indicators (that is, the proportion of the ACO's 
performance year assigned beneficiaries residing in a census block 
group with an ADI national percentile rank of at least 85 or the 
proportion that are dually eligible for Medicare and Medicaid) to 
measure the extent to which an ACO serves underserved populations is 
preferred to an approach that would establish an underserved multiplier 
at the beneficiary-level. We believe it would be appropriate to apply 
an ACO-level underserved multiplier to the measure performance scaler, 
which would be determined based on ACO-level performance on the 
measures in the APP measure set. This would allow for alignment between 
the underserved multiplier and the measure performance scaler to which 
it is being applied.
    Our proposal to use a ``higher of'' either the proportion of an 
ACO's assigned population residing in census blocks with high ADI or 
the proportion of the ACO's assigned beneficiaries that are dually 
eligible for Medicare and Medicaid to calculate the underserved 
multiplier is intended to avoid double-counting overlapping 
beneficiaries (as could happen when taking the sum of the two 
proportions), while also allowing an ACO alternate ways to achieve a 
higher multiplier value, recognizing that no single value would fully 
represent its population.
    We also note that this approach to determining the underserved 
multiplier based on the ACO's assigned population is a means of 
approximating the extent to which the ACO and its ACO participants and 
ACO providers/suppliers are serving underserved beneficiaries. The ADI 
component of the underserved multiplier would be based on the 
neighborhood level characteristics among ACO assigned beneficiaries, 
and these characteristics may generally reflect the social determinants 
of health in the communities served by the ACO and thus serve as a 
proxy for the all payer population characteristics and their 
neighborhoods. The use of dual Medicare and Medicaid eligibility is 
based on the status of beneficiaries within the ACO.
    Although we are proposing to determine the underserved multiplier 
as the higher of two characteristics--the proportion of assigned 
beneficiaries residing in areas of high socioeconomic disadvantage or 
the proportion of dually eligible Medicare and Medicaid assigned 
beneficiaries--we considered an alternative approach that would use a 
combination of these characteristics in calculating the underserved 
multiplier. Together these characteristics may be complementary in 
identifying an ACO's underserved populations, one based on neighborhood 
characteristics and the other based on dual eligibility status among 
the ACO's assigned beneficiaries. However, while the two 
characteristics allow for recognition of the ACO's underserved 
population at the neighborhood and beneficiary levels, there is 
potential overlap and thus double-counting with the approach to combine 
(sum) these characteristics. We seek comment on this alternative 
approach to calculating the underserved multiplier as the sum of an 
ACO's proportion of assigned beneficiaries residing in areas of high 
socioeconomic disadvantage and an ACO's proportion of dually eligible 
Medicare and Medicaid assigned beneficiaries. We note that such an 
approach would result in a potentially higher underserved multiplier 
for ACOs, and thereby higher total health equity adjustment bonus 
points compared to the proposed approach. As a result, under this 
alternative calculation of the underserved multiplier, more ACOs would 
likely achieve the maximum of 10 bonus points.
    More generally, we note that CMS is considering similar 
methodologies for determining underserved populations outside of the 
Shared Savings Program. For example, as discussed in the Announcement 
of Calendar Year (CY) 2023 Medicare Advantage (MA) Capitation Rates and 
Part C and Part D Payment Policies,\218\ we are developing a health 
equity index as a potential methodological enhancement to the Part C 
and Part D Star Ratings that would summarize performance among groups 
with social risk factors across multiple measures into a single score. 
The goal of this health equity index would be to

[[Page 46138]]

advance equity and support underserved communities by incentivizing 
contracts to perform well serving enrollees with social risk factors 
such as low-income subsidy (LIS)/dual eligibility and disability.
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    \218\ Available at https://www.cms.gov/files/document/2023-announcement.pdf. See for example the discussion of Health Equity 
Index (Part C and D) on pages 101-103.
---------------------------------------------------------------------------

    We also considered alternative approaches for calculating the 
underserved multiplier that would additionally consider whether an 
ACO's assigned beneficiaries receive the low-income subsidy (LIS) 
available under the Medicare Part D prescription drug program. LIS, as 
an indicator, may capture a different group of low-income beneficiaries 
than dual eligible status and the eligibility criteria for LIS does not 
vary by State. Specifically, we considered alternatives under which we 
would use the LIS indicator in place of, or in addition to, a 
beneficiary's dual Medicare and Medicaid enrollment status. We also 
considered using the higher of three factors based on the ACO's 
performance year assigned beneficiary population: (1) The proportion of 
the ACO's assigned beneficiary population residing in a census block 
group with an ADI national percentile rank of at least 85; (2) the 
proportion of the ACO's assigned beneficiaries that are dually eligible 
for Medicare and Medicaid; or (3) the proportion of the ACO's assigned 
beneficiaries receiving LIS. We seek comment on these alternative 
approaches, or other approaches, to incorporating assigned 
beneficiaries' LIS status into the underserved multiplier.
(e) Determining the Health Equity Adjustment Bonus Points an ACO Is 
Eligible To Receive Based on the ACO's Measure Performance Scaler and 
Underserved Multiplier
    We propose the ACO's health equity adjustment bonus points would be 
calculated by multiplying the measure performance scaler and the ACO's 
underserved multiplier. However, we are also proposing to impose a 
number of limitations on the availability of and the amount of the 
health equity adjustment bonus points.
    We propose that ACOs would be ineligible to receive any bonus 
points if their underserved multiplier is less than 20 percent, thereby 
establishing a ``floor''on the size of the ACO's underserved population 
under the health equity adjustment. Imposing a floor of 20 percent for 
the underserved multiplier, for an ACO to be eligible to receive bonus 
points, reinforces that the health equity adjustment is intended to 
reward ACOs that are serving higher proportions of underserved 
beneficiaries while also achieving high levels of quality performance. 
We believe this approach is necessary to remain consistent with the 
goal to reward and incentivize care for these populations. Absent such 
a floor, ACOs that perform well on quality measures but serve 
relatively small populations of underserved beneficiaries would be 
further rewarded, which could create incentives that are inconsistent 
with the purpose of the health equity adjustment. We anticipate the 
percent of ACOs meeting the 20 percent floor for the underserved 
multiplier would increase over time, as existing ACOs seek to expand 
their reach into underserved communities, and as a result of the 
proposed new participation options discussed elsewhere in this proposed 
rule that are designed to foster greater entry into the Shared Savings 
Program by ACOs that serve underserved communities. For example, among 
ACOs receiving the proposed AIPs, the amount of the quarterly payments 
would increase as beneficiaries' risk factors-based scores increase 
(set to 100 if the beneficiary is dually eligible for Medicare and 
Medicaid, or set to the ADI national percentile rank of the 
beneficiary's census block group if the beneficiary is not dually 
eligible). ACOs receiving AIPs that expand the size of their 
underserved populations would thereby receive higher amounts of 
quarterly AIPs to build their care coordination capabilities (including 
coordination with community-based organizations, as appropriate), 
address specific health disparities, and meet other proposed criteria 
for use of the funds (as described in section III.G.2.a. of this 
proposed rule). Under the proposed health equity adjustment, these ACOs 
would have a further incentive to deliver high quality of care and 
thereby perform well on the APP measure set for eCQM / MIPS CQM 
reporting.
    We propose the number of health equity adjustment bonus points to 
be awarded would not exceed a maximum of 10 points. We believe that 
limiting the health equity adjustment bonus to a maximum of 10 points 
strikes a balance between creating an incentive for ACOs to report 
eCQM/MIPS CQM measures and rewarding ACOs that are high performing on 
quality and serve higher proportions of underserved beneficiaries, 
while not overly inflating an ACO's quality performance score. Further, 
allocating a maximum of 10 points for this bonus would align with the 
scoring of the required measures under the APP. Previous bonuses within 
the MIPS program have not exceeded 10 points or been higher than 10 
percent of the score the bonus aligns with.<SUP>219 220</SUP>
---------------------------------------------------------------------------

    \219\ Centers for Medicare & Medicaid Services (CMS), ``Merit-
based Incentive Payment System (MIPS) Scoring Guide for the 2022 
Performance Year,'' Quality Payment Program, Updated May 20, 2021, 
https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1201/2020%20MIPS%20Scoring%20User%20Guide.pdf.
    \220\ Centers for Medicare & Medicaid Services (CMS), ``Merit-
based Incentive Payment System (MIPS) Traditional MIPS Scoring Guide 
for the 2021 Performance Year,'' Quality Payment Program, Updated 
April 25, 2022, https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1527/2021%20Traditional%20MIPS%20Scoring%20Guide.pdf.
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    We further propose that the bonus points would be added to the 
ACO's MIPS Quality performance category score, with the sum capped at 
100 percent. This proposed cap at 100 percent would ensure that the 
application of the health equity adjustment does not cause the ACO's 
quality performance score to exceed the maximum possible quality 
performance score an ACO could achieve absent the adjustment. Thus, the 
proposed cap would align with the current practice which sets the 
maximum quality performance score at 100 percent.
    The health equity adjustment bonus points would be added to the 
ACO's MIPS Quality performance category score for the purpose of 
determining whether the ACO meets the quality performance standard for 
a given performance year by meeting or exceeding the applicable MIPS 
Quality performance category score percentile and, if applicable, in 
determining the ACO's final sharing rate or shared loss rate. We note 
that this proposal to adopt a health equity adjustment would not impact 
the calculation of the quality performance standard itself. That is, 
the required percentile (30th for PY 2023 and 40th for subsequent 
performance years) would continue to be determined across all MIPS 
Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring, and would not reflect any health 
equity bonus points earned by Shared Savings Program ACOs.
    Further, as described in section III.G.4.b.(2) of this proposed 
rule, under the proposed sliding scale approach for determining shared 
savings, we would calculate an ACO's final sharing rate as the product 
of the maximum sharing rate under the ACO's track (or payment model 
within a track) and the ACO's quality performance score (inclusive of 
any applicable health equity adjustment bonus points). Similarly, as 
described in section III.G.4.b.(3) of this proposed rule, under the 
proposed modifications to the approach to calculating scaled

[[Page 46139]]

shared losses for ENHANCED track ACOs, we would calculate an ACO's 
shared loss rate as 1 minus the product of 75 percent and the ACO's 
quality performance score (inclusive of any applicable health equity 
adjustment bonus points), not to exceed 75 percent and not to be less 
than 40 percent. The proposed cap of 100 percent on the sum of the 
ACO's MIPS quality performance category score and health equity 
adjustment bonus points would allow for clarity and consistency in the 
calculation of the final sharing rates under the proposed sliding scale 
approach, and for the calculation of the shared loss rate for ENHANCED 
track ACOs.
    Accordingly, the proposed health equity adjustment would enable 
more ACOs that serve underserved populations and provide high quality 
care to share in a portion of the savings that they generate as the 
addition of the proposed health equity adjustment bonus points should 
allow more ACOs to meet the quality performance standard by meeting or 
exceeding the applicable MIPS quality performance category score 
percentile for a given performance year (that is, 30th percentile for 
PY 2023, and 40th percentile thereafter). For ACOs that meet the 
proposed alternative quality performance standard described elsewhere 
in section III.G.4.b. of this proposed rule, the addition of health 
equity adjustment bonus points to the ACO's quality performance score 
could increase the final sharing rate used to calculate the ACO's 
shared savings payment. Finally, for ACOs participating in the ENHANCED 
track that owe shared losses, the addition of health equity adjustment 
bonus points could reduce the shared loss rate used to calculate the 
amount of shared losses owed to CMS.
    The combination of the measure performance scaler, based on an 
ACO's performance on different quality measures, and the underserved 
multiplier, based on an ACO's unique assigned beneficiary population, 
results in a range of possible health equity adjustment bonus points 
that is designed to give the highest rewards to ACOs caring for a 
disproportionate share of underserved individuals and delivering high 
quality care. Through the proposed health equity adjustment, ACOs that 
perform well on measures in the APP measure set for eCQM/MIPS CQM 
reporting and serve a large proportion of underserved individuals 
within their assigned beneficiary population would be more likely to 
receive the maximum number of 10 bonus points, and in turn could see 
the largest increases in their quality performance score, which in 
turn, would have the most significant impact on determining the rate at 
which the ACO shares in savings, or for ACOs under the ENHANCED track, 
the rate at which the ACO shares in losses. We refer readers to 
mathematical examples for the steps in the calculation of the health 
equity adjustment, described in section III.G.4.b.(7)(f) of this 
proposed rule.
    Based on initial modeling, approximately 30 percent of ACOs 
participating in performance year 2020 would have had an underserved 
multiplier above the 20 percent floor necessary to qualify for the 
proposed health equity adjustment. Therefore, we believe the proposed 
approach could result in a significant number of ACOs earning health 
equity adjustment bonus points, which in turn would support these ACOs 
in caring for underserved populations.
    Furthermore, by rewarding ACOs when high quality is achieved, the 
health equity adjustment could create incentives for ACOs to improve 
care for those who have been historically underserved. This proposed 
approach, which is designed to upwardly adjust the ACO's quality 
performance score, lacks additional financial penalties for ACOs that 
are not meeting high standards of care, which we believe is important 
as such a downward adjustment could worsen disparities and further 
jeopardize the ability of these ACOs to care for the populations they 
serve. We believe this proposal aligns with the broader CMS health 
equity goals and serves as an important step forward in advancing 
health equity by providing an incentive for ACOs to care for 
underserved populations and to provide high quality care to all of the 
populations they serve, rather than merely adjusting measure 
performance for patient risk factors.
(f) Calculation Steps and Examples
    In this section, we outline the calculation steps and provide 
examples of the determination of health equity adjustment bonus points 
and the application of these bonus points (for eligible ACOs) to an 
ACO's MIPS Quality performance category score. These example 
calculations illustrate the variability in the health equity adjustment 
bonus points resulting from the proposed approach, which accounts for 
both an ACO's quality performance and the ACO's proportion of 
underserved beneficiaries among its assigned beneficiary population.
    Step 1: Calculate the ACO's measure performance scaler.
    In the example calculation of the ACO's measure performance scaler, 
as shown in Table 47, ACOs with ``high'' measure performance have been 
assigned a value of four for each of the six measures in the APP 
measure set for having achieved performance on these measures in the 
top performance group (top third). ACOs with ``middle'' measure 
performance have a mix of performance in the top performance group (top 
third, assigned a value of four per measure) and middle performance 
group (middle third, assigned a value of two per measure) on the six 
quality measures. ACOs with ``low'' measure performance have a mix of 
performance in the middle performance group (middle third, assigned a 
value of two per measure), and bottom performance group (bottom third, 
assigned a value of zero per measure) on the six quality measures.

[[Page 46140]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.087

    Step 2: Calculate the ACO's underserved multiplier.
    Under the proposed approach, as illustrated in Table 48, the 
underserved multiplier (column [C]) would be calculated as the higher 
of the proportion of the ACO's performance year assigned beneficiary 
population residing in a census block group with an ADI national 
percentile rank of at least 85 (column [A]) or the proportion of the 
ACO's performance year assigned beneficiaries that are dually eligible 
for Medicare and Medicaid (column [B]). To be eligible for the health 
equity adjustment bonus points, an ACO would need to have an 
underserved multiplier of 20 percent (0.2) or higher.
[GRAPHIC] [TIFF OMITTED] TP29JY22.088

    Step 3: Calculate the ACO's health equity adjustment bonus points.
    As shown in Table 49, to calculate the number of health equity 
adjustment bonus points awarded to an ACO (column [C]), CMS would 
multiply an ACO's measure performance scaler (Step 1, column [A]) by 
the ACO's underserved multiplier (Step 2, column [B]).

[[Page 46141]]

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    Step 4: Add the health equity adjustment bonus points to the ACO's 
MIPS Quality performance category score to calculate the ACO's health 
equity adjusted quality performance score.
    As shown in Table 50, up to 10 health equity adjustment bonus 
points (Step 3, column [B]) would be added to the ACO's MIPS Quality 
performance category score (column [A]), with a maximum health equity 
adjusted quality performance score (column [C]) of 100 percent (that 
is, the sum is capped at 100).
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(g) Incorporating the Health Equity Adjustment Into Shared Savings 
Program Quality Performance Reports
    In the event an ACO reports both the Web Interface measure set and 
the eCQM/MIPS CQM measure set, the ACO will be assigned the higher of 
the two quality performance scores for purposes of the MIPS quality 
performance category (86 FR 65259). If the addition of health equity 
adjustment bonus points results in the ACO's eCQM/MIPS CQM quality 
performance score becoming higher than the ACO's Web Interface score 
(even though it was initially lower), the Shared Savings Program would 
use the health equity adjusted eCQM/MIPS CQM quality performance score 
as the ACO's quality performance score. The health equity adjustment 
would not impact a MIPS eligible clinician's final scores because the 
health equity adjusted quality performance score would be limited to 
the Shared Savings Program, where it would be used at the ACO level to 
determine an ACO's shared savings or losses. Under MIPS, eligible 
clinicians in ACOs that report both the CMS Web Interface measures and 
the three eCQMs/MIPS CQMs would receive the higher of either the CMS 
Web interface or the three eCQMs/MIPS CQMs based on their ACO's MIPS 
Quality performance category score.
    We plan to show the calculation of the health equity adjustment for 
all ACOs that report on eCQMs/MIPS CQM measures, even if the adjustment 
would not affect the determination of shared savings or shared losses 
for the ACO. These calculations would be provided to ACOs in their 
reconciliation reports package. For example, under Sec.  
425.512(a)(2)(ii), an ACO in the BASIC track that is participating in 
the first performance year of its first agreement period meets the 
quality performance standard if it reports quality data via the APP and 
meets data completeness and case minimum requirements specified for the 
performance year. An ACO meeting these criteria would qualify for the 
maximum sharing rate under the level of the BASIC track under which it 
is participating, regardless of the health equity adjustment. Likewise, 
if such an ACO was participating in a two-sided model under the BASIC 
track and was liable for shared losses, the ACO would

[[Page 46142]]

be subject to a fixed 30 percent shared loss rate that would also be 
unaffected by the health equity adjustment. For such an ACO, the 
calculation and reporting of the health equity adjustment would be for 
purely informational purposes. This information would provide ACOs with 
an understanding of the proportion of underserved individuals they care 
for and give ACOs additional insight into this population and 
opportunities for improvement as they transition to all payer quality 
measure reporting and develop associated quality improvement strategies 
and initiatives.
(h) Proposed Modifications to the Regulations
    We propose to amend the regulation at Sec.  425.512, which 
establishes the ACO quality performance standard for performance years 
beginning on or after January 1, 2021, to include a new paragraph (b) 
to govern the calculation of an ACO's health equity adjusted quality 
performance score for performance year 2023 and subsequent performance 
years, including the policies governing calculation of health equity 
adjustment bonus points. We are also proposing to make additional 
conforming changes to Sec.  425.512 to incorporate references to the 
health equity adjusted quality performance score, through proposed 
modifications to Sec.  425.512(a)(4)(i)(A), and within proposed 
revisions to Sec.  425.512(a)(5)(i)(A)(1) and (a)(5)(i)(B).\221\
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    \221\ We note that we are proposing to use the term ``health 
equity adjusted quality performance score'' uniformly in the 
regulation provisions enumerated in this section of the proposed 
rule, even in cases where an ACO's MIPS Quality performance category 
score is based on their reporting of the Web Interface measure set. 
For such ACOs, the health equity adjustment is assumed to be zero.
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    We propose further technical and conforming changes to Sec.  
425.512 to redesignate existing paragraph (b) specifying the 
alternative approach to calculating the quality performance score for 
ACOs affected by extreme and uncontrollable circumstances, as a new 
paragraph (c). We also propose a modification to update a cross-
reference within the newly redesignated Sec.  425.512(c) for accuracy 
and to revise newly redesignated Sec.  425.512(c)(3) to specify that we 
would use the health equity adjusted quality performance score in 
determining the quality performance score for ACOs affected by extreme 
and uncontrollable circumstances that report quality data under the APP 
and meet data completeness and case minimum requirements for 
performance year 2023 and subsequent performance years (refer to 
section III.G.4.b.(8) of this proposed rule).
    In addition, as described elsewhere within this proposed rule, we 
propose to revise Sec.  425.605 and 425.610 to specify use of the ACO's 
health equity adjusted quality performance score determined in 
accordance with Sec.  425.512(b) for purposes of calculating an ACO's 
final sharing rate based on a sliding scale. Similarly, under the 
proposed modifications to Sec.  425.610, we propose to specify use of 
the ACO's health equity adjusted quality performance score determined 
in accordance with Sec.  425.512(b) for purposes of calculating the 
ACO's shared loss rate based on a sliding scale.
    In conclusion, we believe the health equity adjustment proposal 
would support ACOs transitioning to all-payer quality measure 
reporting, incentivize ACOs to report eCQMs/MIPS CQMs, provide stronger 
incentives for quality improvement, and recognize high performing ACOs 
serving underserved populations. We seek comment on all aspects of the 
proposed methodology. In particular, we seek comment on the proposal to 
use a three-tiered approach to determine the values assigned to each 
measure. We seek comment on the scale of values attributed to these 
three performance groups, as well as the proposal to limit the overall 
amount of the health equity adjustment to a maximum of 10 bonus points. 
We seek comment on the proposed requirement that an ACO's underserved 
multiplier be at least 20 percent for an ACO to be eligible for health 
equity adjustment bonus points. Finally, we seek comment on alternative 
methodologies for calculating the underserved multiplier, including 
using a combination of the ACO's proportion of assigned beneficiaries 
residing in areas of high socioeconomic disadvantage and proportion of 
dually eligible Medicare and Medicaid assigned beneficiaries, instead 
of the higher of these factors. We also seek comment on incorporating 
into the methodology for calculating the ACO's underserved multiplier 
whether ACO assigned beneficiaries are eligible for the LIS available 
under the Medicare Part D prescription drug program, including use of a 
LIS indicator in place of a beneficiary's dual enrollment status.
    Given that the proposed approach, if finalized, would be the 
initial implementation of a health equity adjustment under the Shared 
Savings Program, we note our intent to monitor the impact of the 
adjustment to ensure it achieves the goal of rewarding ACOs for high 
quality performance while caring for larger proportions of underserved 
beneficiaries. As necessary, we would consider modifications to the 
design of the health equity adjustment through future notice and 
comment rulemaking.
(8) Application of Extreme and Uncontrollable Circumstances Policy
    The approach used to calculate the quality score for ACOs affected 
by extreme and uncontrollable circumstances is described in Sec.  
425.512(b)(2) and (3) of the current regulations, which we are 
proposing to redesignate as Sec.  425.512(c)(2) and (3) (refer to 
section III.G.4.b.(7)(h) of this proposed rule). In summary, for an ACO 
that fails to report quality data via the APP or that reports quality 
data but fails to meet the data completeness or case minimum 
requirements applicable for the performance year, we will set the ACO's 
quality performance score to the equivalent of the 30th percentile (for 
PY 2023) or 40th percentile (for PY 2024 and subsequent performance 
years) across all MIPS Quality performance category scores for the 
relevant performance year, as described in Sec.  425.512(b)(2). For an 
ACO that reports quality data via the APP and successfully meets data 
completeness and case minimum requirements, we will use the higher of 
the ACO's own health equity adjusted quality performance score or the 
equivalent of the 30th percentile (for PY 2023) or 40th percentile (for 
PY 2024 and subsequent performance years) across all MIPS Quality 
performance category scores as described in Sec.  425.512(b)(3).
    By design, any ACO that is deemed to be affected by an extreme and 
uncontrollable circumstance will receive a score that is at least as 
high as the 30th percentile (for PY 2023) or 40th percentile (for PY 
2024 and subsequent performance years) across all MIPS Quality 
performance category scores, thus aligning with the quality performance 
standard applicable for the performance year as described under Sec.  
425.512(a) in the current regulations. An ACO affected by an extreme 
and uncontrollable circumstance that is eligible for shared savings (by 
virtue of having savings that meet or exceed its MSR) will thus receive 
a final sharing rate equal to the maximum sharing rate for the ACO's 
track (or payment model within a track) in the calculation of its 
shared savings amount, as described in Sec.  425.605(d) (for ACOs 
participating in the BASIC track) or Sec.  425.610(d) (for ACOs 
participating in the ENHANCED track). An ACO affected by an extreme and 
uncontrollable circumstance participating in the ENHANCED track that is 
liable for shared losses (by virtue

[[Page 46143]]

of having losses that meet or exceed its minimum loss rate) will face a 
shared loss rate that considers the ACO's quality performance as 
described in Sec.  425.610(f). The remainder of this section describes 
how we propose the existing extreme and uncontrollable circumstances 
policy would interact with our proposals related to scaled shared 
savings and losses, described in sections III.G.4.b.(2) and 
III.G.4.b.(3) of this proposed rule, respectively, and the proposed 
health equity adjustment, described in section III.G.4.b.(7) of this 
proposed rule, if finalized.
    An ACO that is determined to have been affected by an extreme and 
uncontrollable circumstance and is eligible for shared savings would 
already receive the maximum possible sharing rate for its track (or 
payment model within a track) under the current extreme and 
uncontrollable circumstances policy. The sharing rate for such an ACO 
would not be affected by our proposal to re-institute scaled shared 
savings as described in section III.G.4.b.(2) of this proposed rule. 
That is, an ACO affected by an extreme and uncontrollable circumstance 
that meets the proposed alternative quality performance standard, if 
finalized, would continue to qualify for the maximum sharing rate for 
its track (or payment model within a track) rather than receiving a 
sharing rate scaled based on the ACO's quality performance.
    An ACO participating in the ENHANCED track that is affected by an 
extreme and uncontrollable circumstance and is liable for shared losses 
already receives a shared loss rate that is scaled by the ACO's quality 
performance under the current extreme and uncontrollable circumstances 
policy. If such an ACO meets the proposed alternative quality 
performance standard, if finalized, it would continue to receive a 
shared loss rate that is scaled by its quality performance. Thus, our 
proposal to extend scaled shared losses to ENHANCED track ACOs that 
meet the alternate quality performance as described in section 
III.G.4.b.(3) of this proposed rule would not, by itself, have a 
practical impact on the shared loss rate for an ACOs affected by an 
extreme and uncontrollable circumstance.
    With regard to the proposed health equity adjustment, for an ACO 
affected by an extreme and uncontrollable circumstance that reports 
eCQMs/MIPS CQMs via the APP, and successfully meets the data 
completeness requirement at Sec.  414.1340 and case minimum requirement 
at Sec.  414.1380, we would apply the health equity adjustment bonus 
points to the ACO's MIPS Quality performance category score, in 
accordance with our proposed approach described in section 
III.G.4.b.(7) of this proposed rule before determining the ``higher 
of'' score under the extreme and controllable circumstances policy. 
That is, the ACO would receive the higher of the quality performance 
score equal to the sum of the ACO's MIPS Quality performance category 
score and the ACO's health equity adjustment bonus points (that is, the 
health equity adjusted quality performance score) or a score equivalent 
to the 30th percentile (for PY 2023) or 40th percentile (for PY 2024 
and subsequent performance years) across all MIPS Quality performance 
category scores. We propose to specify the use of the health equity 
adjusted quality performance score in determining the quality 
performance score for an ACO affected by extreme and uncontrollable 
circumstances within the proposed new provision at Sec.  425.512(b) and 
in determining the ``higher of'' score under the redesignated 
provisions at Sec.  425.512(c)(3)(ii) and (iii).
    The proposed approach of applying the health equity adjustment 
before determining the ``higher of'' score under the extreme and 
uncontrollable circumstances policy would have no practical impact on 
the sharing rate for an ACO that is eligible to share in savings. By 
design, such an ACO would meet or exceed the 30th percentile (for PY 
2023) or 40th percentile (for PY 2024 and subsequent performance years) 
MIPS Quality performance category score, and qualify for the maximum 
sharing rate for its track (or payment model within a track) . However, 
for an ACO participating in the ENHANCED track that is liable for 
shared losses, the application of the health equity adjustment could 
increase the ACO's quality performance score used to determine the 
ACO's shared loss rate, and thus potentially reduce the amount of 
shared losses owed to CMS.
    For an ACO affected by an extreme and uncontrollable circumstance 
that fails to report quality data via the APP or that reports but fails 
to the meet data completeness or case minimum requirements, we would 
continue to set the ACO's quality performance score to the equivalent 
of the 30th percentile (for PY 2023) or 40th percentile (for PY 2024 
and subsequent performance years) MIPS Quality performance category 
score. Such an ACO would not meet the proposed requirements for the 
health equity adjustment with respect to reporting and measure 
performance.
(9) Summary of the Proposals
    The following provides an overview of the quality performance 
standards that would apply in future performance years under these 
proposals for purposes of determining the rate at which an ACO may 
share in savings.
Performance Year 2023
    <bullet> Performance year 2023, to share in savings at the maximum 
savings rate under its track (or payment model within a track), an ACO 
must:
    ++ Report the 10 CMS Web Interface measures in the APP measure set, 
administer a CAHPS for MIPS survey, while we would calculate the two 
claims-based measures included under the APP, and achieve a health 
equity adjusted quality performance score that is equivalent to or 
higher than the 30th percentile across all MIPS Quality performance 
category scores, excluding entities/providers eligible for facility 
based-scoring, or
    ++ Report the three eCQMs/MIPS CQMs in the APP measure set, 
administer a CAHPS for MIPS survey, while we would calculate the two 
claims-based measures included under the APP. If an ACO selects this 
option, meets the data completeness requirement at Sec.  414.1340 of 
this subchapter and the case minimum requirement at Sec.  414.1380 of 
this subchapter for all three eCQMs/MIPS CQMs, the ACO must achieve a 
quality performance score equivalent to or higher than the 10th 
percentile of the performance benchmark on at least one of the four 
outcome measures in the APP measure set and a quality performance score 
equivalent to or higher than the 30th percentile of the performance 
benchmark on at least one of the remaining five measures in the APP 
measure set.
    An ACO that fails to meet the criteria above may qualify to share 
in savings on a sliding scale based on its performance on any of the 10 
CMS Web Interface measures or three eCQMs/MIPS CQMs, CAHPS for MIPS 
survey, and CMS' calculation of the two claims-based measures in the 
APP measure set that are reported by the ACO. The ACO must achieve a 
quality performance score equivalent to or higher than the 10th 
percentile of the performance benchmark on at least one of the four 
outcome measures in the APP measure set to share in savings (if 
otherwise eligible) at a lower rate that is scaled by the ACO's health 
equity adjusted quality performance score.
    If an ACO (1) does not report any of the ten CMS Web Interface 
measures or any of the three eCQMs/MIPS CQMs

[[Page 46144]]

and (2) does not administer a CAHPS for MIPS survey under the APP, the 
ACO will not meet the quality performance standard or the alternative 
quality performance standard.
Performance Year 2024
    <bullet> Performance year 2024, to share in the savings at the 
maximum rate under its track (or payment model within a track) an ACO 
must:
    ++ Report the 10 CMS Web Interface measures in the APP measure set, 
administer a CAHPS for MIPS survey, while we would calculate the two 
claims-based measures included under the APP, and achieve a health 
equity adjusted quality performance score that is equivalent to or 
higher than the 40th percentile across all MIPS Quality performance 
category scores, excluding entities/providers eligible for facility 
based-scoring, or
    ++ Report the three eCQMs/MIPS CQMs in the APP measure set and 
administer a CAHPS for MIPS survey, while we would calculate the two 
claims-based measures included under the APP. If an ACO selects this 
option, meets the data completeness requirement at Sec.  414.1340 of 
this subchapter and the case minimum requirement at Sec.  414.1380 of 
this subchapter for all three eCQMs/MIPS CQMs, the ACO must achieve a 
quality performance score equivalent to or higher than the 10th 
percentile of the performance benchmark on at least one of the four 
outcome measures in the APP measure set and a quality performance score 
equivalent to or higher than the 40th percentile of the performance 
benchmark on at least one of the remaining five measures in the APP 
measure set.
    <bullet> An ACO that fails to meet the criteria above may share in 
savings on a sliding scale based on its performance on any of the 10 
CMS Web Interface measures or three eCQMs/MIPS CQMs, CAHPS for MIPS 
survey, and CMS' calculation of the two claims-based measures in the 
APP measure set that are reported by the ACO. The ACO must achieve a 
quality performance score equivalent to or higher than the 10th 
percentile of the performance benchmark on at least one of the four 
outcome measures in the APP measure set to share in savings (if 
otherwise eligible) at a lower rate that is scaled by the ACO's health 
equity adjusted quality performance score.
    <bullet> If an ACO (1) does not report any of the 10 CMS Web 
Interface measures or any of the 3 eCQMs/MIPS CQMs and (2) does not 
administer a CAHPS for MIPS survey under the APP, the ACO will not meet 
the quality performance standard or the alternative quality performance 
standard.
Performance Year 2025 and Subsequent Performance Years
    <bullet> Performance year 2025 and subsequent performance years, to 
share in savings at the maximum savings rate under its track (or 
payment model within a track), an ACO must: report quality data via the 
APP established under Sec.  414.1367 of this subchapter, according to 
the method of submission established by CMS and achieve a health equity 
adjusted quality performance score that is equivalent to or higher than 
the 40th percentile across all MIPS Quality performance category 
scores, excluding entities/providers eligible for facility-based 
scoring.
    <bullet> An ACO that fails to meet the criteria above may share in 
savings on a sliding scale based on its performance on any of the three 
eCQMs/MIPS CQMs, CAHPS for MIPS survey, and CMS's calculation of the 
two claims-based measures in the APP measure set that are reported by 
the ACO. The ACO must achieve a quality performance score equivalent to 
or higher than the 10th percentile of the performance benchmark on at 
least one of the four outcome measures in the APP measure set to share 
in savings (if otherwise eligible) at a lower rate that is scaled by 
the ACO's health equity adjusted quality performance score.
    <bullet> If an ACO does not report any of the 3 eCQMs/MIPS CQMs and 
does not administer a CAHPS for MIPS survey under the APP, the ACO will 
not meet the quality performance standard or the alternative quality 
performance standard.
    Similarly, we are proposing to modify the methodology for 
calculating shared losses under the ENHANCED track to account for the 
sliding scale approach, which would remove the ``cliff'' from the all-
or-nothing approach instituted in the CY 2021 PFS final rule (85 FR 
84734 through 84736) whereby an ACO that does not meet the quality 
performance standard would automatically face the maximum shared loss 
rate of 75 percent. For performance year 2023 and subsequent 
performance years, we are proposing that an ACO that has losses that 
exceed its minimum loss rate and either meets the quality performance 
standard or does not meet that standard but meets the proposed 
alternative quality performance standard by achieving a quality 
performance score equivalent to or higher than the 10th percentile of 
the performance benchmark on at least one of the four outcome measures 
in the APP measure set would have a shared loss rate that is 1 minus 
the product of the maximum sharing rate for the ACO's track (75 
percent) and the ACO's health equity adjusted quality performance 
score. The shared loss rate would be subject to a minimum of 40 percent 
and a maximum of 75 percent.
    Under the proposed health equity adjustment, an ACO that reports 
the three eCQMs/MIPS CQMs in the APP measure set, meeting the data 
completeness requirement at Sec.  414.1340 for all three eCQMs/MIPS 
CQMs, and administers the CAHPS for MIPS survey, may receive up to a 
maximum of 10 points added to its MIPS Quality performance category 
score. This combined score would be the ACO's health equity adjusted 
quality performance score and would be used in determining whether the 
ACO met the quality performance standard and in determining scaled 
shared savings and shared losses, as applicable, as summarized in this 
section of the proposed rule. This health equity adjusted quality 
performance score would also be used when applying the extreme and 
uncontrollable circumstances policy for ACOs that report quality data 
via the APP and meet data completeness and case minimum requirements.
    In addition, we wish to clarify that any requirements that are 
based on achieving a specified quality performance score on outcome 
measures are limited to outcome measures that are scored. For example, 
please refer to Table 52 in section III.G.4.c.(1) of this proposed 
rule, which indicates the CMS Web Interface measure Depression 
Remission at Twelve months is an outcome measure that is not scored.
    We reiterate our statement in the CY 2022 PFS final rule that for 
performance years 2022, 2023 and 2024 if an ACO: (1) does not report 
any of the 10 CMS Web Interface measures or any of the 3 eCQMs/MIPS 
CQMs; and (2) does not administer a CAHPS for MIPS survey under the 
APP, the ACO will not meet the quality performance standard (86 FR 
65261). In addition, we are proposing in this proposed rule that, for 
performance years 2023 and 2024, an ACO that does not meet these 
requirements would also fail to meet the alternative quality 
performance standard. Such an ACO would not be eligible to share in 
savings and, if in the ENHANCED track, would automatically face the 
maximum shared loss rate.
    Additionally, as finalized in the CY 2022 PFS final rule, beginning 
with performance year 2025, ACOs will be required to report eCQMs/MIPS 
CQMS, as the Web Interface reporting option

[[Page 46145]]

sunsets after performance year 2024 (86 FR 65261).
    We note that if our proposal described in section III.G.5.f. of 
this proposed rule to allow certain ACOs in the BASIC track that do not 
meet their MSR to receive reduced shared savings is finalized, ACOs 
meeting the requirements of that policy would face final sharing rates 
equal to one half of the final sharing rates determined based on the 
ACO's quality performance, as described in this section.
    In Table 51, we summarize the proposed changes to the regulation at 
Sec.  425.512(a)(4) and (5) to reflect these proposed changes to the 
quality reporting requirements for performance years 2023 and 
subsequent performance years.
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BILLING CODE 4120-01-C

[[Page 46146]]

c. Quality Measures
(1) Proposed APP Measure Set
    We refer readers to Table 52, which lists the measures included in 
the final APP measure set that will be reported by Shared Savings 
Program ACOs for performance year 2022 and subsequent performance 
years. These are the same measures finalized in the CY 2022 PFS final 
rule (86 FR 65264 through 65266); however, we note that the Meaningful 
Measures 2.0 area for each measure has been updated to be consistent 
with the latest information available on the Meaningful Measures 
website and a measure number has been added for the Risk Standardized, 
All-Cause Unplanned Admissions for Multiple Chronic Conditions for MIPS 
measure.\222\ We are proposing to change the nomenclature of this 
measure to align with the MIPS program. There are no other proposed 
changes to this measure except for the name and the addition of a 
measure number. The measure title we are proposing to use moving 
forward is Measure 484: Clinician and Clinician Group Risk-standardized 
Hospital Admission Rates for Patients with Multiple Chronic Conditions. 
In addition, we have included the measure type in Table 52, for each 
measure in the measure set. We are including this information to 
provide ACOs a list of the outcome measures for purposes of meeting the 
quality performance incentive for reporting eCQMs/MIPS CQMs. This 
information is also relevant to our proposal to establish an 
alternative quality performance standard under which ACOs that fail to 
meet the quality performance standard to qualify for the maximum 
sharing rate, but that achieve a quality performance score at the 10th 
percentile on 1 of the 4 outcome measures in the APP measure set, may 
be eligible to share in savings on a sliding scale. We note inclusion 
of this information does not change any of the measures in the measure 
set.
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    \222\ Centers for Medicare and Medicaid Services, Meaningful 
Measures 2.0: Moving from Measure Reduction to Modernization, 
(2022), available at https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.

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[[Page 46147]]

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[[Page 46148]]


    Table 53 includes the proposed eCQM/MIPS CQM measure set for the 
Shared Savings Program and outlines the measure types, especially for 
ACOs that may elect to report on eCQM/MIPS CQMs for PY2023 in order to 
qualify for the incentive under Sec.  425.512(a)(4)(i)(B).
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    The outcome measures in the APP measure set are listed in Table 52.
    The CMS Web Interface collection type under traditional MIPS and 
the APP includes 10 measures. One of the 10 measures included in the 
CMS Web Interface collection type is measure Q110: Preventive Care and 
Screening: Influenza Immunization (also referred to PREV-7 under the 
CMS Web Interface collection type). Table Group CC of Appendix 1 of 
this proposed rule includes a proposal to remove measure Q110: 
Preventive Care and Screening: Influenza Immunization from traditional 
MIPS for the Medicare Part B Claims, eCQM, and MIPS CQM collection 
types starting with the 2023 performance period and a proposal to 
retain the measure for use in relevant MVPs and as a measure in the CMS 
Web Interface collection type under the APP for purposes of APM Entity-
level reporting applicable to Medicare Shared Savings Program ACOs. 
Because Shared Savings Program ACOs report under the APP, this measure 
would still be available as a measure under the CMS Web Interface 
collection type. Please refer to Table Group CC of Appendix 1 where we 
discuss this proposal further. We are also proposing to make changes to 
measure specifications for the CMS Web Interface starting in PY 2023. 
These changes are being proposed to update these measures and to align 
these measures with the CQM practice workflows and for consistency with 
clinical guidelines. These proposed changes are discussed in Group 
Table E of Appendix 1 of this proposed rule.
(2) Proposed Benchmarking Policies for CMS Web Interface Measures for 
Performance Years 2022, 2023, and 2024
    In the CY 2021 PFS final rule, we finalized a change to the quality 
reporting requirements for purposes of the Shared Savings Program (85 
FR 84720 through 84734). Effective for performance year 2021 and 
subsequent performance years, Shared Savings Program ACOs are required 
to report quality data via the APP. Under this new approach, ACOs only 
need to report one set of quality metrics via the APP to satisfy the 
quality reporting requirements under both the Shared Savings Program 
and the MIPS. In the CY 2021 PFS final rule (85 FR 84720), we explained 
that the APP measure set would address the highest priorities for 
quality measurement and improvement, while also reducing reporting 
burden, promoting alignment of measures and consolidation of reporting 
requirements across CMS programs, moving payment toward value, and 
identifying consumers' key quality performance metrics. We also stated 
that, under the APP, the quality performance score for an ACO will be 
calculated using the same benchmarks that are established for quality 
measures available under MIPS (85 FR 84724). Measure benchmarks 
established under MIPS are based on performance by collection type 
(i.e., eCQM or MIPS CQM) using data from all available sources, 
including MIPS eligible clinicians and APM Entities, to the extent 
feasible, during the applicable baseline or performance period (Sec.  
414.1380(b)(1)). Under Sec.  414.1380(b)(1)(ii)(A), the benchmarks from 
the corresponding reporting year of the Shared Savings Program are used 
to score CMS Web Interface measures for purposes of the MIPS Quality 
performance category. Accordingly, in the preamble to the CY 2021 PFS 
we indicated that for performance year 2021, we would continue to use 
the Shared Savings Program benchmarks developed for the CMS Web 
Interface measures for performance year 2020, which were based on data 
reported by ACOs, MIPS eligible clinicians, and groups through the CMS 
Web Interface, and/or a registry from 2016, 2017 and 2018, which would 
allow us to be consistent with the approach that had been used for 
scoring CMS Web Interface measures in the Shared Savings Program under 
Sec.  425.502(b) (85 FR 84724). Furthermore, consistent with the final 
policy to require ACOs to report quality data via the APP and to score 
those measures using the MIPS benchmarks, in the CY 2021 PFS final 
rule, we revised Sec.  425.502 to apply only to performance years 
beginning on or before January 1, 2020.
    Under the policies adopted in the CY 2021 PFS final rule, 
performance year

[[Page 46149]]

2021 would have been the final year in which ACOs would have the option 
to report either the 10 CMS Web Interface measures or the 3 eCQMs/MIPs 
CQMs under the APP, and starting in performance year 2022 all ACOs 
would be required to report the 3 eCQMs/MIPS CQMs (85 FR 84722 and 
84723). However, in response to concerns raised by commenters regarding 
the timeline for implementing eCQM/MIPS CQM reporting requirements 
under the APP for Shared Savings Program ACOs, in the CY 2022 PFS final 
rule, we further extended the CMS Web Interface as a collection type 
under the Quality Payment Program for performance years 2022, 2023, and 
2024 for Shared Savings Program ACOs reporting under the APP (85 FR 
65261).
    When we finalized the extension of the CMS Web Interface as a 
collection type for the Shared Savings Program, we failed to consider 
the policies that would apply for purposes of establishing the 
performance benchmark and minimum attainment level for the CMS Web 
Interface measures for performance years 2022, 2023, and 2024. As noted 
previously, when we adopted the requirement that ACOs report quality 
for purposes of the Shared Savings Program using the APP, our intent 
was to use the measure benchmarks established under MIPS to score the 
measures in the APP measure set. However, under Sec.  
414.1380(b)(1)(ii)(A), we use the benchmarks from the corresponding 
reporting year of the Shared Savings Program to score CMS Web Interface 
measures for purposes of the MIPS Quality performance category. Thus, 
because the benchmarking policies under Sec.  425.502(b) that were used 
to establish quality measure benchmarks in the Shared Savings Program 
prior to the development and implementation of the APP were sunset with 
the 2020 performance year, there are no policies currently in place 
that can be used to establish benchmarks for the CMS Web Interface 
measures in the APP measure set for purposes of determining quality 
performance under the Shared Savings Program for performance years 
2022, 2023, and 2024. Additionally, the absence of benchmarking 
policies under the Shared Savings Program also impacts MIPS because 
MIPS uses the CMS Web Interface measure benchmarks established by the 
Shared Savings Program (Sec.  414.1380(b)(1)(ii)(B)).
    Under the regulation at Sec.  425.502(b)(4)(i), CMS updated the 
quality performance benchmarks every 2 years. The last set of CMS Web 
Interface measure benchmarks were established for performance year 2020 
and were also used to score the Web Interface measures for performance 
year 2021 as explained in the CY 2021 PFS final rule (85 FR 84724). In 
light of the decision to extend the availability of the CMS Web 
Interface measures under the APP, we now need to establish benchmarks 
under the Shared Savings Program for these measures for performance 
years 2022, 2023, and 2024. We believe that the previously established 
benchmark policies at Sec.  425.502(b) continue to be appropriate for 
purposes of establishing the quality measure benchmarks and minimum 
attainment levels and establishing a point scale for the CMS Web 
Interface measures under the Shared Savings Program for performance 
years 2022, 2023, and 2024. In the 2015 PFS final rule (79 FR 67927), 
we finalized the benchmarking proposal to set benchmarks for two years 
for stability in quality improvement targets while also maintaining 
reasonable current practices. We propose to use this approach for 
performance years 2022, 2023 and 2024, using available data for 
performance year 2022 and 2023 and establishing benchmarks for 
performance year 2024 which is the last year of Web Interface 
reporting. We believe the policies are still appropriate as it would 
provide stability during the transition to all-payer reporting and 
sunsetting of the Web Interface reporting option, as well as prevent 
potential variations that could unintentionally create provider burden. 
In addition, this would allow CMS to score as many of the Web Interface 
measures as possible, providing stronger incentives for improving and 
delivering high quality care. Furthermore, using the same policies to 
establish the benchmarks for the CMS Web Interface measures for 
performance years 2022, 2023, 2024, would maintain consistency in the 
development of CMS Web Interface measure benchmarks. Therefore, we are 
proposing to amend the regulation at Sec.  425.512, which governs the 
ACO quality performance standard for performance years beginning on or 
after January 1, 2021, to include a new paragraph (a)(6), which will 
provide that for performance years 2022, 2023, and 2024, CMS designates 
a performance benchmark and minimum attainment level for each CMS Web 
Interface measure and establishes a point scale for the measure as 
described in Sec.  425.502(b).
    We acknowledge that to the extent we are proposing to apply these 
benchmark policies to determine performance benchmarks for the Web 
Interface measures for performance year 2022, our proposal is 
retroactive and would require the use of our authority under Sec.  
1871(e)(1)(A), which permits the retroactive application of a 
substantive change in the regulations when the failure to do so would 
be ``contrary to the public interest.'' We believe this proposal meets 
the standard for retroactive rulemaking as absent retroactive 
application of the proposed benchmarking policies the CMS Web Interface 
measures could not be scored in performance year 2022 for use under the 
Shared Savings Program in determining shared savings and losses or 
under MIPS for purposes of the MIPS payment adjustments. We also note 
that by establishing policies that will allow us to adopt benchmarks 
for these measures, we will ensure that we can determine the ACOs' 
quality performance score. If we did not have the authority to 
establish benchmarks, we would be unable to score ACO quality 
performance which is used to calculate shared savings and losses 
inhibiting our ability to successfully implement the Shared Savings 
Program and recognize and reward ACOs for better care coordination and 
quality improvement. At the same time, the lack of benchmarks to score 
quality measures submitted by ACOs would prevent their MIPS eligible 
clinicians from receiving any MIPS payment adjustment they may be 
eligible for and could subject them to negative MIPS payment 
adjustments if they are determined to have poor performance due to the 
inability to benchmark performance and score the measures submitted by 
the ACO. In addition, as mentioned above it is in the public interest 
to establish benchmarks as it should strengthen the incentive for ACOs 
to deliver high quality and coordinated care consistent with the goals 
of the Shared Savings Program. We believe there are advantages in 
having a greater number of scored measures in the CMS Web Interface, 
including the ability for Shared Savings Program ACOs to report on a 
larger number of measures to have a potentially higher score, as well 
as collecting data on measures that can be used for ACOs' quality 
improvement. An ACO's performance on each measure is assessed against 
its benchmark to determine points and the overall Quality performance 
category score. Additionally, when CMS determines that a benchmark 
cannot be provided for a Web Interface measure, the measure will not be 
scored for Shared Savings Program ACOs. However, ACOs would still be 
required to report on any measure that is not scored in order to

[[Page 46150]]

complete the CMS Web Interface dataset.
    We also need to make a correction from the CY 2022 PFS final rule 
(86 FR 65266) in which we inadvertently indicated that a benchmark 
would not be created for the Preventative Care and Screening: Tobacco 
Use: Screening and Cessation Intervention (Quality ID<greek-i> 226). In 
the CY 2022 PFS final rule (86 FR 65262), we noted three of the CMS Web 
Interface measures (Statin Therapy for the Prevention and Treatment of 
Cardiovascular Disease (Quality ID<greek-i> 438); Depression Remission 
at Twelve Months (Quality ID<greek-i> 370), and Preventive Care and 
Screening: Tobacco Cessation: Screening and Cessation Intervention 
(Quality ID<greek-i> 226)) did not have benchmarks for performance year 
2022 and would not be scored, however, the measures were required to be 
reported in order to complete the CMS Web Interface dataset. We refer 
to Table 52 of this proposed rule for a listing of the measures that 
would not have benchmarks and therefore would not be scored for 
performance year 2022.
    We have determined that we do not have adequate historical data 
available for benchmarking for the Preventive Care and Screening: 
Screening for Depression and Follow-up Plan (Quality ID 134) measure 
for the 2022 performance year. Therefore, CMS is proposing to use the 
approach in this section of the proposed rule to amend the regulation 
at Sec.  425.512 to set flat percentage benchmarks for the Preventive 
Care and Screening: Screening for Depression and Follow-up Plan 
(Quality ID 134) measure. Since we stated in the CY 2022 PFS final rule 
(86 FR 65266) that a benchmark would be created for Preventive Care and 
Screening: Screening for Depression and Follow-up Plan (Quality ID 
134), we find it suitable to use flat percentage benchmarks to measure 
performance on the measure.
    CMS is proposing to score the Preventative Care and Screening: 
Tobacco Use: Screening and Cessation Intervention (Quality ID<greek-i> 
226) measure using flat percentage benchmarks under the approach we 
proposed to amend the regulation at Sec.  425.512 in this section of 
the proposed rule. The Preventative Care and Screening: Tobacco Use: 
Screening and Cessation Intervention (Quality ID<greek-i> 226) measure 
triggered flat percentage benchmarks by the policies described at Sec.  
425.502(b)(2)(ii) in the previous benchmarking update for the 2020 and 
2021 performance years. Therefore, CMS believes it would be 
advantageous for the measure to keep its flat percentage benchmarks for 
the 2022 performance year for continuity and that having another scored 
measure can be beneficial to an ACO's overall quality performance.
    As we are proposing for Preventative Care and Screening: Tobacco 
Use: Screening and Cessation Intervention (Quality ID<greek-i> 226) and 
the Preventive Care and Screening: Screening for Depression and Follow-
up Plan (Quality ID 134) to be scored using flat percentage benchmarks 
for the 2022 performance year, ACOs would be scored on eight out of ten 
CMS Web Interface measures. We believe ACOs might prefer to be scored 
under a greater number of measures which may improve their overall 
score and performance for purposes of Shared Savings Program quality 
assessment. Lastly, use of flat percentages allows ACOs with high 
scores to earn maximum or near maximum achievement points while 
allowing room for improvement and rewarding that improvement in 
subsequent years. Use of flat percentages also helps to ensure that 
ACOs with high performance on a measure are not penalized as low 
performers. For the 2023 performance year, we expect to apply flat 
percentages for the Preventative Care and Screening: Tobacco Use: 
Screening and Cessation Intervention (Quality ID<greek-i> 226) and the 
Preventive Care and Screening: Screening for Depression and Follow-up 
Plan (Quality ID 134) as the Medicare data may not be unavailable or 
may be inadequate.
    We seek comment on this proposal.
d. Clarifying the Use of Unweighted MIPS Quality Performance Category 
Scores for Quality Performance Standard Determinations Under the Shared 
Savings Program
    In the CY 2022 PFS proposed and final rules (86 FR 39274 and 86 FR 
65271), we stated that the performance year 2018 MIPS Quality 
performance category score at the 30th percentile was equivalent to 
83.9 and the MIPS Quality performance category score at the 40th 
percentile was equivalent to 93.3. For performance year 2019, the MIPS 
Quality performance category score at 30th percentile was equivalent to 
87.9 and the MIPS Quality performance category score at the 40th 
percentile was equivalent to 95.7. We also stated that, for a given 
performance year, the 30th or 40th percentile across all MIPS Quality 
performance category scores would be calculated after MIPS final 
scoring is complete based on the distribution across all MIPS Quality 
performance category scores, excluding entities/providers eligible for 
scoring for facility-based scoring. Therefore, we are not able to 
provide performance rate information prior to or during the performance 
year. Nevertheless, we stated that we believe that publicly displaying 
prior year performance scores that equate to the 30th and 40th 
percentile across all MIPS Quality performance category scores for the 
applicable performance year would still provide helpful information for 
ACOs to determine what level of quality performance they would need to 
meet in order to satisfy the quality performance standard under the 
Shared Savings Program. We stated that we would release this historical 
information on the Shared Savings Program website as soon as it becomes 
available.
    While conducting analysis on the MIPS Quality performance category 
score data files after the publication of the CY 2022 PFS final rule, 
we determined that we erroneously used the weighted distribution of 
Quality performance category scores, rather than an unweighted 
distribution of Quality performance category scores, to calculate the 
30th and 40th percentile MIPS Quality performance category scores 
provided in the CY 2022 PFS proposed and final rules for 2018 and 2019. 
The weighted distribution of Quality performance category scores is 
used in MIPS for final payment calculations. The unweighted 
distribution of Quality performance category scores submitted by ACOs, 
groups, and individuals has historically been used to calculate 
benchmarks for quality measure performance under MIPS and the Shared 
Savings Program.
    In this proposed rule, we are clarifying that, despite this 
publication error, we use the submission level MIPS Quality performance 
category scores (unweighted distribution of scores) to determine the 
30th percentile and 40th percentile MIPS Quality performance category 
scores for purposes of establishing the applicable quality performance 
standard under the Shared Saving Program. We are also clarifying that 
we use an ACO's submission, which is considered the unweighted 
distribution of Quality performance category scores, to calculate its 
MIPS Quality performance category score for purposes of determining 
whether the ACO meets the quality performance standard under the Shared 
Savings Program in performance year 2021 and subsequent performance 
years. As noted above, this policy aligns with the MIPS and Shared 
Savings Program benchmarking policies and is consistent with our 
original intended methodology of using the unweighted distribution 
based on submission data to calculate the MIPS Quality performance 
category

[[Page 46151]]

scores for ACOs as we did to calculate the impacts of the Shared 
Savings Program quality performance standard proposals in the CY 2021 
PFS proposed rule (85 FR 50380).
    Based on the use of the unweighted distribution of the Quality 
performance category scores, for performance year 2018, the MIPS 
Quality performance category score at the 30th percentile is equivalent 
to 59.30 and the MIPS Quality performance category score at the 40th 
percentile is equivalent to 70.80. For performance year 2019, the MIPS 
Quality performance category score at 30th percentile is equivalent to 
58.00 and the MIPS Quality performance category score at the 40th 
percentile is equivalent to 70.82. For performance year 2020, the MIPS 
Quality performance category score at 30th percentile is equivalent to 
63.90 and the MIPS Quality performance category score at the 40th 
percentile is equivalent to 75.59. See Table 54 outlining the 
historical unweighted MIPS Quality performance category scores.
[GRAPHIC] [TIFF OMITTED] TP29JY22.094

e. Addressing MIPS Quality Performance Category Score Corrections in 
the Shared Savings Program's Reopening Authority
    As finalized in the CY 2021 PFS final rule, beginning with 
performance year 2021, the Shared Savings Program will use an ACO's 
MIPS Quality performance category score under the APP to determine 
whether the ACO has met the Shared Savings Program's quality 
performance standard. In turn, the ACO's quality performance informs 
the amount of shared savings earned or shared losses owed. There are 
interactions between the Shared Savings Program's financial 
reconciliation timeline and the Merit-Based Incentive Payment System 
(MIPS) targeted review process and other MIPS Quality performance 
category score-related corrections, and as a result, CMS may learn of 
errors in the calculation of MIPS Quality performance category scores 
after the issuance of an initial determination of financial performance 
under the Shared Savings Program.
    CMS has sole discretion over when to reopen determinations of ACO 
shared savings and shared losses to correct errors for good cause. We 
believe that it would be appropriate to clarify the circumstances in 
which we would exercise our discretion to reopen the initial 
determination of an ACO's financial performance for good cause to 
correct errors in the determination of MIPS Quality performance 
category scores that affect the determination of whether an ACO is 
eligible for shared savings, the amount of shared savings due to the 
ACO, or the amount of shared losses owed by the ACO. In this section, 
we discuss these circumstances and explain how we will approach such 
reopenings, the process by which we would make any corrections, and the 
manner in which we will adjust shared savings payments to the ACO or 
shared loss recoupments from the ACO, if applicable.
    Under Sec.  425.315, CMS may reopen the initial determination or a 
final agency determination under 42 CFR part 425 subpart I and issue a 
revised initial determination: (1) at any time in the case of fraud or 
similar fault as defined in Sec.  405.902; or (2) not later than 4 
years after the date of the notification to the ACO of the initial 
determination of savings or losses for the relevant performance year, 
for good cause. Good cause may be established when: (1) there is new 
and material evidence that was not available or known at the time of 
the payment determination and may result in a different conclusion; or 
(2) the evidence that was considered in making the payment 
determination clearly shows on its face that an obvious error was made 
at the time of the payment determination.
    In the June 2016 final rule, we noted in response to comments, that 
in order to provide an opportunity for CMS to consider updated 
information and make other adjustments to payment determinations across 
all ACOs, and to minimize program disruptions for ACOs resulting from 
multiple reopenings, we would, to the extent feasible, use a unified 
reopening (as opposed to multiple reopenings) to correct errors for a 
given performance year (81 FR 38001). In addition, we indicated that we 
would consider other ways to reduce operational burdens for both ACOs 
and CMS that could result from making payment adjustments to correct 
errors for good cause under the reopening provisions. For example, we 
explained that if, during the 4-year time period following notification 
of the initial payment determination, we determine that a correction 
needs to be made to a prior performance year's results for good cause, 
we would seek to potentially adjust the shared savings payment to the 
ACO or the shared loss recoupment from the ACO for a subsequent 
performance year (81 FR 38001). To illustrate, we stated that if an ACO 
that generated shared savings for the second performance year of its 
agreement period owed CMS money based on a correction made to the 
payment determination for the prior performance year, we might be able 
to deduct the amount owed prior to making the shared savings payment 
for the current year (subject to the general Shared Savings Program 
requirement for ACOs to repay monies owed to CMS within 90 days of 
notification of the obligation). We also explained that ACOs would not 
be able to delay recoupment of any payments owed by notifying us of a 
possible error that could merit reopening (81 FR 38002). Instead, we 
stated that if we later determine that a correction should be made, we 
would subsequently combine, if feasible, the revised calculation of 
shared savings or shared losses for the affected performance year with 
the financial reconciliation for the most recent performance year. For 
example, we indicated that we would add any amount owed to the ACO as a 
result of a reopening, to any shared savings payment for which the ACO 
is eligible for the most recent performance year. We indicated that we 
expected to be able to provide ACOs with sufficient details regarding 
these corrections that they would be able to attribute the additional 
payment or recoupment arising from the reopening internally

[[Page 46152]]

and, as applicable, distribute additional funds to or collect amounts 
from the appropriate ACO participants from the prior PY.
    Further, we explained that in considering when to reopen an error 
for good cause, we intend to strike a careful balance between important 
Medicare program integrity concerns that payments be made timely and 
accurately under the Shared Savings Program with our desire to minimize 
unnecessary operational burdens for ACOs and CMS, and to support the 
ACOs' ability to invest in additional improvements to increase quality 
and efficiency of care (81 FR 38001). To achieve this careful balance 
in objectives, for reopenings to address CMS technical errors, we 
indicated that we may consider whether an error satisfies a materiality 
threshold, such as when it affects 3 percent of the total amount of net 
shared savings and shared losses for all ACOs for the applicable 
performance year. This was a threshold based on guidance from the 
Government Accountability Office (GAO) for financial audits of Federal 
entities.\223\ We explained that although ACOs are not Federal 
entities, we believed it would be reasonable to consider the GAO 
guidance in determining when a technical error has a material effect 
across all ACOs, such that we should use our discretion to reopen for 
good cause.
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    \223\ GAO updated the guidance in 2020 and the recommended 
materiality threshold remains 3 percent. See Financial Audit Manual, 
Volume 1, Updated April 2020, 230-4, available at https://www.gao.gov/assets/gao-18-601g.pdf.
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    As finalized in the CY 2021 PFS final rule, beginning with PY 2021, 
Shared Savings Program ACOs are required to report quality data for 
purposes of the Shared Savings Program via the APP under the Quality 
Payment Program (85 FR 84720 through 84736). An ACO will meet the 
Shared Savings Program quality performance standard if the ACO achieves 
a quality performance score that is equivalent to or higher than the 
percentile specified for the relevant performance year, across all MIPS 
Quality performance category scores (Sec.  425.512(a)(3) and (4)). In 
the CY 2022 PFS final rule, we finalized an extended phase-in of the 
quality performance standard under the Shared Savings Program (Sec.  
425.512(a)(3) through (5); 86 FR 65266), which we discuss in detail in 
section III.G.4.b. of this proposed rule. Because ACOs are now 
reporting quality data via the APP and receiving MIPS Quality 
performance category scores, we are concerned that CMS may learn of 
errors in the calculation of MIPS Quality performance category scores 
after the Shared Savings Program has issued financial reconciliation 
reports (which are initial determinations of an ACO's financial 
performance for the applicable performance year). For this reason, we 
believe that it is appropriate to clarify the circumstances in which we 
would exercise our discretion to reopen the initial determination of an 
ACO's financial performance for good cause to correct errors in the 
determination of MIPS Quality performance category scores that affect 
the determination of whether an ACO is eligible for shared savings, the 
amount of shared savings due to the ACO, or the amount of shared losses 
owed by the ACO.
    We issue (typically in the summer) MIPS performance feedback 
reports for the previous performance year to MIPS eligible clinicians, 
eligible practices that submitted data as a group, virtual groups, and 
APM entities. For ACOs, the MIPS performance feedback report includes 
data on ACO quality performance, but does not indicate whether the ACO 
has met the Shared Savings Program's quality performance standard. Each 
ACO's MIPS Quality performance category score is calculated using the 
ACO's performance on the measures reported under the APP (ACO-reported 
measures, CAHPS for MIPS survey measure, claims-based measures), any 
applicable MIPS bonus points, and quality improvement points.\224\
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    \224\ See 2021 APP Toolkit, 2021 APM Performance Pathway for 
Shared Savings Program Accountable Care Organizations (ACOs) Guide, 
slide 15, available at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1495/2021%20APM%20Performance%20Pathway%20(APP)%20Toolkit.zip.
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    MIPS eligible clinicians, groups and APM entities (such as ACOs) 
may request a targeted review of the calculation of the MIPS payment 
adjustment factor pursuant to Sec.  414.1385. The MIPS targeted review 
submission period starts once the MIPS performance feedback report is 
issued and remains open for 60 days with the reviews concluding on a 
rolling basis, and may extend into October or November (Sec.  
414.1385(a)(2)). If a request for a targeted review is approved, CMS 
may recalculate, to the extent feasible and applicable, the scores with 
regard to measures, activities, performance categories (including the 
quality performance category), and the final score, as well as the MIPS 
payment adjustment factors (Sec.  414.1385(a)(6)). For Shared Savings 
Program ACOs, changes to MIPS Quality performance category scores could 
affect the quality performance standard and have an impact on the 
amount of shared savings earned or shared losses owed by the ACOs. 
Further, because we are proposing to incorporate a sliding scale 
approach as part of the quality performance standard, a change to an 
ACO's own MIPS Quality performance category score could also have an 
impact on the amount of shared savings earned by the ACO or the amount 
of shared losses owed to CMS under the ENHANCED track.
    CMS aims to deliver the Shared Savings Program financial 
reconciliation reports that incorporate MIPS Quality performance 
category scores for the previous year to ACOs in August on an embargoed 
basis (that is, ACOs may not publicly release the information in these 
reports), and typically 2-3 weeks later an unembargoed basis, at which 
point ACOs can publicly share the information in the reports. Unlike 
the MIPS performance feedback reports, these reports indicate whether 
an ACO has met the Shared Savings Program's quality performance 
standard. Under the proposed policies in this proposed rule, an ACO's 
health equity adjusted quality performance score for a performance year 
and the determination of whether the ACO met the Shared Savings Program 
quality performance standard would affect the determination of shared 
savings for that performance year and, for ACOs participating in the 
ENHANCED track, the amount of any shared losses owed. The unembargoed 
financial reconciliation reports constitute an initial determination of 
the ACO's financial performance for the applicable performance year. 
With the initial determination, we also send demand letters to ACOs 
that indicate the amount of shared losses that must be paid in full to 
CMS within 90 days of receipt. CMS initiates payments to ACOs that have 
earned shared savings for a performance year in September of the year 
following the applicable performance year in order to pay with the 
correct fiscal year funds. Given that the timeline for conducting a 
MIPS targeted review of the MIPS performance feedback report may extend 
past the date that we issue unembargoed financial reconciliation 
reports, we may learn of errors in the calculation of MIPS Quality 
performance category scores after the issuance of initial 
determinations of financial performance under the Shared Savings 
Program.
    As we discussed previously in this section, we believe that it is 
appropriate to clarify how we would exercise our discretion to reopen 
for good cause in the event of errors in the MIPS Quality performance 
category scores, such as

[[Page 46153]]

those identified through the MIPS targeted review process, that affect 
the determination of whether an ACO is eligible for shared savings, the 
amount of shared savings due to the ACO, or the amount of shared losses 
owed by the ACO. We are contemplating an approach under which we would 
reopen initial determinations of ACO financial performance to account 
for any corrections that have been made to MIPS Quality performance 
category scores that affect the determination of whether an ACO is 
eligible for shared savings \225\ or the amount of shared savings or 
shared losses, with no restrictions on the magnitude of the error or 
the number of ACOs affected. Under this approach, the determination of 
whether there has been an error in the determination of a MIPS Quality 
performance category score that affects the determination of whether an 
ACO is eligible for shared savings, the amount of shared savings due to 
the ACO, or the amount of shared losses owed by the ACO; whether a 
correction would be warranted; and the timing of any correction would 
be within the sole discretion of CMS as provided in Sec.  
425.315(a)(4).
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    \225\ Unlike shared savings, the determination of whether an ACO 
is eligible for shared losses is not dependent upon whether the ACO 
meets the quality performance standard. If an ACO meets or exceeds 
the minimum loss rate, it will be responsible for sharing losses. 
See, for example, Sec.  425.610(b)(3).
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    For illustrative purposes, we describe how a correction to a MIPS 
Quality performance category score, based on a targeted review or other 
changes to the MIPS Quality performance category score, could affect 
the determination of whether an ACO is eligible for shared savings. In 
this example, an ACO participating under the BASIC track received an 
initial determination indicating that it met the MSR requirement and 
that it met the quality performance standard because it achieved a MIPS 
Quality performance category score that is equivalent to or higher than 
the percentile specified as the quality performance standard for that 
performance year. Because the ACO was otherwise eligible to share in 
savings for the performance year, CMS issued an initial determination 
that the ACO was eligible to share in savings at the maximum sharing 
rate under its track (or payment model within a track). Several weeks 
after that initial determination is issued, CMS learns of an error in 
the calculation of the MIPS Quality performance category scores that 
caused the ACO's health equity adjusted quality performance score to be 
higher than it would have been absent the error. As a result, the ACO's 
actual health equity adjusted quality performance score was less than 
the percentile specified as the quality performance standard for that 
performance year. In this example, we would exercise our discretion to 
reopen the determination of the ACO's financial performance for good 
cause to correct the ACO's MIPS Quality performance category score. As 
a result of this correction, the ACO would no longer have a health 
equity adjusted quality performance score that is equivalent to or 
higher than the percentile specified as the quality performance 
standard for that performance year. Accordingly, the ACO would no 
longer meet the quality performance standard and thus would be 
ineligible for shared savings or alternatively might be eligible to 
receive a reduced shared savings payment in the event we finalize the 
proposed sliding scale approach.
    Alternatively, a correction to a MIPS Quality performance category 
score could affect the amount of shared savings or shared losses owed 
to an ACO. For example, an ACO under the ENHANCED track might receive 
an initial determination indicating that it owes shared losses to CMS 
calculated at the maximum shared loss rate because it: (1) Exceeded the 
minimum loss rate; and (2) it failed to meet the quality performance 
standard for that performance year.\226\ Several months after that 
initial determination is issued, as a result of a MIPS targeted review, 
we learn of an error in the calculation of the ACO's MIPS Quality 
performance category score that caused the ACO's health equity adjusted 
quality performance score to be lower than it would have been without 
the error. In this case, we would exercise our discretion to reopen the 
determination of the ACO's financial performance for good cause to 
correct the ACO's MIPS Quality performance category score. In making 
this correction, the ACO now achieves a health equity adjusted quality 
performance score that causes it to meet the quality performance 
standard. While the ACO would still owe shared losses because it 
exceeded the minimum loss rate, the amount of shared losses it owes 
could be reduced based on the ACO's corrected health equity adjusted 
quality performance score as we would now determine the ACO's shared 
loss rate using a sliding scale approach.
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    \226\ Section 425.610(f)(2)(ii). Under the current regulations, 
an ENHANCED track ACO that is liable for losses and fails to meet 
the quality performance standard automatically faces the maximum 
shared loss rate of 75 percent, whereas an ACO that meets the 
quality performance standard would face a shared loss rate that is 
scaled by the ACO's quality performance (subject to a minimum and 
maximum rate). We note that in the event we finalize our proposal to 
extend the sliding scale approach to determining shared losses to 
ENHANCED track ACOs that achieve a quality performance score 
equivalent to or higher than the 10th percentile of the performance 
benchmark on at least one of the four outcome measures in the APP 
measure set, a larger number of ACOs could potentially have their 
shared losses reduced as the result of a MIPS targeted review.
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    In the event that we learn of errors in the calculation of MIPS 
Quality performance category scores (from a MIPS targeted review or 
some other MIPS Quality performance category score-related corrections) 
that change the percentile score an ACO must achieve in order to meet 
the quality performance standard, we would exercise our discretion to 
reopen the initial determination of an ACO's financial performance for 
good cause to correct errors in the determination of whether an ACO is 
eligible for shared savings, the amount of shared savings due to the 
ACO, or the amount of shared losses owed by the ACO due to the 
miscalculation of MIPS Quality performance category scores. Moreover, 
as noted previously, if we determine that there is good cause to make a 
correction to a prior performance year's determination of ACO financial 
results as a result of corrections made to MIPS Quality performance 
category scores, we would seek to potentially adjust the shared savings 
payment to the ACO or any shared loss recoupment from the ACO for a 
subsequent performance year. This approach would not alter the current 
requirement that ACOs repay shared losses within 90 days after 
notification of the initial determination of shared losses.
    We believe this approach is flexible and balanced and would allow 
us to exercise our discretion to reopen initial determinations of ACO 
financial performance for good cause to account for any corrections 
that have been made to MIPS Quality performance category scores that 
affect the determination of whether an ACO is eligible for shared 
savings, the amount of shared savings due to the ACO, or the amount of 
shared losses owed by the ACO. We acknowledge that from year to year, 
corrections could sometimes advantage individual ACOs and sometimes 
disadvantage individual ACOs.
    We seek comment on this clarification of when we would exercise our 
discretion to reopen for good cause when either an initial 
determination or a final agency determination regarding an ACO's 
financial performance needs to be corrected as a result of any 
corrections made to MIPS Quality performance category scores that 
affect the determination of whether an ACO is

[[Page 46154]]

eligible for shared savings, the amount of shared savings due to the 
ACO, or the amount of shared losses owed by the ACO.
f. Screening for Social Drivers of Health and Screen Positive Rate for 
Social Drivers of Health Measures and Future Measure Development--
Request for Information (RFI)
    In the CY 2022 PFS proposed rule, we solicited comments on 
addressing health disparities and promoting health equity (86 FR 39269 
and 39270). We indicated our belief that assessing Shared Savings 
Program ACOs' quality performance on a broader population can have a 
positive impact on the quality of care for all groups, including 
Medicare beneficiaries (86 FR 39270). Additionally, we affirmed our 
expectation that the transition to all-payer eCQM/MIPS CQMs would help 
to address disparities and promote health equity by promoting a single 
standard of care across all patients receiving care from practices 
participating in Shared Savings Program ACOs regardless of location or 
racial/ethnic group (86 FR 39270). We sought comment and 
recommendations on how ACOs could utilize their resources to ensure all 
patients have access to equal care and how to improve the quality of 
care provided to certain communities, while addressing the disparities 
that currently exist in healthcare (86 FR 39270). Furthermore, we 
sought comment on how we could encourage health care providers serving 
vulnerable populations to participate in ACOs and other value-based 
care initiatives, including whether any adjustments should be made to 
quality measure benchmarks to take into account ACOs serving vulnerable 
populations (86 FR 39270).
    We received many comments in support of CMS' commitment to 
advancing health equity and addressing health disparities within the 
Shared Savings Program, including several comments supporting 
stratification of data and quality measures by social risk factors such 
as race and ethnicity and inclusion of health equity measures in the 
program. In addition, we received some feedback expressing concerns 
that eCQM/MIPS CQM measures would divert resources into electronic 
systems instead of focusing on health equity. Commenters also noted 
that changes to the payment structure under the Shared Savings Program 
could help ACOs improve infrastructure to address health equity and 
disparities. As we stated in the November 2011 final rule (76 FR 
67872), our principal goal in selecting quality measures for the Shared 
Savings Program has been to identify measures of success in the 
delivery of high-quality health care at the individual and population 
levels, with a focus on outcomes.
    Health equity and addressing health disparities continue to be high 
priorities for the agency through inclusion of health equity 
initiatives in CMS programs, and better addressing the social needs of 
people with Medicare is an important part of this strategy. Communities 
experiencing persistent poverty or inequality tend to 
disproportionately experience unmet social needs.\227\ According to the 
U.S. Department of Health and Human Services Office of Disease 
Prevention and Health Promotion's Healthy People 2030, which has a 
strong focus on eliminating health disparities and creating equitable 
opportunities for people to live healthy lives, social determinants of 
health have a major impact on people's health, well-being, and quality 
of life. This report cites safe housing, transportation, neighborhoods 
and access to nutritious foods as examples of social determinants of 
health.\228\ For health care providers to help improve health outcomes 
by addressing these needs for people with Medicare, there is growing 
evidence to support screening patients for social needs, referring 
patients who screen positive to local community-based organizations 
that can help patients address these needs, and finally ensuring that 
follow-up is obtained and the social needs are addressed. In addition, 
screening patients for social needs would allow clinicians to develop 
treatment plans, if needed, which would better capture a patient's 
unique needs and priorities.\229\
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    \227\ Centers for Medicare and Medicaid Services CMS Office of 
Minority Health, CMS Framework for Health Equity 2022-2032, (2022), 
available at website https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/framework-for-health-equity.
    \228\ U.S. Department of Health and Human Services Office of 
Disease Prevention and Health Promotion, Healthy People 2030, refer 
to website https://health.gov/healthypeople/priority-areas/health-equity-healthy-people-2030.
    \229\ AHRQ.gov, Identifying and Addressing Social Needs in 
Primary Care Settings, (2021), refer to https://www.ahrq.gov/sites/default/files/wysiwyg/evidencenow/tools-and-materials/social-needs-tool.pdf.
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    In this proposed rule, we are seeking comment on the potential 
future inclusion of two new structural measures in the APP measure set: 
Screening for Social Drivers of Health and Screen Positive Rate for 
Social Drivers of Health. The National Quality Forum (NQF) provided 
conditional support for these two measures during the 2021-2022 cycle 
and indicated the measures would be appropriate for consideration in 
the Shared Savings Program.\230\ The measure Screening for Social 
Drivers of Health assesses the percentage at which providers screen 
their adult patients for food insecurity, housing instability, 
transportation problems, utility help needs, and interpersonal safety. 
This screening for health-related social needs is consistent with the 
priorities of the agency and the Shared Savings Program, including 
Meaningful Measures 2.0 priority areas specific to equity. Meaningful 
Measures 2.0 includes addressing measurement gaps such as development 
and implementation of measures that reflect social and economic 
determinants.\231\
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    \230\ National Quality Forum, MAP Final Reports, (2022), 
available at website https://www.qualityforum.org/setting_priorities/partnership/map_final_reports.aspx.
    \231\ Centers for Medicare and Medicaid Services, Meaningful 
Measures 2.0: Moving from Measure Reduction to Modernization, 
(2021),available at website https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
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    The measure Screening for Social Drivers of Health assesses the 
rate at which providers screen beneficiaries 18 years and older for 
food insecurity, housing instability, transportation problems, utility 
help needs, and interpersonal safety.
    Below are the numerator and denominator for the measure:
    <bullet> Numerator: The number of beneficiaries 18 and older 
screened for food insecurity, housing instability, transportation 
needs, utility assistance, and interpersonal violence.
    <bullet> Denominator: The number of beneficiaries 18 and older in 
practice (or population).
    We refer readers to IV.A.10.c.(1)(c)(i) of this proposed rule and 
Table Group A of Appendix 1 of this proposed rule, where we discuss the 
proposed health equity measure for purposes of MIPS, ``Screening for 
Social Drivers of Health.'' We refer readers to section 
IV.A.10.c.(1)(d) of this proposed rule for the request for information 
regarding measure development related to health equity under MIPS.
    If the measure is adopted in the traditional MIPS program, we will 
consider proposing, in future rulemaking, the addition of this measure 
as an eCQM/MIPS CQM under the APP beginning in PY 2025, once the Web 
Interface reporting option sunsets and the transition to reporting 
eCQMs/MIPS CQMs is complete. It is important to note that the measure 
specifications are not being developed for electronic health record 
(EHR) reporting at this time, but would be considered for purposes of 
any future rulemaking.

[[Page 46155]]

    Per the Measure Applications Partnership 2021-2022 Considerations 
for Implementing Measures in Federal Programs: Clinician, Hospital, and 
Post-Acute Care Long-Term Care final report,\232\ this measure would 
also address a significant performance gap ``in which 84 percent of 
physician offices do not screen for all five needs, even though 
approximately one-third of patients would screen positive for one or 
more social needs.'' We believe the potential inclusion of this measure 
in the APP measure set reported by Shared Savings Program ACOs could 
advance health equity by ensuring ACO participants better understand 
the needs of the patients that they serve. We expect that, by screening 
for these social determinants of health, the ACO would accomplish the 
first step in helping people with Medicare address their social needs--
understanding their needs. This screening would also enable clinicians 
to develop treatment plans, if needed, that are focused on 
beneficiaries' unique needs and priorities. We may consider including 
additional quality measures in the future that would assess how well 
ACOs address the social needs of Medicare beneficiaries more directly. 
We note that any changes to the measures included in the APP measure 
set, including the addition of new measures, would be proposed through 
future rulemaking.
---------------------------------------------------------------------------

    \232\ National Quality Forum, MAP 2021-2022 Considerations for 
Implementing Measures Final Report - Clinicians, Hospitals, and PAC-
LTC, (2022), available at website https://www.qualityforum.org/Publications/2022/03/MAP_2021-2022_Considerations_for_Implementing_Measures_Final_Report_-_Clinicians,_Hospitals,_and_PAC-LTC.aspx.
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    We are also seeking input on Screen Positive Rate for Social 
Drivers of Health, which assesses the percentage of patients who 
screened positive for health-related social needs. We are interested in 
feedback from ACOs and other interested parties on the value of 
implementing a quality measure that indicates a patient's social needs 
as a part of the quality of care provided to them.
    We are soliciting comments on the potential addition of these two 
social determinant of health measures to the APP measure set reported 
under the Shared Savings Program if these measures are adopted for the 
traditional MIPS program and other ways to incorporate health equity 
into public reporting. We also seek comment on the following:
    <bullet> How to best implement the measures and how they could 
further drive health equity and health outcomes under the Shared 
Savings Program?
    <bullet> What are the possible barriers to implementation of the 
measures in the Shared Savings Program?
    <bullet> What impact would the implementation of these measures in 
the Shared Savings Program have on the quality of care provided for 
underserved populations?
    <bullet> What type of flexibility with respect to the social 
screening tools should be considered should the measures be 
implemented? While supporting flexibility, how can we advance the use 
of standardized, coded health data within screening tools?
    <bullet> Should the measures, if implemented in the future, be 
considered pay-for-reporting measures?
    Separately, we refer you to section III.G.2. of this proposed rule 
where we are proposing to implement AIP, which would provide advance 
shared savings payments based on assigned beneficiary dual eligibility 
status and ADI score to new, low revenue ACOs that are inexperienced in 
performance-based risk. Eligible ACOs may use the funds to invest in 
support strategies to address patient challenges related to social 
determinants of health, such as developing transportation services, 
remote access technologies, telemonitoring, language, literacy and 
cultural competency services, offering meals, and partnering with 
community-based organizations to address a patient's social needs, 
further aligning policies under the Shared Savings Program with 
initiatives to advance health equity and be responsive to social needs. 
We are committed to prioritizing the advancement of health equity 
through program policies with a focus on underserved populations, 
improving data collection and analysis on social needs and health 
disparities, and incorporating actionable measures addressing health 
disparities in future notice and comment rulemaking. We note that, 
should measures that screen for social needs be adopted in the future, 
data gathered through such screenings may support the prudent use of 
AIPs by ACOs.
g. Addition of New Consumer Assessment of Healthcare Providers and 
Systems (CAHPS) for the Merit-based Incentive Payment System (MIPS) 
Survey Questions--Request for Information (RFI)
    We are also seeking to gather ACOs and other interested parties 
input on the potential and modified questions in the CAHPS for MIPS 
Survey pertaining to health disparities and price transparency, which 
would support implementation of the No Surprises Act. The No Surprises 
Act includes provisions specific to improvements in transparency and 
greater oversight of prescription drug and medical costs.
    The CAHPS for MIPS Survey measures 10 key domains of patients' 
experience of care that are referred to as summary survey measures 
(SSMs) and include the following:

<bullet> Getting Timely Care, Appointments, and Information
<bullet> How Well Providers Communicate
<bullet> Patient's Rating of Provider
<bullet> Access to Specialists
<bullet> Health Promotion and Education
<bullet> Shared Decision Making
<bullet> Courteous and Helpful Office Staff
<bullet> Care Coordination
<bullet> Stewardship of Patient Resources
<bullet> Health Status and Functional Status

    CAHPS surveys are an integral part of the Shared Savings Program's 
efforts to meaningfully assess patient experience and have been a 
requirement of the program since the November 2011 final rule 
establishing the Shared Savings Program (76 FR 67872). We stated in 
that final rule that we believe there is evidence that the CAHPS survey 
assesses important aspects of provider-patient interaction that can be 
influenced by an ACO's level of organizational support, training and 
incentive structure (76 FR 67874). In the CY 2021 PFS final rule (85 FR 
84722), we finalized that beginning in PY 2021, Shared Savings Program 
Accountable Care Organizations (ACOs) are required to report quality 
data via the APP. As part of the APP, Shared Savings Program ACOs are 
required to administer the CAHPS for MIPS survey (85 FR 84730 through 
84732).
    The No Surprises Act,\233\ which took effect on January 1, 2022, 
includes provisions such as billing protections for consumers covered 
under group and individual health plans as well as certain improvements 
to transparency and oversight of prescription drug and medical costs 
(86 FR 36872). The No Surprises Act aligns with President Biden's goals 
of increased transparency, competition, and fairness across healthcare 
systems.\234\ We are firmly committed to the advancement of the 
President's vision for health care and the resulting benefits, which 
include empowerment of consumers in making more informed and value-
based health care decisions. We believe certain provisions of the No 
Surprises Act are

[[Page 46156]]

relevant in consideration of the questions we are seeking input on for 
the CAHPS for MIPS survey. On [date], the Office of Personnel 
Management, the Internal Revenue Service, the Department of Labor, and 
CMS issued an interim final rule entitled Requirements Related to 
Surprise Billing; Part 1 (86 FR 36872). This interim final rule notes 
that regulations promulgated under the No Surprises Act should ensure 
that all individuals, particularly those from underserved and minority 
communities, trust and believe information they receive related to 
healthcare costs and coverage (86 FR 36875). The agencies also note 
that regulations issued pursuant to the No Surprises Act should 
encourage regulated entities to address barriers to access of care, 
including trust concerns with the health care system, and to 
communicate with individuals in a language they can understand, in a 
respectful way that addresses cultural differences, and at an 
appropriate level of literacy (86 FR 36875).
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    \233\ Title I of Division BB of the Consolidated Appropriations 
Act, 2021, Public Law 116-133.
    \234\ Centers for Medicare and Medicaid Services, HHS Kicks Off 
New Year with New Protections from Surprise Medical Bills, (2022), 
available at website https://www.cms.gov/newsroom/press-releases/hhs-kicks-new-year-new-protections-surprise-medical-bills.
---------------------------------------------------------------------------

    As previously described in this section of the proposed rule, in 
developing policies for the Shared Savings Program, we are also 
committed to prioritizing the advancement of health equity through 
program initiatives with a focus on underserved populations, improving 
data collection and analysis on health disparities, and incorporating 
actionable measures addressing health disparities in future notice and 
comment rulemaking.
    An article in the Journal of the American Medical Association 
titled Patient-Reported Experiences of Discrimination in the U.S. 
Health Care System describes a cross-sectional national survey 
conducted in 2019 that included 3,253 U.S. adults. This survey was 
designed to determine the prevalence, frequency and main types of 
discrimination experienced in the health care system.\235\ Of the 2,137 
survey respondents, 458 (21.4 percent) indicated they had experienced 
discrimination in the health care system, and 330 (72 percent) of those 
who had experienced discrimination reported experiencing it on more 
than one occasion. The most frequently reported type of discrimination 
experienced in the health care system was racial/ethnic discrimination, 
followed by educational or income level discrimination, weight, sex and 
age. According to the authors, the survey results suggested that health 
care discrimination experiences were more prevalent than previously 
recognized and a need existed for additional analysis of how 
discrimination related to structural inequities and social determinants 
of health.
---------------------------------------------------------------------------

    \235\ Nong P., Raj M., Creary M., Patient-Reported Experiences 
of Discrimination in the U.S. Health Care System, JAMA Network, 
(2020), available at https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2774166.
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    One of the additional questions that we are considering adding to 
the CAHPS survey would be specific to health disparities and focuses on 
the patient's experience with discrimination based on the 
characteristics of the patient. The question we are seeking input on is 
``In the last 6 months, did anyone from a clinic, emergency room, or 
doctor's office where you got care treat you in an unfair or 
insensitive way because of any of the following things about you?'' The 
potential responses include; health condition, disability, age, 
culture, sex (including sexual orientation and gender identity) and 
income. We seek feedback on additional or modified potential response 
categories for this health disparities question. Feedback received 
through this RFI, along with analysis and findings from the testing of 
the survey question in other programs and future testing in this 
program would be used to inform future rulemaking.
    We also believe that this question aligns with the goals of the 
quality performance standard under the Shared Savings Program. Section 
1899(b)(3)(C) of the Act provides that the Secretary shall establish 
quality performance standards to assess the quality of care furnished 
by ACOs, and the Secretary shall seek to improve the quality of care 
furnished by ACOs over time, in part, by specifying new measures. 
Inclusion of this question to the CAHPS for MIPS Survey would allow CMS 
to better understand the extent to which patients perceive 
discrimination in their health care, in alignment with HHS efforts to 
provide culturally and linguistically appropriate services (CLAS). The 
National CLAS Standards, were developed by the HHS Office of Minority 
Health and provide a blueprint for individuals and healthcare 
organizations to implement services that are respectful of health 
beliefs, practices and needs of diverse patients with the goal to 
advance health equity, improve quality of services and assist with 
elimination of disparities.\236\ In addition, the Behavioral Health 
Implementation Guide for the National Standards for Culturally and 
Linguistically Appropriate Services in Health and Health Care 
(Behavioral Health Guide) underscores the ways in which the National 
CLAS Standards can improve access to behavioral health care, promote 
quality behavioral health programs and practice, and ultimately reduce 
persistent disparities in mental health and substance use treatment for 
underserved minority communities.\237\
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    \236\ U.S. Department of Health and Human Services Office of 
Minority Health, Cultural and Linguistic Competency, National CLAS 
Standards, (2021), available at website https://www.minorityhealth.hhs.gov/omh/browse.aspx?lvl=1&lvlid=6.
    \237\ U.S. Department of Health and Human Services Office of 
Minority Health, Behavioral Health Implementation Guide for the 
National Standards for Culturally and Linguistically Appropriate 
Services in Health and Health Care, (2012), available at website 
https://www.minorityhealth.hhs.gov/minority-mental-health/clas/.
---------------------------------------------------------------------------

    In addition, inclusion of a health disparities question in the 
CAHPS for MIPS survey would align with the five priorities outlined in 
the CMS Framework for Health Equity 2022-2032.\238\ The priorities 
include both system and community level approaches for achievement of 
equity in Medicare and include:
---------------------------------------------------------------------------

    \238\ Centers for Medicare and Medicaid Services, CMS Framework 
for Health Equity 2022-2032, (2022), available at website https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/equity-plan.
---------------------------------------------------------------------------

    <bullet> Priority 1: Expand the Collection, Reporting and Analysis 
of Standardized Data;
    <bullet> Priority 2: Assess Causes of Disparities Within CMS 
Programs and Address Inequities in Policies and Operations to Close 
Gaps;
    <bullet> Priority 3: Build Capacity of Health Care Organizations 
and the Workforce to Reduce Health and Health Care Disparities;
    <bullet> Priority 4: Advance Language Access, Health Literacy, and 
the Provision of Culturally Tailored Services; and
    <bullet> Priority 5: Increase All Forms of Accessibility to Health 
Care Services and Coverage.
    In addition, we believe that the inclusion of a health disparity 
question in the CAHPS for MIPS Survey would assist CMS in understanding 
the patient's perspective of their treatment during health care visits 
as well as provide insight for health care providers on how to improve 
upon patient interactions, promotion of health equity and delivery of 
care. In addition, this question is already being tested in the 
Medicare Advantage program and based on the findings from this testing 
in the Medicare Advantage program, we may consider including this 
question in the CAHPS for MIPS survey through future rulemaking. 
Including the question in the CAHPS for MIPS survey would provide 
consistency across CMS programs in learning more about patient

[[Page 46157]]

experiences with discrimination from various health care providers.
    We are also seeking input on the addition of questions to the CAHPS 
for MIPS survey specific to price transparency. These questions would 
build upon the goals of the No Surprises Act to improve transparency 
and oversight of drug and medical costs, allowing patients to have more 
information on which to base their healthcare decisions. We also note 
that the questions under consideration are patient focused, which is 
one of the goals of the CAHPS for MIPS survey. Currently, the CAHPS for 
MIPS survey includes the question ``In the last 6 months, did you and 
anyone on your health care team talk about how much your prescription 
medicines cost?'' \239\ We are considering adding a question that would 
be more general in nature and encompass additional areas of a patient's 
care, such as whether the patient talked with anyone on their health 
care team about the cost of health care services and equipment. An 
additional question or questions encompassing a patient's health care 
costs would allow us to better understand how extensively health care 
providers are considering and discussing costs with their patients, so 
they are more able to make informed health care decisions. We believe 
the inclusion of such questions would also support the goals of the 
Shared Savings Program which include promotion of accountability for 
patient populations and fostering coordination of items and services 
under Medicare Parts A and B. The program also encourages investment in 
infrastructure and redesigned care processes for high quality and 
efficient health care service delivery. ACOs work to reduce 
fragmentation in patient care and cost by giving their ACO participants 
and ACO providers/suppliers the incentives and tools to deliver high-
quality, coordinated, team-based care that proactively promotes 
improved health for all patients.\240\
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    \239\ Centers for Medicare and Medicaid Services, 2022 CAHPS for 
MIPS Survey Sample Copy, (2022), available at QPP Resource Library 
website https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1894/2022%20CAHPS%20for%20MIPS%20Survey%20Sample%20Copy.pdf.
    \240\ Centers for Medicare and Medicaid Services, Affordable 
Care Act's Shared Savings Program Continues to Improve Quality of 
Care While Saving Medicare Money During COVID-19 Pandemic, (2021), 
available at website  https://www.cms.gov/newsroom/press-releases/affordable-care-acts-shared-savings-program-continues-improve-quality-care-while-saving-medicare.
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    We are also considering revisions to the CAHPS for MIPS Survey 
measure in order to make it more broadly applicable to specialty groups 
in addition to primary care groups. In particular, we are requesting 
public comment on shortening the survey to remove survey items that are 
relevant only to primary care providers. Alternately, we may create an 
alternate shortened survey version for specialty groups while 
maintaining the existing survey questions for primary care groups.
    In summary, we are seeking information and feedback from commenters 
on: (1) the potential future inclusion of health disparities and price 
transparency questions and whether there are other questions that 
should also be considered for potential future inclusion in the CAHPS 
for MIPS survey; and (2) whether they have any input on creating a 
shortened version of the CAHPS for MIPS Survey measure such that it is 
more applicable to specialty groups. Feedback received through this 
RFI, along with analysis and findings from the testing of the survey 
questions in other programs and future testing in this program would be 
considered to inform future rulemaking, as previously indicated.
5. Financial Methodology
a. Overview
    In this section of this proposed rule, we are proposing 
modifications to the financial methodologies used under the Shared 
Savings Program. We propose a combination of modifications to the 
Shared Savings Program's benchmarking methodology and financial models 
to encourage sustained participation by ACOs in the program and remove 
barriers for ACOs serving medically complex and low-income populations. 
Specifically, we are proposing to revise the benchmarking methodology 
by: incorporating a prospective, external factor for updating the 
benchmark (section III.G.5.c.(3) of this proposed rule); adjusting 
rebased benchmarks to account for an ACO's prior savings (section 
III.G.5.c.(4) of this proposed rule); and reducing the impact of 
negative regional adjustments on ACO benchmarks (section III.G.5.c.(5) 
of this proposed rule). We are also seeking comment on alternatives to 
the combination of policies proposed in sections III.G.5.c.(3) through 
(5) which would be aimed at addressing concerns about the effect of an 
ACO's assigned beneficiaries on regional FFS expenditures used in 
establishing, adjusting, updating, and resetting an ACO's historical 
benchmark (section III.G.5.c.(6) of this proposed rule). We are also 
proposing changes to how we calculate regional factors used in 
benchmarking to reflect differences in prospective and preliminary 
prospective assignment (section III.G.5.d. of this proposed rule), how 
we conduct annual risk adjustment to better account for medically 
complex, high cost populations and to guard against coding initiatives 
(section III.G.5.e. of this proposed rule), and we are proposing a 
methodology to increase opportunities for low revenue ACOs 
participating in the BASIC track to share in savings (section 
III.G.5.f. of this proposed rule). We discuss ongoing considerations of 
the impact of the PHE for COVID-19 on ACO expenditures (section 
III.G.5.g. of this proposed rule), and we are proposing to exclude from 
the determination of Medicare Parts A and B expenditures for purposes 
of calculations under the Shared Savings Program a proposed new 
supplemental payment under the IPPS for IHS/Tribal Hospitals and 
hospitals located in Puerto Rico (section III.G.5.h. of this proposed 
rule). We conclude with a discussion of the proposed modifications to 
42 CFR part 425, subpart G (section III.G.5.i. of this proposed rule), 
to incorporate the related proposed changes discussed throughout this 
section, as well as certain technical and conforming changes, and 
corrections. Our specific proposals are discussed in detail in the 
following sections.
b. Statutory and Regulatory Background on Establishing and Updating the 
Benchmark and Determining Savings
    Section 1899(d)(1)(B)(i) of the Act specifies that, in each year of 
the agreement period, an ACO is eligible to receive payment for shared 
savings only if the estimated average per capita Medicare expenditures 
under the ACO for Medicare FFS beneficiaries for Parts A and B 
services, adjusted for beneficiary characteristics, is at least the 
percent specified by the Secretary below the applicable benchmark under 
section 1899(d)(1)(B)(ii) of the Act. Section 1899(d)(1)(B)(ii) of the 
Act addresses how ACO benchmarks are to be established and updated 
under the Shared Savings Program. This provision specifies that the 
Secretary shall estimate a benchmark for each agreement period for each 
ACO using the most recent available 3 years of per beneficiary 
expenditures for Parts A and B services for Medicare FFS beneficiaries 
assigned to the ACO. This benchmark shall be adjusted for beneficiary 
characteristics and such other factors as the Secretary determines 
appropriate and updated by the projected absolute amount of growth in 
national per capita expenditures for

[[Page 46158]]

Parts A and B services under the original Medicare FFS program, as 
estimated by the Secretary. The benchmark shall be reset at the start 
of each agreement period. In addition to the statutory benchmarking and 
savings determination methodology established in section 1899(d) of the 
Act, section 1899(i)(3) of the Act grants the Secretary the authority 
to use other payment models, including payment models that would use 
alternative benchmarking and savings determination methodologies, if 
the Secretary determines that doing so would improve the quality and 
efficiency of items and services furnished under the Medicare program 
and that the alternative methodology would result in program 
expenditures equal to or lower than those that would result under the 
statutory payment model.
    The rules governing the benchmarking calculations and determination 
of shared savings and losses are set forth in the regulations at 42 CFR 
part 425, subpart G. In the November 2011 final rule establishing the 
Shared Savings Program, we adopted policies for establishing, updating, 
and resetting the benchmark at Sec.  425.602. The Shared Savings 
Program's regulations have since evolved to include different 
benchmarking methodologies, including modifications to Sec.  425.602, 
and the addition of separate benchmarking policies for ACOs entering a 
second or subsequent agreement period at Sec.  425.603. Benchmarking 
policies applicable to all ACOs in agreement periods beginning on July 
1, 2019, and in subsequent years, are specified in Sec.  425.601. We 
refer readers to discussions of the benchmark calculations in earlier 
rulemaking for details on the development of the current policies (see 
November 2011 final rule, 76 FR 67909 through 67927; June 2015 final 
rule, 80 FR 32785 through 32796; June 2016 final rule, 81 FR 37953 
through 37991; and December 2018 final rule, 83 FR 68005 through 
68030).
    Calculations related to determination of shared savings and shared 
losses are specified in Sec.  425.605 for ACOs participating under the 
BASIC track, and Sec.  425.610 for ACOs participating under the 
ENHANCED track (formerly referred to as Track 3). In the June 2015 
final rule, CMS established Track 3, constituting the program's highest 
level of risk and potential reward (80 FR 32771 through 32781). In the 
December 2018 final rule, CMS renamed Track 3 the ENHANCED track (see, 
for example, 83 FR 67841), and established the BASIC track, which 
includes a glide path with five Levels (A through E) (83 FR 67841 
through 67857). The BASIC track's glide path allows eligible ACOs to 
begin under a one-sided model and incrementally advance to higher 
levels of risk and reward. We refer the reader to earlier rules for 
details on the development of the current policies for determining 
shared savings and losses under the BASIC track and ENHANCED track.
    In the May 8, 2020, COVID-19 IFC (85 FR 27578 through 27582), we 
established adjustments to benchmark and performance year expenditure 
calculations to address the COVID-19 pandemic as specified under Sec.  
425.611. In the CY 2021 PFS final rule (85 FR 84771 through 84785), we 
summarized and responded to public comments received on these 
adjustments, and finalized the regulation at Sec.  425.611 with 
modifications.
    Details on the Shared Savings Program's financial methodology are 
included in Specifications documents. Refer to the Medicare Shared 
Savings Program, Shared Savings and Losses and Assignment Methodology 
Specifications (version <greek-i>10, January 2022), available at 
https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-1. For details on Shared Savings Program policies to 
address the impact of COVID-19 pandemic and the resulting public health 
emergency, refer to the Medicare Shared Savings Program, Shared Savings 
and Losses and Assignment Methodology, Specifications of Policies to 
Address the Public Health Emergency for COVID-19 (December 2020), 
available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf.
c. Strengthening Participation by Reducing the Effect of ACO 
Performance on Historical Benchmarks, Addressing Market Penetration, 
and Strengthening Incentives for ACOs Serving Medically Complex and 
High Cost of Care Populations
(1) Regulatory Background
    To establish an ACO's historical benchmark for an agreement period, 
CMS uses ACO historical expenditures for beneficiaries that would have 
been assigned to the ACO in the 3 most recent years prior to the start 
of the agreement period. As the statute requires the use of historical 
expenditures to establish an ACO's benchmark, the per capita costs for 
each benchmark year must be trended forward to current year dollars and 
then a weighted average is used to obtain the ACO's historical 
benchmark. Section 1899(d)(1)(B)(ii) of the Act also requires that the 
benchmark shall be updated by the projected absolute amount of growth 
in national per capita expenditures for Parts A and B services under 
the original Medicare FFS program. Therefore, in the November 2011 
final rule establishing the Shared Savings Program, we adopted policies 
for trending forward expenditures for benchmark year (BY) 1 and BY2 to 
BY3 dollars (76 FR 67924 and 67925), and for updating the benchmark for 
each performance year during the ACO's agreement period (76 FR 67925 
through 67927).
    Over the 10 years since the Shared Savings Program was first 
established, we have used a variety of approaches for determining the 
trend and update factors to make an ACO's cost target more independent 
of its own expenditures, including using factors based on national 
expenditures, regional expenditures, or both. With these approaches, we 
have maintained a degree of parity between the factors used to trend 
and update the benchmark, either based on national FFS expenditures, 
regional FFS expenditures, or a blend of national and regional FFS 
expenditures.
    In the November 2011 final rule establishing the Shared Savings 
Program, we adopted policies at Sec.  425.602 establishing trend and 
update factors based on national FFS expenditures (76 FR 67924 through 
67927). We finalized use of a national growth rate in Medicare Parts A 
and B expenditures for FFS beneficiaries for trending forward BY1 and 
BY2 to BY3 dollars. We also finalized use of a flat dollar equivalent 
of the projected absolute amount of growth in national per capita 
expenditures for Parts A and B services under the Original Medicare FFS 
program to update the benchmark for each performance year of the 
agreement period. We described our belief that using a trend factor 
based on a national growth rate in Medicare Parts A and B expenditures 
and an update factor calculated as a flat dollar amount equivalent of 
the projected absolute amount of growth in national FFS expenditures 
provides a relatively higher expenditure benchmark for low growth/low 
spending ACOs and a relatively lower benchmark for high growth/high 
spending ACOs. ACOs in high cost high growth areas would therefore have 
an incentive to reduce their rate of growth to bring their costs more 
in line with the national average;

[[Page 46159]]

while ACOs in low cost low growth areas would have an incentive to 
maintain or improve their overall lower spending levels (76 FR 67924 
through 67927).
    In the June 2015 final rule, we adopted policies for resetting the 
benchmark for ACOs entering a second agreement period in 2016 at Sec.  
425.603(b) (80 FR 32786 through 32796). These policies addressed 
concerns about the use of an ACO's prior performance years as benchmark 
years in second and subsequent agreement periods \241\ by weighting 
each benchmark year equally and incorporating an adjustment to account 
for the average per capita amount of savings generated during the ACO's 
prior agreement period. We refer to this adjustment as a ``prior 
savings adjustment.'' We believed that incorporating a prior savings 
adjustment into the benchmarking methodology for renewing ACOs entering 
a second agreement period in 2016 would encourage ongoing program 
participation by ACOs that had lowered expenditures during their first 
agreement period. We noted that absent this adjustment, an ACO that 
previously achieved success in the program may elect to terminate its 
participation in the program rather than face a lower benchmark that 
reflects the lower costs for its patient population during the 
performance years of its prior agreement period (80 FR 32788 through 
32791). When proposing this policy in the December 2014 proposed rule 
(79 FR 72838 and 72839), we highlighted the advantages of the prior 
savings adjustment, including increasing incentives for ACOs to remain 
in the program and continue generating shared savings and improving 
quality due to the prospect of a higher benchmark in future agreement 
periods. Furthermore, we hypothesized that adjusting benchmarks for 
prior performance would increase the likelihood of ACOs entering two-
sided risk models. The prior savings adjustment adopted in the June 
2015 final rule applied only to ACOs entering a second agreement period 
beginning in 2016 because we subsequently finalized an alternative 
methodology incorporating factors based on regional FFS expenditures to 
establish, adjust and update the benchmark for ACOs beginning a second 
or subsequent agreement period in 2017 and later years.
---------------------------------------------------------------------------

    \241\ 79 FR 72835 and 72836.
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    In the June 2016 final rule (81 FR 37953 through 37991), we 
modified the benchmarking methodology to finalize an approach that 
incorporated factors based on regional FFS expenditures when resetting 
(or rebasing) and updating ACO historical benchmarks, as specified in 
Sec.  425.603(c) through (f). We replaced the national trend factor 
used in the rebasing methodology with a methodology incorporating 
regional trend factors. This revised rebasing methodology applied 
beginning in 2017 to determine rebased historical benchmarks for ACOs 
renewing for a second or subsequent agreement period under the Shared 
Saving Program. We also adopted a phased approach to adjusting the 
rebased benchmark to reflect a percentage of the difference between an 
ACO's historical expenditures and FFS expenditures in the ACO's 
regional service area. A higher percentage would be used in calculating 
this regional adjustment to the ACO's rebased historical benchmark for 
the ACO's third agreement period (or fourth agreement period for ACOs 
that entered a second agreement period in 2016) and all subsequent 
agreement periods. The finalized methodology also included an annual 
update to the rebased benchmark to account for changes in regional FFS 
spending, replacing the update based solely on the absolute amount of 
projected growth in national FFS spending. We finalized an approach to 
calculate regional FFS expenditures, which included defining an ACO's 
regional service area to include all counties where one or more 
beneficiaries assigned to the ACO reside, calculating risk adjusted 
county FFS expenditures for the ACO's regional service area using the 
assignable beneficiary population residing in each of the counties 
included in the ACO's regional service area, and weighting county-level 
FFS costs by the proportion of the ACO's assigned beneficiaries in the 
county. The approach adopted in the June 2016 final rule was designed 
to address concerns about an ACO's influence on its historical 
benchmark by making the ACO's cost target more independent of its 
historical expenditures and more reflective of FFS spending in its 
region by incorporating regional expenditures into the determination of 
an ACO's historical benchmark and applying a methodology for risk 
adjustment that accounted for the health status of the ACO's assigned 
population in relation to FFS beneficiaries in the ACO's regional 
service area. This approach, which was sunset through subsequent 
rulemaking that was finalized in December 2018, applied to determine 
the rebased historical benchmark for ACOs that renewed their 
participation agreement for a second agreement period beginning on 
January 1, 2017, January 1, 2018, or January 1, 2019.
    In the December 2018 final rule (83 FR 68005 through 68030), we 
adopted policies at Sec.  425.601 that expanded the use of regional 
factors in establishing, adjusting, and resetting historical benchmarks 
to all ACOs, including ACOs in a first agreement period, for agreement 
periods beginning on July 1, 2019, or in subsequent years. These 
policies sought to address concerns about ACOs influencing their own 
regional trends by using a blend of national and regional trend factors 
to trend forward BY1 and BY2 to BY3 when determining the historical 
benchmark under Sec.  425.601(a)(5) and a blend of national and 
regional update factors to update the historical benchmark to the 
performance year under Sec.  425.601(b) (83 FR 68024 through 68030). 
Under this approach, the weight applied to the national component of 
the blended trend and update factors increases with an ACO's 
penetration in its regional service area. We also finalized changes to 
limit the magnitude of the regional adjustment to address CMS' concerns 
about windfall gains for low-spending ACOs and to reduce disincentives 
for ACOs serving medically complex patients (83 FR 68017 through 
68024). Specifically, we established a symmetrical cap on the regional 
adjustment to the historical benchmark equal to positive or negative 5 
percent of the national per capita FFS expenditures for assignable 
beneficiaries for each enrollment type. We also modified the schedule 
of weights used to phase in the regional adjustment at Sec.  
425.601(f), to reduce the maximum weight from 70 to 50 percent for all 
ACOs and to slow the phase-in of weights for ACOs with higher spending 
than their regional service area.
    In earlier rulemaking, we have acknowledged that the use of factors 
based on regional FFS expenditures in calculating benchmarks will have 
varying effects on ACOs depending on each organization's individual 
circumstances (see, for example, 81 FR 37954 through 37957, and 81 FR 
37975 through 37977; also 83 FR 68017 and 68026).
(2) Overview of Considerations for Modification to the Benchmarking 
Methodology
    In the CY 2022 PFS proposed rule (86 FR 39291 through 39295), we 
summarized select aspects of the Shared Savings Program's benchmarking 
methodology and related concerns that have been expressed by ACOs and 
other interested parties and solicited comments. We discussed some of 
our

[[Page 46160]]

considerations based on our initial analyses of these concerns about 
the methodology for calculating regional FFS expenditures used in 
certain benchmark calculations, specifically the regional adjustment 
and the blended national-regional growth rates used in trending and 
updating the benchmark. We sought comment on possible approaches for 
removing an ACO's assigned beneficiaries from the assignable 
beneficiary population used in the regional expenditure calculations to 
address concerns raised by ACOs and other interested parties that the 
current approach results in relatively lower benchmarks for ACOs, 
particularly ACOs with high market penetration in their regional 
service area, which they suggest may tend to be rural ACOs (86 FR 
39292). In the CY 2022 PFS proposed rule (86 FR 39293), we noted the 
potential, based on initial simulations, for mixed effects on ACOs from 
modifications to the benchmark methodology to remove the ACO's assigned 
beneficiaries from the calculation of regional FFS expenditures. We 
also specified that it would be important to consider the extent to 
which market penetration should be considered in benchmark 
calculations, noting that relatively few ACOs have high market shares 
(86 FR 39293). We also sought comment on alternative benchmarking 
methodologies that may incorporate data sources other than Medicare FFS 
expenditure trends, such as by incorporating factors based on Medicare 
Advantage rates, or other published trends (86 FR 39294). We sought 
comment on alternate approaches to updating the historical benchmark, 
noting that in order for us to use our authority under section 
1899(i)(3) of the Act to implement payment methodologies that diverge 
from the requirements of section 1899(d)(1)(B)(ii) of the Act, those 
payment methodologies must be determined to improve the quality and 
efficiency of items and services furnished to Medicare beneficiaries 
without resulting in additional program expenditures (86 FR 39294).
    In the section of the CY 2022 PFS final rule entitled ``Comments on 
Considerations Related to the Use of Regional FFS Expenditures and the 
Risk Adjustment Methodology in Establishing, Adjusting, Updating, and 
Resetting the ACO's Historical Benchmark'' (86 FR 65295 through 65306), 
we summarized comments received, and noted that we would take these 
comments into consideration as we contemplate additional refinements to 
the Shared Savings Program's benchmarking methodologies. We noted that 
we would propose any specific policy changes, if deemed appropriate, in 
future notice and comment rulemaking. In the following discussion we 
provide select information on the comments received and previously 
summarized, and we refer readers to the aforementioned section of the 
CY 2022 PFS final rule for more complete summaries of commenters' 
suggestions.
    Several commenters, including MedPAC, did not support removing ACO 
assigned beneficiaries from the regional FFS expenditure calculations 
(86 FR 65298). MedPAC expressed concern this would reward historically 
low spending ACOs without improving their efficiency of care while at 
the same time further reducing participation incentives among high 
spending ACOs that were likely to have the greatest opportunity for 
efficiency improvements.\242\ Many commenters favored removing ACO 
assigned beneficiaries from the regional reference population (86 FR 
65298 through 65302), with some commenters suggesting this approach in 
combination with other modifications to the benchmarking methodology, 
such as to expand the definition of regional service area, or to modify 
the blended national-regional growth factors used in trending and 
updating the ACO's historical benchmark. Some commenters sought clarity 
on the approach that would be used to remove an ACO's assigned 
beneficiaries from the assignable population of beneficiaries used to 
determine regional FFS expenditures given anticipated mixed effects on 
ACOs, including the impact on ACOs serving patients with high costs of 
care (86 FR 65298). Commenters offered differing perspectives on 
unintended consequences that could result from removing ACO assigned 
beneficiaries from regional FFS expenditures, with some commenters 
suggesting that this could also inadvertently increase incentives for 
patient selection and market consolidation (86 FR 65300 and 65301). 
Commenters offered a variety of alternative approaches (86 FR 65301 and 
65302). For example, MedPAC suggested that ACOs selecting prospective 
assignment be offered a trend factor that is set prospectively prior to 
the start of the performance year and developed utilizing local and 
national estimates as is already done for benchmarking under the Global 
and Professional Direct Contracting Model (to be redesigned and renamed 
as the ACO Realizing Equity, Access, and Community Health (REACH) Model 
beginning January 1, 2023).\243\
---------------------------------------------------------------------------

    \242\ Letter from MedPac to Chiquita Brooks-LaSure, 
Administrator, CMS (September 9, 2021), regarding File code CMS-
1751-P, available at https://www.regulations.gov/comment/CMS-2021-0119-26001.
    \243\ We note that the Global and Professional Direct 
Contracting Model has gained experience using a prospectively set 
trend factor utilizing local and national estimates as part of 
benchmarking; this element of the benchmarking methodology will 
continue when the model transitions to the redesigned ACO REACH 
Model on January 1, 2023.
---------------------------------------------------------------------------

    We have continued to investigate the commenters' concerns and 
consider their suggestions, and have performed additional modeling and 
analysis. We take seriously ACOs' and other interested parties' 
concerns about the Shared Savings Program's benchmarking methodology. 
There are three core concerns (or dynamics) which we seek to address in 
this rule through proposed modifications to the Shared Savings 
Program's benchmarking methodology:
    <bullet> How to ensure rebased benchmarks remain accurate and serve 
as a reasonable baseline, when benchmark years correspond to 
performance years of the ACO's preceding agreement period, requiring 
ACOs to continually beat their own performance (also referred to as a 
``ratchet effect'').
    <bullet> How to address a single ACO's or multiple ACOs' collective 
effects on their own regional expenditures, which are used to calculate 
the regional adjustment and the regional portion of the trend and 
update factors.
    <bullet> How to ensure the benchmarking methodology results in 
benchmarks of sufficient value to encourage program entry and continued 
participation by ACOs, ACO participants, and ACO providers/suppliers 
serving medically complex, high cost populations, and to address 
selective participation in the program by ACOs, ACO participants, and 
ACO providers/suppliers resulting from the program's benchmarking 
methodology.
    As indicated in the regulatory background in section III.G.5.c.(1) 
of this proposed rule, we have taken incremental steps to address these 
dynamics through previous rulemaking, such as: using factors based on 
regional FFS expenditures to trend and update the ACO's rebased 
historical benchmark instead of a prior savings adjustment, followed by 
modifications to use blended national-regional growth factors in 
trending and updating the ACO's historical benchmark beginning with the 
ACO's first agreement period; incorporating a regional adjustment to 
the benchmark in the rebasing methodology, followed by modifications

[[Page 46161]]

to apply the regional adjustment beginning with the ACO's first 
agreement period, and to adjust the phase-in of weights used in 
determining the regional adjustment over time; and modifying the risk 
adjustment methodology to account for changes in severity and case mix 
of the ACO's assigned beneficiaries during the performance year. While 
these approaches have made some progress to address the aforementioned 
dynamics, as discussed elsewhere in this proposed rule, we continue to 
receive feedback from ACOs and other interested parties that additional 
modifications to the benchmarking methodology are needed to further 
reduce impacts from rebasing and the regional effects of increasing 
market penetration by ACOs, and to support ACOs, and in particular ACOs 
serving medically complex, high cost populations, as they work to 
achieve the program's goal of lowering growth in Medicare FFS 
expenditures.
    There is some evidence that certain aspects of the program's 
benchmarking methodology, notably the regional adjustment to the 
benchmark, may already deter participation among ACOs with spending 
above their regional benchmark and those serving medically complex, 
high cost populations. For example, in performance years 2017 through 
2019, just over 80 percent of ACOs subject to a regional adjustment 
received a positive adjustment, indicating their spending was lower 
than spending in their regional service area. More recently, the share 
of ACOs receiving a positive regional adjustment is closer to 90 
percent. This pattern suggests selective participation behavior, where 
ACOs that have already achieved efficiency or that are serving 
beneficiaries with lower health risks are more likely to participate. 
Providers with the greatest opportunity to reduce spending (those that 
are inefficient and high spending relative to their region and that 
would receive a negative regional adjustment if they formed an ACO) are 
less likely to participate under the current methodology, limiting 
savings for the Medicare program. Additional analysis has suggested 
that ACOs receiving the largest negative regional adjustments tend to 
be those serving beneficiaries with high average risk scores and/or 
high proportions of beneficiaries dually eligible for Medicare and 
Medicaid. This further suggests, that these ACOs may be higher cost 
relative to their regions as a result of caring for the highest needs 
populations rather than being inefficient, and that ACOs serving 
medically complex, high cost populations may have more difficulty 
participating in the Shared Savings Program.
    We believe that addressing the concerning dynamics in the 
benchmarking methodology, combined with modifications to the risk 
adjustment methodology and to participation options targeted at 
improving participation by ACOs serving medically complex, high cost 
populations,\244\ would further CMS' goal that 100 percent of people 
with Original Medicare will be in a care relationship with 
accountability for quality and total cost of care by 2030.\245\ This 
goal has informed our consideration of how to approach potential 
modifications to the benchmarking methodology, and in particular to 
consider approaches that would allow for a potentially significant 
increase in participation in the Shared Savings Program.
---------------------------------------------------------------------------

    \244\ Modifications to the risk adjustment methodology targeted 
at supporting ACO's serving medically complex, high cost populations 
are described in section III.G.5.e of this proposed rule. 
Modifications to participation options targeted at ACOs serving 
underserved populations, and providing a longer on-ramp to 
performance-based risk for certain ACOs are described in section 
III.G.2 of this propsed rule.
    \245\ Seshamani M, Fowler E, Brooks-LaSure C. Building On The 
CMS Strategic Vision: Working Together For A Stronger Medicare. 
Health Affairs. January 11, 2022. Available at https://www.healthaffairs.org/do/10.1377/forefront.20220110.198444.
---------------------------------------------------------------------------

    We also note that we are continuing to consider additional 
modifications to the Shared Savings Program benchmarking methodology 
that may be needed to ensure the program's longer-term sustainability. 
MedPAC discussed ratchet effects from rebasing and ACOs' affecting 
their own regional expenditures in its November 2021 public meeting 
\246\ and January 2022 public meeting.\247\ Many of the commissioners 
appear to support a longer-term approach under which CMS would update 
ACOs' benchmarks annually using ``exogenous'' factors, meaning factors 
not impacted by the individual or collective performance of ACOs. This 
approach, which has been referred to as ``administratively set 
benchmarks'', would use a combination of administratively determined 
factors and projected growth in volume and intensity of FFS services, 
to account for whether an ACO is high or low spending relative to its 
region. However, at least one commissioner questioned using a projected 
trend when the actual trend is available and, in their view, has served 
the program well.\248\ In its June 2022 Report to the Congress, MedPAC 
formally recommended the administratively set benchmarks approach.\249\ 
In section III.G.7. of this proposed rule, we describe and seek comment 
on a potential longer-term approach for use of administratively set 
benchmarks that are decoupled from ongoing observed FFS spending.
---------------------------------------------------------------------------

    \246\ Serna L and Stensland J. MedPAC. Presentation on benchmark 
incentives for accountable care organizations (November 8, 2021), 
available at https//www.medpac.gov/wp-content/uploads/2021/09/aco-
benchmarks-medpac-nov-2021.pdf.
    \247\ Burton R et al. MedPAC. Presentation on developing a 
multi-track population-based payment model with administratively 
updated benchmarks (January 14, 2022), available at https://www.medpac.gov/wp-content/uploads/2021/10/APM-MedPAC-Jan22.pdf.
    \248\ See, for example, Medicare Payment Advisory Commission, 
Public Meeting, Friday, January 14, 2022, transcript of proceedings 
starting at 10:02 am, available at https://www.medpac.gov/wp-content/uploads/2021/10/Jan22_MedPAC_Meeting_Transcript_SEC.pdf 
(refer to pages 166-246, enumerated pages 3-83).
    \249\ Medicare Payment Advisory Commission. June 2022 Report to 
the Congress: Medicare and the Health Care Delivery System (June 15, 
2022), available at https://www.medpac.gov/document/june-2022-report-to-the-congress-medicare-and-the-health-care-delivery-system/ 
(Chapter 1, pages 3-22).
---------------------------------------------------------------------------

    Within this section of this proposed rule, we propose a combination 
of policies to ensure a robust benchmarking methodology that would 
reduce the effect of ACO performance on ACO historical benchmarks and 
increase options for ACOs caring for high-risk populations. 
Specifically, we are proposing to modify the methodology for updating 
the historical benchmark (section III.G.5.c.(3) of this proposed rule), 
incorporate a prior savings adjustment in historical benchmarks for 
renewing and re-entering ACOs (section III.G.5.c.(4) of this proposed 
rule), and modify the negative regional adjustment (section 
III.G.5.c.(5) of this proposed rule). We also believe these proposed 
modifications could serve as ``stepping stones'' to a potential longer-
term approach to the benchmarking methodology, and they are designed to 
be consistent with the potential approach for incorporating a 
methodology for administratively set benchmarks, which is described in 
the request for information in section III.G.7. of this proposed rule. 
In section III.G.5.c.(6) of this proposed rule we also seek comment on 
two potential alternatives to the package of policies we are proposing 
in sections III.G.5.c.(3) through (5). Both alternatives would seek to 
limit the impact of an ACO's own assigned beneficiaries on the regional 
factors used in benchmarking calculations. While these alternatives 
would address concerns raised by some interested parties, we believe 
they would be less effective than our

[[Page 46162]]

proposed policies at addressing the full set of core concerns we 
articulate in this section.
(3) Incorporating a Prospective, External Factor in Growth Rates Used 
To Update the Historical Benchmark
(a) Background
    As described in the December 2018 final rule (83 FR 68024 through 
68030), we used our statutory authority under section 1899(i)(3) of the 
Act to adopt the policy under which we update the historical benchmark 
using a blend of national and regional growth rates, rather than the 
projected absolute amount of growth in national per capita expenditures 
for Parts A and B services under the original Medicare FFS program as 
required under section 1899(d)(1)(B)(ii) of the Act. In accordance with 
Sec.  425.601(b), for agreement periods beginning on July 1, 2019, and 
in subsequent years, we update the historical benchmark for an ACO for 
each performance year using a blend of national and regional growth 
rates between BY3 and the performance year. To update the benchmark, we 
make separate calculations for expenditure categories for each of the 
following populations of beneficiaries based on Medicare enrollment 
type: ESRD, disabled, aged/dual eligible for Medicare and Medicaid, 
aged/non-dual eligible for Medicare and Medicaid.
    The national-regional blend is a weighted average of national FFS 
and regional growth rates between BY3 and the performance year for the 
applicable Medicare enrollment type. The national growth rates are 
computed using CMS OACT national Medicare expenditure data for BY3 and 
the performance year for assignable beneficiaries (as defined at Sec.  
425.20) identified for the 12-month calendar year corresponding to each 
year. Regional growth rates are computed using expenditures for the 
ACO's regional service area for BY3 and the performance year. To 
calculate regional expenditures, we determine the counties included in 
the ACO's regional service area based on the ACO's assigned beneficiary 
population for the year, and determine the ACO's regional expenditures 
as specified under Sec.  425.601(c) and (d).
    The national and regional growth rates are blended together by 
taking a weighted average of the two. The weight assigned to the 
national component of the national-regional blend for a given Medicare 
enrollment type is calculated as the share of assignable beneficiaries 
in the ACO's regional service area that are assigned to the ACO for the 
applicable performance year, calculated by taking a weighted average of 
county-level shares as specified in Sec.  425.601(a)(5)(v). To 
calculate this share, we first calculate the county-level share of 
assignable beneficiaries that are assigned to the ACO for each county 
in the ACO's regional service area for that Medicare enrollment type. 
We then weight the county-level shares according to the ACO's 
proportion of assigned beneficiaries in the county, determined by the 
number of the ACO's assigned beneficiaries residing in the county in 
relation to the ACO's total number of assigned beneficiaries for that 
Medicare enrollment type. Next, we sum these weighted county-level 
shares for all counties in the ACO's regional service area for each 
Medicare enrollment type.
    As an ACO's penetration in its region increases, a higher weight is 
placed on the national component of the national-regional blend and a 
lower weight on the regional component. The national and regional 
growth rates are blended together by taking a weighted average of the 
two. Specifically, for each Medicare enrollment type, the national-
regional blended growth rate is equal to the sum of the following: (1) 
the growth rate for national assignable FFS expenditures for BY3 to the 
performance year multiplied by the weight assigned to the national 
component; and (2) the average growth rate for regional FFS 
expenditures for BY3 to the performance year based on the ACO's 
regional service area multiplied by the weight assigned to the regional 
component. In accordance with Sec.  425.601(a)(5), we also use blended 
national-regional growth rates to trend forward expenditures for each 
benchmark year (BY1 and BY2) to BY3 dollars, making separate 
calculations for each Medicare enrollment type.
    We summarize concerns with the current benchmarking approach in 
section III.G.5.c.(2) of this proposed rule. Specifically, ACOs and 
other interested parties have expressed concerns regarding the dynamic 
under which an ACO that reduces costs for its own assigned 
beneficiaries also reduces its average regional costs, resulting in a 
relatively lower benchmark for the ACO under the blended national-
regional growth rates used to trend and update the ACO's historical 
benchmark. As echoed in public comments, ACOs and other interested 
parties have suggested that this dynamic particularly disadvantages 
ACOs with high market penetration in their regional service areas, 
which may tend to be ACOs operating in rural areas (see, for example, 
86 FR 65296 through 65299).
(b) Proposed Revisions
    We are proposing to incorporate a prospectively projected 
administrative growth factor, a variant of the United States Per Capita 
Cost (USPCC) referred to here as the Accountable Care Prospective Trend 
(ACPT), into a three-way blend with national and regional growth rates 
to update an ACO's historical benchmark for each performance year in 
the ACO's agreement period. Incorporating this prospective trend in the 
update to the benchmark would insulate a portion of the annual update 
from any savings occurring as a result of the actions of ACOs 
participating in the Shared Savings Program and address the impact of 
increasing market penetration by ACOs in a regional service area on the 
existing blended national-regional growth factor. Because the ACPT 
would be prospectively set at the outset of an agreement period, any 
savings generated by ACOs during the agreement period would not be 
reflected in the ACPT. Accordingly, incorporation of the ACPT would 
allow for benchmarks to increase beyond actual spending growth rates as 
ACOs slow spending growth. By limiting the negative feedback of efforts 
by ACOs to slow spending growth on their own benchmarks, we believe the 
use of this three-way blend to update ACOs' benchmarks would 
incentivize both greater savings by ACOs and greater program 
participation. Because incorporating the ACPT into the update would 
reduce the degree to which an ACO's savings negatively impact its 
benchmark through the regional trend component of the update, we also 
believe that this proposed change to the update methodology would help 
to address the concerns discussed in section III.G.5.c.(2) of this 
proposed rule regarding the disproportionate impact of an ACO's savings 
on the benchmark update for ACOs with high market share. We discuss 
this in greater detail elsewhere in this section.
    We are not proposing to revise the methodology used to trend 
forward per capita expenditures from BY1 and BY2 to BY3, but would 
maintain the current two-way blend used in calculating the ACO's 
benchmark. Modifying the methodology for determining the update factor 
but not the trend factor means there would no longer be parity between 
these factors, but we believe this would be an appropriate departure 
from the approach we have maintained since the start of the program. 
The two-way blend used for trend factors would continue to reflect 
actual growth rates, which we believe is still appropriate for purposes 
of determining the historical benchmark

[[Page 46163]]

because the benchmark is intended to reflect historical spending prior 
to any savings achieved during the agreement period for which the 
benchmark will be used. In contrast, the proposal to use a three-way 
blend to update the benchmark would incorporate a projected growth 
rate, the ACPT, which would reflect increases in spending independent 
of any savings achieved by the ACO, or ACOs collectively, during the 
agreement period, thus limiting the extent to which ACOs' success in 
reducing expenditures for their assigned beneficiaries over the course 
of an agreement period negatively impacts their ability to share in 
savings during that agreement period. We believe this would incent ACOs 
to reduce expenditures during the agreement period because there would 
be less risk of those reductions negatively impacting their benchmark 
updates. This, in turn, could lead to greater savings generated and 
increased shared savings payments to ACOs.
    Under the proposed approach, a three-way blend would be calculated 
as the weighted average of the ACPT (one-third) and the existing 
national-regional blend (two-thirds) for use in updating an ACO's 
historical benchmark between BY3 and the performance year (PY). The 
ACPT component of the blend would be an external factor, meaning it 
would not be impacted by the individual or collective performance of 
ACOs. Within this proposed rule, reference to a ``two-way blend'' is 
synonymous with the existing blended national-regional growth rates 
under Sec.  425.601.
    The CMS Office of the Actuary (OACT) provides projections of 
Medicare program spending for various recurring deliverables, including 
the Medicare Trustees Report and the Advance Notice and Announcement of 
Medicare Advantage capitation rates and Part C and Part D payment 
policies. These publications include both historical and projected 
future Medicare spending amounts expressed on a per capita basis 
(differences in ESRD and non-ESRD calculations, are described in 
further detail in this section). These amounts published in the Advance 
Notice and the Announcement are labeled the FFS USPCCs. We are 
proposing to calculate the ACPT component of the blended annual update 
using an annualized growth rate based on 5-year-projections in per 
capita spending as of the start of an ACO's agreement period. We 
selected this projection horizon to align with the 5-year agreement 
periods used under the Shared Savings Program. The ACPT would be 
projected by OACT and would be a modification of the existing FFS USPCC 
growth trend projections used annually for establishing Medicare 
Advantage rates. The modifications to the FFS USPCC, aimed at making 
the trends more consistent with Shared Savings Program's existing 
expenditure calculations, would reflect the following:
    <bullet> Exclusion of payments for indirect medical education 
(IME), disproportionate share hospitals (DSH), including both 
empirically justified DSH payments and uncompensated care payments, and 
the proposed new supplemental payment for IHS/Tribal Hospitals and 
hospitals located in Puerto Rico, if finalized in the FY 2023 IPPS/LTCH 
PPS final rule.
    <bullet> Inclusion of payments associated with hospice claims.
    OACT currently produces separate FFS USPCCs for ESRD (dialysis-
only, including aged/ESRD, disabled/ESRD and ESRD-only) and non-ESRD 
aged/disabled populations. Likewise, OACT would also calculate the ACPT 
separately for these two populations. Currently, most Shared Savings 
Program benchmarking calculations are performed separately for four 
separate Medicare enrollment types: ESRD, disabled, aged/dual eligible 
for Medicare and Medicaid, and aged/non-dual eligible for Medicare and 
Medicaid. The Shared Savings Program identifies enrollment type status 
on a monthly basis. A beneficiary month is classified as an ESRD month 
if the beneficiary was in long-term dialysis or transplant status for 
that month (including up to 3 months post-graft). All non-ESRD months 
are then classified as one of the other three categories based on age 
(under 65 for disabled) and dual eligibility status (for beneficiaries 
65 and over only).\250\ We are proposing to use the ESRD ACPT in 
calculating update factors for the ESRD population and to use the 
combined Aged/Disabled ACPT in calculating update factors for the 
remaining three enrollment types (disabled, aged/dual eligible, aged/
non-dual eligible). Using ACPTs based on the existing populations for 
which FFS USPCCs are calculated would allow us to leverage existing 
OACT models which do not currently differentiate among categories 
within the aged/disabled population. We do not believe that there would 
be significant precision gained from revising these existing models to 
incorporate assumptions regarding these distinctions. Furthermore, we 
note that outside of the unforeseen impact of the PHE for COVID-19, 
national assignable per capita spending growth rates were reasonably 
consistent across the three non-ESRD enrollment types from 2013-2019 
and we anticipate that pattern continuing during the period in which 
the ACPT would be incorporated into ACO calculations.
---------------------------------------------------------------------------

    \250\ Refer to Medicare Shared Savings Program, Shared Savings 
and Losses and Assignment Methodology Specifications (January 2022, 
Version <greek-i>10), available at https://www.cms.gov/files/document/medicare-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-1 (Appendix E).
---------------------------------------------------------------------------

    We are proposing to set the ACPT growth factors for the ACO's 
entire 5-year agreement period near the start of the agreement period. 
The ACPT factors would remain unchanged throughout the ACO's agreement 
period, providing a degree of certainty to ACOs. We anticipate we would 
publish finalized ACPT values in the Spring of the first performance 
year of an ACO's agreement period, and we note earlier years' trends 
would be available for reference prior to the start of the ACO's 
agreement period. We acknowledge that, under an approach that sets the 
value of the ACPT at the start of an ACO's agreement period, ACOs 
entering agreement periods in different years could be subject to 
higher or lower updates depending on how projections change from year 
to year. This could lead ACOs to try to time their entry (or renewal) 
in the program to try to maximize the fixed portion of their update. 
However, we believe this concern will be mitigated because the ACPT 
would represent only one-third of the three-way blend used to update an 
ACO's benchmark.
    We further propose that the annualized growth rate(s) would be 
calculated as either a uniform annualized projected growth rate over 
each of the 5 performance years of the 5-year agreement period, or as 
two or more annualized growth rates during the 5 performance years 
comprising the 5-year agreement period. Two or more annualized growth 
rates would be used if OACT determines that a uniform annualized 
projected rate of growth does not reasonably fit the anticipated growth 
curve--for example, if growth is expected to be above- or below-average 
in the short-run and return to more typical levels later in the 
agreement period.
    We considered whether the ACPT component of the blend should 
express projected growth on a relative basis (as the current two-way 
national-regional blend operates) or on an absolute (flat) dollar 
basis. Applying the new portion of the update as an absolute dollar 
growth amount would more closely adhere to the approach stipulated in 
section 1899(d)(1)(b)(ii) of the Act for the benchmark to be updated by 
the

[[Page 46164]]

projected absolute amount of growth in national per capita expenditures 
for Parts A and B services under the original Medicare FFS program. 
However, under the proposed approach, the ACPT would be weighted 
together with the two-way national-regional blend.
    Based on retrospective modeling (described elsewhere in this 
section), both the relative basis and flat dollar approaches to 
calculating the ACPT are anticipated to improve the incentive to 
participate compared with the current two-way blend for both ACOs with 
higher market penetration within their regional service area (the ACO's 
assigned beneficiaries constitute at least 30 percent of the assignable 
beneficiary population within the ACO's regional service area) and ACOs 
operating in a regional service area with higher ACO market penetration 
(at least 50 percent of the assignable beneficiaries within an ACO's 
regional service area are assigned to any Shared Savings Program ACO). 
During the period examined, ACO benchmarks increased an average of $19 
per capita, with an average of 62 percent of all ACOs across all years 
modeled receiving a larger benchmark increase compared with the current 
two-way blend. An average of 65 percent of ACOs operating in a regional 
service area with higher Shared Savings Program market penetration were 
better off under the three-way blended update factor compared with the 
current two-way blend. Additional results comparing the benefits of the 
three-way blend to the current two-way blend are described elsewhere in 
this section. We also anticipate that introducing the ACPT as part of a 
three-way blend may incentivize ACOs to achieve additional savings by 
providing a known prospective trend that allows for improved planning 
and provides a target for ACOs to compare their performance against. 
Because the prospective trend would allow ACOs to improve planning, a 
higher percentage of ACOs may benefit from the three-way blend than is 
reflected in the simulations. In addition, we expect the three-way 
blend would further insulate a portion of the benchmark update from the 
impact of an ACO's own savings, as actual spending trends downward from 
initial projections.
    While both approaches are, on average, favorable for ACOs, the risk 
adjusted flat dollar approach is anticipated to be more beneficial to 
ACOs because the flat dollar amount would be based on per capita 
expenditures among the national assignable population, which tend to be 
higher than per capita expenditures among ACO-assigned beneficiaries. 
That is, if national per capita expenditures are projected to increase 
by 3 percent per year, a flat dollar amount representing 3 percent of 
per capita expenditures from the national assignable population would 
be greater than 3 percent of a typical ACO's own benchmark amount; 
thus, the flat dollar ACPT would result in a larger overall increase to 
the ACO's benchmark amount each year. Another potential advantage of 
calculating flat dollar amounts based on the national per capita FFS 
expenditures for the assignable population (rather than simply 
calculating flat dollar amounts from OACT's original projected dollar 
values for the ACPT), is that it allows us to generate separate values 
for each of the four Medicare enrollment types. This approach would 
also align projections with actual per capita expenditures of the 
assignable population, minimizing the degree to which the projections 
may systematically differ in how they are calculated.
    Therefore, we are proposing to calculate flat dollar amounts 
(separately for each Medicare enrollment type) by applying the relevant 
projected growth rate to truncated national per capita FFS expenditures 
for assignable beneficiaries for BY3 for the given Medicare enrollment 
type. The assignable population for this calculation would be 
identified using the assignment window for the 12-month calendar year 
corresponding to BY3. Truncation would be done in the same manner as is 
done when calculating the ACO's own per capita expenditures to draw an 
equivalent comparison. That is, we would truncate national per capita 
FFS expenditures for assignable beneficiaries for BY3 for a given 
Medicare enrollment type, for purposes of calculating the ACPT flat 
dollar amounts, at the 99th percentile of national Medicare FFS 
expenditures for assignable beneficiaries identified for the 12-month 
calendar year corresponding to BY3. This approach would be consistent 
with the approach to truncating an assigned beneficiary's expenditures 
in calculating the ACO's benchmark year expenditures as currently 
specified in Sec.  425.601(a)(4), and in the proposed new provision at 
Sec.  425.652(a)(4), and performance year expenditures as specified 
under Sec.  425.605(a)(3) (BASIC track) and Sec.  425.610(a)(4)(ii) 
(ENHANCED track). This approach to truncation to establish the ACPT 
flat dollar amounts would also align with the approach to truncating 
assignable beneficiary expenditures in calculating county expenditures 
(refer to Sec.  425.601(c)(3), and the proposed new provision at Sec.  
425.654(a)(3)) used in determining factors based on regional FFS 
expenditures, including the regional component of the two-way blend.
    We are further proposing to risk adjust these flat dollar amounts 
to account for differences in severity and case mix between the ACO's 
assigned beneficiaries and the national assignable FFS population for 
each Medicare enrollment type. We are concerned that flat dollar 
amounts that are not risk adjusted could generate a relatively lower 
update for higher spending ACOs caring for medically complex 
populations because the amount of the update would be set based on per 
capita expenditures for the national assignable population (which are 
likely to be lower) instead of the ACO's own assigned beneficiary 
population. Risk-adjusting the flat dollar amounts would provide a 
higher flat dollar amounts for ACOs serving medically complex 
populations. We are not proposing to adjust the ACPT flat dollar 
amounts for geographic differences in costs or prices, as we believe 
that such an adjustment may inadvertently reward higher spending, less 
efficient ACOs with a high market share in their regional service area.
    In order to blend the risk adjusted flat dollar amounts with the 
corresponding two-way blend for each enrollment type, which would 
continue to operate on a relative basis, we would first need to re-
express the risk adjusted flat dollar amounts on a relative basis by 
dividing by the ACO's historical benchmark expenditure amount. This 
would be done separately for each Medicare enrollment type.
    Using hypothetical values, the steps below illustrate how we would 
set the annualized growth rate(s) and calculate the ACPT flat dollar 
amount(s) (re-expressed as a relative value) that would be included in 
the three-way blend.
Step 1: Calculate Annualized Growth Rate(s) for Agreement Period
    For step 1, OACT would calculate one or more annualized growth 
rates for the ESRD population (the ESRD ACPT) and one or more 
annualized growth rates for the aged/disabled population (the Aged/
Disabled ACPT). Specifically, for each population OACT would project 
per capita spending growth for Parts A and B Medicare FFS spending as 
described earlier in this section between BY3 and each performance year 
of the agreement period. These annualized growth rates may either be 
calculated as a uniform annualized projected rate of growth over each 
of the 5 performance years of the

[[Page 46165]]

5-year agreement period, or as two or more annualized growth rates 
reflecting the projected rates of growth during the 5 performance years 
comprising the 5-year agreement period if CMS determines that a uniform 
annualized projected rate of growth does not reasonably fit the 
anticipated growth curve.
Step 2: Express the Growth Rate(s) for Each Performance Year as Flat 
Dollar Amounts (the ACPT)
    For step 2, we would multiply BY3 truncated national per capita FFS 
expenditures calculated by OACT for the assignable FFS population for a 
given enrollment type (ESRD, disabled, aged/dual eligible Medicare and 
Medicaid beneficiaries, and aged/non-dual eligible Medicare and 
Medicaid beneficiaries), by the applicable growth rate to calculate the 
flat dollar amount of growth for each performance year. As previously 
described in this section, we would use ESRD growth rate(s) for the 
ESRD population and non-ESRD aged/disabled growth rate(s) for the 
disabled, aged/dual eligible, and aged/non-dual eligible populations. 
Thus, for example, if the truncated national assignable per capita 
expenditures for a given enrollment type was $13,000, and the projected 
growth rate for that enrollment type in that year is 5 percent per 
year, the flat dollar amounts would be:

PY1 flat dollar amount = $13,000 x (1.050 - 1) = $650, and
PY5 flat dollar amount = $13,000 x (1.276 - 1) = $3,588 \251\
---------------------------------------------------------------------------

    \251\ For a given performance year ``X'' in an agreement period, 
the growth rate is calculated by raising the annual growth rate to 
the power of X (that is, multiplying the annual growth rate by 
itself X times). Thus, for PY5 in this example, the annual growth 
rate of 1.276 is computed by raising 1.05 to the power of 5 (that 
is, multiplying the single year growth rate of 1.05 by itself 5 
times).
---------------------------------------------------------------------------

Step 3: Risk Adjust the Flat Dollar Amounts
     In step 3, we would multiply the flat dollar amounts for each 
performance year, for each enrollment type, by the ACO's mean BY3 
prospective HCC risk score \252\ for that enrollment type. For 
consistency with other Shared Savings Program risk adjustment 
calculations, the risk score used would first be renormalized by 
dividing by the national mean risk score for the assignable FFS 
population for that enrollment type identified for the calendar year 
corresponding to BY3. Risk adjusting the flat dollar amounts would 
allow for a higher update for ACOs serving a population that is more 
medically complex than the national average. If the ACO's BY3 risk 
score was 1.025, the risk adjusted flat dollar amounts would be:
---------------------------------------------------------------------------

    \252\ We have also used the terms ``CMS-HCC prospective risk 
scores'' and ``CMS-Hcc risk scores'' (see, for example, the December 
2018 final rule, 83 FR 68007 through 68013) to refer to such risk 
scores. While we choose to use the term ``prospective HCC risk 
scores'' within this section of this proposed rule for consistency 
with terminology used in the regulations (see, for example, Sec.  
Sec.  425.601, 425.605, and 425.610), we consider these terms to be 
interchangeable.

PY1 flat dollar amount = $650 x 1.025 = $666, and
PY5 flat dollar amount = $3,588 x 1.025 = $3,678
Step 4: Re-Express Risk Adjusted Flat Dollar Amounts as Relative 
Factors
    The fourth and final step before calculating the three-way blended 
update factor would be to re-express the risk adjusted flat dollar 
amount for each enrollment type on a relative basis such that it can be 
combined in a weighted average with the current two-way blend. We would 
do this by dividing the risk adjusted flat dollar amounts computed in 
Step 3 for a given enrollment type by the ACO's historical benchmark 
expenditures for that enrollment type. The resulting amount would 
represent the final ACPT portion of the blended update factor for that 
enrollment type. If the historical benchmark expenditures for the 
enrollment type were $12,000, the final ACPT portion of the blended 
update factors for this enrollment type would be:

PY1 final ACPT portion of the blended update factor = ($666 / $12,000) 
+ 1 = 1.056, and
PY5 final ACPT portion of the blended update factor = ($3,678 / 
$12,000) + 1 = 1.306

The values in this step would then be combined with the two-way blend 
to compute the three-way blended update factor. The ACPT would 
constitute one-third of the total blend, while the remaining two-thirds 
would consist of the existing two-way blend.
    To illustrate how we would compute the three-way blend, and how it 
would compare with the two-way blend, assume for the same hypothetical 
ACO for a given enrollment type that the regional expenditure growth 
between BY3 and PY1 is 2.5 percent, that national assignable FFS 
expenditure growth is 3 percent and that the ACO's assigned 
beneficiaries represent 20 percent of the assignable population in the 
ACO's regional service area. For simplicity, assume the ACO faces a 
risk ratio of 1.0. The current two-way blended update factor would be 
calculated as:

Two-way blend = (National Update Factor x National Weight) \253\ + 
(Regional Update Factor x (1 - National Weight)); or
---------------------------------------------------------------------------

    \253\ Weight for the national growth rate is calculated as the 
share of assignable beneficiaries in the ACO's regional service area 
for BY3 that are assigned to the ACO in BY3 (refer to Sec.  
425.601(a)(5)(iv)(A)).
---------------------------------------------------------------------------

Two-way blend = (1.030 x 20 percent) + (1.025 x 80 percent) = 1.026.
Updating the ACO's benchmark with the two-way blended update factor 
alone would yield a value of $12,312 (that is, $12,000 x 1.026 = 
$12,312).

    To calculate the three-way blend by incorporating the PY1 ACPT 
factor of 1.056 (from earlier in the example) we would use the 
following weighted average:

Three-way blend = [PY1 ACPT x (1/3)] + [PY1 Two-Way Blend x (2/3)]; or
Three-way blend = [1.056 x (1/3)] + [1.026 x (2/3)] = 1.036.

    Applying the three-way blended update factor to the historical 
benchmark would yield an updated benchmark of $12,432 for the 
enrollment type (that is, $12,000 x 1.036 = $12,432). In this example, 
the ACO's benchmark update factor increases by 1.0 percentage point, 
corresponding to an increase of $120 per capita, which increases the 
ACO's potential for shared savings and reduces the potential for shared 
losses, if applicable.
    Including the ACPT as a component of a three-way blend could 
provide a degree of certainty that benchmarks would not be lowered as a 
result of ACOs reducing FFS spending growth, and thereby increase the 
incentive for such savings and strengthen incentives for ACOs to enter 
and remain in the Shared Savings Program. However, incorporating the 
ACPT into a three-way blended update factor would have the potential 
for mixed effects. For example, it may also lower an ACO's benchmark 
relative to the current approach if external factors lead to higher 
program spending growth than originally projected at the start of an 
ACO's agreement period. This could, for example, cause an ACO in a two-
sided model that would not have been responsible for shared losses 
under the two-way blend to owe shared losses under the three-way blend 
or cause an ACO that would have owed shared losses under the two-way 
blend to owe a larger amount of shared losses under the three-way 
blend.
    Additionally, the three-way blend could potentially have negative 
implications for an ACO based on the Shared Savings Program's policy 
regarding monitoring of ACO financial

[[Page 46166]]

performance described in Sec.  425.316(d). Under this policy, if an 
ACO's performance year expenditures exceed its updated benchmark by an 
amount equal to or exceeding either the ACO's negative MSR under a one-
sided model or the minimum loss rate (MLR) under a two-sided model, CMS 
may take pre-termination actions against the ACO. For a subsequent 
occurrence for another performance year in the same agreement period, 
CMS may immediately or with advance notice terminate the ACO's 
participation agreement.
    Consequently, we believe a guardrail is needed to ensure the use of 
the three-way blend does not result in lower benchmarks than the 
current national-regional blend in a way that poses higher financial 
risk for ACOs under two-sided models, or that could jeopardize an ACO's 
continued participation in the Shared Savings Program under the 
financial performance monitoring policy described in Sec.  425.316(d), 
or both.
    We propose to institute this guardrail as follows: if an ACO 
generates losses for a performance year that meet or exceed its minimum 
loss rate (MLR) (for two-sided model ACOs) or negative MSR (for one-
sided model ACOs) under the three-way blend, we would recalculate the 
ACO's updated benchmark using the national-regional blended update 
factor (two-way blend). If the ACO generates a smaller amount of losses 
using the two-way blend, we would use this smaller amount to determine 
the ACO's responsibility for shared losses, if applicable, and in 
determining the ACO's financial performance for monitoring purposes 
under Sec.  425.316(d). If the ACO generates saving using the two-way 
blend to update its benchmark but does not generate savings under the 
three-way blend, the ACO would neither be responsible for shared losses 
(if in a two-sided model) nor eligible for shared savings for the 
applicable performance year, even if the savings generated exceed the 
ACO's MSR. ACOs in these scenarios would publicly report their 
performance in accordance with Sec.  425.308(b)(4) based on the 
recalculated amounts determined using the two-way blend. However, an 
ACO that generated savings under the two-way blend, but was not 
eligible to earn a shared savings payment, would be required to report 
zero shared savings for the performance year. We believe this guardrail 
would protect ACOs from the most negative potential outcomes of the 
proposed three-way blend, while still insulating the Trust Funds.
    To illustrate how the guardrail would be applied, consider a second 
hypothetical ACO participating at Level E of the BASIC track for which 
the updated benchmark calculated using the three-way blend was $12,760. 
Assume that the ACO's per capita performance year expenditures were 
$12,980 and that the ACO had selected a symmetrical MSR/MLR of 1.5 
percent. Using the three-way blend, the ACO would have per capita 
losses of -$220, or -1.7 percent of its updated benchmark which would 
be above ACO's selected MLR of -1.5 percent. Applying the fixed shared 
loss rate of 30 percent under Level E, the ACO would, in absence of the 
guardrail, be liable for shared losses (on a per capita basis) of -$66 
and would face potential pre-termination actions or involuntary 
termination (depending on the ACO's financial performance in prior 
years of its agreement period). However, with the guardrail in place, 
we would re-assess the ACO's performance using the two-way blend. If 
the two-way blend produced an updated benchmark of $12,804, the ACO's 
new per capita losses amount would be -$176, or -1.4 percent of its 
updated benchmark which would be within the ACO's selected MLR of -1.5 
percent. This ACO would therefore not be responsible for shared losses 
for the performance year and would not face any negative consequences 
under the financial performance monitoring policy. If the two-way blend 
instead produced an updated benchmark of $13,183, the ACO would have 
measured per capita savings of $203, or 1.54 percent of its updated 
benchmark. As previously explained, under the proposed approach, the 
ACO would no longer be responsible for shared losses nor face pre-
termination action or termination based on its financial performance. 
However, although the savings amount would exceed the ACO's MSR of 1.5 
percent, the ACO would not be eligible for shared savings under the 
proposed policy.
    Under this proposal to set the ACPT for the duration of the ACO's 
agreement period, we would not adjust the ACPT due to external factors 
such as geographic price changes, efficiency discounts, or other 
retrospective updates occurring during the performance years throughout 
the agreement period. However, we acknowledge that a variety of 
circumstances could cause actual expenditure trends to significantly 
deviate from projections. Thus, we believe there are circumstances that 
may warrant reducing the weight placed on the ACPT on an ad hoc basis. 
In particular, if we determine that expenditure growth has differed 
significantly from projections made at the start of the agreement 
period due to unforeseen circumstances, such as an economic recession, 
pandemic, or other factors, a reduction in the weight placed on the 
ACPT may be considered. For example, based on a review of projections 
detailed in the 2009 Medicare Trustees Report, an ACPT projected in 
2009 (amidst the great recession and before passage of the ACA) would 
have ultimately overstated per capita spending growth from 2008 to 2013 
by roughly 9 percentage points (which would have corresponded to a 3 
percent upward bias to benchmarks when weighted as one-third of the 
blended update). We are especially concerned that such unforeseen 
circumstances could result in an update factor that significantly 
differs from actual expenditure trends, and in turn could result in 
ACOs owing excessive shared losses or the Medicare Trust Funds paying 
out windfall shared savings. As discussed elsewhere in this section, we 
are proposing a ``guardrail'' to provide protection for ACOs that would 
be responsible for sharing losses with the Medicare program based on an 
updated benchmark computed using the proposed three-way blend and that 
would have had a higher updated benchmark under the two-way blend. 
While we believe the guardrail offers protection against some 
unexpected variances between the projected amount and actual 
expenditures to protect against shared losses, we believe it is also 
important for CMS to retain flexibility to reduce the impact the 
prospectively determined ACPT portion of the three-way blend if 
unforeseen circumstances occur during an ACO's agreement period.
    When determining an approach for adjusting the three-way blend if 
unforeseen circumstances occur, we considered CMS' experience with use 
of a prospective trend, calculated by OACT based on an adjusted USPCC 
amount, in the Next Generation ACO (NGACO) Model.\254\ CMS maintained 
the sole discretion to retrospectively modify the projected trend used 
in calculating the performance year benchmark (aggregate expenditure 
target) if CMS determined that exogenous factors, such as a natural 
disaster, epidemiological event, legislative change and/or other 
similarly unforeseen circumstance during the performance year, rendered 
the projected trend invalid. CMS used this

[[Page 46167]]

discretion for the NGACO Model in response to the COVID-19 pandemic in 
performance years 2020 and 2021. For performance year 2020, instead of 
applying the prospective trend, CMS offered NGACOs the choice between 
use of a retrospective national trend or a retrospective regional 
trend. For performance year 2021, CMS applied a retrospective national 
trend to all NGACOs instead of a prospective trend.\255\
---------------------------------------------------------------------------

    \254\ CMS, ``Next Generation ACO Model, Calculation of the 
Performance Year Benchmark: Performance Year 2021'' (Section 2.1.7, 
``Prospective Base Year Trend''), available at https://innovation.cms.gov/media/document/ngaco-py6-bnechmark-meth.
    \255\ CMS, ``Next Generation ACO Model: Frequently Asked 
Questions'' (May 2021), available at http://innovation.cms.gov/media/document/ngaco-2021-faqs. Refer to question 18.
---------------------------------------------------------------------------

    Based on the experience in the NGACO Model, we believe it would be 
appropriate, when unforeseen circumstances occur, to adjust the three-
way blend to prevent drastic differences between actual and projected 
expenditure trends. Accordingly, we are proposing that if unforeseen 
circumstances occur, we would retain discretion to decrease the weight 
applied to the ACPT in the three-way blend. Absent unforeseen 
circumstances, we would weight the two-way blend as two-thirds and the 
ACPT as one-third in calculating the three-way blend. However, if CMS 
determines an unforeseen circumstance has occurred that would warrant 
adjustments to these weights, then CMS would modify the three-way blend 
to reduce the weight that will apply to the ACPT and increase the 
weight of the two-way blend. We further propose that CMS would have 
sole discretion to determine whether unforeseen circumstances exist 
that would warrant adjustments to these weights, as well as the extent 
to which the components of the three-way blend would be re-weighted. 
However, given that external factors that cause deviations from 
projected trends would continue to be reflected in the two-way blend 
component of the update factor, the impacts from unforeseen 
circumstances that either increase or decrease the two-way blend 
component would also then increase or decrease the three-way blend. 
This would likely mitigate the need to adjust the weight of the ACPT 
used in the three-way blend.
    Based on initial modeling, we believe that the proposed three-way 
blended update factor with the associated guardrail, in combination 
with other benchmarking changes discussed elsewhere in section 
III.G.5.c. of this proposed rule, to apply a prior savings adjustment 
and mitigate the impact of negative regional adjustments on ACOs, would 
serve as a mid-term solution to ensuring the sustainability of ACOs' 
historical benchmarks as we consider moving toward an administrative 
benchmarking methodology, as discussed in section III.G.7. of this 
proposed rule.
    To simulate the potential impact of the three-way blend, we 
examined ACO spending over a 5-year period (2014 to 2019) using ACO 
participant lists in effect for all 12- or 6-month performance years or 
performance periods beginning on January 1, 2019, and existing Medicare 
Part A and Part B USPCC projections published in the 2014 Medicare 
Trustees report.\256\ We also adjusted the Part A projections to remove 
IME, DSH, and uncompensated care payments, to better reflect how the 
proposed ACPT would be calculated in practice. For the purposes of this 
simulation, we used 2014 per capita spending as the historical 
benchmark for each ACO in lieu of a 3-year base period. We then 
simulated updating each ACO's historical benchmark for each of the 5 
subsequent years using the existing two-way blended update factor 
methodology (in accordance with Sec.  425.601(b)) and incorporating the 
simulated flat dollar ACPT amounts into a three-way blended updated 
factor. We compared the simulated benchmark updates determined using 
this three-way blend to updates simulated using the existing two-way 
blend. These simulations showed that, on average, ACOs were better off 
over the course of the 5-year agreement period using the three-way 
blend than using the current two-way blend. That is, in a given year, 
an ACO's benchmark on average increased more when the annual update was 
calculated using the proposed three-way blend. Incorporating the ACPT 
into a three-way blended update factor during the model period resulted 
in an average benchmark increase of $19 per capita, with an average of 
62 percent of all ACOs across all years modeled receiving a larger 
benchmark increase compared with the current two-way blend. ACOs with 
high market penetration within their regional service area (ACOs whose 
assigned beneficiaries constitute at least 30 percent of the assignable 
beneficiary population within the ACO's regional service area) had 
similar results to those with lower market penetration (61 percent vs 
63 percent, respectively), with both groups receiving larger benchmark 
increases from the three-way blend. ACOs operating in markets where the 
Shared Savings Program as a whole has higher penetration (at least 50 
percent of the assignable beneficiaries in an ACO's regional service 
area are assigned to any Shared Savings Program ACO) were, on average, 
better off under the three-way blend. We observed that, on average over 
the 5-year period used in our modeling, approximately 65 percent of 
ACOs operating in markets with high Shared Savings Program penetration 
had a larger benchmark increase under the three-way blend compared with 
the two-way blend. Additionally, an average of 50 percent of ACOs with 
at least 25 percent of assigned beneficiaries being dually eligible for 
Medicare and Medicaid received a higher benchmark update under the 
three-way blend as well as 65 percent of ACOs with at least 20 percent 
of assigned beneficiaries being disabled and 55 percent of ACOs 
operating in rural areas. As discussed elsewhere in this section, these 
results simulate a change in how the benchmark update is calculated 
holding everything else constant. That is, these results do not reflect 
any additional savings that may have materialized had a three-way blend 
that includes the ACPT been in place during the 5-year period included 
in our modeling. We anticipate that introducing the ACPT into a three-
way blend may incentivize ACOs to achieve additional savings, and that 
the three-way blend would then insulate a portion of the benchmark 
update from the impact of those savings as actual spending trends 
downward from initial projections. As a result, a higher percentage of 
ACOs may benefit from the three-way blend than is reflected in these 
simulations.
---------------------------------------------------------------------------

    \256\ The Boards of Trustees, Federal Hospital Insurance and 
Federal Supplementary Medical Insurance Trust Funds, ``2014 Annual 
Report of the Boards of Trustees of the Federal Hospital Insurance 
and Federal Supplementary Medical Insurance Trust Funds'', available 
at https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/tr2014.pdf.
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    We believe that incorporating the prospective trend into the 
benchmarking methodology by including the ACPT in a three-way blended 
update factor would be an important step towards an administrative 
benchmarking approach. ACOs may have a greater incentive to enter and 
continue participation in the Shared Savings Program when their 
benchmarks are further decoupled from their ongoing observed FFS 
spending while continuing to reflect a measure of the ACO's efficiency 
relative to its region. This approach may also serve to anchor and 
stabilize benchmarks to the extent that the ACPT projected growth 
component is an effective counterbalance when there are changes in an 
ACO's penetration in its regional service area that affect the weights 
given

[[Page 46168]]

to the national and regional expenditure components of the current two-
way blended update factor. However, we recognize that some interested 
parties may still have concerns and prefer a different approach to 
address impacts that may result from ACO market penetration. In section 
III.G.5.c.(6) of this proposed rule we seek comment on two potential 
alternatives to the package of policies we are proposing in this 
section and in sections III.G.5.c.(4) and (5). Both of the alternatives 
presented in section III.G.5.c.(6) would attempt to limit the impact of 
an ACO's own assigned beneficiaries on regional factors used in the 
benchmarking methodology.
    Because the proposed three-way blended update factor would be used 
in place of an update factor based on the projected absolute amount of 
growth in national per capita expenditures for Parts A and B services 
under the original FFS program as called for in section 
1899(d)(1)(B)(ii) of the Act, this proposal would require us to 
continue to use our authority under section 1899(i)(3) of the Act. This 
provision grants the Secretary the authority to use other payment 
models, including payment models that use alternative benchmarking 
methodologies, if the Secretary determines that doing so would improve 
the quality and efficiency of items and services furnished under the 
Medicare program and program expenditures under the alternative 
methodology would be equal to or lower than those that would result 
under the statutory payment model.
    By combining an external, prospective factor calculated based on 
the USPCC, as a component in the benchmark update, we believe that the 
proposed ACPT/national-regional three-way blended update factor would 
decouple an ACO's benchmark to a certain degree from ongoing observed 
FFS spending which is currently reflected in ACO benchmarks under the 
methodology specified under Sec.  425.601. This approach may serve to 
anchor and stabilize benchmarks to the extent that the ACPT projected 
growth component is an effective counterbalance to the savings achieved 
by ACOs participating in the Shared Savings Program, which reduce the 
update factor under the current two-way national-regional blended 
update, including as a result of increasing market penetration by 
efficient ACOs in their regional service area. The proposed guardrail 
is designed to protect ACOs from larger shared losses (or potentially 
from the negative implications of financial monitoring) but would not 
allow ACOs to move to a position of sharing in savings. Additionally, 
the proposal that CMS would retain discretion to reweight the 
components of the three-way blend to adjust the weight applied to the 
ACPT and the two-way blend in the event of unforeseen circumstances 
that result in drastic differences between the ACPT and actual national 
per capita FFS expenditure growth for assignable beneficiaries for a 
given performance year, would protect against ACOs owing excessive 
shared losses or the Medicare Trust Funds paying out windfall shared 
savings. We believe this combination of additional incentives and 
safeguards may encourage ACOs to enter and continue participation in 
the Shared Savings Program.
    As discussed in section III.G.5.d. of this proposed rule, we are 
also proposing to determine the assignable population of beneficiaries 
used in calculating county-level FFS expenditures, and in other factors 
based on the assignable population in the ACO's regional service area, 
using the assignment window that corresponds to the ACO's selected 
assignment methodology to improve the precision of the calculations. 
This modification would address a favorable bias in calculations for 
ACOs under prospective assignment, resulting in an estimated decrease 
in regionally adjusted historical benchmarks for these ACOs estimated 
to range from 0.2 percent-1.9 percent based on modeling using 
historical benchmarks for ACOs participating in the 6-month performance 
year from July 1, 2019, through December 31, 2019 (compared to leaving 
the bias uncorrected). If left uncorrected, the bias could potentially 
grow over time as more ACOs are subject to higher weights in the 
calculation of the regional adjustment. The proposed change in 
methodology for identifying the assignable beneficiaries used in 
calculating factors based on regional FFS expenditures would also 
improve the precision of the calculation of the blended national-
regional growth rates within the benchmark update.
    Considering the combination of these factors, we believe the 
changes to the methodology for updating the benchmark that we are 
proposing pursuant to section 1899(i)(3) of the Act would improve the 
quality and efficiency of items and services furnished under the 
Medicare Program. More specifically, we believe that the introduction 
of the prospectively set ACPT into the blended benchmark update factor 
would increase the incentive for ACOs to achieve savings by partially 
insulating ACOs from the impact of those savings on future benchmark 
updates. We also believe that this change would encourage ACOs to enter 
and remain in the Shared Savings Program, which would lead to 
improvement in the quality of care furnished to Medicare FFS 
beneficiaries because participating ACOs have an incentive to perform 
well on quality measures in order to maximize the shared savings they 
may receive, and in the case of ACOs participating under the ENHANCED 
track to minimize any shared losses owed (as described in section 
III.G.4. of this proposed rule). In addition, as discussed in the 
Regulatory Impact Analysis (section VII of this proposed rule), we 
project that this proposed approach for use of an ACPT/national-
regional three-way blended update factor, in combination with other 
changes to the statutory payment model proposed elsewhere in this 
proposed rule, as well as current policies established using the 
authority of section 1899(i)(3) of the Act, would not increase program 
expenditures relative to those under the statutory payment model. We 
will continue to reexamine this projection in the future to ensure that 
the requirement under section 1899(i)(3)(B) of the Act that an 
alternative payment model not result in additional program expenditures 
continues to be satisfied. In the event that we later determine that 
the payment model established under section 1899(i)(3) of the Act no 
longer meets this requirement, we would undertake additional notice and 
comment rulemaking to make adjustments to the payment model to assure 
continued compliance with the statutory requirements.
    We propose that the update factor based on a three-way blend of the 
ACPT and blended national-regional growth rates and the associated 
guardrail would be applicable to agreement periods beginning on January 
1, 2024, and in subsequent years. The use of the three-way blend, the 
associated guardrail, and the discretion for CMS to adjust the weight 
of the ACPT in the three-way blend in the event of unforeseen 
circumstances would be specified in paragraph (b) of a proposed new 
provision at Sec.  425.652, which would govern the process for 
establishing, adjusting, and updating the benchmark for agreement 
periods beginning on January 1, 2024, and in subsequent years. We also 
propose to specify within Sec.  425.652(b) the other components of the 
update factor, namely the calculation of the national and regional 
components of the blend which would follow the same approach currently 
specified under Sec.  425.601(b), although

[[Page 46169]]

with conforming changes to reflect the use of a three-way blend. 
Further, we propose to specify the calculation of the ACPT in a new 
provision at Sec.  425.660. Refer to section III.G.5.i. of this 
proposed rule for a discussion of the organization of the proposed new 
provisions in 42 CFR part 425, subpart G.
    We seek comment on the proposal to use a three-way blend that 
incorporates the ACPT to update an ACO's historical benchmark for 
agreement periods beginning on January 1, 2024, and in subsequent 
years. We also seek comment on the specific elements of this approach, 
including our proposal to calculate the ACPT on a risk adjusted flat 
dollar basis, to institute a guardrail to protect ACOs, and to retain 
discretion to adjust the weight applied to the ACPT and the two-way 
blend in the event of unforeseen circumstances.
(4) Adjusting ACO Benchmarks To Account for Prior Savings
(a) Background
    Under section 1899(d)(1)(B)(ii) of the Act, an ACO's benchmark must 
be reset at the start of each agreement period. Section 
1899(d)(1)(B)(ii) of the Act provides the Secretary with discretion to 
adjust the historical benchmark by ``such other factors as the 
Secretary determines appropriate.'' Pursuant to this authority, as 
described in the June 2015 final rule (80 FR 32785 through 32791), we 
established a prior savings adjustment that applied when establishing 
the benchmark for ACOs entering a second agreement period beginning on 
January 1, 2016, to account for the average per capita amount of 
savings generated during the ACO's prior agreement period.\257\
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    \257\ The relevant provision was originally finalized at Sec.  
425.602(c) in the June 2015 final rule (80 FR 32842). In the June 
2016 final rule, we removed paragraph (c) from Sec.  425.602 and 
included this provision within paragraph (b) of Sec.  425.603 (81 FR 
37968, 38014).
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    The prior savings adjustment adopted in the June 2015 final rule 
(80 FR 32788 through 32791) was designed to adjust an ACO's benchmark 
for its second agreement period to account for the average per capita 
amount of savings generated by the ACO across the 3 performance years 
of its first agreement period. This average per capita amount also 
accounted for the ACO's quality performance in each performance year 
under its first agreement period. We limited the adjustment to the 
benchmark for the second agreement period to the average number of 
assigned beneficiaries (expressed as person years) \258\ under the 
ACO's first agreement period in order to help ensure that the 
adjustment did not exceed the amount of net savings generated by the 
ACO during the first agreement period due to ACO participant list 
changes that may increase the number of assigned beneficiaries in the 
second agreement period (80 FR 32789). In calculating the adjustment, 
we used data from the ACO's finalized financial reconciliation reports 
for the performance years which corresponded to the benchmark years for 
the ACO's second agreement period. As described in the June 2015 final 
rule, the calculation included the following steps (80 FR 32789):
---------------------------------------------------------------------------

    \258\ To calculate person years: We sum the number of Shared 
Savings Program-eligible months for each assigned beneficiary for 
each Medicare enrollment type; we then divide this number by 12 (the 
number of months in a calendar year). Refer to the Medicare Shared 
Savings Program, Shared Savings and Losses and Assignment 
Methodology Specifications (version #10, February 2022), available 
at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-1 (Section 3.1 Calculating ACO-Assigned 
Beneficiary Expenditures).
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    <bullet> Step 1: Determine whether the ACO generated net savings. 
For each performance year we determined an average per capita amount 
reflecting the quotient of the ACO's total updated benchmark 
expenditures minus total performance year expenditures divided by 
performance year assigned beneficiary person years. However, the ACO's 
total updated benchmark expenditures minus total performance year 
expenditures could not exceed the performance payment limit for the 
relevant track. If the sum of the per capita amounts for the 3 
performance years was positive, the ACO would be determined to have net 
savings and we would proceed with Steps 2 and 3. If the sum of the per 
capita amounts for the 3 performance years was zero or negative, we did 
not make any adjustment to the ACO's rebased benchmark to account for 
any savings the ACO may have generated under its prior agreement 
period.
    <bullet> Step 2: Calculate an average per capita amount of savings 
reflecting the ACO's final sharing rates based on quality performance. 
We averaged the performance year per capita amounts determined in Step 
1 to determine the average per capita amount for the agreement period. 
We also determined the ACO's average final sharing rate, based on an 
average of the ACO's quality performance in each performance year of 
the agreement period. Therefore, the average per capita amount of 
savings would account for those situations where an ACO's sharing rate 
for a performance year was set equal to zero (based on the ACO's 
failure to meet the quality performance requirements in that year). We 
then calculated an average per capita amount of savings which was the 
product of the average performance year per capita amount and the 
average sharing rate based on quality performance.
    <bullet> Step 3: Add the average per capita amount of savings 
determined in Step 2 to the ACO's rebased historical benchmark. The 
additional per capita amount was applied to the ACO's rebased 
historical benchmark for a number of assigned beneficiaries (expressed 
as person years) not to exceed the average number of assigned 
beneficiaries (expressed as person years) under the ACO's first 
agreement period.
    Reinstituting a prior savings adjustment would be broadly in line 
with our interest in addressing dynamics to ensure sustainability of 
the benchmarking methodology as described in section III.G.5.c.(2) of 
this proposed rule. Specifically, such an adjustment would help to 
mitigate the rebasing ratchet effect on an ACO's benchmark by returning 
to an ACO's benchmark an amount that reflects its success in lowering 
growth in expenditures while meeting the program's quality performance 
standard in the performance years corresponding to the benchmark years 
for the ACO's new agreement period. Furthermore, we believe that 
returning dollar value to benchmarks through a prior savings adjustment 
could help address an ACO's effects on expenditures in its regional 
service area that result in reducing the regional adjustment added to 
the historical benchmark. We also note that when applying two 
adjustments in establishing the benchmark--a prior savings adjustment 
and a regional adjustment--there are number of considerations related 
to the potential interactions between these adjustments. These 
interactions will determine the extent to which efficient ACOs receive 
positive regional adjustments to their benchmark and the extent to 
which less efficient ACOs can use their savings from a prior agreement 
period to offset a negative regional adjustment, which could help 
foster their continued participation in the Shared Savings Program.
(b) Proposed Revisions
    We are proposing to incorporate an adjustment for prior savings 
that would apply in the establishment of benchmarks for renewing ACOs 
and re-entering ACOs entering an agreement period beginning on January 
1, 2024,

[[Page 46170]]

and in subsequent years and that were reconciled for one or more of the 
3 performance years immediately preceding the start of their agreement 
period. We considered a variety of approaches to calculating the prior 
savings adjustment and prefer an approach that resembles the policy 
implemented for renewing ACOs entering a second agreement period in 
2016 but that includes additional steps to account for subsequent 
changes in Shared Savings Program policies. Specifically, these steps 
would account for the impact of the regional adjustment on the ACO's 
benchmark and attribute prior savings to re-entering ACOs.\259\
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    \259\ According to Sec.  425.20, re-entering ACO means an ACO 
that does not meet the definition of a renewing ACO and meets either 
of the following conditions: (1) Is the same legal entity as an ACO, 
as defined according to Sec.  425.20, that previously participated 
in the program and is applying to participate in the program after a 
break in participation, because it is either--(i) An ACO whose 
participation agreement expired without having been renewed; or (ii) 
An ACO whose participation agreement was terminated under Sec. Sec.  
425.218 or 425.220. (2) Is a new legal entity that has never 
participate in the Shared Savings Program and is applying to 
participate in the program and more than 50 percent of its ACO 
participants were included on the ACO participant list under Sec.  
425.118, of the same ACO in any of the 5 most recent performance 
years prior to the agreement start date.
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    In the June 2016 final rule (81 FR 37962 through 37965), we 
explained our belief that it was important to forgo the adjustment to 
account for shared savings generated by the ACO under its prior 
agreement period when transitioning to a benchmark rebasing methodology 
that incorporates an adjustment for regional FFS expenditures. We 
anticipated that for ACOs generating savings, a rebasing methodology 
that accounts for regional FFS expenditures would generally leave a 
similar or slightly greater share of measured savings in an ACO's 
rebased benchmark for its subsequent agreement period. At the time, we 
disagreed with comments suggesting that we either maintain the 
adjustment for prior savings or broaden its scope to make it more 
generous because we believed that maintaining an adjustment for prior 
savings alongside a regional adjustment could allow benchmarks to 
become overly inflated for some ACOs (particularly those benefiting 
from the regional adjustment). We also believed that continued 
application of the adjustment for prior savings would further tie an 
ACO's benchmark to its past performance rather than making it more 
reflective of FFS spending in the ACO's region, which was an important 
aim of revisions to the rebasing methodology in the June 2016 final 
rule (81 FR 37965).
    Based on our experience with rebasing under the current 
benchmarking methodology, we now believe it would be timely to re-
introduce a prior savings adjustment to ensure rebased benchmarks 
continue to serve as a reasonable baseline when benchmark years 
correspond to performance years of the ACO's preceding agreement 
period. However, we continue to believe that the rebased benchmarks of 
ACOs that are lower spending compared to their regional service area 
and that generated savings in their benchmark years could become 
overinflated if we were to allow for both a prior savings adjustment 
and a positive regional adjustment. To prevent this from occurring, we 
believe that adjusting an ACO's benchmark based on the higher of either 
the prior saving adjustment or the ACO's positive regional adjustment 
would be appropriate.
    Additionally, we believe it would be appropriate to use a prior 
savings adjustment to offset negative regional adjustments for ACOs 
that are higher spending compared to their regional service area. This 
would permit ACOs that have generated savings in prior years to receive 
a relatively higher benchmark than under the current approach, which 
would incorporate a negative regional adjustment. We recognize that 
there are interactions between this proposed approach and the proposal 
to reduce the amount of the negative regional adjustment described in 
section III.G.5.c.(5) of this proposed rule. We have accounted for 
these interactions in developing the proposed methodology for 
determining the prior savings adjustment.
    In order to calculate the prior savings adjustment, we propose 
calculating the simple average of per capita savings or losses 
generated by the ACO during the 3 performance years that immediately 
precede the start of the ACO's current agreement period, and therefore, 
constitute the benchmark years of the current agreement period. The per 
capita savings for each performance year would be determined as the 
quotient of the ACO's total updated benchmark expenditures minus total 
performance year expenditures divided by performance year assigned 
beneficiary person years. We would use all savings generated during 
each of the prior 3 performance years in the prior savings adjustment, 
not just savings that met or exceeded the ACO's MSR for that prior 
performance year. This would include savings generated by ACOs that 
were participating in an agreement period under the BASIC track that 
did not meet the MSR but met the expanded criteria to qualify for 
shared savings as proposed in section III.G.5.f. of this proposed rule. 
An ACO would be eligible for the prior savings adjustment if the ACO 
generates positive average prior savings across the 3 performance years 
immediately preceding the start of its current agreement period. If an 
ACO is not eligible to receive a prior savings adjustment, the ACO 
would receive the regional adjustment to its benchmark.
    In calculating an ACO's average per capita prior savings over the 3 
performance years immediately preceding the start of its agreement 
period, we believe a safeguard is needed to ensure that ACOs that 
achieved savings for a performance year that serves as a benchmark year 
for the current agreement period, but were ineligible to receive a 
shared savings payment due to noncompliance with Shared Savings Program 
requirements, are not subsequently eligible to have a portion of those 
savings included in their historical benchmark. Without such a 
safeguard, we would be rewarding an ACO, despite its noncompliance, 
through a higher benchmark in its subsequent agreement period. This 
would conflict with the sanction imposed on the ACO for its 
noncompliance during the performance year(s) of its prior agreement 
period. Accordingly, we propose that if an ACO was ineligible to share 
in savings for any performance year in the 3 performance years 
immediately preceding the start of its agreement period due to 
noncompliance with Shared Savings Program requirements, we would set at 
zero the per capita amount of savings for the affected performance 
year(s) when calculating the prior savings adjustment.
    There are a variety of reasons that could result in an ACO's 
ineligibility to receive a shared savings payment due to noncompliance. 
In accordance with Sec. Sec.  425.605(c)(2), and 425.610(c)(2), an ACO 
does not qualify to receive shared savings for a performance year if it 
failed to meet the quality performance standard as specified under 
Sec.  425.512 (also refer to section III.G.4.b. of this proposed rule 
for proposed modifications to the use of quality performance in 
determining shared savings and shared losses) or otherwise did not 
maintain its eligibility to participate in the Shared Savings Program. 
Furthermore, an ACO is not eligible to receive shared savings during 
the time it is under a corrective action plan (CAP) for avoidance of 
at-risk beneficiaries, or for performance years attributable to the 
time that necessitated the CAP (Sec.  425.316(b)(2)(ii)).

[[Page 46171]]

    We propose to apply a prior savings adjustment in establishing the 
historical benchmark for re-entering ACOs that meet the eligibility 
criteria for the adjustment. Under Sec.  425.20, a re-entering ACO 
means an ACO that is not a renewing ACO and that is either the same 
legal entity as an ACO that previously participated in the program or a 
new legal entity that has never participated in the program and more 
than 50 percent of its ACO participants were included on the ACO 
participant list under Sec.  425.118 of the same ACO in any of the 5 
most recent performance years prior to the agreement start date. For 
new ACOs that are identified as a re-entering ACO, we propose to 
calculate the average per capita prior savings based on the prior 
performance of the ACO in which 50 percent or more the ACO participants 
previously participated. We attribute various aspects of this prior ACO 
to the re-entering ACO for purposes of determining its eligibility to 
participate in the Shared Savings Program (Sec.  425.224), and to 
determine the agreement period the ACO is entering for purposes of 
applying program requirements that phase-in over multiple agreement 
periods (Sec.  425.600(f)). We believe it would also be appropriate to 
attribute to the re-entering ACO the prior savings of this prior ACO. 
Therefore, in calculating the average per capita prior savings for ACOs 
identified as re-entering ACOs, we would include the per capita savings 
or losses of the prior ACO in the 3 performance years immediately 
preceding the start of the re-entering ACO's agreement period. This 
calculation would exclude from the prior savings adjustment any savings 
generated for performance years in which the prior ACO was ineligible 
to share in savings because of noncompliance with Shared Savings 
Program requirements. This safeguard would help to ensure that we are 
not rewarding ACOs for circumstances that may have led to their 
termination from the program, including circumstances that may have led 
to the formation of a new ACO.
    We propose to apply a proration factor to the prior savings 
adjustment to account for situations where an ACO's assigned 
beneficiary population is larger in the benchmark years when calculated 
using the ACO's certified ACO participant list and assignment 
methodology for the current performance year, than the ACO's assigned 
beneficiary population was when the ACO was reconciled for the 3 
performance years preceding the start of its current agreement period. 
Although the proration approach was not described with much specificity 
in the earlier rulemaking, this proration factor would be calculated 
and implemented in a manner that is mathematically equivalent to the 
cap on the prior savings adjustment that was adopted in the June 2015 
final rule (80 FR 32789).
    Mathematically, to apply this proration factor we would calculate a 
ratio between: (1) the ACO's average person years for the 3 performance 
years that constitute the benchmark years for the ACO's current 
agreement period (regardless of whether these performance years 
occurred over one or multiple prior agreement periods) and (2) the 
average person years in the 3 benchmark years for the ACO's current 
agreement period calculated using the ACO's certified ACO participant 
list and assignment methodology for the current performance year. 
Increases in beneficiary assignment would therefore result in a ratio 
less than 1, while decreases in assignment would result in a ratio 
greater than 1. This ratio would be capped at 1 to avoid increasing the 
per capita prior savings adjustment if the average number of 
beneficiaries assigned to the ACO across the 3 benchmark years of its 
current agreement period is lower than the average number of 
beneficiaries assigned during the 3 performance years immediately 
preceding the start of the ACO's current agreement period. This 
proration factor would be multiplied by the average positive per capita 
prior savings for the 3 performance years immediately preceding the 
start of the ACO's current agreement period to produce the pro-rated 
average per capita prior savings. Prorating for growth in assignment 
would ensure that the prior savings adjustment does not exceed the 
amount of cumulative savings generated by the ACO during the 
performance years that constitute the benchmark years for its current 
agreement period.
    We note that there are a number of factors affecting the size of 
the ACO's assigned population between when CMS determined assignment 
for the performance year under the prior agreement period, and when CMS 
determines assignment for the corresponding benchmark year of the ACO's 
current agreement period, thereby necessitating the calculation of the 
proration factor at the start of the ACO's new agreement period. 
Specifically, changes in the size of the ACO's assigned beneficiary 
population could be due to the addition and removal of ACO participants 
or ACO providers/suppliers in accordance with Sec.  425.118(b), a 
change to the ACO's beneficiary assignment methodology selection under 
Sec.  425.400(a)(4)(ii), or changes to the beneficiary assignment 
methodology specified in 42 CFR part 425, subpart E. These 
circumstances also could arise during the course of an ACO's agreement 
period, and thereby also affect benchmark year assignment. Therefore, 
for the second and each subsequent performance year during the term of 
the current agreement period, we propose to redetermine this proration 
factor under Sec.  425.652(a)(9)(iv) to account for changes in the 
ACO's assigned beneficiary population in the benchmark years of the 
ACO's current agreement period, for the aforementioned reasons.
    We further propose to account for circumstances when an ACO was not 
reconciled for one or more of the 3 performance years immediately 
preceding the start of its current agreement period in the calculation 
of average per capita prior savings and the proration factor. ACOs that 
renew their agreement periods early or are a re-entering ACO may not be 
reconciled for one or more of the 3 years preceding the start of their 
current agreement period depending upon the timing of the expiration or 
termination of their prior agreement period and the start of their new 
agreement period. We propose that if an ACO (or the prior ACO, if the 
ACO is identified as a re-entering ACO) was not reconciled during any 
of the 3 performance years immediately preceding the start of its 
current agreement period, the ACO would receive zero savings or losses 
in the calculation of average per capita prior savings for the relevant 
year(s). We believe this is appropriate because the purpose of the 
prior savings adjustment is to return to an ACO's benchmark a portion 
of the savings experienced by beneficiaries assigned to the ACO during 
the 3 performance years immediately preceding the start of its current 
agreement period and CMS has no way to determine whether the ACO would 
have generated savings or losses during performance years it was not 
reconciled for. Excluding these years entirely from the calculation of 
average per capita prior savings would unduly increase the weight on 
the other year(s) included in the prior savings adjustment calculation 
for which the ACO received financial reconciliation results.
    In contrast, we believe it would be appropriate to exclude years 
the ACO (or the prior ACO, if the ACO is identified as a re-entering 
ACO) was not reconciled for when calculating the proration factor. The 
purpose of the proration factor is to account for

[[Page 46172]]

situations where an ACO's assigned beneficiary population calculated at 
financial reconciliation in the 3 years preceding the start of the 
ACO's agreement period (numerator) is smaller than the ACO's assigned 
beneficiary population identified for those same years using the ACO's 
certified ACO participant list and assignment methodology for the 
current performance year (denominator).
    If an ACO was not reconciled for one or more of the 3 performance 
years immediately preceding the start of its current agreement period, 
it would naturally have zero assigned beneficiaries determined at 
financial reconciliation for such years, which would factor into the 
numerator of the proration factor if such years were considered. 
However, the ACO would have positive beneficiary counts in the 3 years 
preceding the start of its current agreement period generated using the 
ACO's certified ACO participant list and assignment methodology for the 
current performance year, which would factor into the denominator of 
the proration factor if such years were considered. Thus, if the 
numerator and the denominator were both calculated as averages over 3 
years, incorporating years for which the ACO was not reconciled in the 
calculation of the proration factor would artificially decrease the 
proration factor and lead to a smaller pro-rated average per capita 
prior savings for the ACO. Alternatively, if the numerator were 
calculated as an average that excludes performance years for which the 
ACO was not reconciled (that is, as an average across less than 3 
years, including only those years an ACO was reconciled for) and the 
denominator was calculated as an average that included all 3 years 
preceding the beginning of the ACO's agreement period, the direction of 
the impact on the proration factor would depend on whether the number 
of assigned beneficiaries calculated using an ACO's current certified 
ACO participant list and assignment methodology in the benchmark years 
for which the ACO was not reconciled exceeds the number of assigned 
beneficiaries in the other benchmark years, and by how much. Therefore, 
we see no compelling reason to include any of the 3 performance years 
immediately preceding the start of an ACO's agreement period for which 
the ACO was not reconciled in the numerator or the denominator of the 
proration factor and propose to remove such years from the calculation 
of the proration factor. This would ensure that the proration factor 
compares average person years determined for prior performance years at 
financial reconciliation (numerator) to average person years determined 
using the ACO's current certified ACO participant list and assignment 
methodology (denominator) across a consistent set of years preceding 
the start of the ACO's agreement period.
    For instance, if an ACO were only reconciled in 2 of the 3 
performance years immediately preceding the start of its current 
agreement period, the proration factor would be calculated as a ratio 
between: (1) the ACO's average person years for the 2 performance years 
for which the ACO was reconciled (regardless of whether these 
performance years occurred over one or multiple prior agreement 
periods) and (2) the average person years in the 2 benchmark years of 
the ACO's current agreement period which correspond to these same 2 
performance years, calculated using the ACO's certified ACO participant 
list and assignment methodology for the current performance year. 
Tables 55 and 56 provide examples of the proration factor calculation 
when an ACO was not reconciled for one of the 3 performance years 
preceding the start of its agreement period. We do not propose parallel 
adjustments to the calculation of the proration factor if an ACO was 
ineligible to share in savings for any performance year in the 3 
performance years immediately preceding the start of its agreement 
period due to noncompliance with Shared Savings Program requirements. 
We believe this is appropriate because if an ACO was ineligible to 
share in savings in one of these years due to a noncompliance issue, we 
could still use the ACO's assigned person years calculated at financial 
reconciliation in each of the 3 years preceding the start of the ACO's 
agreement period in the numerator of the proration factor, and could 
calculate the proration factor using the same method we would use for 
other ACOs that were reconciled in each of the 3 performance years 
immediately preceding the beginning of its agreement period.
    We propose to calculate the final prior savings adjustment 
separately depending on whether an ACO is higher or lower spending 
relative to its regional service area. In order to avoid overinflating 
the benchmarks of ACOs that are lower spending relative to their 
regional service area by granting them both a prior savings adjustment 
and a positive regional adjustment, we believe it would be appropriate 
to apply the higher of the prior savings adjustment and the regional 
adjustment. In contrast, for ACOs that are higher spending relative to 
their region, we believe it would be appropriate to apply the prior 
savings adjustment to offset their negative regional adjustments 
partially or in full.
    For an ACO that is lower spending than its regional service area, 
we propose that the ACO would receive an adjustment equal to the higher 
of the following: (1) its positive regional adjustment; and (2) a prior 
savings adjustment equal to the lesser of--(i) 50 percent of its pro-
rated positive average per capita prior savings and (ii) 5 percent of 
national per capita FFS expenditures for assignable beneficiaries. The 
national assignable per capita FFS expenditure cap used in this 
calculation would be expressed as a single per capita value by 
weighting the national per capita FFS expenditure averages for 
assignable beneficiaries of each Medicare enrollment type according to 
the ACO's person-year based enrollment proportions. The regional 
adjustment used in this calculation would be the ACO's regional 
adjustment determined as specified in the proposed new provision at 
Sec.  425.656 (which includes modifications to the methodology for 
determining the regional adjustment as proposed in section 
III.G.5.c.(5) of this proposed rule) and expressed as a single value by 
taking a person-year weighted average of the Medicare enrollment type-
specific regional adjustment values. We believe that the cap on the 
prior savings adjustment at 5 percent of national per capita FFS 
expenditures for assignable beneficiaries is needed to ensure the 
amount of the prior savings adjustment does not inflate an ACO's 
benchmark to the point where the ACO is likely to generate shared 
savings without decreasing expenditures. The cap at 5 percent of 
national per capita FFS expenditures for assignable beneficiaries would 
align with the existing cap on positive regional adjustments (see Sec.  
425.601(a)(8)(ii)(C)). Further we note that the 5 percent cap on 
regional adjustments is adjusted to exclude episodes of care for 
treatment of COVID-19 in accordance with Sec.  425.611(c)(2)(iii). 
Consistent with this current approach, we propose to adjust the cap on 
prior savings adjustments to exclude episodes of care for treatment of 
COVID-19, and to specify this adjustment through modifications to the 
regulation at Sec.  425.611(c)(2)(iii).
    We are proposing to apply the 50 percent scaling factor to the pro-
rated positive average per capita prior savings because we believe it 
is important to consider a measure of the sharing rate used in 
determining the shared savings payment the ACO earned in the

[[Page 46173]]

applicable performance years under its prior agreement period(s). The 
earlier version of the prior savings adjustment adopted in the June 
2015 final rule also included a provision to scale the average per 
capita prior savings by a factor related to the sharing rate. Under 
this former policy, the ACO's average per capita prior savings were 
multiplied against its average final sharing rate across the prior 
agreement period. The average final sharing rate was determined using 
an average of the ACO's quality performance in each performance year of 
the prior agreement period (80 FR 32789). The proposed policy of 
applying a 50 percent scaling factor to the pro-rated positive average 
per capita prior savings is a simplification of the older approach. The 
sharing rates vary within the Shared Savings Program's tracks/levels. 
Within an ACO's agreement period under the BASIC track's glide path, 
differing sharing rates will apply depending on the ACO's level of 
participation. Under the BASIC track, the maximum sharing rate is 40 
percent under one-sided model Levels A and B, and 50 percent under two-
sided model Levels C, D, and E (Sec.  425.605(d)). Under the ENHANCED 
track the maximum sharing rate is 75 percent (Sec.  425.610(d)). We 
also note several proposals described elsewhere in this proposed rule 
would affect the sharing rates: the proposal to apply sharing rates not 
to exceed one-half of the maximum amount within each Level of the BASIC 
track for eligible low revenue ACOs (section III.G.5.f. of this 
proposed rule); and the proposal to use a sliding scale in determining 
shared savings based on the ACO's quality performance for ACOs that 
meet the proposed alternative quality performance standard (section 
III.G.4.b. of this proposed rule). For simplicity, we believe it would 
be appropriate to apply a consistent scaling factor in calculating the 
prior savings adjustment when an ACO is lower spending relative to its 
regional service area. We believe that a 50 percent scaling factor is 
appropriate because it represents a middle ground between the maximum 
sharing rate of 75 percent under the ENHANCED track and the lower 
sharing rates available under the BASIC track, and also takes into 
account the opportunity for ACOs to earn shared savings on a sliding 
scale under the proposed alternative quality performance standard.
    For ACOs that are higher spending relative to their regional 
service area, we propose to calculate the final adjustment to the 
benchmark by adding the pro-rated average per capita prior savings to 
the ACO's negative regional adjustment calculated as proposed in 
section III.G.5.c.(5) of this proposed rule and in the proposed new 
regulation at Sec.  425.656. If this sum is positive, we propose that 
the ACO would receive a prior savings adjustment in place of the 
negative regional adjustment equal to the lesser of 50 percent of the 
positive sum and 5 percent of national per capita FFS expenditures for 
assignable beneficiaries. We are proposing to apply the 50 percent 
scaling factor to the positive sum of the ACO's regional adjustment and 
the pro-rated average per capita prior savings instead of to the total 
pro-rated average per capita savings in order to strengthen incentives 
for ACOs to remain in the program by increasing the portion of the pro-
rated average per capita savings that is added to the regional 
adjustment in determining the final adjustment to the benchmark. The 
cap to the adjustment at 5 percent of national per capita FFS 
expenditures for assignable beneficiaries mirrors the proposed 
methodology described previously for determining the prior savings 
adjustment for ACOs with a positive regional adjustment. If the sum of 
the ACO's negative regional adjustment and its pro-rated average per 
capita prior savings is negative, the ACO would receive a reduced 
negative regional adjustment equal to the negative sum. In this case, 
the prior savings adjustment would not be subject to a 50 percent 
scaling factor because we believe that it would be appropriate to give 
the ACO the full benefit of generated prior savings when doing so would 
still not result in an overall positive adjustment to the benchmark 
that would be likely to inflate the ACO's benchmark. We believe this 
approach would also strengthen the incentive for ACOs that are higher 
spending than their regional service area to remain in the program and 
continue generating savings. We note we are also proposing to reduce 
the current 5 percent cap on negative regional adjustments to 1.5 
percent (see section III.G.5.c.(5) of this proposed rule). If this 
proposal is finalized, the sum of the pro-rated average per capita 
prior savings and the negative regional adjustment would, necessarily, 
be less than 1.5 percent of national per capita FFS expenditures for 
assignable beneficiaries.
    We propose to use the following steps to calculate the prior 
savings adjustment:
    <bullet> Step 1: Calculate total per capita savings or losses in 
each performance year that constitutes a benchmark year for the current 
agreement period. For each performance year we would determine an 
average per capita amount reflecting the quotient of the ACO's total 
updated benchmark expenditures minus total performance year 
expenditures divided by performance year assigned beneficiary person 
years. CMS would apply the following requirements in determining the 
amount of per capita savings or losses for each performance year:
    ++ The per capita savings or losses would be set to zero for a 
performance year if the ACO was not reconciled for the performance 
year.
    ++ If an ACO generated savings for a performance year but was not 
eligible to receive a shared savings payment for that year due to 
noncompliance with Shared Savings Program requirements, the per capita 
savings for that year would be set to zero.
    ++ For a new ACO that is identified as a re-entering ACO, per 
capita savings or losses would be determined based on the per capita 
savings or losses of the ACO in which the majority of the ACO 
participants in the re-entering ACO were participating.
    <bullet> Step 2: Calculate average per capita savings. Calculate an 
average per capita amount of savings by taking a simple average of the 
values for each of the 3 performance years as determined in Step 1, 
including values of zero, if applicable. CMS would use the average per 
capita amount of savings to determine the ACO's eligibility for the 
prior savings adjustment as follows:
    ++ If the average per capita value is less than or equal to zero, 
the ACO would not be eligible for a prior savings adjustment. The ACO 
would receive the regional adjustment to its benchmark.
    ++ If the average per capita value is positive, the ACO would be 
eligible for a prior savings adjustment.
    <bullet> Step 3: Apply a proration factor to the per capita savings 
calculated in Step 2 equal to the ratio of the average person years for 
the 3 performance years that immediately precede the start of the ACO's 
current agreement period (regardless of whether these 3 performance 
years fall in one or more prior agreement periods), and the average 
person years in benchmark years for the ACO's current agreement period, 
capped at 1. If the ACO was not reconciled for one or more of the 3 
years preceding the start of the ACO's current agreement period, the 
person years from that year (or years) would be excluded from the 
averages in the numerator and the denominator of this ratio. For a new 
ACO that is identified as a re-entering ACO, the person years of the 
ACO in which the majority of the ACO participants of the re-entering 
ACO were participating would be used in the numerator of the 
calculation. This ratio

[[Page 46174]]

would be redetermined for each performance year during the agreement 
period in the event of any changes to the number of average person 
years in the benchmark years as a result of changes to the ACO's 
certified ACO participant list, a change to the ACO's beneficiary 
assignment methodology selection under Sec.  425.400(a)(4)(ii), or 
changes to the beneficiary assignment methodology.
    <bullet> Step 4: Determine final adjustment to benchmark. Compare 
the pro-rated positive average per capita savings from Step 3 with the 
ACO's regional adjustment, determined as specified in the proposed new 
regulation at Sec.  425.656, expressed as a single per capita value by 
taking a person-year weighted average of the Medicare enrollment type-
specific regional adjustment values.
    ++ If the regional adjustment, expressed as a single value, is 
negative or zero, calculate the sum of the regional adjustment value 
and the pro-rated positive average per capita savings value and 
determine the final adjustment as follows:

--If the sum is positive, the ACO would receive a prior savings 
adjustment in place of the negative regional adjustment equal to the 
lesser of 50 percent of the sum of the pro-rated average per capita 
savings and the regional adjustment and 5 percent of national per 
capita FFS expenditures for Parts A and B services under the original 
Medicare FFS program in BY3 for assignable beneficiaries identified for 
the 12-month calendar year corresponding to BY3. The adjustment would 
be applied as a flat rate to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
--If this sum is negative, this would constitute the amount of the 
negative regional adjustment applied to the ACO's historical benchmark. 
The adjustment would be applied as a flat dollar amount to the 
historical benchmark expenditures for the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.

    ++ If the regional adjustment, expressed as a single value, is 
positive, the ACO would receive an adjustment to the benchmark equal to 
the higher of the following:

--The positive regional adjustment amount. The adjustment would be 
applied separately to the historical benchmark expenditures for each of 
the following populations of beneficiaries according to the methodology 
for calculating the regional adjustment (as proposed under Sec.  
425.656(c)): ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
--A prior savings adjustment equal to the lesser of 50 percent of the 
pro-rated positive average per capita savings value and 5 percent of 
national per capita FFS expenditures for Parts A and B services in BY3 
for assignable beneficiaries identified for the 12-month calendar year 
corresponding to BY3. The adjustment would be applied as a flat dollar 
amount to the historical benchmark expenditures for each of the 
following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.

    Note that an implication of using an ACO's prior performance to 
calculate the prior savings adjustment is that at the time we determine 
the preliminary historical benchmarks, an ACO entering a new agreement 
period that completed a performance year that corresponds to BY3 of its 
new agreement period will not have prior savings data yet available for 
that year. In this case, we anticipate completing financial 
reconciliation for that performance year midway through the first 
performance year of the ACO's new agreement period. Accordingly, to 
determine the preliminary historical benchmark for the first year of 
the ACO's new agreement period, we would calculate the prior savings 
adjustment using zero savings in BY3. We would then update the 
calculation at the time we calculate the ACO's final historical 
benchmark to incorporate any applicable BY3 savings. As a result, 
production and release of final historical benchmarks may need to be 
delayed until after the calculation and release of financial 
reconciliation results for the preceding performance year.
    Tables 55 through 58 present hypothetical examples to demonstrate 
how the adjustment for prior savings would work in practice.
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    We believe that incorporating an adjustment for prior savings, when 
the adjustment for prior savings would be more advantageous for ACOs 
than the regional adjustment, would limit the negative ratchet effects 
of benchmark rebasing. Under the existing benchmarking methodology, the 
savings an ACO achieves in one agreement period can reduce its rebased 
benchmark for the subsequent agreement period either directly by 
reducing the historical spending that forms the basis for its rebased 
benchmark or indirectly by reducing regional expenditures in the ACO's 
regional service area leading to negative (or smaller positive) 
regional adjustments. Under the proposal to incorporate an adjustment 
for prior savings, ACOs that have demonstrated prior savings would 
receive higher benchmarks under the following scenarios:
    <bullet> ACOs with a negative regional adjustment would receive 
either a smaller negative regional adjustment or a positive adjustment 
for prior savings, depending on the relative size of the negative 
regional adjustment and their pro-rated average prior savings.

[[Page 46179]]

    <bullet> ACOs with a positive regional adjustment whose pro-rated 
average prior savings multiplied by 50 percent are higher than their 
regional adjustment would receive a prior savings adjustment that is 
larger than their regional adjustment would have been under current 
policy. In contrast, ACOs whose positive regional adjustment is greater 
than 50 percent of their pro-rated average prior savings would not be 
impacted by the proposed adjustment for prior savings, and would 
continue to receive the (larger) regional adjustment.
    We believe the proposed methodology to take the greater of the 
regional adjustment and the adjustment for prior savings when the 
regional adjustment is positive, and to net out a negative regional 
adjustment with the prior savings adjustment when the regional 
adjustment is negative, would prevent the proposed policy from 
resulting in unduly large benchmarks. While no ACOs would receive a 
lower benchmark as a result of this policy, numerical modeling of the 
proposed policy using PY 2020 data suggests that approximately 22 
percent of all ACOs would receive a higher benchmark under this policy. 
Among ACOs that would receive a higher benchmark, the average net 
effect on per capita benchmark expenditures would be approximately $130 
measured across each of the four enrollment types.
    When the historical benchmark is adjusted for changes in severity 
and case mix between BY3 and the performance year as proposed under 
Sec.  425.652(a)(10) and updated for growth in expenditures between BY3 
and the performance year as proposed under Sec.  425.652(b), the 
portion of the historical benchmark attributable to the prior savings 
adjustment would also be updated for changes in severity and case mix 
and growth in expenditures at the enrollment type level. This is 
consistent with the way in which the regional adjustment that is 
currently calculated under Sec.  425.601(a)(8) (and would be calculated 
under propose Sec.  425.656), is updated at the time of financial 
reconciliation to reflect changes in severity and case mix and growth 
in expenditures. If the portion of the benchmark attributable to prior 
savings were not updated for changes in severity and case mix and 
growth in expenditures, this could result in smaller benchmarks if the 
updates for severity and case mix and growth in expenditures are 
positive (which is typical in past experience). Thus, including the 
prior savings adjustment in these updates would tend to result in 
larger benchmarks for those ACOs that receive a prior savings 
adjustment to their benchmark. We believe that this is appropriate 
because the prior savings adjustment is based on reductions in 
expenditures in previous performance years. To the extent that updates 
to the benchmark for changes in severity and case mix and growth in 
expenditures suggest that the benchmark should be increased, we believe 
that it is appropriate to increase the size of the prior savings 
adjustment proportionally. Similarly, in the less likely scenario that 
updates for severity and case mix and growth in expenditures are 
negative, we believe it is appropriate to commensurately decrease the 
size of the prior savings adjustment.
    We propose that the methodology for calculating the average per 
capita prior savings amount, including the use of a proration factor to 
account for any upward growth in the ACO's assigned population in the 
benchmark years of the current agreement as compared to the size of the 
assigned population when the ACO was reconciled for the corresponding 
performance years in its prior agreement period(s), would be specified 
in a new provision at Sec.  425.658 applicable for agreement periods 
beginning on January 1, 2024, and in subsequent years. This new section 
would also specify the approach to determining an ACO's eligibility for 
the prior savings adjustment. Further, we propose to specify in Sec.  
425.652(a)(8) the approach for comparing the pro-rated average prior 
savings amount calculated under Sec.  425.658 with the ACO's regional 
adjustment amount described in the new provision at Sec.  425.656(c), 
to determine the applicability of the prior savings adjustment, the 
regional adjustment, or a combination of these two adjustments. We also 
propose to specify at Sec.  425.652(a)(9) that for the second and each 
subsequent performance year during the term of the ACO's agreement 
period, we would redetermine the proration factor used in calculating 
the prior savings adjustment under Sec.  425.658 to account for any 
changes in the ACO's assigned beneficiary population in the benchmark 
years due to the addition and removal of ACO participants or ACO 
providers/suppliers in accordance with Sec.  425.118(b), a change to 
the ACO's beneficiary assignment methodology selection under Sec.  
425.400(a)(4)(ii), or changes to the beneficiary assignment 
methodology. Refer to section III.G.5.i. of this proposed rule for a 
discussion of the organization of the proposed new provisions in 42 CFR 
part 425, subpart G.
    We seek comment on this proposal to adjust the ACO's historical 
benchmark for savings generated in the ACO's prior agreement period.
(5) Reducing the Impact of the Negative Regional Adjustment
(a) Background
    In earlier rulemaking we have discussed our use of the Secretary's 
discretion under section 1899(d)(1)(B)(ii) of the Act to adjust the 
historical benchmark by ``such other factors as the Secretary 
determines appropriate'' in order to adjust ACO historical benchmarks 
to reflect FFS expenditures in the ACO's regional service area (81 FR 
37962). As described elsewhere within this section of this proposed 
rule (section III.G.5.c.(1)), CMS initially established a regional 
adjustment in a benchmark rebasing methodology that applied to ACOs 
entering a second agreement period beginning on January 1, 2017, 
January 1, 2018, or January 1, 2019 (Sec.  425.603(c) through (g)), 
prior to applying this adjustment program wide beginning with agreement 
periods starting on July 1, 2019, and in subsequent years (Sec.  
425.601(a)(8)).
    In accordance with Sec.  425.601(a)(8), for ACOs in agreement 
periods beginning on or after July 1, 2019, we adjust historical 
benchmark expenditures by Medicare enrollment type (ESRD, disabled, 
aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual 
eligible Medicare and Medicaid beneficiaries) by a percentage of the 
difference between the average per capita expenditure amount for the 
ACO's regional service area and the average per capita amount of the 
ACO's historical benchmark (referred to herein as the ``regional 
adjustment''). The percentage that is applied in calculating the 
regional adjustment is determined in accordance with Sec.  425.601(f) 
and depends on whether the ACO has lower or higher spending compared to 
the ACO's regional service area and the agreement period for which the 
ACO is subject to the regional adjustment, according to the phase-in 
schedule of the applicable weights. For an ACO that has lower spending 
compared to its regional service area, the weight applied to the 
regional adjustment is 35 percent for the first agreement period in 
which the ACO is subject to a regional adjustment and 50 percent in the 
ACO's second and subsequent agreement periods subject to a regional 
adjustment. For an ACO that has higher spending compared to its 
regional service area, the weight is 15 percent for the first agreement 
period in which the ACO is

[[Page 46180]]

subject to a regional adjustment, increasing to 25 percent, 35 percent, 
and 50 percent, for the second, third, and fourth and subsequent 
agreement periods that an ACO is subject to a regional adjustment, 
respectively.
    We cap the per capita dollar amount of the regional adjustment for 
each Medicare enrollment type at a dollar amount equal to positive or 
negative 5 percent of national per capita FFS expenditures for Parts A 
and B services under the original Medicare FFS program in benchmark 
year (BY) 3 for assignable beneficiaries (as defined in Sec.  425.20) 
in that Medicare enrollment type identified for the 12-month calendar 
year corresponding to BY3 (Sec.  425.601(a)(8)(ii)(C)) (referred to 
herein as positive or negative 5 percent of national per capita FFS 
expenditures for assignable beneficiaries, and as the ``symmetrical 
cap;'' terms which we consider to be synonymous).
    Table 59 illustrates how the regional adjustment is calculated 
under the current policy. For this hypothetical ACO, assumed to be in 
its first agreement period subject to a regional adjustment, the ACO 
has lower spending than its regional service area for the ESRD and 
aged/dual eligible populations (that is, the difference between the 
ACO's average per capita regional expenditures and the ACO's average 
per capita historical benchmark expenditures is positive) and higher 
spending for its disabled and aged/non-dual eligible populations (that 
is, the difference between the ACO's average per capita regional 
expenditures and the ACO's average per capita historical benchmark 
expenditures is negative). The weighted average difference between the 
region and the ACO, which is used to calculate the ACO's regional 
adjustment, is determined first by multiplying the difference between 
average per capita FFS expenditures for the ACO's regional service area 
and the ACO's average per capita historical benchmark expenditures for 
each Medicare enrollment type by its respective enrollment type 
proportion and then summing across the four enrollment types. In this 
example, because the weighted average is negative (-$495), the ACO is 
considered to have higher (overall) spending than its regional service 
area. Thus, the weight used to calculate the regional adjustment for 
this ACO based on the schedule of weights described in Sec.  425.601(f) 
is 15 percent. This regional adjustment percentage weight is applied to 
the difference between the ACO's average per capita regional 
expenditures and the ACO's average per capita historical benchmark 
expenditures for each enrollment type (whether positive or negative) to 
obtain the uncapped regional adjustment for each enrollment type. When 
comparing these uncapped values to the symmetrical cap of 5 percent of 
national per capita FFS expenditures for assignable beneficiaries, only 
the ACO's positive ESRD adjustment is constrained by the cap. The 
ultimate impact of the symmetrical cap is to increase the ACO's overall 
weighted average regional adjustment from -$74 to -$77.
[GRAPHIC] [TIFF OMITTED] TP29JY22.099

    As discussed in the ``Regulatory Background'' (section 
III.G.5.c.(1) of this proposed rule), the current schedule of weights 
described in Sec.  425.601(f)) and the positive or negative 5 percent 
cap on the regional adjustment described in Sec.  425.601(a)(8)(ii)(C)) 
were finalized in the December 2018 final rule (83 FR 68017 through 
68024). These policies were designed to address a dynamic where the 
regional adjustment could provide overly inflated benchmarks for ACOs 
that are relatively low spending compared to their region, while ACOs 
with higher spending compared to their region may find little value in 
remaining in the program when faced with a significantly reduced 
benchmark. We also explained our belief that these policies would make 
the benchmark more achievable for ACOs that care for medically complex 
patients and are high spending compared to their region, thereby 
encouraging their continued participation, while at the same time 
preventing windfall shared savings payments for ACOs that have 
relatively low spending levels relative to their region (83 FR 67822).
    As discussed in the section entitled ``Overview of Considerations 
for Modification to the Benchmarking Methodology'' (section 
III.G.5.c.(2) of this proposed rule), we now believe that the existing 
negative 5 percent cap may not limit the negative regional adjustment 
enough to provide sufficient incentive for participation among ACOs 
serving high cost, medically complex populations. We are concerned that 
setting the cap on negative regional adjustments at negative 5 percent 
may limit opportunities for these beneficiaries, who arguably have the 
greatest need, to receive coordinated care, as well as potential 
savings for the Trust Funds. Therefore, we believe it is important to 
further reduce the impact of negative regional adjustments, 
particularly for ACOs caring for high cost populations, including high-
risk patients and beneficiaries dually eligible for Medicare and 
Medicaid, beyond what is allowed under the current regulation at Sec.  
425.601(a)(8)(ii)(C).
(b) Proposed Revisions
    We propose to institute two policy changes designed to limit the 
impact of

[[Page 46181]]

negative regional adjustments on ACO historical benchmarks and further 
incentivize program participation among ACOs serving high cost 
beneficiaries:
    <bullet> Reduce the cap on negative regional adjustments from 
negative 5 percent of national per capita expenditures for Parts A and 
B services under the original Medicare FFS program in BY3 for 
assignable beneficiaries to negative 1.5 percent.
    <bullet> After the cap is applied to the regional adjustment, 
gradually decrease the negative regional adjustment amount as an ACO's 
proportion of dual eligible Medicare and Medicaid beneficiaries 
increases or its weighted-average prospective HCC risk score increases.
    The choice of a negative 1.5 percent cap is informed by CMS' 
experience with use of a 2 percent cap on negative regional expenditure 
adjustments under the Global and Professional Direct Contracting Model 
(to be redesigned and renamed as the ACO Realizing Equity, Access, and 
Community Health (REACH) Model beginning January 1, 2023), as well as 
considerations related to the potential longer-term vision for use of 
an administratively set benchmark under which a negative discount for 
less efficient ACOs could be approximately 1.6 percent over the ACO's 
agreement period as described in our comment solicitation on 
Incorporating an Administrative Benchmarking Approach into the Shared 
Savings Program (section III.G.7. of this proposed rule).
    Under this proposal, we would continue to apply a cap equal to 
positive 5 percent of national per capita expenditures for assignable 
beneficiaries to positive regional adjustments for each enrollment 
type. Table 60 illustrates how the cap would be applied asymmetrically 
to positive and negative regional adjustments under this proposal.
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    The hypothetical ACO in this example had a mix of positive and 
negative regional adjustments across the four enrollment types. The 
ACO's uncapped ESRD adjustment is positive and above the positive 5 
percent cap. Therefore, it falls from $4,450 to $4,299 when the cap is 
applied. The ACO's uncapped aged/non-dual eligible adjustment is 
outside the new negative 1.5 percent cap and thus falls from -$259 to -
$158 when the cap is applied. The ACO's disabled and aged/dual eligible 
adjustments are both under the applicable caps and are unaffected. The 
ACO's overall weighted average regional adjustment (calculated by 
multiplying the adjustment for each enrollment type by the 
corresponding enrollment type proportion and then summing across the 
four enrollment types) falls from -$74 to -$7 when the cap is applied. 
Note that under the current policy with a symmetrical cap equal to 5 
percent of national per capita expenditures for Parts A and B services 
for assignable beneficiaries, only the ACO's ESRD adjustment would be 
constrained. The ACO's aged/non-dual eligible adjustment would remain 
at -$259 and the ACO's overall adjustment would actually become more 
negative (-$77) after capping (as shown in Table 59).
    For negative regional adjustments, we also propose to apply an 
offset factor based on the following: [A] the ACO's overall proportion 
of BY3 assigned beneficiaries that are dually eligible for Medicare and 
Medicaid (including dually eligible ESRD, disabled, and aged 
beneficiaries) \260\ and [B] the ACO's weighted average prospective HCC 
risk score for BY3 taken across the four Medicare enrollment types. 
Before taking this weighted average, the risk score for each enrollment 
type would first be renormalized by dividing by the national mean risk 
score for the assignable FFS population for that enrollment type 
identified for the calendar year corresponding to BY3. Specifically, 
the offset factor would be calculated as:
---------------------------------------------------------------------------

    \260\ In computing this proportion, we would use for each 
beneficiary the fraction of the year (referred to as person years) 
in which they were eligible for the aged/dual eligible enrollment 
type or for which they were eligible for the ESRD or disabled 
enrollment type and dually elibible for Medicare and Medicaid.

---------------------------------------------------------------------------
Offset factor = [A] + ([B]-1)

    This offset factor would be applied to negative regional 
adjustments after the negative 1.5 percent cap is applied. The offset 
factor would be subject to a minimum of zero and a maximum of one. We 
would apply the offset factor by subtracting its value from 1 and 
multiplying this difference by the negative regional adjustment for 
each Medicare enrollment type, calculated as:

Final regional adjustment = Negative regional adjustment x (1-Offset 
factor)

    The higher an ACO's proportion of dual eligible beneficiaries or 
the higher its risk score, the larger the offset factor would be and 
the larger the reduction to the overall negative regional adjustment. 
If the offset factor is equal to the maximum value of one, the ACO 
would not receive a negative regional adjustment (that is, the negative 
weighted average regional adjustment would be fully offset). If the 
offset factor is equal to the minimum value of zero, the ACO would 
receive no benefit from the offset factor.
    To illustrate how the offset would be calculated and applied, 
assume that the hypothetical ACO from Table 60 had a proportion of dual 
eligible beneficiaries of 0.220 and a weighted average prospective HCC 
risk score for BY3 of

[[Page 46182]]

1.389. The offset factor for this ACO would be calculated as:

Offset factor = 0.220 + (1.389-1) = 0.609

    This factor would be applied as illustrated in Table 61 by 
multiplying the negative regional adjustment for each applicable 
Medicare enrollment type by 1 minus the offset factor or 0.391.
[GRAPHIC] [TIFF OMITTED] TP29JY22.101

    Here, the offset factor would be applied to the regional 
adjustments for the disabled and aged/non-dual eligible populations, as 
both are negative, but not to the regional adjustments for the ESRD and 
aged/dual eligible populations, which are both positive. Taking the 
weighted average across the enrollment types following application of 
the offset factor shows that the ACO's overall weighted regional 
adjustment goes from -$7 before the offset to $78 after the offset, a 
positive per capita impact of $85.
    We note that it is possible for an ACO to benefit from one aspect 
of this proposed policy, but not the other. For example, ACOs that have 
negative regional adjustments that are below the negative 1.5 percent 
cap will not be affected by the proposed reduction to the cap but could 
still benefit from the proposed offset factor. Alternatively, an ACO 
whose negative adjustment is reduced by the negative 1.5 percent cap 
would receive no further benefit from the offset factor if it has a low 
proportion of dual eligible beneficiaries or a low risk score such that 
the offset factor equals 1.
    We simulated the combined impact of these policy proposals using 
data from PY 2020 historical benchmarks for ACOs in agreement periods 
starting on or after July 1, 2019. The results of this simulation are 
summarized in Table 62.
[GRAPHIC] [TIFF OMITTED] TP29JY22.102

    Under these policy proposals, the negative regional adjustment for 
almost every ACO that had a negative regional adjustment under current 
policy (40 out of 43 ACOs) would have been reduced (or eliminated), 
with an average per capita impact of approximately $114. ACOs with 
higher weighted-average BY3 prospective HCC risk scores and higher 
proportions of dual eligible Medicare and Medicaid beneficiaries had 
overall greater reductions in their negative regional adjustments. Four 
ACOs in the simulation had an offset factor of 1, meaning they received 
a full offset to their negative regional adjustments. An additional 170 
ACOs that had a positive weighted average regional adjustment under the 
current policy but that had at least one enrollment type with a 
negative regional

[[Page 46183]]

adjustment would also have benefitted from the combined policy. The 
average per capita impact among these ACOs was smaller at around $5. We 
believe that the impacts observed in our simulation are likely to grow 
larger as more ACOs progress further in the program and are subject to 
higher weights in the calculation of the regional adjustment, and as 
more ACOs that serve high cost and medically complex populations join 
the program.
    We considered whether to make the proposed changes applicable only 
to ACOs that would have had a negative weighted average regional 
adjustment under the current policy (that is, ACOs for which the 
regional adjustment has an overall negative impact on the per capita 
historical benchmark). However, we believe that applying the lower cap 
and the offset factor at the enrollment type level is more 
straightforward and will have the opportunity to benefit ACOs that may 
be serving high risk populations in at least one, but not all Medicare 
enrollment types.
    We seek comment on these proposed changes to the calculation of the 
regional adjustment for agreement periods beginning on January 1, 2024, 
and in subsequent years. These proposed changes would be reflected in 
the proposed new regulation at Sec.  425.656. We also propose to 
specify in paragraph (a)(8) of the proposed new regulation at Sec.  
425.652, also applicable for agreement periods beginning on January 1, 
2024, and in subsequent years, the approach for comparing the pro-rated 
average prior savings amount (described in the proposed new provision 
at Sec.  425.658(b)(3)(ii), and as discussed in section III.G.5.c.(4) 
of this proposed rule) with the ACO's regional adjustment amount 
(described in the proposed new provision at Sec.  425.656(c)), to 
determine the applicability of a prior savings adjustment, the regional 
adjustment, or a combination of these two adjustments.
(6) Alternative Options for Addressing Concerns About the Effect of an 
ACO's Assigned Beneficiaries on Regional FFS Expenditures in 
Establishing, Adjusting, Updating, and Resetting the ACO's Historical 
Benchmark
    ACOs and other interested parties have expressed concerns with CMS' 
approach to determining regional FFS expenditures using a population of 
assignable beneficiaries that includes the ACO's assigned beneficiaries 
including, with respect to the impact on the calculation of the 
regional adjustment and the blended national-regional growth rate used 
to trend and update an ACO's historical benchmark, suggesting this 
policy results in relatively lower benchmarks for ACOs, particularly 
ACOs with high market penetration in their regional service area, which 
may tend to be ACOs located in rural areas. In the CY 2022 PFS proposed 
rule (86 FR 39291 through 39294), we sought comment on a number of 
potential approaches to addressing these concerns, as well as any 
unintended consequences that may result from removing an ACO's assigned 
beneficiaries from regional calculations. We summarized comments 
received in the CY 2022 PFS final rule (86 FR 65296 through 65302). In 
sections III.G.5.c.(3) through (5) of this proposed rule, we are 
proposing a package of three proposals: incorporating a prospective, 
external factor in the growth rates used in updating the benchmark; 
adjusting rebased benchmarks to account for an ACO's prior savings; and 
reducing the impact of negative regional adjustments on ACO benchmarks. 
We believe this package of proposals would, among other things, address 
concerns associated with including an ACO's own beneficiaries on its 
regional FFS expenditures. For example, the proposed inclusion of the 
ACPT in the growth rates used to update the benchmark based on a three-
way blend would reduce the impact of including an ACO's assigned 
beneficiaries in the regional component of the blend. Under the 
proposal to use the higher of the prior savings adjustment or positive 
regional adjustment, the proposed prior savings adjustment could 
increase the historical benchmark for an ACO whose regional adjustment 
could have been decreased by the inclusion of its own assigned 
beneficiaries in the regional expenditure calculation.
    We considered alternative options to this package of three 
proposals described in sections III.G.5.c.(3) through (5) of this 
proposed rule, that would more directly reduce the effect of the ACO's 
own beneficiaries on its regional FFS expenditures: (1) removing an 
ACO's assigned beneficiaries from the assignable beneficiary population 
used in regional expenditure calculations; and (2) expanding the 
definition of the ACO's regional service area to use a larger 
geographic area to determine regional FFS expenditures. We note that 
these related approaches were among the policies we discussed and on 
which we sought comment in the CY 2022 PFS proposed rule. We also 
considered whether to use a combination of these two alternative 
approaches under which we would expand the ACO's regional service area 
in combination with removing an ACO's assigned beneficiaries from the 
assignable beneficiary population used in calculating regional FFS 
expenditures. In evaluating these alternative approaches, we considered 
the comments we received in response to that comment solicitation 
(summarized in the CY 2022 PFS final rule) and considered the extent to 
which each alternative would address three core concerns (or dynamics) 
previously described in section III.G.5.c.(2) of this proposed rule and 
summarized here:
    <bullet> Mitigating the ratchet effect to ensure ACOs' rebased 
benchmarks remain accurate and serve as a reasonable baseline.
    <bullet> Reducing a single ACO's or multiple ACOs' collective 
impacts on an ACO's regional expenditures, which are used to calculate 
the regional adjustment and the regional portion of the trend and 
update factors.
    <bullet> Ensuring the benchmarking methodology results in 
benchmarks of sufficient value to encourage program entry and continued 
participation by ACOs, ACO participants, and ACO providers/suppliers 
serving medically-complex, high-cost populations.
    We also considered the extent to which the alternatives could lead 
to other unintended consequences including introducing excessive 
benchmark volatility or creating incentives for market consolidation. 
We note some of these alternatives may require use of our authority 
under section 1899(i)(3) of the Act to implement alternative 
benchmarking methodologies that diverge from the requirements of 
section 1899(d)(1)(B)(ii) of the Act, including alternative approaches 
to updating the historical benchmark. In order to use our authority 
under section 1899(i)(3) of the Act, we must determine that the 
alternative payment methodology will improve the quality and efficiency 
of items and services furnished to Medicare beneficiaries, without 
resulting in additional program expenditures. As of the time of this 
proposed rule, we have not performed an analysis of the extent to which 
the alternative approaches described in this section of this proposed 
rule would meet the requirements of section 1899(i)(3) of the Act, when 
use of this authority would be necessary for implementing such 
approaches within the Shared Savings Program's financial methodology.
    In the remainder of this section, we describe in more detail the 
alternative options that we considered, as well as our assessment of 
the ability of each alternative to address the three core concerns we 
articulated and other factors considered earlier in this section.

[[Page 46184]]

We are again seeking comment on these alternative options with 
interested parties now having the opportunity to consider their merits 
relative to the package of policies we are proposing in sections 
III.G.5.c.(3) through (5) of this proposed rule. We are also seeking 
comment on certain operational factors that we would need to address 
with greater specificity if we were to finalize any of the 
alternatives. We will consider the comments received on these 
alternative options along with the comments on the proposed package of 
policies in the development of our final policy, and may consider 
adopting one or both of the alternatives discussed in this section in 
lieu of the package of policies we are proposing in section 
III.G.5.c.(3) through (5) of this proposed rule.
Alternative 1: Removing an ACO's Assigned Beneficiaries From the 
Assignable Beneficiary Population Used in Regional Expenditure 
Calculations
    Under the first alternative considered, which aligns with 
suggestions made by some ACOs and other interested parties, we would 
exclude an ACO's assigned beneficiaries from the population of 
assignable beneficiaries in the ACO's regional service area used to 
determine the regional FFS expenditures used in all benchmarking 
calculations including trending and updating the benchmark and 
calculating the regional adjustment. If we were to adopt this first 
alternative to remove the ACO's own assigned beneficiaries but not also 
adopt the alternative to expand the ACO's regional service area under a 
combined approach, the ACO's regional service area would remain as all 
counties where one or more beneficiaries assigned to the ACO reside (as 
defined under Sec.  425.20). If we were to adopt a combined 
alternative, we would consider a modified definition of the ACO's 
regional service area. To remove an ACO's assigned beneficiaries from 
the regional expenditure calculation, we would use the mathematical 
approach described in the CY 2022 PFS proposed rule (86 FR 39292 and 
39293), which relies on the premise that per capita risk adjusted FFS 
expenditures for all assignable beneficiaries in an ACO's regional 
service area (a) can be interpreted as a weighted average of per capita 
risk adjusted FFS expenditures for the ACO's assigned beneficiaries (b) 
and per capita risk adjusted FFS expenditures for assignable 
beneficiaries in the region who are not assigned to the ACO (c), where 
the weight on (b) is the ACO's regional market share \261\ and the 
weight on (c) is one minus the ACO's regional market share. Shown as an 
equation this is:
---------------------------------------------------------------------------

    \261\ What is referred to here as the ``ACO's regional market 
share'' is the share of assignable beneficiaries in the ACO's 
regional service area that are assigned to the ACO, which is the 
weight that it is applied to the national component of the national-
regional blend under Sec.  425.601(a)(5)(iv) and (v).

(a) = [(b) x (ACO's regional market share)] + [(c) x (1-ACO's regional 
---------------------------------------------------------------------------
market share)].

Thus, to remove the ACO's assigned beneficiaries from the regional 
expenditure calculation, we would insert the applicable values for (a), 
(b), and regional market share (all data elements already computed 
under the current benchmarking methodology) into the above equation and 
solve for (c) by rearranging the equation as follows:

(c) = {(a)-[(b) x (ACO's regional market share)]{time} /(1-ACO's 
regional market share).

    By using such ACO- and regional-level values, this approach, 
performed separately by Medicare enrollment type, would avoid the need 
to calculate individualized ACO county-level risk-adjusted 
expenditures. As such, and by leveraging existing data elements, we 
believe this approach would pose relatively limited operational burden.
    As described in the CY 2022 PFS final rule, some of the commenters 
responding to our initial comment solicitation indicated CMS' 
mathematical approach was ``directionally correct,'' relatively simple, 
and would work well in nearly every case while using data that CMS 
already produces (86 FR 65299 and 65300). However, we share the 
concerns raised by several commenters that an approach to remove an 
ACO's assigned beneficiaries from the assignable population could 
incentivize ACOs to ``cherry-pick'' healthier, lower-cost patients and 
could unfairly penalize ACOs that specialize in more medically-complex, 
higher-cost patients, running counter to one of the core dynamics we 
seek to address (86 FR 65300 and 65301). Similarly, we are also 
concerned that this approach would incentivize market consolidation, as 
ACOs may anticipate a benefit to maintaining the largest market share 
in the region if their own assigned beneficiaries are removed from the 
assignable population. Additionally, removing an ACO's assigned 
beneficiaries from the calculation of regional FFS expenditures could 
yield unstable estimates due to small sample sizes in areas with high 
program penetration and/or in rural areas. As a result, an approach 
that would remove an ACO's assigned beneficiaries from the assignable 
population used to calculate regional FFS expenditures could result in 
a situation where the ACO's assigned population is relatively healthier 
and less costly than the assignable beneficiary population in the 
regional service area, which in turn would result in higher benchmarks 
for ACOs and thereby greater shared savings payments and reduced shared 
losses. More generous benchmark updates resulting from this approach 
could jeopardize CMS' use of the statutory authority under section 
1899(i)(3) of the Act to adopt such an alternative approach. We believe 
these concerns are relevant to whether we adopt this alternative alone 
or adopt a combined approach, under which we would both remove the 
ACO's own assigned beneficiaries from the regional expenditure 
calculation and expand the ACO's regional service area for purposes of 
that calculation. Expanding the regional service area may also mitigate 
the concern about unstable estimates due to small sample sizes.
    While we believe that this first alternative would partially 
address one of our core concerns summarized at the start of this 
section by removing an ACO's own impact on the regional expenditures 
used in its benchmark calculations, it would not directly address the 
collective impact of multiple ACOs that may be operating in the same 
regional service area. Under the proposed changes designed to increase 
participation in the Shared Savings Program, discussed elsewhere within 
this proposed rule, we would expect this issue to grow more prominent 
over the coming years.\262\ Additionally, we believe that removing an 
ACO's own assigned beneficiaries from the regional expenditure 
calculation would be less effective at mitigating the ratchet effect 
than our proposed package of policies. For example, while this 
alternative might address how the ACO's prior performance affects 
regional factors used for purposes of calculating an ACO's rebased 
historical benchmark, this alternative would not address the concern 
that actual assigned beneficiary expenditures used in establishing an 
ACO's rebased historical benchmark may already be reduced by the ACO's 
prior success in reducing expenditures for its own assigned beneficiary 
population. The proposed adjustment

[[Page 46185]]

for prior savings described in section III.G.5.c.(4) of this proposed 
rule would more directly address this concern by adding a portion of 
the ACO's prior savings during the benchmark years back into the 
rebased benchmark. Further, our proposal to include the ACPT in a 
three-way blended update factor as described in section III.G.5.c.(4) 
of this proposed rule would more directly ``decouple'' the update 
factor from actual observed expenditures, including expenditure 
reductions that are a result of savings already achieved by the ACO, 
than simply removing the ACO's own beneficiaries from the regional 
expenditure calculation.
---------------------------------------------------------------------------

    \262\ CMS has set forth a goal that 100 percent of people with 
Original Medicare will be in a care relationship with accountability 
for quality and total cost of care by 2030.
---------------------------------------------------------------------------

    One option that has been suggested by commenters is to remove all 
Shared Savings Program assigned beneficiaries from the assignable 
beneficiary population used to calculate each ACO's regional 
expenditures. After careful consideration, at this time we decline to 
consider removing all Shared Savings Program assigned beneficiaries 
from the assignable beneficiary population used to calculate each ACO's 
regional expenditures, as we have concerns about the short- and long-
term sustainability and soundness of such an approach given the 
Agency's goal to expand participation in accountable care. We believe 
that under the current level of program participation, an approach that 
would remove all Shared Savings Program assigned beneficiaries from the 
assignable population for each ACO's regional service area would yield 
unstable estimates of regional FFS expenditures for some ACOs, even if 
we were to expand the definition of an ACO's regional service area. 
Over time, we would expect this issue to worsen as Shared Savings 
Program participation expands.
    If we were to seek to finalize the first alternative of removing an 
ACO's assigned beneficiaries from the calculation of regional 
expenditures either by itself or in the combination with expanding our 
definition of an ACO's regional service area in lieu of our proposed 
package of policies, we anticipate that we would potentially need to 
adjust the weights currently used in calculating the regional 
adjustment to the historical benchmark. Under the current regulations, 
for ACOs that have lower average spending than their regional service 
area, we use a weight of 35 percent in the first agreement period that 
an ACO is subject to a regional adjustment and a weight of 50 percent 
in the second and subsequent agreement periods the ACO is subject to a 
regional adjustment. If an ACO was serving an assigned population that 
is markedly healthier than other assignable beneficiaries in the ACO's 
regional service area, removing the ACO's assigned beneficiaries from 
the population used to compute regional expenditures would increase the 
magnitude of the regional adjustment, all else being equal. This could 
potentially lead to a dramatic increase in program costs as higher 
regional adjustments could translate to higher shared savings payments. 
Thus, we would potentially need to consider reducing the weights used 
to calculate the regional adjustment to protect the Medicare Trust 
Funds. Determining the appropriate adjustment to the weights may be 
complicated by potential resulting consolidation. For example, assume 
for illustration purposes that the regional adjustment weights were 
reduced by 10 percentage points to bring the overall impact of regional 
adjustments back in line with the existing program design (that is, the 
weighting would be reduced from 35 to 25 percent in the first agreement 
period if positive, 50 percent to 40 percent in succeeding agreement 
periods if positive, etc.). If ACOs consolidate in order to concentrate 
the residual regional spending on fewer higher spending assignable 
beneficiaries, then the weights may need to be further reduced to 
offset the further increase in regional adjustments for consolidated 
ACOs.
Alternative 2: Expanding the Regional Service Area
    The second alternative we considered in place of the package of 
policies that we are proposing would seek to reduce an ACO's influence 
on expenditures in its regional service area by expanding the ACO's 
regional service area. While we did not outline a specific approach in 
the CY 2022 PFS proposed rule (86 FR 39294), we sought comment on 
basing regional expenditure calculations on larger geographic areas, 
such as using State-level data or Core-Based Statistical Area (CBSA)-
level data, or a combination of data for these larger geographic areas 
and county-level data (such as blended county/State expenditures). We 
also sought comment on what would constitute heavy market penetration 
by an ACO in its regional service area if we were to use an approach 
that would consider the ACO's level of penetration in determining 
whether to expand the ACO's regional service area.
    For example, one potential approach to expanding the regional 
service area would be to define an ACO's regional service area to 
include all States in which at least one of the ACO's assigned 
beneficiaries resides and calculating regional expenditures as a 
weighted average of State-level risk adjusted expenditures, with the 
weights reflecting the proportion of the ACO's total assigned 
beneficiaries residing in each State. This approach would therefore 
mimic the current calculation, but replace county-level data with 
State-level data.
    Another possible approach would be to follow the existing 
methodology, but replace county-level risk adjusted expenditure values 
with State-level risk adjusted expenditure values for the corresponding 
State only for counties where an ACO has market share above a specified 
threshold, such as 50 percent. Such a blended approach would maintain 
greater geographic specificity than an approach that relies exclusively 
on State-level data, while still reducing the influence of an ACO's own 
beneficiaries in areas where the impacts may be most acute.
    In its comment responding to our solicitation, MedPAC favored 
altering the calculation of regional spending by extending the ACO's 
regional service area to a larger market area (for example, CBSAs, 
health service areas, or hospital referral regions) in lieu of removing 
ACO assigned beneficiaries from the calculation of regional FFS 
expenditures, noting that expanding an ACO's regional service area 
would help to reduce an ACO's influence on its regional benchmark 
calculation without explicitly favoring certain categories of ACOs (for 
example, historically low spending ACOs). Other commenters also 
supported expanding the regional service area for the purposes of 
calculating regional FFS expenditures in cases where ACO market 
penetration is high, with some of those commenters suggesting this 
would mitigate concerns about the reference population being too small 
after removing the ACO's assigned beneficiaries. Some commenters 
specifically called for using a threshold of 50 percent market 
penetration in such an approach. For example, a commenter suggested 
expanding the regional service area to include all contiguous counties 
for ACOs that have high market penetration (for example, when an ACO's 
assigned beneficiary population in a county exceeds 50 percent), with 
allowances for a lower threshold under special circumstances. For a 
full summary of the considerations and comments received, refer to the 
CY 2022 PFS final rule (86 FR 65301 and 65302).
    Like MedPAC, we believe that adopting only this second alternative 
to expand the regional service area would reduce the impact of an ACO's 
own expenditures on its regional

[[Page 46186]]

expenditures without introducing incentives for favorable patient 
selection or concerns about increased volatility that may result from 
the first alternative of excluding an ACO's assigned beneficiaries from 
the population of assignable beneficiaries used to determine regional 
FFS expenditures. However, like that first alternative, expanding the 
regional service area might not address concerns about ACOs' collective 
market penetration. We also believe that this second alternative or a 
combined approach would do less to ``decouple'' the ACO's benchmark 
from observed FFS spending than the package of policies that we are 
proposing, and thus would likely be more limited in countering the 
ratchet effect. By contrast, our proposal to incorporate the ACPT into 
the growth rates used to update the benchmark would ensure that a 
portion of the update will remain unaffected by observed FFS spending. 
Furthermore, we have concerns that use of a market penetration 
threshold may drive further market consolidation as ACOs seek to meet 
such a threshold.
    If we were to decide to finalize this second alternative or a 
combined approach in lieu of our proposed package of policies, there 
are a number of operational factors that we would need to address with 
greater specificity, including, but not limited to: what alternative 
geographic area we would use, whether we would replace county-level 
data with data based on an alternate geographic area or use a blend, 
and, if using a blend, at what threshold it would be triggered, and 
what weights would be applied when aggregating expenditures across 
geographic areas.
    On the balance, we believe that our proposed package of policies 
described in sections III.G.5.c.(3) through (5) of this proposed rule 
would collectively be more effective at addressing the core concerns we 
articulated than the two alternatives described or a combined approach, 
and would avoid some of the alternatives' potential unintended 
consequences. However, we seek further comment on these alternatives, 
including various operational considerations we would need to specify 
if we were to finalize either alternative 1, alternative 2, or a 
combined approach. As stated previously, we will consider the comments 
received on these alternative options and the related operational 
considerations along with the comments on the proposed package of 
policies in the development of our final policy, and may consider 
adopting one or both of the alternatives discussed in this section in 
lieu of the package of policies we are proposing in section 
III.G.5.c.(3) through (5) of this proposed rule.
d. Calculating County FFS Expenditures To Reflect Differences in 
Prospective Assignment and Preliminary Prospective Assignment With 
Retrospective Reconciliation
(1) Background
    Under the current regulation at Sec.  425.601, CMS uses risk 
adjusted county-level FFS expenditures, determined based on 
expenditures for assignable beneficiaries identified for the 12-month 
calendar year corresponding to the relevant benchmark or performance 
year, to calculate factors used in establishing, adjusting and updating 
the ACO's historical benchmark. Specifically, we use these risk 
adjusted county-level FFS expenditures to determine the ACO's regional 
service area expenditures, which are used to calculate the regional 
adjustment in accordance with Sec.  425.601(a)(8) and the blended 
national-regional growth rates used to trend forward expenditures for 
BY1 and BY2 to BY3 dollars (Sec.  425.601(a)(5)), and to update the 
ACO's historical benchmark between BY3 and each performance year in the 
ACO's agreement period (Sec.  425.601(b)).
    To calculate the risk adjusted regional expenditure amounts under 
Sec.  425.601(d) for each Medicare enrollment type, we first calculate 
risk adjusted expenditures for the relevant benchmark year or 
performance year for assignable beneficiaries in each county in the 
ACO's regional service area in accordance with Sec.  425.601(c). We 
then weight these county-level risk adjusted expenditure amounts by the 
proportion of the ACO's assigned beneficiaries residing in each county, 
and sum across all counties in the ACO's regional service area. 
Additionally, we use county-level assignable beneficiary person years 
in combination with the ACO's assigned beneficiary person years by 
county to calculate an ACO's share of assignable beneficiaries in the 
ACO's regional service area as described in Sec.  425.601(a)(5)(v). 
These shares are, in turn, used to determine the weights used in 
calculating the blended national-regional trend and update factors as 
described in Sec. Sec.  425.601(a)(5)(iv) and (v) and 425.601(b)(4).
    The assignable population of beneficiaries used to calculate the 
county level values described above is identified in accordance with 
the definition of ``assignable beneficiary'' under Sec.  425.20. 
Specifically, an assignable beneficiary means a Medicare FFS 
beneficiary who receives at least one primary care service with a date 
of service during a specified 12-month assignment window from a 
Medicare-enrolled physician who is a primary care physician or who has 
one of the specialty designations included in Sec.  425.402(c). When 
first proposing to incorporate regional and national factors based on 
the assignable beneficiary population in the February 2016 proposed 
rule (81 FR 5843 through 5845), we discussed our consideration of which 
assignment window to use to identify the assignable population used to 
calculate inputs to the program's financial calculations. Specifically, 
we considered using the 12-month period based on a calendar year which 
aligned with the assignment window for preliminary prospective 
assignment with retrospective reconciliation, or an offset 12-month 
period which aligned with the assignment window for prospective 
assignment (for example, October through September preceding the 
calendar year). We proposed, and ultimately finalized, use of the 12-
month period based on the calendar year for all ACOs, regardless of the 
ACO's assignment methodology (81 FR 37985 through 37989).
    In the February 2016 proposed rule (81 FR 5843 and 5844), and as 
restated in the June 2016 final rule (81 FR 37985 and 37986), we 
expressed our belief that it is important to calculate regional and 
national FFS factors consistently program-wide, so as not to advantage 
or disadvantage an organization simply on the basis of the assignment 
methodology that applied under its track. We also noted our belief that 
this consistency would help to ensure a level playing field in markets 
where multiple ACOs are present and would also simplify program 
operations. We indicated that we would monitor for observable 
differences in the health status (for example, as identified by 
prospective HCC risk scores) and expenditures of the assignable 
beneficiaries identified using the 12-month calendar year assignment 
window, as compared to assignable beneficiaries identified using the 
offset assignment window (for example, October through September 
preceding the calendar year) and would, if warranted, address the need 
for additional adjustments to account for the use of assignable 
beneficiaries identified using an assignment window that is different 
from the assignment window used to assign beneficiaries to the ACO 
through future rulemaking.
    In addition to these inputs based on county-level assignable 
beneficiary data, the Shared Savings Program's financial calculations 
also use the assignable

[[Page 46187]]

beneficiary population to calculate a variety of factors based on 
national FFS expenditures, including:
    <bullet> National growth rates used to trend and update the 
benchmark (see Sec.  425.601(a)(5)(ii) and Sec.  425.601(b)(2));
    <bullet> Thresholds used to truncate beneficiary expenditures (see 
Sec. Sec.  425.601(a)(4), 425.601(c)(3), 425.605(a)(3) and 
425.610(a)(4)(ii));
    <bullet> Caps applied to the regional adjustment (see Sec.  
425.601(a)(8)(ii)(c)); and
    Mean risk scores used to renormalize ACO- and county-level risk 
scores (see discussion in 83 FR 68007 through 68013).
    Having gained experience using factors based on the assignable 
beneficiary population since PY 2017, and based on our monitoring of 
differences in expenditure and risk scores among beneficiaries 
identified using an assignment window based on the calendar year versus 
an offset assignment window, we have concluded that there exists a 
systematic bias in the calculations using county-level expenditures 
that favors ACOs under prospective assignment. Based on historical 
data, we have observed that for a given calendar year, risk adjusted 
expenditures for populations identified based on the offset assignment 
window are systematically lower than risk adjusted expenditures for 
populations identified based on the calendar year assignment window, 
all else equal. In the calculation of the regional adjustment, the 
favorable bias arises for ACOs under prospective assignment because we 
are comparing risk adjusted expenditure levels between populations 
identified based on different assignment windows for BY3: the ACO's own 
assigned beneficiary population identified based on the offset 
assignment window, and expenditures for the assignable population of 
beneficiaries in the ACO's region identified based on the calendar year 
assignment window. This mismatch causes the ACO's spending to look 
``low'' relative to the regional spending, leading to a larger positive 
(or smaller negative) regional adjustment than we would observe if the 
assignment windows used to identify the two populations were 
consistent.
    Based on modeling using historical benchmarks for ACOs 
participating in the 6-month performance year from July 1, 2019, 
through December 31, 2019, and after accounting for regional adjustment 
weighting and capping, we estimate that actual regionally adjusted 
historical benchmarks were 0.2 percent to 1.9 percent higher for ACOs 
under prospective assignment than they would have been if the regional 
adjustment had been calculated using risk adjusted regional 
expenditures for assignable beneficiaries identified using the offset 
assignment window used under prospective assignment. The median 
estimated bias was 1.0 percent. We believe the program-wide impact of 
this bias was likely low in the initial years that the regional 
adjustment was in effect because only a subset of ACOs were originally 
eligible for the regional adjustment (ACOs that renewed for a second 
agreement period starting in January 2017, January 2018, or January 
2019), and a relatively small share of those ACOs were under 
prospective assignment (ACOs participating in Track 3 or the Track 1+ 
ACO Model). Starting with agreement periods beginning on July 1, 2019, 
all ACOs became eligible to receive a regional adjustment and to select 
their assignment methodology in accordance with Sec. Sec.  
425.226(a)(1) and 425.400(a)(4)(ii). With this latter change, the share 
of ACOs under prospective assignment grew considerably, from around 17 
percent in PY 2019 to 38 percent in PY 2022. Because of this, we 
believe that the bias has a larger impact currently than in earlier 
years.
    Additionally, while risk adjusted expenditure trends have generally 
been consistent for prospectively and retrospectively determined 
assignable populations, this stable relationship was disrupted in the 
PHE for COVID-19 when decreased utilization led to expenditures for 
prospectively determined populations falling more sharply in CY 2020 
than for retrospectively determined populations (due to an increase in 
the number of beneficiaries that did not utilize any care after being 
prospectively assigned to an ACO). This appears to have generated an 
additional 1.0 percentage point increase in measured savings (relative 
to total benchmark) for ACOs under prospective assignment in PY 2020 
beyond the effect of the biased regional adjustment. However, we note 
that between CY 2020 and CY 2021 expenditures grew more quickly for 
prospectively determined populations, causing cumulative trends from 
years preceding the PHE for COVID-19 to CY 2021 to return to a roughly 
parallel state for the two populations. Although the disruption of 
expenditure trends between prospective and retrospectively assignable 
populations was temporary in this case, the disruption of stable 
expenditure trends during the PHE for COVID-19 highlights the 
possibility of future biases in the blended national-regional growth 
factor. If the blended growth factor is based on an assignable 
population with a different expenditure growth trend than the expected 
trend in expenditures of an ACO's assigned population, an ACO could 
receive an artificial increase or decrease in savings.
    Without correction, we believe that the impact of this bias has the 
potential to grow costlier to the Trust Funds over time. For one, more 
ACOs will be subject to higher weights used in calculating the regional 
adjustment as they progress in the Shared Savings Program, which is 
expected to lead to larger regional adjustments and, by extension, 
larger biases than those estimated in our analysis using benchmark data 
from the 6-month performance year beginning July 1, 2019, in which most 
ACOs were subject to the lowest regional adjustment weights. Second, as 
more ACOs move to the ENHANCED track with its 75 percent sharing rate, 
aggregate savings against a favorably biased benchmark will be shared 
by ACOs at a higher rate. Preventing further influence of the bias, as 
would be achieved under the proposed approach, is important for 
ensuring good stewardship of Medicare Trust Fund dollars. Addressing 
this bias in Shared Savings Program calculations for ACOs under 
prospective assignment would also ensure a more level playing field for 
ACOs under both assignment methodologies, and would improve the 
comparability of ACOs' performance under the Shared Savings Program 
irrespective of the ACO's chosen assignment methodology.
    Further, if left unresolved, this bias would need to be taken into 
account as part of the regulatory impact analysis for evaluating 
proposed modifications to policies under the Shared Savings Program, 
and in considering whether CMS has met the requirements for use of 
other payment models under section 1899(i)(3) of the Act. The authority 
to use other payment models under section 1899(i)(3) of the Act is 
necessary for implementing key aspects of the Shared Savings Program, 
including the two-sided models and the blended national-regional growth 
factors used to update the historical benchmark (as discussed within 
section III.G.5.c.(3) of this proposed rule), as well as the proposal 
to provide AIPs to eligible ACOs (discussed within section III.G.2 of 
this proposed rule). This authority is contingent on the statutory 
requirement that other payment models adopted under section 1899(i)(3) 
of the Act must be determined to improve the quality and efficiency of 
items and services furnished to Medicare FFS beneficiaries and not to 
increase program spending relative to a baseline estimated for the

[[Page 46188]]

Shared Savings Program were it not to employ modifications authorized 
under section 1899(i)(3) of the Act. A predictable favorable bias would 
increase program spending (particularly in combination with 
modifications like two-sided risk sharing that require authority from 
section 1899(i)(3) of the Act), and therefore, jeopardize CMS' ability 
to satisfy the requirements of section 1899(i)(3) of the Act for use of 
other payment models.
    We believe modification to the methodology for calculating regional 
FFS expenditures is necessary and timely to mitigate the observed 
favorable bias for ACOs under prospective assignment.
(2) Proposed Revisions
    To remove the favorable bias and bring greater precision to the 
calculation of factors based on regional FFS expenditures, we are 
proposing to modify the calculation of risk adjusted regional 
expenditures used in the regional adjustment and in the regional 
component of the blended factors used to trend and update the benchmark 
(including, if finalized, the three-way blend proposed in section 
III.G.5.c.(3) of this proposed rule). Under this proposal, for 
agreement periods beginning on January 1, 2024, and in subsequent 
years, we would calculate risk adjusted regional expenditures using 
county-level values computed using an assignment window that is 
consistent with an ACO's assignment methodology selection for the 
performance year under Sec.  425.400(a). That is, for ACOs selecting 
prospective assignment, we would use an assignable population of 
beneficiaries that is identified based on the offset assignment window 
(for example, October through September preceding the calendar year) 
and for ACOs selecting preliminary prospective assignment with 
retrospective reconciliation, we would continue to use an assignable 
population of beneficiaries that is identified based on the calendar 
year assignment window. We believe that removing the current mismatch 
in the assignment window used to determine the assignable population, 
and the assigned population for ACOs under prospective assignment would 
create a more equitable historical benchmark across assignment 
methodologies and help protect the Trust Funds. For consistency, we are 
also proposing to use an assignable population identified using an 
assignment window that corresponds to an ACO's selected assignment 
methodology to calculate other factors based on county-level data, 
namely, the weights used in computing the blended trend and update 
factors.
    At this time, we are not proposing to change the way we would 
compute national factors that require identifying assignable 
populations. That is, all factors used in calculations that are based 
on the national assignable FFS population would continue to be computed 
using an assignable population identified based on the calendar year 
assignment window. This choice is driven by two factors. First, for 
simplicity, we favor using the same set of national values for all 
ACOs. Second, we do not believe the national factors, as currently 
computed, contribute to the current bias that we have observed and 
which is the motivation for the proposed policy changes. While using a 
national assignable population based on an offset assignment window to 
compute the national component of trend and update factors could help 
to further protect against unanticipated biases in those calculations, 
the national component represents a small portion of the blend for most 
ACOs. Thus, the additional protection provided would be limited. 
However, we intend to continue monitoring how national assignable 
expenditure trends hinge on the selection of assignment methodology, 
and may return to this issue in future rulemaking if significant biases 
exist that may systemically impact the national component of the trend 
and update factors.
    We currently make available public use files (PUFs) containing the 
county level expenditures, risk scores and assignable beneficiary 
person years for each calendar year on the data.cms.gov website, 
specifically: (1) County-level Aggregate Expenditure and Risk Score 
Data on Assignable Beneficiaries PUF,\263\ and (2) Number of ACO 
Assigned Beneficiaries by County PUF.\264\ Interested parties are able 
to use these files to replicate the calculation of risk adjusted 
regional expenditures or the weights used in the blended trend and 
update factors. We also provide ACOs with program reports that include 
information on the geographic distribution of their assigned 
beneficiary populations which can also be used along with the county-
level data based on the assignable population for modeling purposes.
---------------------------------------------------------------------------

    \263\ Refer to Data.CMS.gov, County-level Aggregate Expenditure 
and Risk Score Data on Assignable Beneficiaries, available at 
https://data.cms.gov/medicare-shared-savings-program/county-level-aggregate-expenditure-and-risk-score-data-on-assignable-beneficiaries.
    \264\ Refer to Data.CMS.gov, Number of Accountable Care 
Organization Assigned Beneficiaries by County, available at https://data.cms.gov/medicare-shared-savings-program/number-of-accountable-care-organization-assigned-beneficiaries-by-county.
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    If this proposal is finalized, we anticipate we would make two sets 
of county-level values publicly available for each calendar year: we 
would continue to provide county-level data on the assignable 
population identified based on the calendar year assignment window and 
would also make available county-level data based on the assignable 
population identified using the offset assignment window. Additionally, 
we would update the public use files that reflect the distribution of 
each ACO's assigned beneficiary population by county to include a field 
indicating each ACO's assignment methodology selection for the 
applicable performance year.
    We believe additional data will facilitate modeling of the proposed 
changes to the calculation of county-level FFS expenditures used in 
Shared Savings Program benchmark calculations. Concurrent with the 
issuance of this proposed rule, we are making available through the 
Shared Savings Program website at www.cms.gov/sharedsavingsprogram/ 
data files containing risk adjusted county-level FFS expenditures for 
2018-2020 calculated based on an assignable beneficiary population 
identified using an offset assignment window.
    The changes we are proposing would be specified in the proposed new 
regulations at Sec. Sec.  425.652, 425.654, and 425.656. Refer to 
section III.G.5.i. of this proposed rule for a discussion of the 
organization of the proposed new provisions in 42 CFR part 425, subpart 
G.
    We note that in order to finalize the proposed changes to the 
regional component of the update factor we would need to use our 
statutory authority under section 1899(i)(3) of the Act. We refer 
readers to section III.G.5.c.(3) and the Regulatory Impacts Analysis 
(section VII.) of this proposed rule for related discussions around the 
use of this authority with respect to the proposed modifications to the 
update factor.
    We seek comment on these proposals.
e. Improving the Risk Adjustment Methodology to Better Account for 
Medically Complex, High Cost Beneficiaries and Guard Against Coding 
Initiatives
(1) Background
    Currently, for ACOs in agreement periods beginning on or after July 
1, 2019, we account for changes in severity and case mix of the ACO's 
assigned

[[Page 46189]]

beneficiary population when establishing the benchmark for an agreement 
period and also in adjusting the benchmark for each performance year 
during the agreement period. In accordance with Sec.  425.601(a)(3), in 
establishing the benchmark, we adjust expenditures for changes in 
severity and case mix using CMS Hierarchical Condition Category (CMS-
HCC) prospective risk scores (herein referred to as prospective HCC 
risk scores). Pursuant to Sec.  425.601(a)(10), we further adjust the 
ACO's historical benchmark at the time of reconciliation for a 
performance year to account for changes in severity and case mix for 
the ACO's assigned beneficiary population between BY3 and the 
performance year (refer to Sec.  425.605(a)(1), (a)(2); Sec.  
425.610(a)(2), (a)(3)). In making this risk adjustment, we make 
separate adjustments for the population of assigned beneficiaries in 
each Medicare enrollment type used in the Shared Savings Program (ESRD, 
disabled, aged/dual eligible, aged/non-dual eligible). We use 
prospective HCC risk scores to adjust the historical benchmark for 
changes in severity and case mix for all assigned beneficiaries, 
subject to a cap of positive 3 percent for the agreement period 
(referred to herein as the ``3 percent cap''). This cap is the maximum 
increase in prospective HCC risk scores allowed for each agreement 
period, such that any positive adjustment between BY3 and any 
performance year in the agreement period cannot be larger than 3 
percent. That is, the prospective HCC risk ratios (ratio of performance 
year risk score to the BY3 risk score) applied to historical benchmark 
expenditures to capture changes in health status between BY3 and the 
performance year will never be higher than 1.030 for any performance 
year over the course of the agreement period. This cap is applied 
separately for the population of beneficiaries in each Medicare 
enrollment type.\265\
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    \265\ Refer to the December 2018 final rule (83 FR 68007 through 
68013), section on ``Risk Adjustment Methodology for Adjusting 
Historical Benchmark Each Performance Year''. See also, the Medicare 
Shared Savings Program, Shared Savings and Losses and Assignment 
Methodology Specifications (version #10, February 2022), section 
3.6, available at https://www.cms.gov/files/document/medicare-shared-savings-program-shared-savings-and-losses-and-assignment-methodology-specifications.pdf-1.
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    The 3 percent cap was finalized through the December 2018 final 
rule (83 FR 68013) to address concerns with the prior approach for risk 
adjustment, which used a methodology that differentiated between newly 
assigned and continuously assigned beneficiaries, as defined in Sec.  
425.20. The issues raised by interested parties included concerns that 
the risk adjustment methodology did not adequately adjust for changes 
in health status among continuously assigned beneficiaries between the 
benchmark and performance years and concern that performing risk 
adjustment separately for newly and continuously assigned beneficiaries 
created uncertainty around benchmarks and made it difficult for ACOs to 
anticipate how risk scores would affect their financial performance 
(refer to 76 FR 67916 through 67919, 80 FR 32777 through 32778, 81 FR 
37962 through 37968, 83 FR 68008 through 68013). As a result, in the 
December 2018 final rule, we finalized the use of prospective HCC risk 
scores to adjust the historical benchmark for changes in severity and 
case mix for all assigned beneficiaries, subject to a cap of positive 3 
percent for the agreement period, for agreement periods beginning on 
July 1, 2019, and in subsequent years (83 FR 68013).
    We believe that this current policy has several advantages relative 
to the original risk adjustment methodology distinguishing between 
newly and continuously assigned beneficiaries, including: allowing for 
some upward growth in prospective HCC risk scores between the benchmark 
period and the performance year for an ACO's entire assigned 
beneficiary population, providing better recognition for changes in 
beneficiary health status between the benchmark period and the 
performance year, and providing greater clarity for ACOs than the 
previous methodology, while still limiting the impact of ACO coding 
initiatives. However, interested parties remain concerned about the 
program's risk adjustment methodology, including the 3 percent cap. In 
the CY 2022 PFS proposed rule, we solicited comment on several issues 
related to the Shared Savings Program's risk adjustment methodology (86 
FR 39294 and 39295)--
    <bullet> Approaches, generally, to improving the risk adjustment 
methodology for the Shared Savings Program, and specifically for ACOs 
with medically complex, high cost beneficiaries.
    <bullet> Approaches to risk adjustment that would balance the need 
for accurate and complete coding, while protecting against 
incentivizing coding intensity initiatives by ACO participants and ACO 
providers/suppliers (which may be even more problematic for ACOs with 
high penetration in their region) that increase risk score growth above 
the existing 3 percent cap.
    <bullet> Alternate approaches that would increase the cap on an 
ACO's risk score growth in relation to risk score growth in the ACO's 
regional service area.
    <bullet> The potential interactions between policies to remove 
assigned beneficiaries from the assignable beneficiary population used 
to calculate regional FFS expenditures and growth rates, and policies 
addressing regional risk score growth.
    For a full summary of the comments submitted in response to our 
comment solicitation, we refer readers to the relevant discussion in 
the CY 2022 PFS final rule (86 FR 65302 through 65306). Among the 
comments received, many commenters expressed concern about the existing 
3 percent cap on positive risk score growth, as well as the absence of 
a cap (or floor) on negative adjustments to account for risk score 
decreases. Several commenters indicated that the current 3 percent cap 
on risk score growth is unfair over a 5-year period, suggesting that 
the cap is too low over a period of this length. Additionally, several 
commenters suggested that the existing policy is driving inequity and 
may disadvantage ACOs that serve more vulnerable populations or 
beneficiaries with complex medical needs. Some commenters explained 
that beneficiaries who are in the disabled and the aged/dual eligible 
Medicare enrollment types are, in most combinations, more than twice as 
likely to have risk score growth above the cap as those who are in the 
aged/non-dual eligible category. These concerns are similar to certain 
comments made in response to the original proposal for the 3 percent 
cap and summarized in the December 2018 final rule (83 FR 68010 through 
68012). Additionally, some commenters indicated that due to a variety 
of factors, such as sample size and volatility, the rates at which 
Medicare enrollment types are subject to the 3 percent cap on risk 
score growth are often significantly different. A commenter explained 
that there can also be significant risk score volatility when the high-
risk patient population is small. This concern was also raised in 
response to the original proposal for the current policy (83 FR 68012). 
Several commenters on the proposal recommended that any cap be applied 
at the aggregate level rather than the enrollment type level, with one 
commenter suggesting that we cap the prospective HCC risk ratios in the 
aggregate across the four beneficiary enrollment types to account for 
smaller sample sizes and resulting higher volatility for certain 
enrollment types.

[[Page 46190]]

    Many of the comments received in response to the comment 
solicitation in the CY 2022 PFS proposed rule also expressed concern 
that the current policy places a cap on the ACO's risk score growth but 
does not restrict regional risk score growth that is reflected in the 
regional component of the update factor, noting that this penalizes 
ACOs in markets where a region's risk score growth exceeds the 3 
percent cap (86 FR 65304). Other commenters, notably MedPAC, expressed 
support for CMS' considerable caution in the area of risk adjustment, 
noting that population-based models can be highly susceptible to coding 
incentives and that the Shared Savings Program does not include a 
retrospective coding adjustment to offset these incentives. MedPAC 
recommended that CMS should address the underlying incentives for 
coding intensity and the accuracy of risk adjustment before considering 
any policy that would increase the risk score growth cap (86 FR 65304).
(2) Proposed Revisions
    In response to these concerns, we considered three options to 
modify the existing 3 percent cap on risk score growth: (1) Account for 
all changes in demographic risk scores for the ACO's assigned 
beneficiary population between BY3 and the performance year prior to 
applying the 3 percent cap on positive adjustments resulting from 
changes in prospective HCC risk scores, and apply the cap in aggregate 
across the four Medicare enrollment types (ESRD, disabled, aged/dual 
eligible, aged/non-dual eligible); (2) Apply the 3 percent cap in 
aggregate across the four Medicare enrollment types (ESRD, disabled, 
aged/dual eligible, aged/non-dual eligible) without first accounting 
for changes in demographic risk scores for the ACO's assigned 
beneficiary population between BY3 and the performance year; and (3) 
Allow the cap on an ACO's risk score growth to increase by a percentage 
of the difference between the current 3 percent cap and risk score 
growth in the ACO's regional service area, where the percentage applied 
would be equal to 1 minus the ACO's regional market share (continuing 
our consideration of the approach described in the CY 2022 PFS proposed 
rule (86 FR 39294)).
    We believe the first two options for modifications to the risk 
adjustment methodology (applying the cap on risk score growth in 
aggregate across Medicare enrollment types, with or without first 
accounting for changes in demographic risk scores for the ACO's 
assigned beneficiary population between BY3 and the performance year) 
would address several of the concerns raised by interested parties by: 
accounting for higher volatility in prospective HCC risk scores for 
certain enrollment types due to smaller sample sizes; allowing for 
higher benchmarks than the current risk adjustment methodology for ACOs 
that care for larger proportions of beneficiaries in aged/dual 
eligible, disabled and ESRD enrollment types (which are more frequently 
subject to the cap on risk score growth currently); and continuing to 
safeguard the Trust Funds by limiting returns from coding initiatives. 
We believe the third option (to allow the cap on an ACO's risk score 
growth to increase by a percentage of the difference between the 
current 3 percent cap and risk score growth in the ACO's regional 
service area) would address some commenters' concerns about the 
possible impacts of regional prospective HCC risk score growth, but 
would not address the multiple other concerns addressed by options 1 
and 2. We also note that the approach described in the second option 
includes a component of the first option (applying the cap on an ACO's 
risk score growth in aggregate across Medicare enrollment types). We 
considered the third option independently from the first and second 
options, and did not consider using the third option in combination 
with either the first or second option. That is, we did not consider an 
approach under which we would account for the difference between the 3 
percent cap and the risk score growth in the ACO's regional service 
area (third option) in combination with applying a cap on risk score 
growth in aggregate across Medicare enrollment types, with or without 
first accounting for changes in demographic risk scores for the ACO's 
assigned beneficiary population between BY3 and the performance year 
(the first and second options, respectively). We view these two 
approaches to be inconsistent with each other, as the third approach 
allows an ACO's risk score growth to rise above 3 percent based on risk 
score growth in the ACO's regional service area, whereas the first and 
second options would retain the 3 percent cap, but apply it at the 
aggregate level (with or without first accounting for changes in 
demographic risk scores for the ACO's assigned beneficiary population 
between BY3 and the performance year).
    After careful consideration and modelling of the impacts of these 
three potential modifications to the existing 3 percent cap on positive 
prospective HCC risk score growth, we are proposing to use the 
authority granted by section 1899(d)(1)(B)(ii) of the Act to adjust the 
benchmark for beneficiary characteristics and other such factors as the 
Secretary determines to be appropriate, to modify the existing 3 
percent cap on risk score growth using the first option. We are also 
seeking comment on the second and third options as potential 
alternatives to the proposed approach. We will consider the comments 
received on these alternative options along with the comments on our 
proposal to adopt the first option in the development of our final 
policy, and may consider adopting one of these alternatives in place of 
the proposed approach if we conclude that it would better address the 
concerns with the current risk adjustment methodology.
    Under our proposal of the first option, an ACO's aggregate 
prospective HCC risk score would be subject to a cap equal to the ACO's 
aggregate growth in demographic risk scores between BY3 and the 
performance year plus 3 percentage points. Specifically, we would:
    <bullet> Account for all changes in demographic risk scores for the 
ACO's assigned beneficiary population between BY3 and the performance 
year prior to applying the 3 percent cap on positive adjustments 
resulting from changes in prospective HCC risk scores.
    <bullet> Then apply the 3 percent cap in aggregate across the four 
Medicare enrollment types (ESRD, disabled, aged/dual eligible, aged/
non-dual eligible).
    Demographic risk scores are based on certain demographic attributes 
that do not vary with the beneficiary's health condition, such as age, 
sex, Medicaid status, and original reason for Medicare 
entitlement.\266\ Unlike prospective HCC risk scores, demographic risk 
scores are not subject to coding intensity because they do not use 
diagnosis information. Accounting for all changes in demographic risk 
scores for the ACO's assigned beneficiary population between BY3 and 
the performance year prior to applying the 3 percent cap on positive 
prospective HCC risk score growth could allow for higher benchmarks 
than the current methodology for ACOs that have experienced increases 
in health risk among their assigned beneficiary populations, while 
still safeguarding the
---------------------------------------------------------------------------

    \266\ Medicare Shared Savings Program, Shared Savings and Losses 
and Assignment Methodology Specifications (version #7, February 
2019), section 3.4.2, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/Shared-Savings-Losses-Assignment-Spec-V7.pdf.

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[[Page 46191]]

Trust Funds by limiting returns due to coding initiatives. We note that 
the CMS Innovation Center's Global and Professional Direct Contracting 
(GPDC) Model, which will transition to the redesigned and renamed 
Accountable Care Organization (ACO) Realizing Equity, Access, and 
Community Health (REACH) Model on January 1, 2023, will also take into 
account the underlying demographics of a model participant's aligned 
beneficiary population when determining whether risk score growth will 
be capped starting in PY 2024.\267\
---------------------------------------------------------------------------

    \267\ CMS. Accountable Care Organization (ACO) Realizing Equity, 
Access, and Community Health (REACH) Model. February 24, 2022. 
Available at https://www.cms.gov/newsroom/fact-sheets/accountable-care-organization-aco-realizing-equity-access-and-community-health-reach-model.
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    Under this proposal, the positive 3 percent cap (after accounting 
for changes in demographic risk scores) would also apply in aggregate 
across the four Medicare enrollment types (ESRD, disabled, aged/dual 
eligible, and aged/non-dual eligible). In other words, we would 
calculate a single aggregate value for the cap equal to the dollar-
weighted average growth in demographic risk scores across the four 
enrollment types plus 3 percentage points. We would only apply this cap 
to risk score growth for a particular enrollment type if the aggregate 
growth in prospective HCC risk scores, calculated as the dollar-
weighted average growth in prospective HCC risk scores across the four 
enrollment types, exceeds the value of the cap. We believe this would 
make it less likely that the prospective HCC risk scores for Medicare 
enrollment types with smaller populations, typically populations of 
ESRD, disabled, or aged/dual eligible beneficiaries, would be subject 
to the cap. These smaller populations are more likely to experience 
random variation in risk score growth as a relatively small number of 
assigned beneficiaries with large changes in prospective HCC risk 
scores can have an outsized impact on the average score for the 
Medicare enrollment type.
    To implement the new cap, we would follow these steps:
    <bullet> Step 1: Determine demographic risk score growth for each 
Medicare enrollment type. Demographic risk score growth is measured as 
the ratio of the ACO's performance year demographic risk score for an 
enrollment type to the ACO's BY3 demographic risk score for that 
enrollment type. Before calculating these demographic risk ratios, the 
demographic risk scores for each enrollment type for each year would be 
renormalized by dividing by the national mean demographic risk score 
for that enrollment type for that year.
    <bullet> Step 2: Calculate the dollar-weighted average demographic 
risk ratio across the four enrollment types to obtain a single 
aggregate dollar-weighted average demographic risk ratio. The dollar 
weight for each enrollment type would be equal to historical benchmark 
expenditures for that enrollment type divided by the sum of historical 
benchmark expenditures across all enrollment types. Historical 
benchmark expenditures for each enrollment type would be calculated as 
per capita historical benchmark expenditures for that enrollment type 
multiplied by the ACO's BY3 assigned beneficiary person years for that 
enrollment type. The aggregate dollar-weighted average demographic risk 
ratio would be computed by multiplying the risk ratio for each 
enrollment type by its respective dollar weight and then summing across 
the four enrollment types. Note that the approach of using an aggregate 
dollar-weighted average in this calculation would be similar to the 
approach used in the Shared Savings Program's original benchmarking 
methodology to determine whether demographic factors would be used to 
adjust risk scores for an ACO's continuously assigned 
beneficiaries.\268\
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    \268\ Refer to the Medicare Shared Savings Program, Shared 
Savings and Losses and Assignment Methodology Specifications 
(version #7, February 2019), section 3.4.2, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/Shared-Savings-Losses-Assignment-Spec-V7.pdf.
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    <bullet> Step 3: Calculate the sum of the aggregate dollar-weighted 
average demographic risk ratio from Step 2 and 0.030. This would 
represent the aggregate cap.
    <bullet> Step 4: Determine prospective HCC risk score growth for 
each Medicare enrollment type. Prospective HCC risk score growth would 
be measured as the ratio of the ACO's performance year prospective HCC 
risk score for that enrollment type to the ACO's BY3 prospective HCC 
risk score for that enrollment type. Before calculating these 
prospective HCC risk ratios, the prospective HCC risk scores for each 
enrollment type for each year would be renormalized by dividing by the 
national mean prospective HCC risk score for that enrollment type for 
that year.
    <bullet> Step 5: Calculate the aggregate growth in prospective HCC 
risk scores by calculating the dollar-weighted average prospective HCC 
risk ratio across the four enrollment types to obtain a single 
aggregate dollar-weighted average prospective HCC risk ratio, using the 
same dollar weights and the same approach described in Step 2.
    <bullet> Step 6: Determine if the ACO will be subject to the cap. 
If the ACO's aggregate dollar-weighted average prospective HCC risk 
ratio determined in Step 5 is less than the aggregate cap determined in 
Step 3, no cap would apply to the prospective HCC risk ratio for any 
enrollment type, even if the prospective HCC risk ratio for a given 
enrollment type is higher than the aggregate cap. If the ACO's 
aggregate dollar-weighted average prospective HCC risk ratio determined 
in Step 5 is greater than or equal to the aggregate cap determined in 
Step 3, proceed to Step 7.
    <bullet> Step 7: Compare the prospective HCC risk ratio for each 
enrollment type calculated in Step 4 to the aggregate cap determined in 
Step 3. If the prospective HCC risk ratio for a given enrollment type 
is greater than the aggregate cap, the prospective HCC risk ratio for 
that enrollment type would be set equal to the aggregate cap. If the 
prospective HCC risk ratio for a given enrollment type is less than or 
equal to the aggregate cap, no cap would apply to the prospective HCC 
risk ratio for that enrollment type.
    The resulting prospective HCC risk ratios would then be multiplied 
by the ACO's historical benchmark expenditures for the relevant 
Medicare enrollment type at the time of reconciliation for a 
performance year to account for changes in severity and case mix for 
the ACO's assigned beneficiary population between BY3 and the 
performance year.
    Table 63 provides a numeric example of this proposed methodology 
for a hypothetical ACO that is determined to be subject to the cap:

[[Page 46192]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.103

    For this hypothetical ACO, the dollar-weighted average demographic 
risk ratio is 1.026, meaning that demographic risk score growth 
averaged across the four enrollment types was 2.6 percent from BY3 to 
the performance year for the ACO's assigned beneficiaries, when 
measured against national mean risk score growth. To calculate the cap, 
we would add 0.03 to this value, arriving at an aggregate cap of 1.056. 
This ACO is determined to be subject to the cap because its dollar-
weighted average prospective HCC risk ratio of 1.070 was higher than 
the aggregate cap. When comparing the aggregate cap to the prospective 
HCC risk ratio for each individual enrollment type, risk score growth 
for both the aged/dual eligible and aged/non-dual eligible enrollment 
types would be constrained by the cap. In this example, the aggregate 
cap that is ultimately applied is higher than the current 3 percent 
cap, meaning that this hypothetical ACO would benefit from the proposed 
policy relative to the current policy.
    In the second numeric example described in Table 64, the ACO's 
aggregate demographic risk ratio is less than 1 and its aggregate cap 
of 1.028 is less than the current effective risk score cap of 1.030. In 
this case, the ACO's dollar-weighted average prospective HCC risk ratio 
of 1.013 is below the aggregate cap meaning that no cap would be 
applied to the prospective HCC risk score growth for any enrollment 
type, even though the ACO's ESRD, disabled, and aged/dual eligible 
populations all have prospective HCC risk ratios above the aggregate 
cap. This ACO would also benefit from the proposed policy relative to 
the current policy, with its benefit solely stemming from the use of an 
aggregate cap.
[GRAPHIC] [TIFF OMITTED] TP29JY22.104

    While the examples above show ACOs that would benefit from the 
proposed risk adjustment policy relative to the current policy, there 
are ACOs that would receive a lower updated benchmark under this 
proposed policy, all else being equal. Namely, ACOs with a dollar-
weighted average demographic risk ratio less than 1 found to be subject 
to the aggregate cap (which by default, will be less than 1.030) will 
have their upward risk score growth constrained more by the proposed 
aggregate cap than the existing 3 percent cap.
    We simulated the impact of this proposed policy change using 
performance year 2020 financial reconciliation data from ACOs in 
agreement periods beginning on or after July 1, 2019. This simulation 
found that 45 percent of ACOs would have had a higher updated benchmark 
with the proposed policy compared to the current policy, 5 percent 
would have had a lower updated benchmark with the proposed policy, and 
50 percent would have been unaffected (that is, because they were not 
subject to any cap under either policy). Fifty-three ACOs had their 
prospective HCC risk ratio capped for at least one Medicare enrollment 
type under the proposed policy, compared to 177 ACOs under the current 
policy. Among ACOs that were capped under the current policy but not 
the proposed policy, many had prospective HCC risk score growth above 
1.030 for one or more of the typically smaller enrollment types (that 
is, ESRD, disabled, aged/dual eligible) but not for their aged/non-dual 
eligible population. Table 65 illustrates that 47 percent of ACOs were 
subject to the current 3 percent cap imposed at the enrollment type 
level for one or more of the ESRD, disabled or aged/dual eligible

[[Page 46193]]

enrollment types versus 17 percent for aged/non-dual eligible. Under 
the proposed policy, the share would fall to 14 percent for both 
groups.
[GRAPHIC] [TIFF OMITTED] TP29JY22.105

    Based on this modeling, we believe that a significant share of ACOs 
would either be unaffected by or benefit from the proposed policy, 
especially those with increases in health risk as measured by 
demographic risk ratios, while a small share would do worse, likely 
reflecting decreases in health risk for their assigned beneficiary 
population as measured by demographic risk ratios. Additionally, ACOs 
would be much less likely to have prospective HCC risk ratios for ESRD, 
disabled, and aged/dual eligible Medicare enrollment types capped under 
this proposed policy which would improve the incentives for treating 
these medically complex, high cost populations. At the same time, we 
believe that this proposed policy would continue to be protective of 
the Trust Funds by continuing to limit incentives for coding intensity, 
as it would retain the 3 percent cap on growth in prospective HCC risk 
scores after accounting for all changes in demographic risk scores for 
the ACO's assigned beneficiary population.
    Under the second option that we considered, we would continue to 
employ a fixed 3 percent cap on positive adjustments to prospective HCC 
risk scores, but we would apply the cap at the aggregate level. 
Specifically, the current 3 percent cap on risk score growth would 
apply in aggregate across the four Medicare enrollment types (ESRD, 
disabled, aged/dual eligible, and aged/non-dual eligible) instead of 
being applied separately for the population of beneficiaries in each 
Medicare enrollment type. We would only apply the current 3 percent cap 
on risk score growth for a particular enrollment type if the ACO's 
aggregate growth in prospective HCC risk scores, calculated as the 
dollar-weighted average growth in prospective HCC risk scores across 
the four enrollment types, exceeds the value of the cap.
    One advantage of this second, alternative option over the proposed 
approach, which allows aggregate prospective HCC risk score growth 
above 3 percent when aggregate demographic risk score growth is 
positive, is that no ACOs would receive a lower updated benchmark under 
this methodology compared to the current approach. However, according 
to our simulations using performance year 2020 financial reconciliation 
data from ACOs in agreement periods beginning on or after July 1, 2019, 
while around 5 percent of ACOs would have had higher benchmarks under 
this second, alternative approach compared to the proposed approach, 
around 12 percent would have had lower benchmarks under this approach 
compared to the proposed approach. Thus, we believe that this second, 
alternative approach would, in aggregate, be less advantageous to ACOs 
than the proposed approach.
    Under the third option that we considered, which we also described 
in the CY 2022 PFS proposed rule (86 FR 39294), we would allow the cap 
on an ACO's risk score growth to increase by a percentage of the 
difference between the current 3 percent cap and risk score growth in 
the ACO's regional service area. The percentage applied would be equal 
to 1 minus the ACO's regional market share. For example, if regional 
risk score growth for a particular enrollment type was 5 percent and 
the ACO's regional market share was 20 percent, we would increase the 
cap on the ACO's risk score growth for that enrollment type by an 
amount equal to the difference between the regional risk score growth 
and the existing cap (2 percent) multiplied by one minus the ACO's 
regional market share (80 percent). Thus, the ACO would face a cap for 
this enrollment type equal to 4.6 percent instead of 3 percent (3 
percent + (2 percent x 80 percent)). This approach would raise the 
existing cap while limiting the ability for ACOs with high penetration 
in their regional service areas to increase their cap by engaging in 
coding intensity initiatives that significantly raise their regions' 
prospective HCC risk scores. While this third, alternative option could 
potentially mitigate concerns raised by some commenters about the 
impacts of regional prospective HCC risk score growth, modeling 
suggested that relatively fewer ACOs would benefit under this 
alternative approach as compared to the proposed methodology 
incorporating demographic risk score growth. A key reason for this is 
that a relatively small share of ACOs affected by the existing 3 
percent cap on risk score growth operated in regional service areas 
where regional risk score growth was greater than 3 percent.
    Furthermore, we still have concerns that allowing the cap on an 
ACO's risk score growth to increase with regional risk score growth 
could incentivize ACOs, particularly those highly penetrated in their 
regional service areas, to engage in coding behavior that would 
increase their cap, even if this incentive would be mitigated to some 
degree by limiting the allowable increase in the cap based on the ACO's 
market share. We believe that our proposed methodology would avoid this 
undesired incentive while still accounting for changes in health risk 
for an ACO's assigned beneficiary population to a greater extent than 
the current policy and would also help to address cases where regional 
risk score growth stems from higher volatility due to small sample 
sizes or shifting demographics within a regional service area.
    Our modeling suggests that a majority of ACOs that operate in 
regions with risk score growth in excess of 3 percent for at least one 
Medicare enrollment type would have had a higher updated benchmark 
under the proposed policy than the current policy. In addition, we 
believe that our proposal to incorporate a prospective, external factor 
in the growth rates used to update the historical benchmark (see 
section III.G.5.c.(3) of this proposed rule) would further help to 
mitigate concerns raised by some commenters about the impacts of 
regional risk score growth, by decreasing the weight placed on the two-
way blend of national and regional growth rates when updating an ACO's

[[Page 46194]]

historical benchmark for each performance year in the ACO's agreement 
period.
    Although requested by some commenters, we decline to consider an 
approach that would limit the impact of prospective HCC risk score 
decreases at this time. As we have described in past rulemaking (83 FR 
68011), we remain concerned that such approach would encourage 
favorable risk selection. If ACOs seek to attract low-cost 
beneficiaries or avoid high-cost beneficiaries, they could lower their 
performance year expenditures without any corresponding adjustment to 
their benchmark due to the cap on negative prospective HCC risk 
adjustments. We continue to believe that this effect would be 
detrimental to medically complex patients, who may miss the opportunity 
to receive better coordinated care through an ACO, as well as to the 
Medicare Trust Funds. We also decline to consider an approach that 
would impose a direct cap on risk score growth in an ACO's regional 
service area, as requested by some commenters as we are concerned that 
such an approach would create adverse incentives for coding behavior, 
especially for ACOs that are highly penetrated in their regional 
service areas. Currently, ACOs that are highly penetrated in their 
regional service area have a disincentive to engage in coding 
initiatives, as it could increase risk score growth in their regional 
service area and potentially decrease the value of the regional 
component of their update factor. Capping risk score growth in an ACO's 
regional service area could change the incentives and encourage ACOs to 
engage in coding initiatives.
    We propose to revise the regulations governing risk adjustment 
under the BASIC track and the ENHANCED track at Sec.  425.605(a)(1) and 
Sec.  425.610(a)(2), respectively, to reflect the proposed 
modifications to the risk adjustment methodology.
    We seek comment on the proposed changes to the risk adjustment 
methodology for agreement periods beginning on or after January 1, 
2024. While we believe that the modifications that we are proposing to 
the program's risk adjustment methodology in conjunction with other 
policies we are proposing in this proposed rule would provide the best 
balance between addressing concerns raised by interested parties and 
limiting incentives for coding intensity and risk selection, we also 
seek comment on the two alternatives considered. We will consider the 
comments received on these alternative options along with the comments 
on our proposed changes to the risk adjustment methodology, and may 
consider adopting one of these alternatives in place of the proposed 
approach if we conclude that it would better address the concerns with 
the current risk adjustment methodology.
f. Increased Opportunities for Low Revenue ACOs to Share in Savings
(1) Background
    In the November 2011 final rule (76 FR 67927 through 67929), we 
explained that a goal of the Shared Savings Program is to use a portion 
of the savings (the difference between the ACO's actual expenditures 
and the benchmark) to encourage and reward participating ACOs for 
coordinating the care for an assigned beneficiary population in a way 
that controls the growth in Medicare expenditures for that patient 
population while also meeting the established quality performance 
standards. However, we also acknowledged that observed savings can also 
occur as a result of normal year-to-year variations in Medicare 
beneficiaries' claims expenditures in addition to the ACO's activities. 
Thus, even if an ACO engages in no activities to improve the quality 
and efficiency of the services it delivers, in certain cases, 
differences between the benchmark expenditures and assigned patients' 
expenditures would be observed during some performance periods merely 
because of such normal variation. Consequently, section 
1899(d)(1)(B)(i) of the Act requires us to specify an MSR to account 
for the normal variation in expenditures, based upon the number of 
Medicare FFS beneficiaries assigned to the ACO. As we stated in the 
November 2011 final rule, the MSR should be set in a way that gives us 
some assurance that the ACO's performance is a result of its 
interventions, not normal variation in expenditures. However, we also 
do not want an outcome where savings that have been earned are not 
recognized.
    Establishing an MSR on the basis of standard inferential statistics 
that take into account the size of an ACO's beneficiary population 
provides confidence that, once the savings achieved by the ACO exceed 
the MSR, the change in expenditures represents actual performance 
improvements by the ACO as opposed to normal variations. There are 
several policy implications associated with the methodology used to set 
the MSR. A higher MSR would provide greater confidence that the shared 
savings amounts reflect real quality and efficiency gains, and offer 
greater protection to the Medicare Trust Funds. However, due to the 
larger barrier to achieving savings, a higher MSR could also discourage 
potentially successful ACOs, especially physician-organized ACOs and 
smaller ACOs in rural areas, from participating in the program. In 
contrast, a lower MSR would encourage more potential ACOs to 
participate in the program, but would also provide less confidence that 
shared saving amounts are a result of improvements in quality and 
efficiency made by an ACO. In the original rulemaking establishing the 
Shared Savings Program, we stated that we believed that the most 
appropriate policy concerning determination of the ``appropriate 
percent'' for the MSR would achieve a balance between the advantages of 
making incentives and rewards available to successful ACOs and prudent 
stewardship of the Medicare Trust Funds. In the November 2011 final 
rule, we finalized an approach wherein the MSR and MLR are calculated 
as a percentage of the ACO's updated historical benchmark (see 
Sec. Sec.  425.604(b) (Track 1), 425.606(b) (Track 2)).
    In the June 2015 final rule, we finalized an approach to offer 
Track 2 ACOs and ACOs in the new Track 3 (subsequently renamed the 
ENHANCED track) the opportunity to select the MSR/MLR that will apply 
for the duration of the ACO's 3-year agreement period from several 
symmetrical MSR/MLR options (80 FR 32769 through 32771, and 80 FR 32779 
and 32780; Sec. Sec.  425.606(b)(1)(ii) and 425.610(b)(1)). We 
explained our belief that offering ACOs a choice of MSR/MLR will 
encourage ACOs to move to two-sided risk, and that ACOs are best 
positioned to determine the level of risk they are prepared to accept. 
For instance, ACOs that are more hesitant to enter a performance-based 
risk arrangement may choose a higher MSR/MLR, to have the protection of 
a higher threshold before the ACO would become liable to repay shared 
losses, thus mitigating downside risk, although the ACO would in turn 
be required to meet a higher threshold before being eligible to receive 
shared savings. ACOs that are comfortable with a lower threshold of 
protection from risk of shared losses may select a lower MSR/MLR to 
benefit from a corresponding lower threshold for eligibility for shared 
savings. We also explained our belief that applying the same MSR/MLR 
methodology in both of the risk-based tracks reduces complexity for 
CMS' operations and establishes more equal footing between the risk 
models. ACOs participating in the Track 1+ Model were also allowed

[[Page 46195]]

the same choice of MSR/MLR to be applied for the duration of the ACO's 
agreement period under the Track 1+ Model.\269\
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    \269\ Refer to the Medicare ACO Track 1+ Model Participation 
Agreement, section V, available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Downloads/track-1plus-model-par-agreement.pdf.
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    ACOs applying to a two-sided model (Track 2, Track 3 or the Track 
1+ Model) could select from the following options:
    <bullet> Zero percent MSR/MLR.
    <bullet> Symmetrical MSR/MLR in a 0.5 percent increment between 
0.5-2.0 percent.
    <bullet> Symmetrical MSR/MLR that varies based on the ACO's number 
of assigned beneficiaries according to the methodology established 
under Sec.  425.604(b) for Track 1. The MSR is the same as the MSR that 
would apply in the one-sided model, and the MLR is equal to the 
negative MSR.
    In the December 2018 final rule, we finalized policies governing 
the MSR/MLR for ACOs in the BASIC track at Sec.  425.605(b). Under the 
final policies, ACOs in a one-sided model of the BASIC track's glide 
path have a variable MSR based on the number of beneficiaries assigned 
to the ACO (Sec.  425.605(b)(1)). The variable MSR (ranging from 3.9 
percent for ACOs with 5,000 assigned beneficiaries to 2.0 percent for 
ACOs with 60,000 or more assigned beneficiaries) is determined using 
the same methodology that was used for Track 1. ACOs in a two-sided 
model of the BASIC track are able to choose among the MSR/MLR options 
that are available to ACOs in the ENHANCED track. ACOs participating 
under Level A or B of the BASIC track's glide path will choose an MSR/
MLR, ranging from zero to 2 percent (in 0.5 percent increments), or 
that is variable based on number of beneficiaries assigned to the ACO, 
before the start of their first performance year in a two-sided model 
(Sec.  425.605(b)(2)(i)). This selection will occur before the ACO 
enters Level C, D or E of the BASIC track's glide path, depending on 
whether the ACO is automatically transitioned to a two-sided model 
(Level C or E) or elects to more quickly transition to a two-sided 
model within the glide path (Level C, D, or E), and will be in effect 
for the duration of the agreement period that the ACO is under two-
sided risk (Sec.  425.605(b)(2)(ii)).
    In addition to the MSR/MLR, we also use an ACO's quality score as 
part of the determination of eligibility for and calculation of shared 
savings and shared losses. In the CY 2021 PFS final rule, we adopted a 
new regulation at Sec.  425.512(a) to reflect the new quality 
performance requirements under the Shared Savings Program for 
performance year 2021 and subsequent performance years. For performance 
years beginning on January 1, 2021, and subsequent performance years, 
if the ACO meets the quality performance standard established under 
Sec.  425.512, the ACO will share in savings at the maximum sharing 
rate based on the ACO's track/level of participation (refer to Table 
66). The final sharing rate is applied to an ACO's savings on a first 
dollar basis up to the applicable performance payment limit, expressed 
as a percentage of the ACO's updated benchmark.
[GRAPHIC] [TIFF OMITTED] TP29JY22.106

    As discussed in the November 2011 final rule and during subsequent 
rulemaking cycles, we have received comments from ACOs and other 
interested parties expressing concerns regarding the MSR/MLR 
methodology and proposing revisions. Commenters responding to the April 
2011 proposed rule \270\ expressed concern that the proposed (and later 
finalized) methodology for establishing the MSR on a sliding scale 
based on population size would disadvantage smaller ACOs, including 
ACOs likely to form in rural areas and those largely comprised of 
small- and medium-sized physician practices, and discourage their 
participation by setting too high a bar on shared savings (76 FR 67928 
and 67929). Some commenters considered the potential long-term 
consequences of this dynamic, indicating it could ultimately result in 
diminished provider competition in some markets or stifle the 
development of innovative care coordination strategies. Further, as 
other commenters indicated, smaller ACOs are likely to be in greatest 
need of additional capital to support start-up and operational 
expenses. Some commenters suggested that the MSRs that apply to smaller 
ACOs based on their number of assigned beneficiaries may make it 
impossible for these ACOs to ever share in savings.
---------------------------------------------------------------------------

    \270\ The proposed rule proposing the establishment of the 
Shared Savings Program entitled ``Medicare Program; Medicare Shared 
Savings Program: Accountable Care Organizations'' appeared in the 
April 7, 2011 Federal Register (76 FR 19528) (herein referred to as 
the ``April 2011 proposed rule'').
---------------------------------------------------------------------------

    Additionally, a number of commenters offered that other proposed 
policies under the Shared Savings Program, including, for example, the

[[Page 46196]]

rigorous quality performance standards and the requirement that all 
ACOs ultimately accept downside performance risk, are sufficient to 
ensure savings are a result of actions by ACOs and obviate the need for 
an MSR. One commenter suggested a blended approach such that if an ACO 
exceeds the 2 percent MSR, it would be eligible for a lower sharing 
rate, but would not receive the full sharing rate unless it exceeded 
its statistically adjusted MSR.
    In the December 2018 final rule (83 FR 67924 through 67928), we 
summarized commenters' responses to the proposals described in August 
2018 proposed rule related to the MSR and MLR. One commenter asked that 
CMS reconsider its proposals in order to ``lessen restrictions and 
remove barriers to participation in risk sharing arrangements,'' but 
did not specify which aspects of the MSR/MLR proposals they believed to 
be restrictive or to create barriers. A number of commenters supported 
a combination of a lower MSR and higher sharing rates for low revenue 
ACOs participating in the BASIC track and offered several different 
alternatives. Commenters explained that combining a lower MSR and 
higher final sharing rate was necessary to ensure there are sufficient 
and attainable incentives to support ACOs' efforts to improve quality 
and lower cost, to provide early returns on investments as well as 
predictability of savings and the financial support ACOs need to ensure 
successful participation, and to incentivize low revenue and 
physician[hyphen]led ACOs to participate in the redesigned 
participation options under the Shared Savings Program.
    While it remains important to ensure performance payments are not 
based on normal expenditure fluctuations, we believe modification to 
our MSR policy would provide payments to ACOs with the greatest need 
for shared savings, in particular smaller, rural ACOs which tend to be 
less capitalized, allowing for investments in care redesign and quality 
improvement activities. This modification would also align with the 
other changes we are proposing to the participation options and 
financial methodologies under the Shared Savings Program to encourage 
participation by new ACOs and ACOs that focus on underserved 
populations, such as the proposal to offer AIPs to new low revenue ACOs 
joining the BASIC track as described in section III.G.2. of this 
proposed rule.
(2) Proposed Revisions
    We are proposing to use our authority under section 1899(i)(3) of 
the Act, for the use of other payment models, to expand the eligibility 
criteria to qualify for shared savings to enable certain low revenue 
ACOs participating in the BASIC track to share in savings even if the 
ACO does not meet the MSR as required under section 1899(d)(1)(B)(i) of 
the Act. Specifically, we are proposing to modify the relevant 
provisions of Sec.  425.605 to specify that ACOs participating in the 
BASIC track that do not meet the MSR requirement, but do meet the 
quality performance standard or the proposed alternative quality 
performance standard under Sec.  425.512 and otherwise maintain 
eligibility to participate in the Shared Savings Program, would qualify 
for a shared savings payment if the following criteria are met:
    <bullet> The ACO has average per capita Medicare Parts A and B fee-
for-service expenditures below the updated benchmark.
    <bullet> The ACO is a low revenue ACO as defined in Sec.  425.20 at 
the time of financial reconciliation for the relevant performance year.
    <bullet> The ACO has at least 5,000 assigned beneficiaries at the 
time of financial reconciliation for the relevant performance year.
    Eligible ACOs that meet the quality performance standard required 
to share in savings at the maximum sharing rate would receive half of 
the maximum sharing rate for their level of participation (20 percent 
instead of 40 percent under Levels A and B, and 25 percent instead of 
50 percent under Levels C, D, and E). For eligible ACOs that do not 
meet the quality performance standard required to share in savings at 
the maximum sharing rate but meet the proposed alternative quality 
performance standard, the sharing rate would be further adjusted 
according to the proposal described in section III.G.4.b. of this 
proposed rule, which would reinstate a sliding scale approach for 
determining shared savings. This calculation would use an ACO's quality 
performance score, which would reflect the inclusion of health equity 
adjustment bonus points as proposed in section III.G.4.b.(7) of this 
proposed rule, if finalized. A numerical example is provided in Table 
67.

[[Page 46197]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.107

    This approach would apply to low revenue ACOs entering an agreement 
period in the BASIC track beginning January 1, 2024, and in subsequent 
years. High revenue ACOs in the BASIC track, ACOs below 5,000 assigned 
beneficiaries at the time of financial reconciliation, and ACOs in the 
ENHANCED track would not be eligible for this option. We are proposing 
that this policy would apply to all ACOs meeting the criteria, 
including new, renewing, and re-entering ACOs, in order to provide 
incentives both for new ACOs to join the Shared Savings Program and for 
existing ACOs to remain in the program. This differs from the proposed 
eligibility criteria for AIPs listed in section III.G.2.a.(2) of this 
proposed rule, which are limited to ACOs that are new to the Shared 
Savings Program with the intent of lowering barriers to entry. Although 
as described in section III.G.2.b.(2) of this proposed rule we are 
proposing to revise our regulations to permit otherwise eligible ACOs 
that are inexperienced with performance-based risk Medicare ACO 
initiatives to elect to participate in one, 5-year agreement period 
under a one-sided model of the BASIC track's glide path regardless of 
revenue status, we believe it would be appropriate to limit this 
proposed policy change to the low revenue ACOs in the BASIC track in 
order to direct the payments to ACOs with the greatest need for 
capital, in particular smaller, rural ACOs which tend to be less 
capitalized, allowing for investments in care redesign and quality 
improvement activities. We do not believe it is necessary or 
appropriate to extend this opportunity to high revenue ACOs as these 
ACOs, which tend to include institutional providers and are typically 
larger and better capitalized, have the potential to exert more 
influence, direction, and coordination over the full continuum of care, 
and thus have a greater potential to achieve the level of savings 
necessary to meet the MSR. We believe that by retaining the requirement 
that high revenue ACOs meet or exceed their MSR, we will drive more 
meaningful systematic change by the ACOs that have the greatest 
potential to achieve significant change in spending. Furthermore, we 
note that our proposal to exclude ACOs with fewer than 5,000 assigned 
beneficiaries at the time of financial reconciliation aligns with the 
requirement under section 1899(b)(2)(D) of the Act and Sec.  425.110 
that an ACO have at least 5,000 assigned beneficiaries and guards 
against the heightened risk--absent an MSR--that any savings are the 
result of random variation.
    We simulated the impact of this proposal using financial 
reconciliation data from performance years 2020, 2019, and 2019A.\271\ 
There were 80, 109, and 60 positive within corridor ACOs (that is, ACOs 
that had performance year expenditures below benchmark expenditures but 
did not meet the MSR and did not receive shared savings payments) in 
each year, respectively. Of these positive within corridor ACOs, 35 
ACOs in 2020 and 2019 and 18 ACOs in 2019A would have met the criteria 
described in this section and received a shared savings payment under 
our proposed policy change. On average, the positive within corridor 
ACOs that would benefit from the proposed policy change had fewer 
assigned beneficiaries in all 3 performance years and a larger share of 
these ACOs were classified as rural in performance years 2020 and 
2019.\272\ We believe by offering additional opportunities for low 
revenue ACOs to share in savings, this proposed approach could increase 
participation in the Shared Savings Program by providing an incentive 
for new ACOs to join the program and for existing ACOs to remain in the 
program. In addition, this proposal would enable low revenue ACOs, 
which are most in need of additional capital, to make investments in 
care redesign and quality improvement activities, and would also 
recognize incremental improvements in care by ACOs that receive AIPs.
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    \271\ Performance year 2019 refers to both the 12-month 
performance year from January 1, 2019 through December 31, 2019 and 
the 6-month performance year from January 1, 2019 through June 30, 
2019. Performance year 2019A refers to the 6-month performance year 
from July 2, 2019 through December 31, 2019.
    \272\ For this analysis, ACOs were classified as rural if the 
plurality of their assigned beneficiaries resided in either 
micropolitan or noncore counties as defined by The United States 
Census Bureau and the Office of Management and Budget (OMB).
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    To exercise our authority under section 1899(i) of the Act, we must 
determine that a payment model under which certain low revenue ACOs 
participating in the BASIC track may

[[Page 46198]]

qualify for shared savings payments even when the MSR as required under 
1899(d)(1)(B)(i) is not met, will improve the quality and efficiency of 
items and services furnished under the Medicare program, and that 
program expenditures under the alternative methodology would be equal 
to or lower than those that would result under the statutory payment 
model. By supporting expanded and sustained participation by ACOs in 
the Shared Savings Program, we believe this proposed approach would 
allow for lower growth in Medicare FFS expenditures. We also believe 
this proposed approach would lead to improvement in the quality of care 
furnished to Medicare FFS beneficiaries because participating ACOs 
would have an incentive to perform well on quality measures in order to 
maximize the shared savings they may receive. Further, the proposed 
approach would provide additional capital to enable low revenue ACOs to 
make investments in care redesign and quality improvement activities, 
potentially leading to improvements in the quality and efficiency of 
items and services furnished to Medicare FFS beneficiaries. We also 
believe this proposal, along with many of the other proposals in this 
proposed rule, would expand participation among ACOs serving higher 
cost beneficiaries for whom the savings potential is greater (relative 
to ACOs serving lower cost beneficiaries that may already find the 
current regional adjustment methodology an adequate incentive to 
participate in the program), and among low revenue ACOs, which have 
historically performed well in the program. For example, in performance 
year 2018, about 49 percent of low revenue Shared Savings Program ACOs 
shared in savings compared to 28 percent of high revenue ACOs. These 
proportions were 63 percent and 40 percent in PY 2019, 69 percent and 
40 percent in PY 2019-A, and 75 percent and 59 percent in PY 2020.\273\ 
Lastly, as discussed in the Regulatory Impact Analysis (see section 
VII. of this proposed rule), this proposed change is not expected to 
result in a situation in which all policies adopted under the authority 
of section 1899(i) of the Act, when taken together, result in more 
spending under the program than would have resulted under the statutory 
payment methodology in section 1899(d) of the Act.
---------------------------------------------------------------------------

    \273\ Refer to Data.CMS.gov, Performance Year Financial and 
Quality Results, available at https://data.cms.gov/medicare-shared-savings-program/performance-year-financial-and-quality-results/data.
---------------------------------------------------------------------------

    We are proposing to amend the regulation at Sec.  425.605, which 
governs calculation of shared savings and shared losses under the BASIC 
track, to specify an exception to the MSR requirement for eligible ACOs 
participating in an agreement period beginning on January 1, 2024, and 
in subsequent years, in a new provision at Sec.  425.605(h). We are 
also proposing modifications to the provisions in Sec.  425.605(d)(1) 
specifying the calculation of the final sharing rate for the different 
levels of the BASIC track. Further we are proposing conforming changes 
to Sec. Sec.  425.100(b)(1), 425.605(a), 425.605(b)(3), and 
425.605(c)(2) to reflect this exception to the MSR requirement.
    We seek comment on this proposal to expand the criteria ACOs can 
meet to qualify for shared savings under the BASIC track.
g. Ongoing Consideration of Concerns About the Impact of the Public 
Health Emergency (PHE) for COVID-19 on ACOs' Expenditures
    On January 31, 2020, Health and Human Services Secretary, Alex M. 
Azar II, declared a PHE for the United States to aid the nation's 
healthcare community in responding to COVID-19 (hereafter referred to 
as the PHE for COVID-19). On March 11, 2020, the World Health 
Organization (WHO) publicly characterized COVID-19 as a pandemic. On 
March 13, 2020, the President of the United States declared the COVID-
19 outbreak a national emergency. The term ``Public Health Emergency,'' 
as defined in the regulation at Sec.  400.200, identifies the PHE 
determined to exist nationwide as of January 27, 2020, by the Secretary 
under Section 319 of the Public Health Service Act on January 31, 2020, 
as a result of confirmed cases of COVID-19, including any subsequent 
renewals. This determination was, as of this publication, subsequently 
renewed on April 21, 2020, July 23, 2020, October 2, 2020, January 7, 
2021, April 15, 2021, July 19, 2021, October 15, 2021, January 14, 
2022, and April 12, 2022. In the March 31st COVID-19 IFC (85 FR 19267 
and 19268) and the May 8th COVID-19 IFC (85 FR 27573 through 27587) we 
adopted several modifications to policies under the Shared Savings 
Program in response to the PHE.
    In the March 31st COVID-19 IFC (85 FR 19267 and 19268), we removed 
the restriction which prevented the application of the Shared Savings 
Program extreme and uncontrollable circumstances (EUC) policy for 
disasters that occur during the quality reporting period if the 
reporting period is extended, to offer relief under the Shared Savings 
Program to all ACOs that may have been unable to completely and 
accurately report quality data for 2019 due to the PHE for COVID-19.
    In the May 8th COVID-19 IFC (85 FR 27573 through 27587), we 
modified certain Shared Savings Program policies to: (1) allow ACOs 
whose current agreement periods expired on December 31, 2020, the 
option to extend their existing agreement period by 1 year; (2) allow 
ACOs in the BASIC track's glide path the option to elect to maintain 
their current level of participation for PY 2021; (3) adjust certain 
program calculations to remove payment amounts for episodes of care for 
treatment of COVID-19; and (4) expand the definition of primary care 
services for purposes of determining beneficiary assignment to include 
telehealth codes for virtual check-ins, e-visits, and telephonic 
communication.
    As discussed in the May 8th COVID-19 IFC (85 FR 27578 through 
27582) and in accordance with Sec.  425.611, all Parts A and B fee-for-
service (FFS) payment amounts for an episode of care for treatment of 
COVID-19 are excluded from the following Shared Savings Program 
calculations:
    <bullet> Calculation of Medicare Parts A and B FFS expenditures for 
an ACO's assigned beneficiaries for all purposes including the 
following: Establishing, adjusting, updating, and resetting the ACO's 
historical benchmark and determining performance year expenditures.
    <bullet> Calculation of FFS expenditures for assignable 
beneficiaries as used in determining county-level FFS expenditures and 
national Medicare FFS expenditures.
    <bullet> Calculation of Medicare Parts A and B FFS revenue of ACO 
participants for purposes of calculating the ACO's loss recoupment 
limit under the BASIC track as specified in Sec.  425.605(d).
    <bullet> Calculation of total Medicare Parts A and B FFS revenue of 
ACO participants and total Medicare Parts A and B FFS expenditures for 
the ACO's assigned beneficiaries for purposes of identifying whether an 
ACO is a high revenue ACO or low revenue ACO, as defined under Sec.  
425.20, and determining an ACO's eligibility for participation options 
according to Sec.  425.600(d).
    <bullet> Calculation or recalculation of the amount of the ACO's 
repayment mechanism arrangement according to Sec.  425.204(f)(4).
    As part of the March 2020 Coronavirus Aid, Relief, and Economic 
Security (CARES) Act, Medicare sequestration adjustments were

[[Page 46199]]

temporarily suspended. This suspension has been further extended 
through subsequent legislation. Most recently, the Protecting Medicare 
and American Farmers from Sequester Cuts Act extended the suspension 
through March 31, 2022. From April 1, 2022, to June 30, 2022, 
sequestration will be 1 percent. Starting July 1, 2022, sequestration 
will increase to 2 percent. When full Medicare sequestration is in 
effect, we are required to make a 2 percent reduction to shared savings 
payments that is applied before applying an ACO's shared savings limit. 
As a result of the suspension of sequestration in 2020 and 2021, shared 
savings payments made in 2020 and 2021 were roughly 2 percent higher 
than they would have been otherwise for ACOs that did not earn shared 
savings in excess of their shared savings limit.
    In December 2017, we issued an interim final rule with comment 
period entitled ``Medicare Program; Medicare Shared Savings Program: 
Extreme and Uncontrollable Circumstances Policies for Performance Year 
2017'' (hereinafter referred to as the ``December 2017 IFC''), which 
appeared in the Federal Register on December 26, 2017 (82 FR 60912 
through 60919). In the December 2017 IFC, we established a policy for 
mitigating shared losses for Shared Savings Program ACOs participating 
in a performance-based risk track, when the ACO's assigned 
beneficiaries were located in geographic areas that were impacted by 
extreme and uncontrollable circumstances, such as hurricanes, 
wildfires, or other triggering events, during PY 2017. In the CY 2019 
PFS final rule (83 FR 59707), we extended the extreme and 
uncontrollable circumstances policy finalized for PY 2017 to PY 2018 
and subsequent performance years. We apply determinations made under 
the Quality Payment Program with respect to whether an extreme and 
uncontrollable circumstance has occurred and the affected areas. 
Further, we have sole discretion to determine the time period during 
which an extreme and uncontrollable circumstance occurred and the 
percentage of the ACO's assigned beneficiaries residing in the affected 
areas.
    The Secretary's declaration of the PHE for COVID-19 in January 2020 
triggered the Medicare Shared Savings Program's Extreme and 
Uncontrollable Circumstances Policy. The extreme and uncontrollable 
circumstances of the PHE for COVID-19 began in January 2020, and will 
apply nationwide for the duration of the PHE for COVID-19. As set forth 
in Sec. Sec.  425.605(f) (applicable to ACOs in two-sided models of the 
BASIC track) and 425.610(i) (applicable to ACOs in the ENHANCED track), 
we reduce the amount of an ACO's shared losses by an amount determined 
by multiplying the shared losses by the percentage of the total months 
in the performance year affected by an extreme and uncontrollable 
circumstance, and the percentage of the ACO's assigned beneficiaries 
who reside in an area affected by an extreme and uncontrollable 
circumstance. The PHE for COVID-19 was considered an extreme and 
uncontrollable circumstance that applied to all counties in the United 
States for the entirety of PY 2020 and PY 2021, and no ACOs were liable 
for shared losses for those performance years as any such losses were 
fully mitigated by the adjustment for extreme and uncontrollable 
circumstances.
    As a result of forgoing the 2021 application cycle for new 
applications, agreement periods starting in 2022 are the first 
agreement periods for which 2020 and 2021 serve as benchmark years for 
ACOs in the Shared Savings Program. Interested parties have expressed 
concern that the policy adjustments made in response to the PHE for 
COVID-19 may not fully address the potential for relatively lower 
expenditures resulting from lower utilization by non-COVID-19 patients. 
For example, in 2020, Parts A and B FFS expenditures decreased by 7 
percent nationally compared to 2019. This decrease in utilization and 
expenditures could result in relatively lower benchmark year 
expenditures for ACOs in agreement periods beginning in 2022, 2023 or 
2024 for which 2020 and/or 2021 are benchmark years. Several interested 
parties have suggested alternative approaches to establishing 
benchmarks for ACOs for which 2020 and 2021 are benchmark years, 
including using alternative years (such as 2017, 2018, and 2019), or 
differently weighting COVID-19 affected years in the calculation of 
financial benchmarks. The impact of COVID-19 was not uniform for all 
areas of the country as surges occurred in different geographic areas 
at different times. Removing specific years from benchmark calculations 
would have varied effects on different geographic areas depending on 
when COVID-19 had the largest impact in those areas. We believe such 
approaches could produce mixed results; one analysis performed by the 
Institute for Accountable Care \274\ estimated that 55 percent of ACOs 
would have lower benchmarks if 2020 were dropped from the benchmark 
period.
---------------------------------------------------------------------------

    \274\ Institute for Accountable Care. Analysis of Policy Options 
to Reduce the Impact of COVID-19 on ACO Benchmarks. October 13, 
2021. Available at https://www.institute4ac.org/covid-19-aco-benchmarks-analysis/.
---------------------------------------------------------------------------

    OACT's analysis of current data indicates that ACOs exhibiting 
sharp declines in spending in 2020 tend to show rebounds in spending in 
2021 such that historical benchmarks averaged across a base period 
including both 2020 and 2021 would appear to represent a reasonable 
basis from which to update ACO spending targets going forward. Due to 
the rebound in 2021 national expenditures, which increased by roughly 
8.4 percent between 2021 Q1 (lowest observed expenditures since the PHE 
for COVID-19 began) and 2021 Q4, we believe that the current blended 
national-regional trend and update factors will be sufficient to 
address and mitigate the impact of the start of the PHE for COVID-19 on 
benchmark year expenditures. ACOs that did not experience such an 
increase in spending between 2021 Q1 and 2021 Q4 would still be subject 
to a regional adjustment that could beneficially impact their benchmark 
determination. The proposal described in section III.G.5.c.(3) of this 
proposed rule to utilize a three-way blend of the ACPT/national-
regional growth rates to update benchmarks would further mitigate any 
potential adverse effects of the PHE for COVID-19 on historical 
benchmarks while also protecting against unanticipated variation in 
performance year expenditures and utilization resulting from a future 
PHE. We seek comment on this analysis regarding the impact of the PHE 
for COVID-19 on Shared Savings Program ACOs' expenditures. In addition, 
we will continue to monitor the impact of the PHE for COVID-19 to 
determine whether any further changes may be necessary to account for 
the effects of this PHE or future PHEs.
h. Proposed Supplemental Payment for Indian Health Service and Tribal 
Hospitals and Hospitals Located in Puerto Rico
    As discussed in the December 2018 final rule (83 FR 67856 and 
67857), we exclude Indirect Medical Education (IME), Disproportionate 
Share Hospital (DSH) and uncompensated care payments from ACOs' 
assigned and assignable beneficiary expenditure calculations because we 
do not wish to incentivize ACOs to avoid the types of providers that 
receive these payments, and for other reasons described in earlier 
rulemaking (76 FR 67919 through 67922, and 80 FR 32796 through 32799).

[[Page 46200]]

In the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28396 through 28398), 
we are proposing to use our exceptions and adjustments authority under 
section 1886(d)(5)(I) of the Act to establish a new supplemental 
payment for IHS/Tribal hospitals and hospitals located in Puerto Rico, 
beginning in FY 2023. As explained in the FY 2023 IPPS/LTCH PPS 
proposed rule, we have determined that this supplemental payment is 
necessary to avoid causing undue long-term financial disruption to IHS/
Tribal hospitals and hospitals located in Puerto Rico as a result of a 
proposed change in the data used to determine uncompensated care 
payments for these hospitals beginning in FY 2023.
    In order to align Shared Savings Program policies with updates made 
to Medicare FFS payment policies, we are proposing to exclude this 
supplemental payment for IHS/Tribal Hospitals and hospitals located in 
Puerto Rico from the determination of Medicare Parts A and B 
expenditures for purposes of calculations under the Shared Savings 
Program, if the proposal to establish this new supplemental payment is 
finalized in the FY2023 IPPS/LTCH PPS final rule. Further, for 
consistency with our current approach of using total revenue, including 
IME, DSH and uncompensated care payments, in Shared Savings Program 
calculations of ACO participant revenue,\275\ we propose to similarly 
include the proposed supplemental payment to IHS/Tribal hospitals and 
hospitals located in Puerto Rico in such calculations for the 
performance year beginning January 1, 2023, and subsequent performance 
years. More specifically, ACO participant revenue is used in 
determining whether an ACO is a low revenue ACO or high revenue ACO as 
defined in Sec.  425.20, and in determining the revenue-based loss 
sharing limits under two-sided models of the BASIC track's glide path 
in accordance with Sec.  425.605. Because this proposed new 
supplemental payment for IHS/Tribal hospitals and hospitals located in 
Puerto Rico is intended to prevent disruptions due to a change in the 
uncompensated care payment methodology for these hospitals and uses 
these hospitals' FY 2022 uncompensated care payments as the starting 
point for this calculation, we believe that it should be treated 
consistently with how we currently treat uncompensated care payments in 
Shared Savings Program calculations. We seek comment on this proposed 
change to the determination of Medicare Parts A and B expenditures for 
purposes of calculations under the Shared Savings Program, including 
the determination of benchmark and performance year expenditures, as 
well as the calculation of ACO participant revenue.
---------------------------------------------------------------------------

    \275\ In the December 2018 final rule, see for example the 
discussion of the calculation of ACO participant revenue as used in 
the determining the revenue-based loss sharing limits under the 
BASIC track (83 FR 67856) and the determination of whether an ACO 
qualifies as a low revenue ACO or a high revenue ACO (83 FR 67875).
---------------------------------------------------------------------------

    In the November 2011 final rule (76 FR 67919), we explained that 
section 1899(d) of the Act provides flexibility to adjust the benchmark 
for IME and DSH payments, and certain other adjustments to Parts A and 
B payments. Section 1899(d)(1)(B)(ii) of the Act states, among other 
things, that the benchmark shall be adjusted for beneficiary 
characteristics and such other factors as the Secretary determines 
appropriate. However, when it comes to performance year expenditures, 
section 1899(d)(1)(B)(i) of the Act provides authority to adjust 
expenditures in the performance period for beneficiary characteristics, 
but does not provide authority to adjust for ``other factors.'' Thus, 
we noted that while we could make some adjustments to the benchmark 
pursuant to section 1899(d)(1)(B)(ii) of the Act, to exclude certain 
payments, we could not make similar adjustments in our calculation of 
performance year expenditures. In the November 2011 final rule (76 FR 
67921 and 67922), we adopted an alternate payment methodology that 
excluded IME and DSH payments from ACO benchmark and performance year 
expenditures, as authorized by section 1899(i) of the Act. We have 
maintained this approach to excluding IME and DSH payments across all 
Shared Savings Program calculations of benchmark and performance year 
expenditures, as specified in 42 CFR part 425, subpart G.
    Consistent with our longstanding policy with respect to excluding 
IME and DSH payments from benchmarking and performance year 
expenditures, we are proposing to use our authority under section 
1899(i)(3) of the Act to use other payment models to remove the 
proposed supplemental payment for IHS/Tribal hospitals and hospitals 
located in Puerto Rico from performance year expenditures. To exercise 
our authority under section 1899(i)(3) of the Act to use other payment 
models, we must demonstrate that the payment model would improve the 
quality and efficiency of items and services furnished under the 
Medicare program and that program expenditures under the alternative 
methodology would be equal to or lower than those that would result 
under the statutory payment model. Because we are proposing to exclude 
the supplemental payment from benchmark year expenditures using our 
authority under section 1899(d)(1)(B)(ii) of the Act, removing this 
payment from performance year expenditures would ensure greater parity 
between benchmark and performance year expenditure calculations. 
Further, by removing the proposed supplemental payment for IHS/Tribal 
hospitals and hospitals located in Puerto Rico from performance year 
expenditures we can reward more accurately actual decreases in 
unnecessary utilization of health care services. Excluding supplemental 
payments for IHS/Tribal hospitals and hospitals located in Puerto Rico 
from performance year expenditure calculations ensures these payments 
do not make it more challenging for an ACO to generate shared savings 
as compared to its updated historical benchmark. We also note that, for 
ACOs participating under two-sided models of the BASIC track's glide 
path, excluding the supplemental payment from performance year 
expenditures may help to mitigate the amount of losses generated by an 
ACO, although including the supplemental payment in the calculation of 
ACO participant revenue used to determine the revenue-based loss 
sharing limit may result in a relatively higher loss sharing limit used 
in determining an ACO's shared losses.
    Considering the balance of these factors we believe that the 
proposed approach could help ensure participation of IHS/Tribal 
hospitals and hospitals located in Puerto Rico in ACOs, and their 
engagement in the accountable care model. In turn, this could result in 
Medicare beneficiaries receiving higher quality, better coordinated and 
more cost-efficient care in these settings. We also do not expect that 
excluding the proposed new supplemental payment for IHS/Tribal 
hospitals and hospitals located in Puerto Rico from performance year 
expenditures will result in greater payments to ACOs than would 
otherwise have been made if this proposed new supplemental payment were 
included. We will continue to reexamine this policy in the future to 
ensure that the requirement under section 1899(i)(3)(B) of the Act that 
an alternative payment model not result in additional program 
expenditures continues to be satisfied. In the event that we later 
determine that the payment model established under section 1899(i)(3) 
of the Act no longer meets this requirement, we would

[[Page 46201]]

undertake additional notice and comment rulemaking to make adjustments 
to the payment model to assure continued compliance with the statutory 
requirements.
    We propose to modify the provisions of the existing regulations 
describing calculations of benchmark year and performance year 
expenditures to incorporate a reference to the exclusion of the 
proposed new supplemental payment for IHS/Tribal hospitals and 
hospitals located in Puerto Rico, if finalized, for the performance 
year beginning January 1, 2023, and subsequent performance years, and 
to include this exclusion in proposed new sections of the regulations 
as follows:
    <bullet> Within Sec.  425.601(a)(1)(i) and the proposed new section 
of the regulations at Sec.  425.652(a)(1)(i), specifying the 
calculation of payment amounts included in Parts A and B FFS claims 
using a 3-month claims run out with a completion factor, for computing 
per capita Medicare Part A and B benchmark expenditures for 
beneficiaries that would have been assigned to ACO in any of the 3 most 
recent years prior to the start of the agreement period.
    <bullet> Within Sec.  425.601(c)(2)(i) and the proposed new section 
of the regulations at Sec.  425.654(a)(2)(i), specifying the 
calculation of county-level assignable beneficiary expenditures using 
payment amounts included in Parts A and B FFS claims with dates of 
service in the 12-month calendar year for the relevant benchmark or 
performance year, using a 3-month claims run out with a completion 
factor.
    <bullet> Within Sec.  425.605(a)(5)(i), describing the calculation 
of performance year expenditures under the BASIC track using payment 
amounts included in Medicare Parts A and B FFS claims for the ACO's 
assigned beneficiary population for the performance year.
    <bullet> Within Sec.  425.610(a)(6)(i), describing the calculation 
of performance year expenditures under the ENHANCED track using payment 
amounts included in Medicare Parts A and B FFS claims for the ACO's 
assigned beneficiaries for the performance year.
    <bullet> Within the proposed new section of the regulations at 
Sec.  425.660(b)(1)(i), describing the calculation of the ACPT.
i. Organization and Structure of the Regulations Text Within 42 CFR 
Part 425 Subpart G; Technical and Conforming Changes
    Since the Shared Savings Program was established in 2012, the 
benchmarking methodology has been specified in several sections of the 
Shared Savings Program regulations within 42 CFR part 425, subpart G. 
Section 425.601 specifies the methodology for establishing, adjusting, 
and updating the benchmark for agreement periods beginning on July 1, 
2019, and in subsequent years. Sections 425.602 and 425.603 specify the 
benchmarking methodology applicable to earlier agreement periods for 
new and renewing ACOs, respectively. To date, we have tended to include 
the entirety of the benchmarking methodology applicable to ACOs, based 
on their agreement period start date, within a single section of the 
regulations. However, there are currently a limited number of unused 
sections within the range between Sec. Sec.  425.600 and 425.613, and 
no remaining sections in sequential order immediately following the 
existing benchmarking sections.
    A variety of other provisions are contained within subpart G. 
Specifically, Sec.  425.600 specifies selection of risk models. The 
methodology for calculation of shared savings or losses (as applicable) 
under each of the Shared Savings Program's financial models is 
specified within Sec. Sec.  425.604 (Track 1), 425.605 (BASIC track), 
425.606 (Track 2), and 425.610 (ENHANCED track). Several sections 
specify particular requirements or exceptions relating to determining 
performance for ACOs in earlier performance years: Sec.  425.608 
applied to determine first year performance for ACOs beginning their 
participation in the program on April 1 or July 1, 2012; and Sec.  
425.609 applied to determine performance for a 6-month performance year 
(or performance period) during CY 2019. Section 425.611 specifies 
adjustments to Shared Savings Program calculations to address the 
COVID-19 pandemic. Section 425.612 specifies waivers of payment rules 
and other Medicare requirements, including the SNF 3-day rule waiver, 
and Sec.  425.613 addresses expanded use of telehealth services 
furnished by physicians or other practitioners participating in 
applicable Shared Savings Program ACOs.
    We have considered how to restructure the regulations to 
incorporate the proposed modifications to the benchmarking methodology 
in this proposed rule. One consideration is that the existing 
provisions of the regulations under subpart G are referred to within 
programmatic material, including guidance and technical specifications 
documents. For continuity and clarity, we believe it is important to 
maintain the organization of the existing provisions, as opposed to 
renumbering these existing sections. We also considered the need for a 
regulations text structure that would organize the details for the 
multiple aspects of the benchmarking calculations, each of which is 
detailed and complex. Lastly, as discussed in section III.G.2. of this 
proposed rule, we are proposing to specify the policies governing the 
proposed AIPs in a new section of the regulations at Sec.  425.630. For 
these reasons, we are proposing to specify the proposed modifications 
to the benchmarking methodology for agreement periods beginning on 
January 1, 2024, and in subsequent years in a series of new regulations 
at Sec. Sec.  425.650 through 425.660. We propose the following 
organization and structure for subpart G of the regulations:
    <bullet> Reserve sections Sec. Sec.  425.614 through 425.629, prior 
to the proposed new section of the regulations at Sec.  425.630 on the 
option to receive AIPs.
    <bullet> Reserve sections Sec. Sec.  425.631 through 425.649.
    <bullet> Establish a new section of the regulations at Sec.  
425.650, generally describing the organization of the sections on the 
benchmarking methodology within 42 CFR part 425, subpart G.
    <bullet> Establish a new section of the regulations at Sec.  
425.652 which specifies the methodology for establishing, adjusting, 
and updating the benchmark for agreement periods beginning on January 
1, 2024, and in subsequent years.
    <bullet> Establish a new section of the regulations at Sec.  
425.654, which specifies the methodology for calculating county 
expenditures and regional expenditures for agreement periods beginning 
on January 1, 2024, and in subsequent years.
    <bullet> Establish a new section of the regulations at Sec.  
425.656, which specifies the methodology for calculating the regional 
adjustment to the historical benchmark for agreement periods beginning 
on January 1, 2024, and in subsequent years.
    <bullet> Establish a new section of the regulations at Sec.  
425.658, which specifies the methodology for calculating the prior 
savings adjustment to the historical benchmark for agreement periods 
beginning on January 1, 2024, and in subsequent years.
    <bullet> Establish a new section of the regulations at Sec.  
425.660, which specifies the methodology for calculating the ACPT used 
in updating the historical benchmark for agreement periods beginning on 
January 1, 2024, and in subsequent years.
    We also propose to make certain technical and conforming changes to 
the following provisions to reflect our proposal to add new regulations 
at

[[Page 46202]]

Sec. Sec.  425.652 through 425.660 to establish the benchmarking 
methodology applicable to all agreement periods starting on January 1, 
2024, and in subsequent years.
    <bullet> Under subpart C, which governs application procedures, add 
a reference to Sec.  425.652 in Sec.  425.204(g).
    <bullet> Under subpart G, which governs shared savings and losses 
calculations, do the following--
    ++ In Sec.  425.600(f)(4), add a reference to Sec.  425.656(d) in 
Sec.  425.600(f)(4)(ii) and a reference to Sec.  425.652(c) in Sec.  
425.600(f)(4)(iii);
    ++ Revise Sec.  425.601 to specify that it applies to agreement 
periods beginning on or after July 1, 2019, and before January 1, 2024;
    ++ Add references to Sec.  425.652 in Sec. Sec.  425.605(a), 
425.605(a)(2), 425.605(d)(1)(iii)(D)(2), 425.605(d)(1)(iv)(D)(2), 
425.605(d)(1)(v)(D)(2), 425.610(a), and 425.610(g);
    ++ Add reference to Sec.  425.652(a)(10) in Sec.  425.610(a)(3);
    ++ Add reference to Sec.  425.654(a) in Sec.  425.611(c)(2)(i);
    ++ Add reference to Sec.  425.652(a)(4) in Sec.  
425.611(c)(2)(ii)(A);
    ++ Add reference to Sec.  425.654(a)(3) in Sec.  
425.611(c)(2)(ii)(B);
    ++ Within Sec.  425.611(c)(2)(iii), remove the specific reference 
to 5 percent of national per capita FFS expenditures for assignable 
beneficiaries, to account for the proposed modifications to the cap on 
the regional adjustment as specified in section III.G.5.c.(5) of this 
proposed rule, and to add a reference to Sec.  425.656(c)(3), which 
refers to the cap of 5 percent of the national per capita expenditure 
amount applied to positive regional adjustments, and the cap of 1.5 
percent of the national per capita expenditure amount applied to 
negative regional adjustments for ACOs in agreement periods beginning 
on January 1, 2024, and in subsequent years; and add a reference to 
Sec.  425.652(a)(8)(iv) which refers to the cap equal to 5 percent of 
the national per capita expenditure amount that is applied in 
calculating the prior savings adjustment; and
    ++ Add references to Sec.  425.652(a)(5)(ii) (referring to the 
national component of the blended growth rates used to trend forward 
BY1 and BY2 expenditures to BY3) and Sec.  425.652(b)(2)(i) (referring 
to the national component of the blended growth rate used to update the 
benchmark) in Sec.  425.611(c)(2)(v).
    <bullet> Under subpart I, which governs the reconsideration review 
process, add a reference to Sec.  425.652 in Sec.  425.800(a)(4).
    We also propose to correct the following inadvertent errors in 
cross-references:
    <bullet> In Sec.  425.601(f)(5)(ii), remove the reference 
``paragraph (f)(4)(i) of this section'', and add in its place the 
reference ``paragraph (f)(5)(i) of this section''.
    <bullet> In Sec.  425.601(f)(5)(iv), remove the reference 
``paragraphs (f)(1) and (2) of this section'', and add in its place the 
reference ``paragraphs (f)(1) through (3) of this section''.
    Additionally, we believe it is appropriate to specify in the 
proposed new regulation at Sec.  425.656(e) a narrower set of special 
rules for determining the weights used in calculating the regional 
adjustment for certain ACOs that previously participated in the Shared 
Savings Program. In the December 2018 final rule (83 FR 68024), we 
established Sec.  425.601(e)(2)(ii) which specifies that for renewing 
or re-entering ACOs whose prior agreement period benchmark was 
calculated according to Sec.  425.603(c), we consider the agreement 
period the ACO is entering upon renewal or re-entry in combination with 
either of the following in determining the weight used in the regional 
adjustment calculation in the ACO's new agreement period: (A) The 
weight previously applied to calculate the regional adjustment to the 
ACO's benchmark in the ACO's most recent prior agreement period; or (B) 
For new ACOs that are identified as re-entering ACOs, we consider the 
weight previously applied to calculate the regional adjustment to the 
benchmark for the ACO in which the majority of the new ACO's 
participants were participating previously. With the agreement period 
beginning on January 1, 2022, all ACOs continuing their participation 
in the Shared Savings Program that were previously under the 
benchmarking rebasing methodology specified in Sec.  425.603 are now 
participating under the benchmarking methodology specified in Sec.  
425.601. However, it is possible that an ACO that participated in a 
second agreement period beginning on January 1, 2017, January 1, 2018, 
or January 1, 2019, and whose rebased benchmark was established in 
accordance with Sec.  425.603(c), and whose participation agreement 
expired without having been renewed, or whose participation agreement 
was terminated under Sec.  425.218 or Sec.  425.220, may seek to re-
enter the Shared Savings Program. Therefore, we believe it is necessary 
to maintain special rules for determining the weights used in the 
regional adjustment calculation for re-entering ACOs. Accordingly, we 
propose to incorporate the policies that currently apply to re-entering 
ACOs under Sec.  425.601(e)(2)(ii) in the new regulation at Sec.  
425.656(e).
    Lastly, we propose to remove from the existing regulations on 
calculating county expenditures and regional expenditures an extraneous 
step in the calculation specified under Sec.  425.601(d)(3). This 
provision specifies that CMS weights aggregate expenditure values 
determined for each population of beneficiaries according to Medicare 
enrollment type to reflect the proportion of the ACO's overall 
beneficiary population in the applicable Medicare enrollment type for 
the relevant benchmark or performance year. However, at no point in the 
calculation do we actually combine the risk adjusted regional 
expenditures across the four Medicare enrollment types to determine a 
single risk adjusted regional expenditure value. Risk adjusted regional 
expenditures are incorporated in all relevant calculations at the 
Medicare enrollment type level. Similarly, as part of our proposal to 
establish a new regulation at Sec.  425.654 to govern the calculation 
of county expenditures and regional expenditures for agreement periods 
beginning on January 1, 2024, and in subsequent years, we would also 
omit this extraneous step in the calculation.
6. Reducing Undue Administrative Burden and Other Policy Refinements
a. Overview
    We are dedicated to reducing unnecessary ACO and CMS administrative 
burden where possible. In response to requests from interested parties 
from prior rules, we are proposing 2 burden reduction proposals and 2 
policy refinements in this proposed rule. If finalized in the CY 2023 
PFS final rule, the policy proposals and refinements would be 
implemented January 1, 2023. Specifically, we propose the following, 
which are discussed in more detail in sections (b) through (e) below:
    <bullet> Modify Sec.  425.310 to eliminate the requirement for an 
ACO to submit marketing materials to CMS for review and approval prior 
to disseminating notifications to beneficiaries and participants.
    <bullet> Amend the beneficiary notification requirements at Sec.  
425.312 to reduce the frequency of certain beneficiary notifications 
from once annually to once in an agreement period, and to further 
clarify the settings in which ACO participants are expected to make 
required beneficiary notifications by displaying signs in their 
facilities.

[[Page 46203]]

    <bullet> Streamline the SNF 3-Day Rule Waiver application review 
process by amending requirements at Sec.  425.612(a)(1)(i)(A) to 
include an ACO attestation that plan narratives are in place and 
available to CMS upon request.
    <bullet> Amend regulations at Sec. Sec.  425.702(c)(2) and 
425.704(b) to recognize ACOs structured as OHCAs for data sharing 
purposes.
    We anticipate that, collectively, these proposals would 
significantly reduce administrative burden in the Shared Savings 
Program.
b. Proposal To Modify Marketing Material Review Requirements
(1) Background
    The Shared Savings Program regulations define ``marketing materials 
and activities'' at Sec.  425.20 to include, without limitation, 
``general audience materials'' and activities used or conducted by or 
on behalf of the ACO, or by ACO participants, or ACO providers/
suppliers when used to educate, solicit, notify, or contact Medicare 
beneficiaries or providers and suppliers about the Shared Savings 
Program. General audience materials include brochures, advertisements, 
outreach events, letters to beneficiaries, web pages, data-sharing opt-
out letters, mailings, and social media. The following beneficiary 
communications are not marketing materials and activities: certain 
informational materials customized or limited to a subset of 
beneficiaries; materials that do not include information about the ACO, 
its ACO participants, or its ACO providers/suppliers; materials that 
cover beneficiary-specific billing and claims issues or other specific 
individual health-related issues; educational information on specific 
medical conditions; written referrals for health care items and 
services; and materials or activities that do not constitute 
``marketing'' under 45 CFR 164.501 and Sec.  164.508(a)(3)(i).
    In addition, the Shared Savings Program regulations impose certain 
marketing requirements at Sec.  425.310 regarding the content and 
approval of marketing materials and activities. Specifically, under 
Sec.  425.310(c), all marketing materials and activities must: (1) use 
template language developed by CMS, if available; (2) not be used in a 
discriminatory manner or for discriminatory purposes; (3) comply with 
Sec.  425.304 regarding beneficiary incentives; and (4) not be 
materially inaccurate or misleading. Under Sec.  425.310(a), marketing 
materials may be used 5 business days following their submission to CMS 
if: (1) The ACO certifies compliance with all the marketing 
requirements under this section; and (2) CMS does not disapprove the 
marketing materials or activities. Under Sec.  425.310(b), marketing 
materials and activities are deemed approved after the initial 5-day 
review period. In other words, if CMS has not disapproved of the 
marketing submission within 5 days, the ACO may use the submitted 
marketing materials. CMS may subsequently issue a written notice of 
disapproval at any time, including after the expiration of the initial 
5-day review period, at which point the ACO must discontinue use of the 
disapproved marketing materials. Per Sec.  425.310(d), failure of an 
ACO to comply with the marketing requirements will subject the ACO to 
pre-termination actions sets forth in Sec.  425.216, termination from 
the program under Sec.  425.218, or both.
    As indicated in the November 2011 final rule (74 FR 67948), we 
finalized these marketing policies as an aspect of patient-
centeredness, indicating that we believed it would be appropriate and 
consistent with the purpose and intent of the statute to limit and 
monitor the use of ACO-related marketing activities and materials to 
ensure that such communications and marketing are used only for 
appropriate purposes, such as notification that a beneficiary's 
healthcare provider is participating in the ACO, issuance of any CMS-
required notices, or notification of provider or ACO terminations. We 
indicated that we were sensitive to the operational burden imposed on 
ACOs by these marketing requirements, such as the ACO bearing sole 
responsibility for collecting and submitting to CMS all marketing 
materials in use by the ACO, ACO participants, and ACO providers/
suppliers, and we noted our desire to balance this burden with the need 
for appropriate beneficiary protections.
    Historically, the majority of marketing submissions for the Shared 
Savings Program are approved upon review or are found not to constitute 
marketing materials and activities, as defined at Sec.  425.20. For 
example, in 2021, of 241 Shared Savings Program marketing material 
submissions reviewed by CMS, 163 (~68 percent) of those submissions 
were approved, while only 1 submission (0.4 percent) was denied. For 
the remaining 77 submissions (~32 percent), 58 submissions did not to 
meet the definition of marketing materials and activities; 9 were 
approved after the ACO responded with additional information or 
resubmitted revised materials; 9 were withdrawn for unspecified 
reasons, and 1 was neither approved nor denied and remained in non-
compliant status.
    We believe that marketing materials and activities are important 
communications between an ACO and its patients and participants, and we 
remain committed to patient-centered care, patient engagement, and 
program transparency in the Shared Savings Program. However, given the 
breakdown of marketing material review dispositions, the time and 
resources CMS currently expends to review all submitted marketing 
materials, and the additional effort for ACOs to submit these materials 
prior to use, we believe the current submission requirements create an 
unnecessary administrative burden for both CMS and ACOs that is not 
outweighed by the benefits of the current policy.
(2) Proposal To Modify Regulations on Review of ACO Marketing Materials
    To reduce unnecessary administrative burden, we propose to remove 
the requirement at Sec.  425.310(a) that ACOs submit marketing 
materials and activities to CMS before use, but would maintain the 
requirement that ACOs must provide marketing materials upon request. 
Additionally, we propose to remove the provisions in Sec.  425.310(b) 
regarding deemed approval of marketing materials and activities after a 
5-day review period. We note that ACOs must continue to comply with all 
Shared Savings Program regulations, including the marketing material 
content requirements that currently appear at Sec.  425.310(c). Our 
proposed policy does not affect an ACO's obligation to comply with 
marketing content requirements, and we propose to retain the authority 
to request the submission of marketing materials and activities at any 
time. We propose that if we determine an ACO's marketing materials and 
activities to be non-compliant, we will issue a written notice of 
disapproval under proposed Sec.  425.310(b)(1). In addition, we propose 
that ACOs must discontinue (and must require its ACO participants, ACO 
providers/suppliers, and other individuals or entities performing 
functions or services related to ACO activities to discontinue) use of 
any disapproved materials or activities. Under our proposal, we would 
retain language stating that the failure to comply with the 
requirements of Sec.  425.310 will subject the ACO to the penalties set 
forth in Sec.  425.216, termination under Sec.  425.218, or both.
    We believe that the existing marketing material content 
requirements and our proposed policy to review marketing materials and 
activities upon request would provide sufficient safeguards and

[[Page 46204]]

appropriate patient protections. Additionally, beneficiaries may 
express concerns regarding ACO marketing materials by utilizing the 1-
800-MEDICARE hotline, contacting their healthcare provider, or 
submitting a complaint to the Medicare Ombudsman's office, while ACOs 
and other interested parties may use any of these avenues, as well as 
express concerns via the Shared Savings Program mailbox or via their 
ACO coordinators.
    We would codify our proposal by revising Sec.  425.310 to remove 
existing references to CMS' collection, review, and approval of 
marketing materials. Specifically, we propose to remove the marketing 
material file and use requirement at Sec.  425.310(a) so that they may 
be used without prior approval. We propose that Sec.  425.310(a) would 
set forth without change the marketing material content requirements 
that currently appear in paragraph (c) (for example, the requirement to 
use template language and not be materially inaccurate or misleading). 
We propose to revise paragraph (b) to remove language at Sec.  425.310 
(b)(1) regarding deemed approval after expiration of a 5-day review 
period and to retitle the section ``Monitoring.'' Under proposed 
paragraph (b)(1), CMS may request the submission of marketing materials 
and activities at any time, and if CMS determines that the marketing 
materials and activities do not comply with the content requirements of 
paragraph (a), CMS will issue written notice of disapproval to the ACO. 
Proposed paragraph (b)(2) sets forth without change language that 
currently appears Sec.  425.310(b)(2)(ii) regarding the duty to cease 
use of disapproved marketing materials and activities. Finally, 
proposed paragraph (c) would set forth without change the sanctions 
provision that currently appears at Sec.  425.310(d).
    If finalized, our proposed modifications to Sec.  425.310 would 
become effective on January 1, 2023. We believe that, if finalized, 
this proposal would reduce administrative burden for both CMS and for 
ACOs, while maintaining program integrity and beneficiary protections. 
We believe the revised regulation would provide sufficient safeguards 
and appropriate patient protections.
c. Proposal To Modify Beneficiary Notification Requirements
(1) Background
    Under Sec.  425.312(a), an ACO is required to ensure that Medicare 
FFS beneficiaries are notified of the following: (1) that each ACO 
participant and its ACO providers/suppliers are participating in the 
Shared Savings Program; (2) the beneficiary's opportunity to decline 
claims data sharing; and (3) the ability to, and process by which, the 
beneficiary may identify or change identification of a primary care 
provider for purposes of voluntary alignment.
    Section 425.312(a)(2) sets forth the manner in which ACOs or ACO 
participants are required to notify beneficiaries of this information. 
ACO participants must post signs in their facilities and, in settings 
in which beneficiaries receive primary care services, make standardized 
written notices available upon request. In addition, in the case of an 
ACO that has selected preliminary prospective assignment with 
retrospective reconciliation, the ACO or ACO participant must provide 
each FFS beneficiary with a standardized written notice prior to or at 
the first primary care visit of the performance year (Sec.  
425.312(a)(2)(ii)). Finally, in the case of an ACO that has selected 
prospective assignment, the ACO or ACO participant must provide the 
standardized written notice to each prospectively assigned beneficiary 
prior to or at the first primary care visit of the performance year 
(Sec.  425.312(a)(2)(iii)).
    We periodically receive inquiries from ACOs seeking clarification 
as to the types of facilities in which signs are required to be posted. 
In addition, ACOs have continued to express concern regarding the 
obligation to provide an annual standardized notification prior to or 
at a beneficiary's first primary care service visit of the performance 
year. Specifically, ACOs state that such notices may confuse 
beneficiaries, who misinterpret the notice and believe that it 
signifies a change to their Medicare benefits or otherwise represents 
an undesirable or disadvantageous change regarding their health care 
services. ACOs assert that this confusion may cause a beneficiary to 
opt out of data sharing, which could result in less cohesive care, 
duplicative or unnecessary medical tests, or contraindicated 
prescription drug therapy. ACOs have reported that the information in 
the beneficiary information notice is unclear and that the frequency of 
notifications containing identical information is redundant. According 
to ACOs, the beneficiary notices also cause unnecessary administrative 
burden to ACOs because ACOs retain documentation that the notices were 
sent, and ACOs may be required to perform additional follow-up for 
patients contacting ACOs with questions regarding the notice.
    CMS remains committed to program transparency. Beneficiary notices 
are important communication tools, and we believe that ACOs are in the 
best position to communicate with beneficiaries regarding their care 
and the purposes for Medicare claims data sharing. We want to ensure 
that beneficiaries understand the advantages of their participation in 
ACOs, that their data is secure, that only the minimum necessary data 
is collected, and how this data is used for purposes of improving the 
quality of care for beneficiaries in the Shared Savings Program. We are 
working to improve the beneficiary notice to ensure that the content of 
the notice utilizes plain language and is beneficiary-friendly, as well 
as affirming patient choice and clarifying the beneficiary's 
opportunity to decline claims data sharing.
(2) Proposal To Clarify Location of Beneficiary Notification Signage
    ACOs and ACO participants frequently ask whether CMS requires 
signage to be posted in all facilities or only those where primary care 
services are provided. Although we believe the existing regulation text 
is clear on this point, we wish to provide clarification in this 
proposed rule that ACO participants are required to post beneficiary 
notification signs in all of their facilities, whether or not primary 
care services are provided in every facility. Accordingly, we propose 
to modify Sec.  425.312(a)(2)(i) to move the requirement for 
standardized written notices available to the newly proposed, 
redesignated Sec.  425.312(a)(2)(ii). With this modification, CMS 
clarifies that an ACO participant must post signs in ``all'' of its 
facilities and make standardized written notices available upon request 
in ``all'' settings in which beneficiaries receive primary care 
services. Signage notifies the entirety of a patient population that 
the facility participates in an ACO and is therefore qualitatively 
different from standardized written notices provided directly to 
individual patients in conjunction with primary care service visits. We 
note that the requirement to furnish standardized written notices upon 
the request of a beneficiary applies only in settings or facilities in 
which beneficiaries receive primary care services. We are not proposing 
to expand the care settings in which standardized written notices must 
be furnished to beneficiaries upon request.
(3) Proposal To Reduce the Frequency of Annual Standardized Written 
Notices
    In addition to providing standardized written notices to 
beneficiaries upon

[[Page 46205]]

request, ACOs and ACO participants are currently required to furnish 
standardized written notices prior to or at the first primary care 
visit of the performance year (Sec.  425.312(a)(2)(iii), (iv)). We 
continue to believe that requiring periodic beneficiary notifications 
affords ACOs and ACO participants an opportunity for direct engagement 
with the beneficiary, thereby serving to strengthen the beneficiary's 
relationship with the ACO and ACO participants from whom the 
beneficiary may receive care. The requirement promotes program 
transparency and empowers patients with the knowledge of the ACO's 
mission, data sharing requirements, and ACO operations, thereby 
allowing patients to make informed decisions about where they receive 
care. Therefore, we intend to retain the beneficiary notification 
policies, but in the interest of an overall reduction in administrative 
burden, we propose to modify Sec.  425.312(a) to reduce the frequency 
with which an ACO or ACO participant must furnish standardized written 
notifications to beneficiaries from up to 5 times per agreement period 
to once per agreement period. We also propose to implement a new 
follow-up beneficiary communication that we expect will reduce 
beneficiary confusion and improve beneficiary comprehension. Our 
proposed changes would become effective January 1, 2023.
    First, we propose to revise the requirements regarding annual 
beneficiary notifications, which currently appear at Sec.  
425.312(a)(2)(ii) and (iii). Specifically, at proposed Sec.  
425.312(a)(2)(iii), we propose to provide that, in the case of an ACO 
that has selected preliminary prospective assignment with retrospective 
reconciliation, the ACO or ACO participant must provide each FFS 
beneficiary with a standardized written notice at least once during an 
agreement period. Similarly, at proposed Sec.  425.312(a)(2)(iv), we 
propose to provide that, in the case of an ACO that has selected 
prospective assignment, the ACO or ACO participant must provide each 
prospectively assigned beneficiary with a standardized written notice 
at least once during an agreement period. In either case, the 
standardized written notice must be furnished prior to or at the first 
primary care service visit during the first performance year in which 
the beneficiary receives a primary care service from an ACO 
participant, and the notice must be in the form and manner specified by 
CMS.
    Second, in the interest of ensuring program transparency, 
maintaining beneficiary protections, reducing beneficiary confusion, 
and improving beneficiary comprehension, we propose at Sec.  
425.312(a)(2)(v) to require the ACO or ACO participant to follow up 
with each beneficiary to whom it furnished the standardized written 
notice pursuant to proposed Sec.  425.312(a)(2)(iii) or (iv). We 
propose that the follow-up communication may be verbal or written and 
must occur no later than the earlier of the beneficiary's next primary 
care service visit or 180 days from the date the first standardized 
written notice was provided. The follow up communication must afford 
the beneficiary an additional opportunity to ask any outstanding 
questions they may have, thereby reducing any potential beneficiary 
confusion and improving their understanding of the advantages of value-
based care. The follow-up communication may be provided in any manner, 
so long as the form of the follow up communication includes a 
meaningful opportunity for beneficiaries to ask questions and engage 
with a representative of the ACO or ACO participant with regard to the 
beneficiary notice. Because of the flexibility granted to ACOs in 
communicating key features of the beneficiary notification, we propose 
that ACOs track and document how this beneficiary communication is 
implemented and make this documentation available to CMS upon request.
    ACOs should administer the communication in the way that best suits 
their beneficiary population. We believe that while the follow-up 
communication would be most effective when occurring during a primary 
care service visit, it may be delivered in another manner. We note that 
while it is permissible to provide the standardized written notice 
again during the course of the follow-up communication, simply 
providing the same standardized written notice as the full extent of 
the follow-up communication is not sufficient to satisfy the proposed 
requirements at 425.412(a)(v), since doing so would not allow for an 
opportunity to engage the beneficiary and ensure they have the chance 
to ask any questions they may have as a result of receiving the 
standardized written notice. The implementation of the follow-up 
communication does not create a new benefit or billable service and 
therefore, no additional payment will be made for the follow-up 
communication.
    We are actively engaged in efforts to improve beneficiary 
notification materials, which include gathering feedback from 
beneficiaries and beneficiary representatives to make improvements as 
to how we disseminate information to beneficiaries. Further, we will 
work expeditiously to provide any updated and new materials as they 
become available. Although our proposal will reduce the frequency with 
which beneficiaries will receive the information that appears in 
standardized written notices, we note that this information is also 
readily available via signage in ACO facilities, as well as in the 
Medicare & You handbook. Additionally, we will maintain the requirement 
for ACO participants to make the notice available upon request in all 
settings in which beneficiaries receive primary care services. We note 
that ACOs and ACO participants may choose to provide the standardized 
written notice or follow-up beneficiary engagement communications more 
frequently than once per agreement period, and we would support their 
efforts to do so.
    We seek comment on the proposed frequency of the notification and 
whether our proposal will reduce net burden and mitigate any potential 
beneficiary confusion.
d. Streamline SNF 3-Day Rule Waiver Application Review Process
    Under section 1861(i) of the Act, beneficiaries must have a prior 
inpatient hospital stay of no fewer than 3 consecutive days to be 
eligible for Medicare coverage of inpatient skilled nursing facility 
(SNF) care (the SNF 3-day rule). Section 1819(a) of the Act defines a 
SNF, in part, as an institution (or a distinct part of an institution) 
that is not primarily for the care and treatment of mental diseases but 
is primarily engaged in providing the following to residents: skilled 
nursing care and related services for residents who require medical or 
nursing care; or rehabilitation services for the rehabilitation of 
injured, disabled, or sick persons. The Medicare SNF benefit applies to 
beneficiaries who require a short-term intensive stay in a skilled 
nursing facility or rehabilitation facility, or both.
    In the CY 2015 Shared Savings Program final rule (80 FR 32692), CMS 
used its authority under section 1899(f) to waive the SNF 3-day rule 
under section 1861(i) of the Act in order to carry out the provisions 
of section 1899 of the Act by offering ACOs that have accepted two-
sided risk under the Shared Savings Program more flexibility under FFS 
Medicare to provide appropriate care for beneficiaries in the most 
appropriate care setting. CMS believes this is an opportunity to 
provide experienced, risk-bearing ACOs

[[Page 46206]]

with additional flexibilities to increase quality and decrease costs.
    The waiver is codified in the Shared Savings Program regulations at 
Sec.  425.612(a)(1). Specifically, for PY 2017 and subsequent 
performance years, CMS waives the SNF 3-day rule for eligible 
beneficiaries that are assigned to an ACO participating in a two-sided 
model (or as provided in Sec.  425.612(a)(1)(iv) during a grace period 
for beneficiaries excluded from prospective assignment to such an ACO) 
and who receive covered post-hospital extended care services furnished 
by an eligible SNF that has entered into a written agreement to partner 
with the ACO (a ``SNF Affiliate''). An ACO is eligible to use the SNF 
3-Day Rule Waiver if the ACO participates in performance-based risk 
(for example, Levels C, D, or E of the BASIC track or the ENHANCED 
track) and has a SNF affiliate list. All other statutory and regulatory 
provisions regarding Medicare Part A post-hospital extended care 
services continue to apply.
    An eligible ACO may apply for a programmatic waiver of the SNF 3-
day rule to allow its assigned beneficiaries to receive coverage for 
inpatient SNF care without a prior 3-day inpatient hospital stay when 
admitted to a SNF affiliate. A SNF affiliate is a SNF that has executed 
a written agreement with an eligible ACO that meets the requirements of 
Sec.  425.612(a)(1)(iii)(B) and is included on the ACO's SNF affiliate 
list. If the SNF affiliate is eligible to be included in the CMS 5-star 
Quality Rating System, it must have and maintain an overall rating of 3 
or higher (Sec.  425.612(a)(1)(iii)(A)).
    It is important to note that the Shared Savings Program SNF 3-Day 
Rule Waiver does not create a new benefit or extend Medicare SNF 
coverage to patients who could be treated in outpatient settings or who 
require long-term custodial care. Also, the SNF 3-Day Rule Waiver does 
not restrict a beneficiary's choice of provider or supplier. A 
beneficiary will continue to have the option to seek care from any 
Medicare FFS provider or supplier, including from a SNF or other 
facility that is not an affiliate of an ACO participating in the Shared 
Savings Program. If a beneficiary that is assigned to an ACO chooses to 
receive care from a SNF or other facility that is not an affiliate of 
the ACO, normal Medicare requirements apply, including the requirement 
for a 3-day inpatient hospitalization. The SNF 3-Day Rule Waiver is 
intended to provide ACOs that are participating in certain performance-
based risk tracks with additional flexibility to increase quality and 
decrease costs.
(1) SNF 3-Day Rule Waiver Application Process
    An ACO participating or applying to participate in performance-
based risk within the BASIC track under Sec.  425.605 or the ENHANCED 
track under Sec.  425.610 may request to use the SNF 3-Day Rule Waiver 
at the time of application to participate in the program or during its 
agreement period. The waiver request must be submitted in a form and 
manner and by a deadline specified by CMS, which typically occurs once 
each year. Any ACO, including those applying for the waiver during the 
term of an existing participation agreement, must apply during the 
annual application process. Current regulations require that an ACO 
submit an application demonstrating that it has the capacity to 
identify and manage beneficiaries who would either be directly admitted 
to a SNF or admitted to a SNF after an inpatient hospitalization of 
fewer than 3 days. Under Sec.  425.612(a)(1)(i), to be eligible to use 
the SNF 3-Day Rule Waiver, an ACO must submit supplemental application 
materials that include, but are not limited to, a list of SNFs with 
whom the ACO will partner (that is, a SNF affiliate list), along with 
executed written SNF affiliate agreements between the ACO and each 
listed SNF, in addition to 3 narratives describing how the ACO plans to 
implement the waiver. The narratives must include: the communication 
plan between the ACO and its SNF affiliates, a care management plan for 
beneficiaries admitted to a SNF affiliate, and a beneficiary evaluation 
and admission plan approved by the ACO medical director and the 
healthcare professional responsible for the ACO's quality improvement 
and assurance processes.
    Historically, the SNF 3-Day Rule Waiver originated from the CMS 
Innovation Center's Pioneer ACO and Next Generation ACO Models. These 
models included application questions (answered by the ACO in a 
narrative format) which, while not codified in regulation, were 
transformed into plan narrative requirements in the Shared Savings 
Program SNF 3-Day Rule Waiver application. In the CY 2015 Shared 
Savings Program final rule (80 FR at 32805), we discussed a variety of 
issues that could be addressed in these narratives, such as the 
protocol that will be followed by ACOs for evaluating and approving 
admissions to a SNF under the waiver and consistent with the 
beneficiary eligibility requirements and the education and training for 
eligible SNFs regarding waiver requirements. We have not set forth 
specific ways that ACOs must address issues in their plan narratives 
because we believe the ACO is in the best position to establish its 
protocols, develop SNF training, and otherwise determine how to best 
coordinate care for patients transferred to their SNF affiliates.
    After successfully implementing the Shared Savings Program SNF 3-
Day Rule Waiver for several performance years, we determined in 2017 
that some application requirements were burdensome for both CMS and 
ACOs, did not add value to the application review, or were not 
permitted by regulation. For example, the SNF 3-Day Rule Waiver 
application originally included a narrative describing any financial 
relationships between an ACO, SNF affiliate and acute care hospital. 
Because the Shared Savings Program regulations do not prohibit ACOs or 
SNFs from having financial arrangements with acute care hospitals, nor 
do they require such arrangements, we discontinued the submission of 
this narrative. Previously, ACOs also submitted documentation for each 
proposed SNF affiliate demonstrating they met minimum star rating 
requirements. Because CMS could obtain the required star rating 
information directly from the CMS Care Compare website, this 
application submission requirement was discontinued. We removed the 
requirement for these two application elements in the CY 2018 PFS final 
rule (82 FR 52976).
    At the time of these modifications, CMS chose to retain the three 
narratives related to an ACO's communication plan, care management 
plan, and beneficiary evaluation and admission plan without 
establishing specific criteria for an ACO's process for implementing 
the SNF 3-Day Rule Waiver. We have since found that these plan 
narratives have not aided in our ability to evaluate an ACO's capacity 
to identify and manage beneficiaries who may be admitted to a SNF 
affiliate beyond what is otherwise established within the application. 
These narratives describe the plans that exist and that the ACO will 
adhere to requirements for beneficiary eligibility set forth in the 
waiver, but the program continues to provide operational flexibility to 
ACOs to develop their own internal processes and protocols.

[[Page 46207]]

(2) Proposal To Modify the CMS Review Process for ACOs Applying for a 
Shared Savings Program SNF 3-Day Rule Waiver
    We remain committed to reducing unnecessary application and/or 
program burden where possible and consider application attestations as 
a way of streamlining processes when appropriate. The submission of the 
three remaining narratives has largely functioned as a mechanism for 
ACOs to confirm they have established operations for communicating 
between the ACO and its SNF affiliates, establishing a care management 
plan, and beneficiary evaluation and admission plan. The existence of 
the three narrative plans provides some assurance of an ACO's capacity 
to identify and manage beneficiaries who may be admitted to a SNF 
affiliate. However, as a payer, we do not have the experience that 
would be required to evaluate the appropriateness of the contents of 
these plans. Therefore, to reduce CMS burden, we propose to remove the 
requirement to submit the plan narratives and instead propose to 
require ACOs to certify that they have a communication plan, care 
management plan, and beneficiary evaluation and admission plan in place 
prior to SNF 3-Day Rule Waiver approval. Such plans should continue to 
address the issues we previously discussed in the CY 2015 Shared 
Savings Program final rule at 80 FR 32805. ACOs must continue to 
develop robust processes to implement the 3-Day Rule Waiver and to 
successfully transition care for their identified FFS beneficiaries and 
must be able to provide upon request a narrative describing their 
communication plan, care management plan, and beneficiary evaluation 
and admission plan. If our proposed policy is finalized, an ACO would 
be subject to compliance action if it fails to submit, upon CMS 
request, the narratives about its capacity to manage patients under the 
waiver. The proposed attestation requirement retains oversight for 
ensuring that an ACO has the capacity to identify and manage 
beneficiaries while reducing burden during the application process.
    Furthermore, we have determined that other provisions of our 
regulations provide sufficient safeguards to ensure that CMS can assess 
an ACO's capacity to identify and manage beneficiaries who would be 
either directly admitted to a SNF or admitted to a SNF after an 
inpatient stay of less than 3 days. We have found that these 
experienced, risk-bearing ACOs focus on care coordination and 
clinically-integrated, patient-centered care. Such investments in care 
coordination not only improve patient outcomes, but also serve to 
reduce the cost of care. In addition, our ongoing oversight and program 
compliance monitoring of the use of the waiver by ACOs helps us to 
ensure that ACOs have the capacity to identify and manage beneficiaries 
who are admitted to a SNF under the SNF 3-Day Rule Waiver.
    In summary, we propose to amend Sec.  425.612(a)(1)(i)(A) to 
require that an ACO applying to use the SNF 3-Day Rule Waiver must 
submit an attestation that it has established plan narratives 
(communication plan, care management plan, and beneficiary evaluation 
and admission plan) and will make them available to CMS upon request. 
We are making minor revisions to the narrative language by replacing 
``the communication plan'' with ``a communication plan'' in Sec.  
425.612(a)(1)(i)(A)(1). We expect that, when implemented, our proposal 
will reduce the application review burden on CMS, as well as the burden 
on ACOs to submit this information.
e. Updating Shared Savings Program Data Sharing Regulations To 
Recognize ACOs Structured as Organized Health Care Arrangements (OHCAs) 
for Data Sharing Purposes
    In the CY 2022 PFS final rule (86 FR 65261), we stated that we were 
considering whether it would be appropriate to revise the regulations 
at Sec. Sec.  425.702(c) and 425.704(b) to allow data sharing with a 
Shared Savings Program ACO that has structured its relationship with 
its ACO participants as an OHCA, as that term is defined in the Health 
Insurance Portability and Accountability Act of 1996 (HIPAA) 
regulations at 45 CFR 160.103. This was in response to commenters who 
shared concerns about collecting patient-level all-payer data (eCQMs/
MIPS CQM) from patients who were not assigned to the ACO. These 
commenters cited HIPAA and patient consent concerns related to sharing 
non-Medicare patient information with the ACO and with CMS for a 
population that is not assigned to the ACO and indicated that obtaining 
this consent would be an additional burden.
    As we explained in the CY 2022 PFS final rule (86 FR 65261), we 
believe the disclosure of this all-payer data to CMS as required by 
Sec.  414.1340(a) is permitted by the HIPCAA Privacy rule under the 
provision that permits disclosures of protected health information 
(PHI) as ``required by law.'' \276\ We also encouraged ACOs and their 
ACO participants to consult with their legal counsel as necessary to 
ensure that their business associate agreements (BAAs) address the need 
to share data for patients covered by all payers with the ACO to permit 
the ACO to comply with its legal obligation to completely and 
accurately report this data to CMS. Nevertheless, these comments 
prompted us to consider whether the current Shared Savings Program 
regulations provide sufficient flexibility regarding different 
arrangements permitted under HIPAA. In the CY 2022 PFS final rule, we 
stated that we were specifically considering potential revisions to the 
regulations at Sec. Sec.  425.702(c) and 425.704(b) to permit data 
sharing with an ACO structured as an OHCA. We are now proposing those 
changes as part of this proposed rule.
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    \276\ 45 CFR 164.512(a).
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    In the April 2011 proposed rule (76 FR 19528, 19556), we discussed 
the importance of data sharing and beneficiary protections in light of 
existing HIPAA requirements. We noted that ACO participants and ACO 
providers/suppliers are also covered entities, provided they are health 
care providers as defined by 45 CFR 160.103 and they or their agents 
electronically engage in one or more HIPAA standard transactions, such 
as for claims, eligibility or enrollment transactions. We also stated 
that an ACO may itself be a HIPAA covered entity if it is a health care 
provider that conducts such transactions or may qualify as the business 
associate of its covered entity ACO participants and ACO providers/
suppliers based on the quality assessment and improvement activities 
that the ACO is conducting on behalf of those ACO participants and ACO 
providers/suppliers (76 FR 19556). In the November 2011 final rule (76 
FR 67846 through 67851), we established requirements for data sharing 
with ACOs that are designed around the HIPAA provisions for ``health 
care operations'' disclosures. These provisions permit CMS to disclose 
PHI without obtaining individual authorization for the health care 
operations activities of the recipient of the data (that is, the 
ACO).\277\ As we explained in the CY 2015 PFS final rule (80 FR 32692), 
ACOs work with their ACO participants and ACO providers/suppliers to 
evaluate their performance, conduct quality assessment and improvement 
activities, perform care coordination activities, and conduct 
population-based activities relating to improved health for their 
assigned beneficiary population. When done by

[[Page 46208]]

or on behalf of a covered entity, these are activities that would 
qualify as health care operations under the first and second paragraphs 
of the definition of ``health care operations'' at 45 CFR 164.501 (76 
FR 19558). Therefore, in the Shared Savings Program data sharing 
regulations at Sec. Sec.  425.702(c)(2) and 425.704(b), we have focused 
on ACOs that are themselves HIPAA-covered entities, or that are acting 
as business associates on behalf of their ACO participants and ACO 
providers/suppliers who are HIPAA-covered entities.
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    \277\ 45 CFR 164.506(c)(4).
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    We believe that most ACOs are acting as business associates of 
their covered entity ACO participants (the providers and suppliers that 
are part of the ACO). However, we believe it is possible that some ACOs 
may choose to operate as an OHCA.
    An OHCA is another type of entity that is recognized under the 
HIPAA regulations. An OHCA is a distinct entity from a covered entity 
or a business associate under HIPAA, although it is made up of covered 
entities. As most relevant to Shared Savings Program ACOs, under 45 CFR 
160.103, an OHCA is defined to include an organized system of health 
care in which more than one covered entity participates and in which 
the participating covered entities hold themselves out to the public as 
participating in a joint arrangement and participate in specified joint 
activities such as quality assessment and improvement activities and 
payment activities.\278\ In addition, the purpose of the OHCA is that 
participants in such clinically integrated settings are able to share 
health information freely not only for purposes of care, but also to 
improve their joint operations (65 FR 82494). The HIPAA Privacy Rule 
has specific provisions relevant to OHCAs. For example, under 45 CFR 
164.506(c)(5), a covered entity that participates in an OHCA may 
disclose PHI about an individual to other participants in the OHCA for 
any health care operations activities of the OHCA.
---------------------------------------------------------------------------

    \278\ For the complete definition of an OHCA, see 45 CFR 
160.103.
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    We note that the Office for Civil Rights (OCR) and the Office of 
the National Coordinator for Health Information Technology (ONC) have 
recognized in joint guidance that ACOs may operate as OHCAs.\279\ An 
ACO that operates as an OHCA would be able to share PHI among the 
covered entities in the OHCA without getting authorization from 
individuals for the health care operations of the OHCA and would be 
permitted to share PHI for the health care activities of the OHCA 
without entering into BAAs with each other.\280\
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    \279\ Permitted Uses and Disclosures: Exchange for Health Care 
Operations (https://www.healthit.gov/sites/default/files/exchange_health_care_ops.pdf).
    \280\ Please see HIPAA For Professionals FAQ 242 (Are covered 
entities that engage in joint activities under an organized health 
care arrangement (OHCA) required to have business associate 
contracts with each other?) (https://www.hhs.gov/hipaa/for-professionals/faq/242/may-i-share-protected-health-information-directly-with-another/index.html).
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    Effective for performance year 2023 and subsequent performance 
years, we propose to modify the Shared Savings Program data sharing 
regulations at Sec. Sec.  425.702(c)(2) and 425.704(b) to specify that 
ACOs acting as OHCAs may request aggregate reports and beneficiary-
identifiable claims data from CMS, respectively. As outlined above, 
these proposed changes would recognize an OHCA as an additional 
organizational structure under which an ACO can request data from CMS. 
Our intention is to update the data sharing regulations to reflect how 
ACOs may be structured and provide flexibility with respect to the 
different arrangements permitted under HIPAA for purposes of data 
sharing.
    Separately, we believe that an OHCA structure potentially could 
address some of the concerns that commenters have raised about ACOs 
collecting and reporting all-payer data to CMS as required under the 
APP. However, we note that our proposal is limited to the Shared 
Savings Program regulations governing CMS' data sharing with ACOs and 
is not intended to affect or modify any existing obligations under the 
HIPAA Privacy Rule. It is the ACOs' responsibility to consult with 
their legal counsel and others as necessary to determine how to 
structure their arrangements with their ACO participants and ACO 
providers/suppliers to comply with HIPAA requirements.
7. Seeking Comment on Incorporating an Administrative Benchmarking 
Approach Into the Shared Savings Program
a. Background on Longer Term Approach to Benchmarking Under the Shared 
Savings Program
    We have set a goal that 100 percent of Original Medicare 
beneficiaries will be in a care relationship with accountability for 
quality and total cost of care by 2030.\281\ Achieving this goal will 
require significant growth in the number of ACOs participating in the 
Shared Savings Program, or the number of beneficiaries served by 
existing ACOs, or both. Benchmarks are a core policy instrument for 
providing sufficient incentives for ACOs to enter and remain in the 
Shared Savings Program, with significant implications on impacts to the 
Medicare Trust Funds.
---------------------------------------------------------------------------

    \281\ Seshamani M, Fowler E, Brooks-LaSure C. Building On The 
CMS Strategic Vision: Working Together For A Stronger Medicare. 
Health Affairs. January 11, 2022. Available at https://www.healthaffairs.org/do/10.1377/forefront.20220110.198444.
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    The benchmark is a cost target used to determine savings or losses 
for an ACO compared to performance year expenditures for its assigned 
beneficiary population and, importantly, to create incentives for ACOs 
to reduce spending and generate savings, which will be shared by the 
ACO and CMS; by extension, these savings opportunities also create 
incentives for providers and suppliers to participate in ACOs. Many 
factors need to be considered in establishing benchmarks including the 
variability in the composition of ACOs, the beneficiary populations 
they serve, and their experience with accountable care models, as well 
as the need to protect the Trust Funds and minimize unintended 
consequences such as market consolidation and patient risk selection. 
In this section of this proposed rule, we describe and seek comment on 
a modified benchmarking methodology which may boost participation, 
increase savings to the Medicare Trust Fund and make long-term 
participation in the Shared Savings Program possible for more ACOs.
    Currently, we establish, adjust, update and reset the historical 
benchmark under the Shared Savings Program in accordance with Sec.  
425.601. An ACO's benchmark is established based on historical 
expenditures for a population of beneficiaries that would have been 
assigned to that ACO in the 3 years prior to the start of its agreement 
period. In establishing the benchmark, we adjust the benchmark based on 
the ACO's spending relative to its service area (referred to as the 
regional adjustment). For each performance year of the ACO's 5-year 
agreement period, we risk adjust the benchmark for changes in severity 
and case mix of the ACO's assigned beneficiaries, and we update the 
benchmark using growth rates that are a blend of observed national and 
regional FFS spending trends. We reset (or rebase) the ACO's benchmark 
at the start of the ACO's second and each subsequent agreement period. 
Refer to section III.G.5. of this proposed rule for a more detailed 
description of the statutory and regulatory background of the Shared 
Savings Program's current benchmarking methodology and certain 
benchmark calculations, as well as proposed modifications to the 
current

[[Page 46209]]

benchmarking methodology for agreement periods starting on January 1, 
2024, and in subsequent years.
    ACOs and other interested parties have expressed concerns about the 
effects of current benchmarking methods on ACOs' incentives to generate 
savings, the extent to which they are able to share in those savings, 
and thus the incentives for ACOs to enter and remain in the program 
over the long-term. Specifically, there are two ways in which the use 
of factors based on realized FFS spending (which reflects any ACO 
spending reductions) can lead to lower benchmarks, which we will refer 
to as ``ratchet'' effects: (1) downward pressure on an individual ACO's 
benchmark resulting from the impact of its achieved spending reductions 
on its historical benchmark expenditures, regional adjustment, and 
update factor; and (2) downward pressure on benchmarks due to program-
wide spending reductions across all ACOs.
    The first type of ratchet effect occurs at the individual ACO 
level, when an ACO's own savings reduce its benchmark, which can occur 
when we reset the historical benchmark at the start of the ACO's second 
or subsequent agreement period. When the benchmark years correspond to 
performance years from the ACO's preceding agreement period, the 
benchmark reflects a portion of any spending reductions achieved by the 
ACO. A ratchet effect can also occur through the use of factors based 
on the regional FFS expenditures to adjust the benchmark and update an 
ACO's benchmark; specifically, when an ACO reduces spending, it also 
reduces average spending in its region, thereby lowering the regional 
adjustment to its benchmark. This effect becomes more prominent as an 
ACO has increasing market share in its region. Critically, ACOs must be 
able to retain the ability to achieve savings over the long-term to 
have an incentive to take the steps necessary to generate them, as 
there are costs associated with delivering care outside of the fee-for-
service construct and in running an ACO to lower (and maintain) reduced 
spending levels.
    The second type of ratchet effect occurs at the program level, 
where overall program success can apply downward pressure on ACOs' 
benchmarks through the method for updating benchmarks each performance 
year for changes in expenditures between Base Year 3 (BY3) and the 
performance year. We determine the update factor retrospectively using 
a blend of realized national and regional FFS expenditure growth rates, 
which incorporates the collective impact of ACOs on spending across 
Original Medicare. As a greater portion of Medicare FFS beneficiaries 
are assigned to ACOs, this program level ratcheting effect increasingly 
diminishes incentives to participate in the Shared Savings Program. If 
all beneficiaries enrolled in the Original Medicare FFS program under 
Parts A and B were assigned to an ACO, calculating the update factor 
based on realized spending growth rates would necessitate that some 
ACOs would experience expenditure growth in excess of the update factor 
(and forgo shared savings), even if all ACOs reduced spending growth. 
That is, an ACO would have to reduce spending more than the average ACO 
in order to earn savings, all else equal (absent regional adjustments 
to historical benchmarks). Similarly, program-wide savings lower the 
average per capita amounts of expenditures for an ACO's regional 
service area which are used in computing the regional adjustment to the 
historical benchmark. As ACOs' benchmarks converge toward average 
realized FFS spending, approximately half of ACOs will necessarily be 
given benchmarks below their spending at the start of their current 
agreement period, even if all ACOs have generated spending reductions 
relative to the counterfactual (that is, what spending would have been 
without the ACO). This downward pressure of program success on 
benchmark updates means that ACOs collectively keep less of the savings 
they generate. In the context of CMS' strategic objective to increase 
the number of Medicare beneficiaries in a care relationship with 
quality and total cost of care accountability, we anticipate that this 
program level ratcheting effect will become more pronounced with the 
growth in the number of beneficiaries assigned to ACOs, further 
weakening incentives to participate in the Shared Savings Program with 
the potential for impeding progress towards the fulfillment of this 
same goal.
    For illustrative purposes, consider a scenario in which all 
Original Medicare beneficiaries are receiving the plurality of their 
primary care from an ACO provider/supplier, and thus are assigned to an 
ACO. Assume that FFS expenditure growth in the absence of ACOs would be 
5 percent each year, but that ACOs, on average, slow expenditure growth 
to 3 percent each year. Under the current benchmarking approach, the 
update factor applied to an ACO's benchmark would be 3 percent, 
matching the average overall FFS expenditure growth rate under 100 
percent ACO penetration. However, because 3 percent is the average 
growth rate, there will be ACOs with both higher and lower growth rates 
than 3 percent, meaning that some ACOs' growth in expenditures will 
outpace their benchmarks, even if they reduced spending relative to the 
counterfactual. In this example, an ACO that limited expenditure growth 
to 4 percent would (ignoring regional adjustments to the benchmark) 
show losses, despite reducing spending relative to the 5 percent growth 
rate expected without ACOs. Figure 2 provides a visual example of this 
scenario. provides a visual example of this scenario.

[[Page 46210]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.108

    MedPAC and researchers are also examining the Shared Savings 
Program benchmarking methodology and have noted many of the above 
concerns. MedPAC has discussed ratchet effects in ACO benchmarks in its 
November 2021 public meeting \282\ and January 2022 public 
meeting,\283\ with the general consensus that eliminating ratcheting 
effects is essential for the long-term sustainability of the Shared 
Savings Program. Many of the commissioners discussed a longer-term 
approach under which CMS would update ACOs' benchmarks annually using 
``exogenous'' factors, meaning factors not impacted by the individual 
or collective performance of ACOs. Under this approach, which has also 
been referred to as administratively set benchmarks, benchmarks may be 
set prospectively based on projected growth in volume and intensity of 
FFS services, with guardrails in place to account for actual changes in 
FFS prices, demographics, and large projection errors. McWilliams, 
Chen, and Chernew have also raised concerns about ACO benchmark ratchet 
effects in outlining a blueprint for ACO benchmark changes in a recent 
white paper.\284\
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    \282\ https://www.medpac.gov/wp-content/uploads/2021/09/aco-benchmarks-medpac-nov-2021.pdf; https://www.medpac.gov/wp-content/uploads/2021/11/november21_medpac_transcript_sec.pdf.
    \283\ https://www.medpac.gov/wp-content/uploads/2021/10/APM-MedPAC-Jan22.pdf; https://www.medpac.gov/wp-content/uploads/2021/10/Jan22_MedPAC_Meeting_Transcript_SEC.pdf.
    \284\ https://www.brookings.edu/research/from-vision-to-design-in-advancing-medicare-payment-reform-a-blueprint-for-population-based-payments/.
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    Addressing these ratchet effects may also improve the experience of 
beneficiaries assigned to ACOs. ACOs are incentivized through sharing 
savings to provide services to beneficiaries that may not have been 
traditionally reimbursed under Medicare FFS. However, because any costs 
incurred in providing such services are not reflected in observed FFS 
spending but may help to reduce that spending and thus result in the 
ratcheting down of future benchmarks, incentives to provide such 
services are diminished. We anticipate that addressing these ratchet 
effects under the current benchmarking methodology will allow ACOs and 
their ACO participants to provide additional services and therefore 
improve the beneficiary experience in ACOs.
    We have used a variety of approaches to mitigate the effect of ACO 
performance on their historical benchmarks, as described in earlier 
rulemaking and as summarized in section III.G.5. of this proposed rule, 
including: adjusting the ACO's rebased benchmark to account for savings 
generated by the ACO in its prior agreement period (Sec.  
425.603(b)(2), June 2015 final rule, 80 FR 32788 through 32791); 
subsequently replacing the prior savings adjustment with an approach 
that incorporated factors based on regional FFS expenditures in 
resetting the ACO's benchmark through a regional adjustment (Sec.  
425.603(c) through (f), June 2016 final rule, 81 FR 37953 through 
37991); in addition, more recent modifications to use blended national-
regional growth factors to trend and update the ACO's historical 
benchmark help ameliorate the ACO-specific ratchet effect caused by the 
use of regional trends to update benchmarks in areas where ACOs 
contribute substantially to regional trends (Sec.  425.601(a)(5), (b), 
December 2018 final rule, 83 FR 68005 through 68030).
    In particular, the regional adjustment has reduced the impact of 
rebasing by partially decoupling an ACO's benchmark from its prior 
savings performance. Importantly, this adjustment also begins to 
converge benchmarks toward a consistent basis within a region, which we 
believe is an important objective for creating equitable payment within 
a market that rewards ACOs for relative efficiency. However, recent 
experience suggests that the regional adjustment may have led to 
selective participation, with 80-87 percent of ACOs subject to a 
regional adjustment having spending below their region for performance 
years 2017 through 2020, as shown in Table 68.\285\
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    \285\ https://data.cms.gov/medicare-shared-savings-program/performance-year-financial-and-quality-results.

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[[Page 46211]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.109

    Furthermore, as shown in Table 69, selective participation effects 
are stronger for ACOs subject to downside risk, with 92-100 percent of 
ACOs having positive regional adjustments. This suggests that as ACOs 
are required to participate under performance-based risk and higher 
levels of downside risk, these selective participation effects may 
continue to grow. Setting aside the net costs to the Trust Funds from 
subsidizing participation by ACOs with spending already below their 
region, the chief concern with this pattern of participation under the 
current methodology is that the providers/suppliers with the greatest 
savings potential (those with high spending relative to their region) 
have fewer incentives to participate.
[GRAPHIC] [TIFF OMITTED] TP29JY22.110

    Through the benchmarking changes proposed in section III.G.5. of 
this proposed rule, we seek to more immediately address certain ratchet 
effects and features within the existing benchmarking methodology that 
result in selective participation. Specifically, the proposals to 
incorporate a prior savings adjustment, mitigate the impact of the 
negative regional adjustment, and to modify the benchmark update to 
incorporate a prospective, external factor (ACPT) are intended to 
address these dynamics. In this RFI, we seek comment on broader changes 
to the benchmarking methodology that may be needed to further 
strengthen incentives for providers and suppliers to participate in the 
Shared Savings Program and generate savings while preserving a 
mechanism for convergence to a consistent regional benchmarking 
approach that does not elicit selective participation.
b. Administratively-Established Benchmarks as a Potential Solution To 
Address Benchmarking Concerns
    In this section, we describe and seek comment on a direction for 
future benchmarking that is designed to create a sustainable pathway 
for long term program savings for both ACOs and CMS and to address 
interested parties' concerns around ratcheting. Within this section, we 
provide an overview of and discuss details of key components of this 
approach.
    This approach involves separating benchmarking update factors from 
realized FFS expenditure growth through the implementation of a 
prospective, administratively set annual growth rate to update 
benchmarks. Under this approach, benchmarks would be allowed to rise 
above realized FFS expenditure growth as ACOs generate savings, 
allowing ACOs to retain more of their savings and thus strengthening 
incentives to participate and achieve savings. Over time, use of this 
administratively set growth rate would allow for a wedge to accrue 
between average benchmarks and realized spending reductions, offering 
greater and more sustainable savings opportunities over the long-term 
for both Medicare and ACOs. Importantly, average benchmark growth would 
only exceed realized FFS spending growth to the extent that ACOs reduce 
spending, such that benchmarks remain at or below FFS spending levels 
projected in the absence of ACO participation. A graphic depiction of 
administratively-established benchmarking is provided in Figure 3.

[[Page 46212]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.111

    In concert with shifting from a benchmark update based on observed, 
or realized, FFS expenditure growth to a prospectively set trend that 
does not ratchet benchmarks downward as ACOs slow observed FFS 
expenditure growth, we are considering approaches that would minimize 
rebasing effects between agreement periods.
    An administratively set benchmarking approach also offers a path 
for converging benchmarks gradually towards a common risk-adjusted rate 
in each region, which we anticipate would mitigate selective 
participation and improve the savings potential of the program. 
Allowing benchmarks to remain above observed FFS spending as ACOs lower 
spending also allows convergence of benchmarks to a regional rate that 
is above average regional FFS spending. Accordingly, convergence would 
not require ACOs operating in the same region to outcompete each other 
to accrue savings and should not discourage participation by ACOs with 
above average observed spending to the same extent that they are 
discouraged under the present methodology. As long as ACOs are 
generating savings collectively, this approach would allow all ACOs a 
chance to earn shared savings while reducing overall spending relative 
to projections and protecting the Trust Funds. In addition, benchmarks 
that exceed FFS spending would give ACOs flexibility to meet 
beneficiary needs through alternative modes of care such as virtual 
care or care management programs that have not traditionally been 
reimbursed under FFS.
    Through the design of this approach, we believe CMS could address 
the selective participation effects that currently discourage 
participation by ACOs with higher spending compared to their regional 
services area. For example, we are considering an approach that would 
remove the negative regional adjustment to ACO historical benchmarks. 
This approach would mean that an ACO with spending above its regional 
average would receive a historical benchmark set at the ACO's average 
historical FFS expenditures, rather than below its historical spending 
levels due to the negative regional adjustment.
    Ultimately, we envision such an approach would generate sufficient 
spending reductions for higher spending providers and suppliers such 
that CMS could consider a further modified benchmarking methodology 
under which ACOs' benchmarks would be calculated using a regionally 
consistent baseline. This longer-term option is discussed in section 
III.G.7.d. of this proposed rule. To maintain the divergence between 
benchmarks and realized FFS expenditures, regional baselines would be 
set to incorporate accrued FFS expenditure reductions relative to 
projected growth, rather than setting regional baselines at average FFS 
spending, which would effectively claw back the accrued savings. We 
consider regionally consistent benchmarks to be an important objective 
for the longer-term sustainability of the Shared Savings Program in 
that it would create equitable payment within a market by rewarding 
ACOs for their relative efficiency. Such an approach could also reduce 
complexity relative to both the current methodology (including the 
proposed changes described in section III.G.5. of this proposed rule) 
and the administratively established benchmark methodology used to 
generate convergence.
    We invite comments on these concepts and on the design of an 
administratively established benchmarking methodology. In the remaining 
discussion in this section of this proposed rule, we provide additional 
details on the key features of an administrative benchmarking concept 
to inform commenters' consideration of this approach, including the 
administratively established update and discount factors, the continued 
use of certain factors in establishing and adjusting an ACO's 
historical benchmark, the convergence to a regional benchmark, and 
considerations for the post-convergence phase. We also welcome comments 
on the stages for implementing such an approach within the Shared 
Savings Program, particularly on an initial convergence phase and a 
post-convergence phase, and any other considerations related to this 
approach that we have not addressed in this proposed rule. We note that 
any such modifications to the benchmarking methodology would need to be 
adopted through notice and comment rulemaking.
    We are continuing to consider the financial impact of this modified 
approach, and are also considering other modifications to the design of 
the

[[Page 46213]]

Shared Savings Program that may be needed along with an 
administratively established benchmarking methodology, including 
potential changes to the program's participation options and financial 
models (level of risk and potential reward). We seek comment on any 
additional modifications to the design of the Shared Savings Program 
that should be considered in conjunction with administratively set 
benchmarks.
    Lastly, we note that a number of the features of an 
administratively established benchmarking methodology diverge from the 
benchmarking requirements under section 1899(d)(1)(B)(ii) of the Act 
and would require the use of our authority under section 1899(i)(3) of 
the Act. Under section 1899(i)(3) of the Act, in order to use a payment 
model other than the payment model described in section 1899(d) of the 
Act, we must determine that the alternative payment methodology will 
improve the quality and efficiency of items and services furnished to 
Medicare beneficiaries, without resulting in additional program 
expenditures. Accordingly, we also seek comment on the extent to which 
the use of administratively set benchmarks might have the potential to 
improve the quality and efficiency of care furnished to Medicare 
beneficiaries and any anticipated impact on Medicare expenditures. We 
will consider the information submitted as part of any determination of 
whether to propose in future rulemaking to implement aspects of an 
administratively-established benchmarking methodology in the Shared 
Savings Program.
c. Establishing an Administrative Benchmark Update Factor
(1) Overview
    Under the administratively-established benchmarking concept, we 
would continue to utilize an ACO's historical FFS expenditures to 
establish the ACO's historical benchmark. However, we would modify the 
existing methodology to fully remove negative regional adjustments to 
the benchmark. We would otherwise retain much of the existing 
methodology for calculating the historical benchmark, including, if 
finalized, the proposed changes detailed in section III.G.5. of this 
proposed rule.
    When setting the historical benchmark, we would continue to 
calculate the annualized and truncated per capita expenditures for 
beneficiaries who would have been assigned to the ACO using the 3 most 
recent years prior to the start of the agreement period for each of the 
four Medicare enrollment types. We would then trend the BY1 and BY2 
expenditures forward to BY3, using the existing blend of national and 
regional FFS expenditure growth rates, adjust for health risk using the 
CMS-HCC model, and apply benchmark year weights to the trended, risk-
adjusted expenditures for each Medicare enrollment type. The benchmark 
year weights would remain as follows: for new ACOs, BY1 (10 percent), 
BY2 (30 percent), BY3 (60 percent), and for ACOs in their second or 
subsequent agreement period, each benchmark year is weighted equally.
    As described in the following sections, we would apply an 
alternative approach to annually updating the ACO's historical 
benchmark, using an OACT-projected ACPT factor, and applying a discount 
to the benchmark update to support savings to the Medicare program; the 
discount factor would vary based on the ACO's regional efficiency to 
converge benchmarks gradually between ACOs with higher and lower 
spending compared to their regions. We also further explain that with 
the use of a discount factor, we would no longer apply a negative 
regional adjustment. We conclude this section with an overview of the 
steps for the calculation for the administratively-established 
benchmark update factor.
(2) Use of Accountable Care Prospective Trend in the Benchmark Update
    We are considering an approach that would transition the proposed 
three-way blend between the prospective ACPT and retrospectively 
determined regional and national growth rates (as described in section 
III.G.5.c. of this proposed rule) to an entirely prospectively set 
trend. This approach would further decouple benchmark updates from 
growth in realized FFS expenditures, thereby strengthening incentives 
for ACOs to participate in the Shared Savings Program and achieve 
savings.
    OACT annually develops and publishes United States Per Capita Cost 
(USPCC) growth projections for Medicare spending. As described in 
section III.G.5.c. of this proposed rule, we are proposing that OACT 
would calculate an ACPT, based on a modification of the existing USPCC 
growth projections used annually for establishing Medicare Advantage 
rates. We envision that an ACPT, with some additional modifications as 
described below, would serve as the core component of the 
administratively set benchmark update under the longer-term approach.
    We are considering how to calculate and apply the ACPT in a manner 
that maintains a consistent national benchmark update trend across ACOs 
for a given performance year, independent of when the ACO's agreement 
period began. We are considering an approach under which we would 
establish an ACPT every 5 years which would apply during that 5-year 
window. For example, if we were to establish an average annual trend 
for the years 2025 through 2029, we would then calculate a new average 
annual trend for the years 2030 through 2034, then for 2035 through 
2039, and so on for each subsequent period.\286\ An ACO's update factor 
for a given performance year would be derived from the average annual 
trend established for the 5-year window that includes the applicable 
performance year.
---------------------------------------------------------------------------

    \286\ ACPT 5-year growth projection trends include different 
growth rates for each year within the 5-year projection. However, 
for the purposes of simplicity, the overall average annualized 
growth rate over the 5-year period would be utilized, such that the 
growth rate is constant over each of the 5 years. Price and 
demographic projections would be considered at an annual level for 
the purposes of the adjustment for forecasting error.
---------------------------------------------------------------------------

    For example, an ACO beginning its 5-year agreement period in 2025 
would have a single update factor trend for all performance years under 
the agreement period. For illustration, Table V.D1 from the 2021 
Medicare Trustees Report \287\ projects overall per capita spending 
growth for Medicare Parts A and B at an annualized rate of 5.1 percent 
from a 2024 base year to what would be a fifth performance year in 
2029. Note that this projected spending growth serves as an 
illustrative proxy for what a corresponding ACPT might show, though it 
is based on a different methodology that is not customized to the mix 
of spending categories included in Shared Savings Program benchmark 
calculations. In contrast, an ACO beginning its 5-year agreement period 
in 2027 would have one trend rate for its first 3 performance years 
(2027, 2028, and 2029) and another for its last 2 performance years 
(2030 and 2031), as the update factor would be reset every 5 calendar 
years. This update factor would not change for the duration of the 5-
year period in response to changes to the OACT projection, with the 
exception of an adjustment for changes to the price and demographic 
components of the ACPT trend as described below, or to account for 
extreme and uncontrollable circumstances. We would plan to continue to 
apply the update factor as a flat dollar, risk-adjusted amount, 
consistent with the methodology for the

[[Page 46214]]

proposed use of ACPT in a three-way blend described in section 
III.G.5.c. of this proposed rule.
---------------------------------------------------------------------------

    \287\ https://www.cms.gov/files/document/2021-medicare-trustees-report.pdf.
---------------------------------------------------------------------------

    We are considering further refinements to calculating the ACPT as 
part of a longer-term approach for updating benchmarks using entirely 
administratively set update factors. For example, we are considering 
maintaining separate projections within the ACPT for price growth, 
volume/intensity growth, and demographic factors (with potential 
exceptions for certain service types such as Part B drugs, which are 
not currently projected using disaggregated growth assumptions). This 
disaggregation of these factors could be utilized in ACO benchmark 
updates (for service types where possible), as ACOs are anticipated to 
have impacts on volume/intensity growth but have minimal impact on 
price growth and demographic factors. Therefore, the ACPT volume-
intensity trend would be held constant for the duration of the 
agreement period, but retrospective adjustments could be made annually 
to account for any differences between projected and actual price 
growth and demographic factors. This would mitigate the effects of 
unexpected changes in assignable beneficiary demographics, as well as 
of inflationary pressures or other price changes on ACOs benchmarks. We 
would also incorporate adjustments to the ACPT to account for changes 
in relative price levels across counties, as has been done in other ACO 
initiatives that use national trend projections, such as the Next 
Generation ACO Model.
    By incorporating annual adjustments for changes in price and 
demographics, we expect that the administrative growth projection will 
exceed the observed volume/intensity growth, as ACOs generate savings 
relative to the growth projection. However, we are considering adding 
potential guardrails to the administrative growth projection in early 
years to ensure that forecasting error does not unfairly penalize ACOs 
or discourage participation. One option is to phase-in the 
administrative trend over the first 5 years, increasing the weighting 
of the administrative trend component of the update in the three-way 
blend calculation from 33 percent in PY1 to 50 percent in PY2, 75 
percent in PY3, and 100 percent thereafter. Another option would be to 
limit the contribution of forecasting error to savings and loss 
calculations during the first 5 years of the new methodology. For 
example, a floor could be set such that the national mean benchmark 
could not fall more than 2 percent below national mean FFS spending. 
CMS may consider applying either or both of these guardrail options as 
part of a prospectively-set update factor.
    As detailed in section III.G.5.c. of this proposed rule, we are 
proposing a prior savings adjustment with a 50 percent scaling factor 
for renewing and re-entering ACOs. Together, this proposed change and 
the changes to the benchmark update described in this RFI would act to 
limit the impact of an ACO's performance on its own benchmark. 
Increasing the 50 percent scaling factor for prior savings adjustments 
could be considered to further limit the impact of rebasing. The 
prospective update factor would remove this link within an agreement 
period and the prior savings adjustment would mitigate the impact of 
rebasing between agreement periods. After benchmarks converge to a 
regional baseline (as discussed in section III.G.7.d. of this proposed 
rule), the link between an ACO's savings and its subsequent benchmark 
would be severed completely. We anticipate that these changes would 
create and improve long-term incentives for ACOs to generate savings.
    We would also need to establish a process for considering 
additional factors when recalculating the ACPT prospective update 
factor every 5 years. One factor may be the size of the accrued wedge 
between benchmarks and realized FFS spending. It is vital that ACOs are 
permitted to retain savings in subsequent agreement periods for there 
to be a strong incentive to generate savings. Allowing a permanent 
wedge between benchmarks and FFS spending is also vital to giving ACOs 
flexibility to meet patient needs by providing care that has been 
traditionally unreimbursed under FFS, such as care management programs 
or services addressing social needs. Should this wedge grow excessive, 
however, the update trend may need to be slowed to recover more savings 
for the Medicare program and its beneficiaries. Over time, updated OACT 
ACPT projections would also come to reflect the impact of ACOs on 
spending, and therefore we may need to use other external indices as 
factors in determining the preset benchmark update factor to ensure 
that ACOs continue to retain accrued savings.
    We seek comment on these considerations for calculating an ACPT to 
be used as an administratively set benchmark update factor. We seek 
comment on the 5-year intervals for establishing an ACPT, and 
alternative approaches that would tie the ACPT to an ACO's agreement 
period. We also seek comment on approaches to accounting for price 
growth and demographic factors versus volume/intensity and 
considerations for guardrails to protect against projection error. 
Finally, we seek comment on approaches to updating the ACPT that would 
ensure it does not overly reflect ACOs' collective impact on spending.
(3) Discount Factor
    Under the approach we are considering for implementing a common 
risk-adjusted regional benchmark (described in section III.G.7.d. of 
this proposed rule) that encourages participation by both historically 
efficient (spending below regional average) and inefficient (spending 
above regional average) ACOs, we believe there would need to be a 
period of gradual convergence in spending between efficient and 
inefficient ACOs, while allowing benchmarks for both to remain above 
realized FFS spending as ACOs generate savings. Therefore, we are 
seeking comment on the approach of subtracting a modest annual discount 
factor from the fixed 5-year ACPT growth trend based on the relative 
efficiency of the ACO. For example, if the projected ACPT trend was 5.1 
percent annual growth, an ACO with a 0.2 percent discount factor would 
have a benchmark update factor based on a 4.9 percent annual growth 
rate (5.1 percent minus 0.2 percent). Overall, these discount factors 
would be intended to provide realistic targets that encourage 
participation by ACOs and providers and suppliers with spending above 
their regional average. Once in the program, these ACOs and providers 
and suppliers would have incentives to generate savings, and thus, 
gradually converge their spending more in line with historically lower 
spending ACOs.
    To determine what discount would be applied to an ACO's update 
factor, we would calculate a measure of the ACO's regional efficiency. 
We would compare the ACO's historical spending (the weighted-average 
spending for the ACO in benchmark year 3 to a regional benchmark (the 
weighted-average regional FFS expenditures for benchmark year 3). This 
calculation would be similar to the approach used to determine the 
difference between the average per capita expenditures for the ACO's 
regional service area, and the average per capita amount of the ACO's 
historical benchmark under Sec.  425.601(a)(8)(ii)(A). The discount 
would vary according to the regional efficiency of each participating 
ACO but, importantly, would not grow if an ACO successfully lowers 
spending (as it would under the current regional

[[Page 46215]]

adjustment methodology). Sample discount factors are shown in Table 70. 
If an ACO's historical spending was greater than its regional 
benchmark, we would apply a discount to the amount of the benchmark 
update, scaled such that a larger discount is applied for ACOs with 
increasingly higher spending (less efficient) compared to their 
regional benchmark. No discount would be applied to the update amount 
for ACOs with spending 2 percent or more below their regional 
benchmark. Applying larger discount factors to less efficient ACOs 
would converge benchmarks towards regionally consistent levels, 
allowing CMS to remove negative regional adjustments as further 
discussed in section III.G.7.c.(4) of this proposed rule while still 
driving convergence.
[GRAPHIC] [TIFF OMITTED] TP29JY22.112

    We have observed that ACOs make significant changes in composition 
of ACO participant TINs during an agreement period, by adding and 
removing ACO participants. To account for ACO participant TIN changes, 
we would recalculate the ACO's discount factor for each performance 
year of the agreement period based on its regional efficiency using the 
composition of its ACO participant TINs for the applicable performance 
year. That is, we would use the ACO's certified ACO participant list 
for the performance year to determine the ACO's historical spending 
based on expenditures for the beneficiaries who would have been 
assigned to the ACO in benchmark year 3 and determine the ACO's 
regional service area for calculating the ACO's regional benchmark, and 
thus its regional efficiency.
    We seek comment on this approach for calculating and applying a 
discount factor in determining the amount of an ACO's benchmark update. 
We seek comment on the intervals of the discount we described, and 
alternative approaches such as use of a sliding scale in determining 
the discount amount. We also seek comment on approaches to ensuring the 
discount is reflective of the ACO's regional efficiency, including the 
approach of recalculating the discount factor to reflect changes in an 
ACO's regional efficiency as a result of changes in the ACO's 
composition during its agreement period.
(4) Removal of Negative Regional Adjustments to the Benchmark
    In accordance with Sec.  425.601(a)(8), we apply a regional 
adjustment in establishing the ACO's historical benchmark, which is 
equal to a percentage of the difference between the average per capita 
amount of expenditures for the ACO's regional service area for BY3 and 
the ACO's historical benchmark.
    In the administratively-established benchmarking concept, we would 
no longer apply negative regional adjustments to the benchmark, 
although positive regional adjustments would remain. Under this 
approach, ACOs with higher than average historical spending would begin 
with a benchmark calculated solely using their historical experience. 
This would encourage providers and suppliers with higher historical 
spending relative to their region to participate in the Shared Savings 
Program, while continuing to reward ACOs with lower-than-average 
historical spending for their efficiency relative to their region. This 
approach builds on the policies proposed in section III.G.5.c.(5) of 
this proposed rule to mitigate the impact of the negative regional 
adjustment on ACOs, particularly those caring for high-risk 
populations.
    We are also considering approaches for addressing a potential 
concern that efficient ACOs would be disincentivized from adding less 
efficient providers and suppliers as ACO participants because it would 
reduce their regional adjustment. One approach would be to scale an 
ACO's initial, larger positive regional adjustment based on the overlap 
in beneficiaries that would have been aligned to the ACO using the 
ACO's initial ACO participant list and its updated ACO participant 
list. In this way, an ACO with spending below its regional average 
would retain its advantage conferred by the regional efficiency 
adjustment under its initial ACO participant list (to the extent it 
retains those ACO participants) while also being able to pursue the 
expanded savings opportunity afforded by the new benchmarking approach 
by adding less efficient providers and suppliers to its ACO participant 
list.
    We seek comment on this approach, and considerations related to 
removing the negative regional adjustment in establishing the ACO's 
historical benchmark under an administratively-established benchmark 
approach. We also seek comment on considerations for limiting 
disincentives for efficient ACOs to add less efficient providers and 
suppliers.
(5) Detailed Administratively-Established Benchmark Update Calculation
    The following is a step-by-step example of the administratively-
established benchmark update calculation on which we are seeking 
comment:
    <bullet> Step 1: Calculate the historical benchmark according to 
the existing Shared Savings Program benchmarking methodology 
(including, if finalized, the proposed changes detailed in section 
III.G.5. of this proposed rule), without applying negative regional 
adjustments.
    <bullet> Step 2: Risk-adjust the historical benchmark to account 
for changes in severity and case mix between BY3 and the performance 
year for each enrollment type.
    <bullet> Step 3: Apply the update factor to the risk-adjusted 
historical benchmark for each enrollment type, calculated as follows:
    ++ Start with the overall OACT-projected Shared Savings Program 
ACPT 5-year projected trend \288\

[[Page 46216]]

applicable for the ACO based on the start of its agreement period and 
the performance year for each enrollment type.\289\ The update rate 
over an agreement period may include ACPT projected trends from more 
than one 5-year period if the ACO's agreement period does not align 
with the 5-year cycle for ACPT calculation.
---------------------------------------------------------------------------

    \288\ As described in section III.G.5.c. of this proposed rule, 
we are proposing that OACT would develop a Shared Savings Program-
specific ACPT to incorporate into the update factor calculation. 
This projected trend would vary from the USPCC projections designed 
for MA payment purposes in that adjustments would be made to make it 
applicable to ACO spending calculations, including adding back 
hospice and removing IME, DSH, and uncompensated care payments (as 
is already done for benchmarking under the Global and Professional 
Direct Contracting Model and will continue when the model 
transitions to the redesigned ACO REACH Model on January 1, 2023).
    \289\ The ACPT would include trends for Aged & Disabled (A&D) 
and End Stage Renal Disease (ESRD) beneficiaries. The Aged & 
Disabled trend would apply for the disabled, aged/dual eligible, 
aged/non-dual eligible enrollment types.
---------------------------------------------------------------------------

    ++ Apply the average projected trend based on the number of years 
between BY3 and the performance year.
    ++ Apply any retrospective adjustments to the trend based on 
divergence between the price and demographic components of the ACPT 
projected trend and observed price trends and demographic changes. This 
retrospective adjustment would be calculated annually after the end of 
each performance year only for the price and demographic components (no 
such adjustment would be made for the volume-intensity component).
    ++ Subtract the relevant discount factor (as per the examples in 
Table 70, based on the regional efficiency of the ACO in BY3) from the 
adjusted trend for each year between BY3 and the performance year to 
determine the ACO's trend percentage.
    ++ Multiply the ACO's trend percentage by the average national ACPT 
value for assignment eligible beneficiaries (adjusted to reflect the 
ACO's relative risk in each eligibility category) to determine the flat 
dollar update amount.
    ++ Apply any guardrails as described in section III.G.7.c.(2) of 
this proposed rule.
    ++ Add the flat dollar update amount to the ACO's risk-adjusted 
historical benchmark for the applicable enrollment type.
    <bullet> Step 4: Calculate a single per capita benchmark amount by 
taking a weighted average across each enrollment type.
d. Convergence to Regional Benchmarks; Post-Convergence Phase
    Ultimately, this administratively-established benchmark approach 
would be partially intended to drive ACOs towards regional spending 
convergence, such that the Shared Savings Program could consider 
further benchmarking changes under which benchmarks would be 
established on a regionally consistent risk-adjusted basis across ACOs 
in the same area. This post-convergence phase would completely 
eliminate ratcheting effects by removing rebasing and would also 
decouple benchmarks from an ACO's historical spending, thereby creating 
a sustainable benchmarking approach that would support high ACO 
participation levels and reward ACOs for increased efficiency.
    Regionally consistent benchmarking has precedent in other CMS 
models and programs. Medicare Advantage benchmarks are established 
using beneficiary risk scores and the Medicare Advantage Ratebook of 
county risk-standardized benchmarks, as described in Sec. Sec.  422.258 
and 422.306. In the ACO REACH Model,\290\ the baseline component of the 
benchmark will be calculated either entirely or in part using a rate 
book with county benchmark expenditures and beneficiary risk scores. 
The Shared Savings Program calculates risk-adjusted county FFS 
expenditures for individual calendar years using a comparable approach, 
as discussed in section III.G.5.d. of this proposed rule.
---------------------------------------------------------------------------

    \290\ See the ACO REACH Request for Applications at https://innovation.cms.gov/media/document/aco-reach-rfa.
---------------------------------------------------------------------------

    ACO benchmarks in this post-convergence phase would be calculated 
based on a rate book of risk-standardized average per capita rates at 
the county level and beneficiary level risk scores. Crucially, the 
initial per capita county rates would reflect the average benchmark 
levels in the county, inclusive of the accrued wedge between benchmarks 
and realized spending, as opposed to reflecting average expenditures. 
An ACO's benchmark would be the product of its average beneficiary risk 
score, weighted by assigned beneficiary months, and its average 
regional benchmark rate, calculated as the weighted average of the 
county rates, weighted by the number of months of experience 
contributed by assigned beneficiaries residing in each county. The 
administratively set update factor described above would continue to be 
applied to ACO benchmarks in the post-convergence phase to determine 
average benchmark growth. As an example, say an ACO has assigned 
beneficiaries that reside entirely in two counties (County A and County 
B), with 50 percent of the assigned beneficiary population in each 
county. If the rate book rate for County A is $1,300 per beneficiary 
per month (PBPM) and the rate for County B is $1,100 PBPM, then the 
ACO's average regional benchmark rate would be $1,200 PBPM. If the 
ACO's assigned beneficiaries have an average risk score of 1.5, then 
the risk-adjusted benchmark would be $1,800 PBPM, pending application 
of the update factor. A regionally consistent benchmarking approach as 
described above would likely involve an annual determination of county 
rates tied to the publication of the rate book.
    The convergence phase would be intended to converge benchmarks 
toward some level above realized spending, but below predicted spending 
absent ACOs, assuming ACOs generate savings. We are considering several 
approaches for developing county per capita rates. One method under 
consideration would be to calculate risk-standardized average per 
capita expenditures and apply a scalar adjustment that accounts for 
prior savings or the accrued wedge. Alternatively, another approach 
could involve developing county rates by calculating a weighted average 
benchmark across ACO-assigned and unassigned beneficiary populations in 
the county. In either case, we would continue to use an 
administratively-established factor to update county rates over time; 
however, we anticipate the need for a process to monitor the size of 
the wedge within a region (the risk-adjusted difference between the 
benchmark and FFS spending) and to establish bounds that restrict 
regional rates from exceeding a certain level above FFS spending.
    We anticipate that the convergence phase will last between 5-10 
years, depending on participation rates and the pace of spending 
convergence within regions. We expect ACO spending will converge within 
regions under the changes described in preceding sections of this RFI 
because the incentives for providers and suppliers with high spending 
for their region to participate in ACOs and lower spending would be 
much stronger, and the ACOs in which those providers and suppliers 
participate would have strong savings potential. Convergence in risk-
adjusted spending may also be fostered by improvements to the risk 
adjustment methodology. Convergence in spending would not have to be 
complete, however, to transition to a post-convergence phase in which 
benchmarks are set based on a common regional rate that is risk-
adjusted for an ACO's aligned population characteristics. We expect 
some continued variation in ACO spending, but the convergence to 
regional rates would still provide all ACOs an opportunity to lower 
spending below their benchmarks. Still, the timing for

[[Page 46217]]

transitioning to the post-convergence phase is important, as it may 
cause a significant shift in benchmarks for many ACOs as the baseline 
component shifts from population-specific to regionally consistent. In 
order to maintain participation, it would be essential that this phase 
does not occur until a sufficient portion of providers are below the 
administratively projected regional benchmark.
    If the convergence phase takes longer than 5 years, we would need 
to address the potential rebasing effects for ACOs renewing for 
subsequent agreement periods under the new benchmarking approach. One 
approach would be to completely eliminate rebasing, and use the 
historical benchmark period from an ACO's first agreement period under 
the new benchmarking approach for subsequent agreement periods until 
the post-convergence phase. This approach would most directly eliminate 
rebasing effects, but would risk weakening the accuracy of the 
historical baseline expenditures as the number of years separating the 
baseline period and performance year increases. In prior rulemaking, we 
have acknowledged concerns about an approach that depends on older 
historical data in benchmark calculations (see, for example, February 
2016 proposed rule, 81 FR 5832 through 5834, 5865 and 5866), including 
operational complications and potential biases that result from use of 
older historical data when the ACO's composition of providers and 
suppliers changes over time. These complicating circumstances may 
become more pronounced with a longer convergence period and a larger 
gap between the historical benchmark and performance period. An 
alternative approach would be to continue to use a baseline period of 3 
years directly proceeding the start of the agreement period, but with 
ACO-specific adjustments to limit rebasing effects. For example, we are 
considering approaches that would build on the proposal, discussed in 
section III.G.5.c. of this proposed rule, to add prior ACO savings into 
subsequent benchmarks, with weighting to address changes in ACO 
composition.
    We seek comment on--
    <bullet> Considerations for the design of a regionally consistent 
benchmarking approach, including how to set fair and accurate risk-
standardized benchmarks, the process for annual updates to regional 
rates, and how to distinguish between enrollment types.
    <bullet> Considerations for the required conditions and timing for 
reaching this post-convergence phase with the use of regionally 
consistent benchmarks, as well as incentives to promote ACO spending 
convergence within a region.
    <bullet> Approaches to addressing rebasing effects for renewing and 
re-entering ACOs in subsequent agreement periods during the convergence 
phase.
    <bullet> Considerations for converging to nationally consistent 
spending versus regionally consistent spending.
e. Request for Comment on Addressing Health Equity Through Benchmarking
    Consistent with the Executive Order on Advancing Racial Equity and 
Support for Underserved Communities Through the Federal Government 
(E.O. 13985), we are committed to advancing equity in health and 
healthcare for all individuals and addressing inequities that exist in 
our policies and programs that serve as barriers to equal opportunity. 
The term ``equity'' is defined in E.O. 13985 as ``the consistent and 
systematic fair, just, and impartial treatment of all individuals, 
including individuals who belong to underserved communities that have 
been denied such treatment . . . .''
    Benchmarks based on historically observed spending may be 
inequitable to the extent that historical patterns reflect existing 
inequities in both access to care and the provision of care. We are 
interested in considering how direct modification of benchmarks to 
account for existing inequities in care can be used to advance health 
equity. Direct increases to benchmarks for historically underserved 
populations would grant additional financial resources to health care 
providers accountable for the care of these populations, and may work 
to offset historical patterns of underspending that influence benchmark 
calculation. Furthermore, setting payment in excess of current spending 
for groups experiencing disadvantage would incentivize ACOs to attract 
those groups with care and enhancements valued by these beneficiaries. 
Pairing such benchmark changes with monitoring of use of resources, 
quality, and outcomes can ensure that increased benchmarks are being 
used to address care inequities, rather than solely generating 
increased shared savings potential for ACOs benefitting from positive 
benchmark adjustments.
    The redesigned ACO REACH Model \291\ will be implementing a 
benchmark adjustment to address historical health inequities within CMS 
ACO initiatives, with the intent of incentivizing ACOs to seek out and 
form relationships with historically underserved beneficiaries. The ACO 
REACH benchmark adjustment is calculated at the beneficiary level, and 
provides for a $30 per beneficiary per month (PBPM) increase to an 
ACO's benchmark for each assigned beneficiary classified as being in 
the top decile of underserved beneficiaries across all beneficiaries in 
the ACO REACH Model. The adjustment is designed in a budget neutral 
manner, in which benchmarks will be reduced by a smaller $6 PBPM 
adjustment for each assigned beneficiary classified as being in the 
bottom five deciles. Beneficiaries will be stratified using a composite 
measure that incorporates a combination of ADI (percentile score from 
1-100) and Dual Medicaid Status (Medicare only vs. Full or Partial Dual 
Eligibility). The area-level measure (Area Deprivation Index) \292\ 
captures local socioeconomic factors correlated with medical 
disparities and underservice, while the beneficiary level measure (Dual 
Medicaid Status) captures economic challenges directly affecting 
individual beneficiaries' ability to access high-quality care. Because 
ADI is measured as a percentile (continuous variable), while Medicaid 
Status is a binary metric, a simple blending of the variables would 
underweight the ADI. Therefore, CMS will calculate the measure by 
starting with the ADI for a given beneficiary's census block group of 
residence (scored from 0-99 based on percentile relative to the 
nation), and applying a 25-point increase to the score for dually 
eligible beneficiaries. For example, a dually eligible beneficiary 
residing in a census block group with an ADI in the 75th percentile 
would receive a score of 75 + 25, for a total of 100.
---------------------------------------------------------------------------

    \291\ See the ACO REACH Request for Applications at https://innovation.cms.gov/media/document/aco-reach-rfa.
    \292\ The University of Wisconsin Neighborhood Atlas website 
(https://www.neighborhoodatlas.medicine.wisc.edu/) Area Deprivation 
Index was developed by researchers at the University of Wisconsin 
based on a measure developed by the Health Resources and Services 
Administration (HRSA) over 3 decades ago. It has been adapted to the 
Census Block Group level and includes factors measuring income, 
education, employment, and housing quality, which have been linked 
to a number of healthcare outcomes, to rank neighborhoods by 
socioeconomic disadvantage.
---------------------------------------------------------------------------

    Each ACO will then receive a net benchmark adjustment based on the 
number of its assigned beneficiaries in each category. For example, an 
ACO with 100 beneficiaries scoring in the top decile and 500 
beneficiaries in the bottom five deciles in a given month would receive 
a net neutral benchmark impact for that month [($30 PBPM x 100)--($6 
PBPM x 500) = 0].
    The ACO REACH health equity benchmark adjustment addresses

[[Page 46218]]

inequity in benchmarks calculated primarily using historical 
expenditures, where historical underspending for underserved 
beneficiaries informs benchmarks. In the context of the benchmarking 
approach outlined elsewhere in this section of this proposed rule, our 
intent would be to converge spending to the point where benchmarks can 
be calculated on a regionally consistent basis, which would address 
equity concerns associated with entrenched historical underspending. By 
utilizing risk-standardized regional rates to derive benchmarks, rather 
than blends of historical and regional spending that can entrench 
inappropriately low levels of spending for populations with unmet 
needs, the new benchmarking approach would facilitate setting 
benchmarks above current levels of spending for providers caring for 
underserved populations. Such adjustments could be implemented within 
the estimation of the predictive model of spending used for risk 
adjustment (the CMS-HCC model) or in a post-estimation benchmark 
adjustment as in ACO REACH so that benchmarks would support optimal 
rather than current spending for historically marginalized groups. 
These adjustments would not only act to correct resource disparities 
but also establish incentives for ACOs to attract underserved groups 
with enhanced care.
    Likewise, these and other approaches could be employed to preserve 
(if not expand) existing payment differentials that set payment higher 
for certain providers. Equity-motivated benchmark adjustments could be 
implemented, for example, to support additional funding for safety net 
providers (for example, CAHs, RHCs, and FQHCs). In other cases, add-on 
payments, such as DSH and IME, might continue to be carved out of ACO 
benchmarks and performance year expenditures, as they are now. We seek 
comment on other policy adjustments that should be considered for 
benchmark setting in the post-convergence phase.
    We seek comment on--
    <bullet> Approaches, generally, to addressing health inequities via 
the benchmark methodology for the Shared Savings Program, and 
specifically to incentivize ACOs to serve historically underserved 
communities.
    <bullet> Considerations for what data would need to be collected on 
Medicare beneficiaries and their communities (for example, need for and 
access to health care providers, transportation, and social services) 
and what factors should be considered to identify underserved 
communities and adjust ACO benchmarks.
    <bullet> Considerations for including a health equity benchmark 
adjustment in the Shared Savings Program in the near term comparable to 
the equity adjustment being tested within the ACO REACH Model.
    <bullet> Considerations for addressing health inequities in the 
context of the benchmarking concept outlined in this section of this 
proposed rule.
    <bullet> Considerations for monitoring and program integrity tools 
that would track the use of any health equity benchmark adjustments for 
the intended purposes.
    <bullet> Considerations for whether benchmark adjustments for ACOs 
that include CAHs, RHCs, FQHCs, and REHs as ACO participants would 
improve care for rural and underserved populations and increase 
participation by these providers and suppliers in the Medicare Shared 
Savings Program.

H. Medicare Part B Payment for Preventive Vaccine Administration 
Services

1. Statutory Background
    Under section 1861(s)(10) of the Act, Medicare Part B covers both 
the vaccine and its administration for the specified preventive 
vaccines--the influenza, pneumococcal, and hepatitis B virus (HBV) 
vaccines. Under sections 1833(a)(1)(B) and 1833(b)(1) of the Act, 
respectively, there is no applicable beneficiary coinsurance, and the 
annual Part B deductible does not apply for these vaccinations or the 
services to administer them. Payment for these vaccines is based on 95 
percent of the Average Wholesale Price (AWP) for a particular vaccine 
product except where furnished in the settings for which payment is 
based on reasonable cost, such as a hospital outpatient department 
(HOPD), rural health clinic (RHC), or Federally qualified health center 
(FQHC). We note that many other preventive vaccine products are not 
specified for Medicare Part B coverage under section 1861(s)(10) of the 
Act, such as the shingles vaccine, and instead are covered and paid for 
under Medicare Part D.
    Section 1861(s)(10)(A) of the Act, as amended by section 3713 of 
the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) 
(Pub. L. 116-136) includes the COVID-19 vaccine and its administration 
in the same subparagraph as the influenza and pneumococcal vaccines and 
their administration. We implemented this change in the interim final 
rule with comment period titled, ``Additional Policy and Regulatory 
Revisions in Response to the COVID-19 Public Health Emergency,'' 
published in the November 6, 2020 Federal Register (85 FR 71145 through 
71150). In that rule, we established that payments for COVID-19 
vaccines and vaccine administration would be made in the same manner as 
payments for the influenza and pneumococcal vaccines. In section 
III.H.5. of this proposed rule, we propose to permanently codify 
regulatory changes published in the November 6, 2020 IFC.
2. Refinement to the Payment Amount for Preventive Vaccine 
Administration

a. Background for Medicare Part B Payment for Administration of 
Influenza, Pneumococcal, HBV Vaccines

    Vaccine administration services described under section 1861(s)(10) 
of the Act are not technically valued or paid under the PFS, as they 
are not included within the statutory definition of physicians' 
services in section 1848(j)(3) of the Act. Prior to CY 2022, we had 
based payment rates for the administration of these preventive vaccines 
by suppliers such as physicians, NPPs, and mass immunizers on an 
evaluation of the resource costs involved in furnishing the service, 
which is similar to the methodology that we use to establish payment 
rates for the PFS. Payments for the administration of the preventive 
vaccines by these suppliers are geographically adjusted based on the 
location of where the service was performed. Under the Outpatient 
Prospective Payment System (OPPS), we assign a payment rate for 
administering these preventive vaccines and the payment rates are 
applicable for preventive vaccine administration services by hospitals 
and home health agencies. Certain other types of providers and 
suppliers, such as RHCs, FQHCs and critical access hospitals (CAHs), 
are paid based on reasonable cost for vaccine administration.
    We provided a discussion in the CY 2022 PFS final rule on the 
history of the valuation of the three HCPCS codes, G0008, G0009, and 
G0010, which describes the services to administer an influenza, 
pneumococcal, and HBV vaccine, respectively (86 FR 65180 through 
65182). We explained that we generally had established payment rates 
for the three codes based on a direct crosswalk to the PFS payment rate 
for CPT code 96372 (Therapeutic, prophylactic, or diagnostic injection 
(specify substance or drug); subcutaneous or intramuscular). 
Additionally, we stated that using this methodology resulted in 
reductions in

[[Page 46219]]

the payment rates for the preventive vaccine administration services 
over several years and raised concerns from interested parties. 
Therefore, we attempted to address the reduction in payment rates for 
these vaccine administration HCPCS codes in the CY 2020 and CY 2021 PFS 
final rules (84 FR 62798 and 85 FR 84626 through 84628, respectively) 
by maintaining the CY 2019 payment rate for all three codes.
    In rulemaking for the CY 2022 PFS, we continued efforts to 
establish payment for vaccine administration services on a long-term 
basis. In the CY 2022 PFS proposed rule (86 FR 39220 through 39224), we 
included a comment solicitation requesting information that 
specifically identifies the resource costs and inputs that should be 
considered when determining the payment amount for vaccine 
administration services. In the CY 2022 PFS final rule (86 FR 65183 
through 65187), we discussed the feedback received from a wide variety 
of interested parties in response to our comment solicitation. In that 
rule, we explained that we agreed with commenters on the need to 
establish stable payment rates that consider the costs associated with 
administering the preventive vaccines included in the Part B preventive 
vaccine benefit. In particular, we agreed that the payment rates for 
administration of the influenza, pneumococcal and hepatitis B vaccines 
are too low and need to be adjusted to reflect the costs incurred by 
healthcare providers. Furthermore, we agreed with commenters who stated 
that we should decouple payment for these vaccine administration 
services from the crosswalk to the PFS and treat them independently.
    Additionally, in the CY 2022 PFS final rule (86 FR 65185), we 
explained that based on the history and status of payment for 
preventive vaccine administration and given the concerns gathered 
through the comment solicitation we believed that we needed to act 
expeditiously to update payment rates for the administration of 
preventive vaccines paid under Medicare Part B, effective January 1, 
2022. In addition, we believed that the timing was appropriate for 
establishing a predictable payment rate for preventive vaccine 
administration since the PHE had ignited a hypervigilance for 
infectious diseases.
    Therefore, for CY 2022, we finalized a uniform payment rate of $30 
for the administration of an influenza, pneumococcal or HBV vaccine 
covered under the Medicare Part B preventive vaccine benefit at section 
1861(s)(10) of the Act. We explained that since the administration of 
the preventive vaccines described under section 1861(s)(10) of the Act 
are finalized independent of the PFS, that these payment rates will be 
updated as necessary independently of the valuation of any specific 
codes under the PFS.
b. Background for Medicare Part B Payment for Administration of COVID-
19 Vaccines
    In the CY 2022 PFS final rule we stated that under the authority 
provided by section 3713 of the CARES Act, we have established specific 
coding and payment rates for the COVID-19 vaccine and its 
administration through technical direction to Medicare Administrative 
Contractors (MACs) and information posted publicly on the CMS 
website.\293\ We also provided a detailed history on how the initial 
payment rates for the administration of the COVID-19 vaccines were 
determined and how the payment policy evolved to a rate of $40 per dose 
(86 FR 65181 and 65182).
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    \293\ https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/covid-19-vaccines-and-monoclonal-antibodies.
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    As discussed above in this section, in the CY 2022 PFS proposed 
rule (86 FR 39220 through 39224) we included a comment solicitation 
requesting information that specifically identifies the resource costs 
and inputs that should be considered when determining a payment amount 
for preventive vaccine administration. As part of the comment 
solicitation, we requested feedback specifically related to the 
circumstances and costs associated with furnishing the COVID-19 
vaccines to ensure we took these into consideration when determining 
our payment policy. In the CY 2022 PFS final rule (86 FR 65185), we 
discussed the feedback received in response to our comment solicitation 
with regard to the COVID-19 pandemic. In that rule, we recognized that 
the PHE has posed and continues to pose unique challenges for 
vaccination providers, particularly with respect to the administration 
of vaccines for COVID-19. For example, we anticipate that healthcare 
providers will continue to experience unusual costs associated with 
staffing, scheduling, and reporting requirements as increasing numbers 
of patients receive additional doses and boosters of the COVID-19 
vaccines in the near future, and as health care providers adapt their 
vaccine delivery infrastructure accordingly. However, after the PHE, we 
anticipate that these costs will go down as patient volumes stabilize 
and as healthcare providers incorporate tasks such as scheduling and 
reporting into their routine clinical practice. For example, while we 
may see annual vaccination for COVID-19 similar to influenza, these 
vaccinations may happen in a more predictable manner, which would 
provide healthcare settings more time and ability to plan ahead for 
future vaccination needs. In addition, we noted that healthcare 
providers will have already made certain capital investments associated 
with the COVID-19 vaccines, such as ultra-cold storage freezers and 
software upgrades, during the course of the PHE, and thus, after the 
PHE such investments will no longer represent a significant additional 
cost over and above the costs of administering other preventive 
vaccines. For example, we believe recurrent staffing costs for COVID-19 
vaccines may mirror the staffing needs for the administration of the 
yearly influenza vaccine. At the same time, we recognized that the 
formal termination of the PHE will not necessarily coincide with an 
immediate return to pre-pandemic circumstances, and that some of the 
additional costs mentioned above may persist while conditions 
normalize. For these reasons, we believed that it was appropriate to 
establish a single, consistent payment rate for the administration of 
all Part B preventive vaccines following the end of the calendar year 
in which the PHE expires. That is, effective January 1 of the year 
following the year in which the PHE ends, the $40 payment rate for 
administration of the COVID-19 vaccines will be adjusted to align with 
the payment rate for the administration of other Part B preventive 
vaccines (86 FR 65185).
c. Proposed Adjustment to the Payment Amount for Administration of 
Preventive Vaccines for Geographic Locality
    Our method of paying for the administration of preventive vaccines 
has varied over time. Prior to March 1, 2003, we paid for the 
administration of an influenza, pneumococcal, or HBV vaccine, at the 
same rate as CPT code 90782 for the year corresponding to the date of 
service on the claim.\294\ For dates of service on or after March 1, 
2003 through December 31, 2021, the vaccine administration payment 
rates for an influenza, pneumococcal, or HBV vaccine were established 
through notice-and-comment rulemaking using a crosswalk to the payment 
rate for similar services paid under the PFS,

[[Page 46220]]

such as, CPT code 96372 (Therapeutic, prophylactic, or diagnostic 
injection (specify substance or drug); subcutaneous or intramuscular) 
or CPT code 36000 (Introduction of needle or intracatheter, vein). 
Using the direct crosswalk to a similar service under the PFS requires 
applying the PFS payment calculation. This formula that uses a HCPCS 
code's relative value units (RVUs) for work, practice expense (PE), and 
malpractice (MP) adjusted by the location where the service is 
furnished (that is, geographic practice cost indices (GPCIs)). The 
GPCIs reflect the relative costs of work, PE, and MP in an area 
compared to the average national costs for furnishing the service. 
Thus, in order to calculate the payment for the vaccine administration 
codes, the work, PE, and MP RVUs are adjusted by the GPCIs to reflect 
the variations in the costs of furnishing the services.
---------------------------------------------------------------------------

    \294\ Pub. 100-04, Chapter 18, Section 10.2.5.2. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c18pdf.pdf.
---------------------------------------------------------------------------

    For CY 2022, we decoupled payment for these vaccine administration 
services from the PFS crosswalk and finalized a payment rate of $30 for 
the administration of an influenza, pneumococcal, or HBV vaccine and a 
payment rate of $40 for the administration of COVID-19 vaccines. 
However, in the CY 2022 PFS final rule, we inadvertently neglected to 
address a geographic adjustment policy for these payment rates and 
instead, noted only that payments would be geographically adjusted. 
When we posted the CY 2022 payment rates for preventive vaccine 
administration to the seasonal influenza web page, we posted locality-
specific payment rates based on application of the PFS GPCIs to the 
finalized payment rate.\295\ Similarly, when we posted the CY 2022 
payment rates for the COVID-19 vaccine administration to the COVID-19 
vaccine web page, we posted locality-specific payment rates based on 
application of the PFS GPCIs to the finalized payment rate.\296\
---------------------------------------------------------------------------

    \295\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/VaccinesPricing.
    \296\ https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/covid-19-vaccines-and-monoclonal-antibodies.
---------------------------------------------------------------------------

    In this proposed rule, we are proposing a geographic adjustment 
policy that would apply to preventive vaccine administration services 
for CY 2023 and subsequent years. We continue to believe that it is 
appropriate to adjust the payment amount for the administration of 
preventive vaccines to reflect cost differences for each geographic 
locality. For example, suppliers' costs for rent or employee wages 
could vary significantly across different geographic areas. We also 
continue to believe that the geographic variation in costs of 
administering preventive vaccines provided by suppliers such as 
physicians, NPPs, and mass immunizers is similar to the geographic 
variation in the cost of physicians' services paid under the PFS.
    Since we have decoupled payment for these vaccine administration 
services from the PFS crosswalk and finalized a payment rate for them, 
we believe the next step in establishing appropriate payment for 
preventive vaccine administration services independent of the PFS would 
be to consider a more independent approach to geographic payment 
adjustment. The PFS GPCIs reflect cost differences for each geographic 
locality for each of the three distinct components of PFS services 
(work, PE, and MP). In contrast, the payment rate we have established 
for administration of the flu, pneumococcal, and HBV preventive 
vaccines is a flat rate payment of $30, and for the administration of 
COVID-19 vaccines is a flat rate payment of $40. As such, a single 
adjustment factor could be used to apply the geographic locality 
adjustment for these services. In addition to calculating the three 
component GPCIs (work, PE and MP) to adjust payment under the PFS, 
under section 1848(e)(2) of the Act, we also calculate a Geographic 
Adjustment Factor (GAF) for each fee schedule area and, as we explain 
below, we are proposing to use this GAF described in Sec.  414.26 to 
geographically adjust payment for preventive vaccine administration 
services beginning for CY 2023. Specifically, we are proposing to use 
the GAF to adjust the payment to reflect the costs of administering 
preventive vaccines in each of the PFS fee schedule areas. The GAF is 
calculated using the three component GPCIs under the PFS (work, PE, and 
malpractice), and is calculated for each PFS fee schedule area as the 
weighted composite of all three GPCIs for each fee schedule area using 
the national GPCI cost share weights. The GAF, which is described under 
our regulation at Sec.  414.26, is further discussed in section II.D. 
of this proposed rule, and the specific proposed GAF values for each 
fee schedule area are posted in Addendum D to this proposed rule.
    We also considered continuing to adjust the payment amount for 
administration of preventive vaccines by applying the PFS GPCIs to 
reflect cost differences for each geographic area. However, to 
effectuate this adjustment, this method would require a crosswalk to 
the RVUs established under the PFS for a CPT code that describes a 
similar service and is reflective of the mix of work, PE and MP for 
preventive vaccine administration services. Having recently 
disconnected payment for preventive vaccine administration services 
from the PFS through rulemaking as explained above, we did not believe 
it would be appropriate to continue connecting these payments to the 
PFS in this way for purposes of geographic adjustment.
    We have opted to propose use of the GAFs to adjust payment for the 
preventive vaccine administration services for geographic cost 
differences beginning for CY 2023. As we discuss above and in the CY 
2022 PFS final rule (86 FR 65180-65194), we engaged the preventive 
vaccine community and established a stable payment amount for 
preventive vaccine administration that is based on resource costs. 
Since calculation of the GAFs incorporates the fundamental relative 
cost structure of the PFS GPCIs, but is a single factor that is 
weighted by the overall relative share of the three PFS component 
GPCIs, we believe application of the single GAF to geographically 
adjust the payment rate for preventive vaccine administration services 
based on costs in a given locality would be a more appropriate, 
streamlined approach to geographic adjustment that results in similar 
payment. Additionally, this method avoids the need to refer to the 
component RVUs for any particular reference service that is valued 
under the PFS, and thus gets us closer to updating the preventive 
vaccine administration rates independent of the PFS.
    We propose to amend our regulation at Sec.  410.152 to codify the 
use of the GAFs for each PFS fee schedule area to adjust payment 
amounts for the preventive vaccine administration services (influenza, 
pneumococcal, HBV, and COVID-19) to reflect the cost differences in 
furnishing these services in different fee schedule areas. We note that 
under this proposal, beginning January 1, 2023 we would apply the GAF 
to the $40 payment amount for COVID-19 vaccine administration service 
so long as the EUA declaration is still in place, as discussed in 
section III.H.4.d.i. of this proposed rule. We also note that we 
discuss payment for the administration of COVID-19 monoclonal antibody 
products in section III.H.4. of this proposed rule.
    We invite public comment on our proposal to adjust the payment 
amount for the administration of preventive vaccines for geographic 
cost variations using the GAF. We also welcome comments on any other 
factors that could be used to make this payment adjustment to reflect 
geographic cost differences.

[[Page 46221]]

    In this proposed rule, we are also proposing to amend our 
regulations to codify the payment amount established for administration 
of preventive vaccines in the CY 2022 PFS final rule and the proposed 
method for adjusting this rate for cost differences in each geographic 
locality. We note, as discussed in section III.H.2.d. of this proposed 
rule, we are proposing additional revisions to Sec.  410.152 to reflect 
an annual adjustment to the payment amount for administration of 
preventive vaccines to reflect changes in cost using the Medicare 
Economic Index (MEI).
    We also note that Sec.  410.152(h) currently contains outdated 
payment policies for pneumococcal vaccine administration. Therefore, in 
this proposed rule we propose to revise Sec.  410.152 by replacing the 
current paragraph (h) to reflect the following:
    <bullet> Effective January 1, 2022, the established payment amount 
under Medicare Part B for administration of influenza, pneumococcal, 
and HBV vaccines is $30. For preventive vaccines administered January 
1, 2022 through December 31, 2022, payments under Medicare Part B for 
administration of preventive vaccines are adjusted to reflect 
geographic cost variations using the GPCIs established under the PFS 
and the RVUs for a designated reference code under the PFS. Beginning 
January 1, 2023, we would adjust the payment amount for the 
administration of preventive vaccines for geographic cost variations 
using the GAF described in Sec.  414.26.
    <bullet> Effective January 1, 2022, the established payment amount 
under Medicare Part B for administration of COVID-19 vaccines is $40. 
For COVID-19 vaccines administered January 1, 2022 through December 31, 
2022, payments under Medicare Part B for administration of COVID-19 
vaccines are adjusted to reflect geographic cost variations using the 
GPCIs established under the PFS and the RVUs for a designated reference 
code under the PFS. Beginning January 1, 2023, we would adjust the 
payment amount for the administration of COVID-19 vaccines for 
geographic cost variations using the GAF described in Sec.  414.26.
    <bullet> Effective January 1 of the year following the year in 
which the PHE ends, the payment rate for administration of the COVID-19 
vaccines will be adjusted to align with the payment amount for the 
administration of other Part B preventive vaccines. We note, as 
discussed in section III.H.4.d.i. of this proposed rule, we are 
proposing to clarify that this policy would be dependent on the 
declaration under section 564 of the Federal Food, Drug, and Cosmetic 
Act (FD&C Act), that is, EUA declaration for drugs and biological 
products.
    We solicit comment on these proposals and the proposed amendments 
to the regulation text.
d. Proposed Annual Adjustment to the Payment Amount for Administration 
of Preventive Vaccines To Reflect Changes in Cost
    As part of the comment solicitation in the CY 2022 PFS proposed 
rule, we requested feedback on whether CMS should use a different 
process to update the payment rates for administration of the 
preventive vaccines described in section 1861(s)(10) of the Act on an 
annual basis. Some commenters provided feedback in response to this 
specific inquiry. One commenter suggested that incremental updates 
should be made to the payment rate each year. Another commenter stated 
that annual updates to the vaccine administration payment rates based 
on OPPS claims data would be a reliable and data-based method for 
updating the payment rate and would prevent the issues that have 
occurred in the past with the crosswalk under the PFS to CPT code 
96372. In response to those comments, we stated that we would continue 
to seek feedback on an appropriate mechanism for updating these 
payments on a yearly basis by, for example, applying an annual 
inflation factor, for example the increase in the MEI, to the payment 
rate in order to reflect increases in costs faced by providers and 
suppliers that furnish the service; and that we plan to address 
updating the payment rate for Part B preventive vaccine administration 
in future rulemaking.
    We believe that finalizing a $30 payment amount that is adjusted 
for geographic locality for the service to administer preventive 
vaccines in CY 2022 was the first step in the development of a Part B 
payment methodology that provides predictable payment to the providers/
suppliers furnishing these vaccines. For CY 2023, we discuss below how 
we propose to annually update the $30 payment amount to account for 
changes in costs associated with furnishing the service.
    To account for the change in costs of administering preventive 
vaccines, we are proposing to update the payment amount (that is, $30) 
established in the CY 2022 PFS final rule for the administration of 
preventive vaccines based upon the annual increase to the MEI. The MEI 
is defined in section 1842(i)(3) of the Act and is used to update 
payment amounts in other healthcare settings. For example, the MEI is 
used to update the non-drug component of the OTP payment bundle and is 
also used to update the fixed-dollar payment amount for the originating 
site facility fee for Medicare telehealth services. The MEI is a fixed-
weight input price index that reflects the physicians' own time and the 
physicians' practice expenses, with an adjustment for the change in 
economy-wide, private nonfarm business total factor productivity. The 
MEI was last revised in the CY 2014 PFS final rule with comment period 
(78 FR 74264) and the proposal to rebase and revise the MEI for CY 2023 
can be found in section II.M. of this proposed rule. The current 
forecast of the increase in the MEI for CY 2023 is 3.8 percent based on 
the proposed 2017-based MEI. We note that the CY 2023 MEI increase 
factor for the final rule will be based on historical data through the 
2nd quarter of 2022.
    In developing the proposed method to update the payment amount for 
administering preventive vaccines, we considered other potential update 
factors, such as the Bureau of Labor Statistics Consumer Price Index 
for All Items for Urban Consumers (Bureau of Labor Statistics 
#CUUR0000SA0 (https://www.bls.gov/cpi/data.htm). The Consumer Price 
Index for All Items (CPI-U) is a measure of the average change over 
time in the prices paid by urban consumers for a market basket of 
consumer goods and services. However, we concluded that a healthcare-
specific update factor, such as the MEI, would be more appropriate for 
suppliers that administer preventive vaccines than the CPI-U, which 
measures general inflation, as the MEI would more accurately reflect 
the change in the prices of goods and services included in the vaccine 
administration service. We also considered using a labor-specific 
series for the inflation factor since a main source of the expenses 
related to the administration of vaccines are related to the staff who 
administer them. For example, we considered the Employment Cost Index 
(ECI)--Wages and salaries for All Civilian workers in Hospitals 
(current forecast through CY 2023 is 4.2 percent) or the ECI--Wages and 
salaries for All Civilian workers in Health care and social assistance 
(current forecast through CY 2023 is 3.8 percent). However, we 
concluded that an update factor that takes into account other costs, 
such as the MEI, would be more appropriate for suppliers that 
administer preventive vaccines than the ECI.
    We note that under this proposal, beginning January 1, 2023 we 
would

[[Page 46222]]

update the $40 payment amount for COVID-19 vaccine administration 
service based upon the proposed 2017-based MEI so long as the EUA 
declaration is still in place, as discussed in section III.H.4.d.i. of 
this proposed rule. We also note that we discuss payment for the 
administration of COVID-19 monoclonal antibody products in section 
III.H.4. of this proposed rule.
    Accordingly, we propose to annually update the payment amount for 
administration of preventive vaccines based upon the most recently 
available historical annual growth in the MEI available at the time of 
rulemaking. We propose to codify this proposal in tandem with the 
revisions discussed above in section III.H.2.c. of this proposed rule 
under Sec.  410.152. We invite public comment on this proposal. We also 
welcome comments on potential approaches to updating payment rates for 
administration of preventive vaccines other than the MEI that could be 
used as an annual adjustment to account for the change in costs 
associated with administering preventive vaccines.
e. Summary of Proposals and Implementation
    In summary, for CY 2023 we propose to annually update the payment 
amount for the administration of Part B preventive vaccines based upon 
the increase in the MEI. Additionally, we propose to adjust this 
payment amount to reflect cost differences for the geographic locality 
based upon the fee schedule area where the preventive vaccine is 
administered using the GAF. These adjustments would apply to HCPCS 
codes G0008, G0009, and G0010 effective January 1, 2023.
    With regard to COVID-19 vaccine administration, we stated in the CY 
2022 PFS final rule that we will maintain the current payment rate of 
$40 per dose, which is geographically adjusted as described above, for 
the administration of the COVID-19 vaccines through the end of the 
calendar year in which the ongoing PHE ends. Effective January 1 of the 
year following the year in which the PHE ends, the payment rate for 
COVID-19 vaccine administration will be set at a rate to align with the 
payment rate for the administration of other Part B preventive 
vaccines. For example, if the COVID-19 PHE ends in CY 2022, the payment 
amount for COVID-19 vaccine administration would change from $40 to $30 
effective January 1, 2023, and we would apply the proposed geographic 
adjustments and the proposed annual update as proposed for the other 
preventive vaccine administration services as discussed above. We note, 
as discussed in section III.H.4.d.i. of this proposed rule, we are 
proposing to clarify that this policy would be dependent on the 
declaration under section 564 of the FD&C Act (EUA declaration) for 
drugs and biological products. Several CPT codes used for billing 
COVID-19 vaccine administration and a list of effective COVID-19 
vaccine administration codes is available on the CMS web page.\297\
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    \297\ https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/covid-19-vaccines-and-monoclonal-antibodies.
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3. In-Home Additional Payment for Administration of COVID-19 Vaccines
a. Background
    On June 9, 2021, we announced a new add-on payment with a national 
rate of approximately $35.00 when a COVID-19 vaccine is administered in 
the home, and on August 24, 2021, we expanded the circumstances under 
which the in-home add-on payment is available.<SUP>298 299</SUP> Under 
this policy, providers and suppliers that administer a COVID-19 vaccine 
in the home under certain circumstances can bill Medicare for one of 
the existing COVID-19 vaccine administration CPT codes \300\ along with 
HCPCS code M0201 (COVID-19 vaccine administration inside a patient's 
home; reported only once per individual home per date of service when 
only COVID-19 vaccine administration is performed at the patient's 
home). The total national average payment to providers and suppliers 
administering a COVID-19 vaccine in the home is $75.50 dollars per dose 
($40 for COVID-19 vaccine administration and $35.50 for the additional 
payment for administration in the home), and both payments are 
geographically adjusted using PFS GPCIs as discussed in section 
III.H.2.c. of this proposed rule. In the CY 2022 PFS final rule (86 FR 
65187 and 65188), we provide a detailed explanation on how the payment 
amount was established. In announcing the add-on payment for in-home 
COVID-19 vaccine administration, we noted that we established these 
policies on a preliminary basis to ensure access to COVID-19 vaccines 
during the public health emergency and that we will continue to 
evaluate the needs of Medicare patients and these policies, and address 
them in the future, as needed.
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    \298\ https://www.cms.gov/newsroom/press-releases/biden-administration-continues-efforts-increase-vaccinations-bolstering-payments-home-covid-19.
    \299\ https://www.cms.gov/newsroom/press-releases/cms-expands-medicare-payments-home-covid-19-vaccinations.
    \300\ https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/covid-19-vaccines-and-monoclonal-antibodies.
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    In the CY 2022 PFS proposed rule (86 FR 39224 through 39226), we 
included a comment solicitation to collect feedback on these policies 
and potential future changes. As part of the comment solicitation, we 
requested feedback related to our definition of ``home'', program 
integrity concerns, changes that we should consider, costs associated 
with administering COVID-19 vaccines in the home, and whether outside 
of a PHE there is a need to vaccinate people in the home rather than 
going to a health care provider or supplier. In the CY 2022 PFS final 
rule (86 FR 65188 through 65190), we discussed the feedback received 
and that commenters overwhelmingly recommended that we continue making 
the additional payment beyond the end of the PHE, with many also 
supporting extending the payment to other preventive vaccines, either 
permanently or until the end of the PHE. Commenters emphasized the 
importance of increasing vaccination rates and making vaccines 
available to vulnerable homebound beneficiaries who face barriers 
including chronic illness, financial and social precarity, and lack of 
access to digital resources.
    In that rule, we agreed with commenters that the added costs and 
compelling needs required CMS to adopt the in-home add-on payment rate 
for COVID-19 vaccine administration. In addition, we stated that since 
we did not expect those needs or costs to diminish immediately with the 
end of the PHE, we believed it would be appropriate to leave the in-
home add-on payment rate in place through the end of the CY in which 
the PHE ends. For example, we anticipated that additional COVID-19 
vaccine booster doses will be needed. In addition, we believed that 
that this policy would set clear expectations for vaccine providers and 
suppliers and allow for a more gradual transition to a permanent 
payment policy.
    Therefore, we finalized continuation of the additional payment of 
$35.50 when a COVID-19 vaccine is administered in a beneficiary's home 
under certain circumstances until end of the calendar year in which the 
PHE ends. As we discussed in the CY 2022 PFS final rule, extending the 
availability of the in-home add-on payment past the end of the PHE 
maximizes access to COVID-19 vaccines for vulnerable homebound 
beneficiaries during the gradual return to normal conditions following 
the formal termination of the PHE. We also explained that this

[[Page 46223]]

extension of payment past the end of the PHE affords CMS the 
opportunity to monitor vaccine uptake data (86 FR 65189).
b. Conditions for Billing HCPCS Code M0201
    In establishing the additional payment for COVID-19 vaccine 
administration in the home, we also established certain conditions for 
the add-on payment described by HCPCS code M0201. In the CY 2022 PFS 
final rule, we provide a detailed discussion on how we established the 
certain conditions under which the code can be used, and the situations 
we contemplated to arrive at our final payment policy (86 FR 65187 and 
65188).
    For purposes of this add-on payment for in-home COVID-19 vaccine 
administration, the following requirements apply when billing for HCPCS 
code M0201: <SUP>301 302</SUP>
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    \301\ https://www.cms.gov/medicare/covid-19/medicare-covid-19-vaccine-shot-payment.
    \302\ https://www.cms.gov/files/document/vaccine-home.pdf.
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    <bullet> The patient has difficulty leaving the home to get the 
vaccine, which could mean any of these:
    ++ They have a condition, due to an illness or injury, that 
restricts their ability to leave home without a supportive device or 
help from a paid or unpaid caregiver;
    ++ They have a condition that makes them more susceptible to 
contracting a pandemic disease like COVID-19; or
    ++ They are generally unable to leave the home, and if they do 
leave home, it requires a considerable and taxing effort.
    <bullet> The patient is hard-to-reach because they have a 
disability or face clinical, socioeconomic, or geographical barriers to 
getting a COVID-19 vaccine in settings other than their home. These 
patients face challenges that significantly reduce their ability to get 
vaccinated outside the home, such as challenges with transportation, 
communication, or caregiving.
    <bullet> The sole purpose of the visit is to administer the COVID-
19 vaccine. Medicare will not pay the additional amount if the provider 
or supplier furnished another Medicare covered service in the same home 
on the same date.
    <bullet> A home can be:
    ++ A private residence, temporary lodging (for example, a hotel or 
motel, campground, hostel, or homeless shelter);
    ++ An apartment in an apartment complex or a unit in an assisted 
living facility or group home (including assisted living facilities 
participating in the CDC's Pharmacy Partnership for Long-Term Care 
Program when their residents are vaccinated through this program);
    ++ A patient's home that is made provider-based to a hospital 
during the PHE for COVID-19; or
    ++ Communal spaces of a multi-unit or communal living arrangement.
    <bullet> A home cannot be:
    ++ An institution that meets the requirements of sections 
1861(e)(1), 1819(a)(1), or 1919(a)(1) of the Act, which includes 
hospitals and skilled nursing facilities (SNFs), as well as most 
nursing facilities under Medicaid.\303\
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    \303\ 42 CFR 409.42(a).
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    The COVID-19 vaccine must be administered inside an individual's 
home. For this purpose, an individual unit in a multi-dwelling building 
is considered a home. For example, an individual apartment in an 
apartment complex or an individual bedroom inside an assisted living 
facility or group home is considered a home. HCPCS code M0201, as noted 
in the code descriptor, can be billed only once per individual home per 
date of service. Medicare pays the additional payment amount for up to 
a maximum of 5 vaccine administration services per home unit or 
communal space within a single group living location; but only when 
fewer than 10 Medicare patients receive a COVID-19 vaccine dose on the 
same day at the same group living location.
c. Proposal for CY 2023
    Subsequent to the CY 2022 PFS final rule, we have received 
suggestions from interested parties that this in-home add-on payment 
should be applied more broadly to all preventive vaccines, and concerns 
that discontinuation of the payment would negatively impact access to 
preventive vaccines for vulnerable homebound beneficiaries. While we 
agree with these concerns, we also believe that we need to learn more 
about the populations served through the current in-home add-on 
payment, and other potential populations that may not have been able to 
access a COVID-19 vaccine despite the availability of the in-home add-
on payment, to understand the barriers they face in receiving 
vaccinations in their home versus in the community. We also need to 
consider potential program integrity concerns.
    We believe continuing the additional payment for at-home COVID-19 
vaccinations for another year would provide us time to track 
utilization and trends associated with its use to inform the policy for 
CY 2024. At this time, we are not extending the policy to include the 
other preventive vaccines. One of the reasons we established this rate 
is to account for the post-administration time that the health care 
professional must spend in the home to monitor the patient after 
administration of the COVID-19 vaccine. Administration of the COVID-19 
vaccine typically involves monitoring the patient for at least 15-30 
minutes post-injection which is not the general administration protocol 
for other vaccines. The in-home add-on payment helps to account for the 
costs associated with special handling of the vaccine and the extra 
time spent with the patient when a vaccine is administered in the home.
    Therefore, for CY 2023 we propose to continue the additional 
payment of $35.50 when a COVID-19 vaccine is administered in a 
beneficiary's home under the certain circumstances described above in 
section III.H.3.b of this proposed rule. We are also proposing to 
adjust this payment amount for geographic cost differences as we do the 
payment for the preventive vaccine administration service. That is, for 
CY 2023, we would adjust this payment amount to reflect cost 
differences for the geographic area based upon the fee schedule area 
where the COVID-19 vaccine is administered using the GAF. In addition, 
for CY 2023, we would update the $35.50 by the CY 2023 MEI as we 
proposed to do for the other preventive vaccine administration 
services. Both proposals are discussed above in section III.H.2.c. and 
III.H.2.d. of this proposed rule, respectively. We believe that this 
policy will continue to provide access to beneficiaries who would 
otherwise have difficulty getting vaccinated, while we continue to 
monitor utilization and receive information to be considered in 
developing our policy for the future. We welcome comments and 
suggestions on steps we could take related to program integrity and 
beneficiary protections associated with payments for administering 
preventive vaccines in the home, including the COVID-19 vaccine and 
other preventive vaccines under Medicare Part B.
4. Clarification on Policies for COVID-19 Vaccine and Monoclonal 
Antibody Products
a. Background
    Under section 319 of the Public Health Service (PHS) Act (42 U.S.C. 
247d), the Secretary can declare a public health emergency (PHE) if he 
determines that: (1) a disease or disorder

[[Page 46224]]

presents a PHE; or (2) a PHE, including significant outbreaks of 
infectious diseases or bioterrorist attacks, otherwise exists. A PHE 
declaration allows the Secretary to take certain actions in response to 
the PHE. In addition, a PHE declaration under section 319 of the PHS 
Act can be a necessary step in authorizing the Secretary to take a 
variety of discretionary actions to respond to the PHE under the 
statutes HHS administers.\304\ If the criteria under section 564 of the 
FD&C Act are met, the Secretary may make a declaration that the 
circumstances exist justifying an emergency use authorization (EUA) of 
unapproved drugs, devices, or biological products, or of approved 
drugs, devices, or biological products for an unapproved use.\305\
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    \304\ https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertEmergPrep/Downloads/PHE-Questions-and-Answers.pdf.
    \305\ https://www.fda.gov/regulatory-information/search-fda-guidance-documents/emergency-use-authorization-medical-products-and-related-authorities.
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    On January 31, 2020, under section 319 of the PHS Act, the 
Secretary determined that a PHE as a result of confirmed cases of 2019 
Novel Coronavirus existed nationwide and had existed since January 27, 
2020 (hereafter referred to as the PHE for COVID-19). The Secretary has 
since renewed this declaration for successive 90-day periods, most 
recently on April 12, 2022.\306\ On March 27, 2020, the Secretary 
declared that circumstances exist justifying the authorization of 
emergency use of drugs and biological products during the COVID-19 
pandemic, pursuant to section 564 of the FD&C Act, subject to the terms 
of any authorization issued under that section (85 FR 18250 through 
18251). This latter declaration enabled the Commissioner of Food and 
Drugs to issue an EUA for a drug or biological product if the 
Commissioner reasonably concludes that, among other criteria, based on 
the totality of available scientific evidence, the product may be 
effective in diagnosing, treating or preventing such disease or 
condition, and the product's known and potential benefits when used to 
diagnose, prevent, or treat such disease or condition, outweigh its 
known and potential risks.
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    \306\ https://aspr.hhs.gov/legal/PHE/Pages/COVID19-12Apr2022.aspx.
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b. Timing Distinction Between Section 319 of the PHS Act and Section 
564 of the FD&C Act Declarations
    Declarations under section 319 of the PHS Act generally last for 90 
days, but may be extended \307\ by the Secretary. After each extension, 
the declaration lasts for 90 days or until the Secretary declares the 
emergency no longer exists, whichever occurs first. In contrast, an 
emergency declaration pursuant to section 564 of the FD&C Act (an ``EUA 
declaration'') continues until specifically terminated.\308\ An EUA 
declaration may remain in effect beyond the duration of the section 319 
PHE declaration. When an EUA declaration is to be terminated, notice of 
termination will be published in the Federal Register that provides a 
reasonable period of advance notice to the public that the EUA 
declaration is being terminated, to permit manufacturers, health care 
facilities, providers, patients, and other interested parties to 
transition away from EUA products and the policies that support them.
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    \307\ https://www.phe.gov/emergency/news/healthactions/phe/Pages/default.aspx.
    \308\ https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/faqs-what-happens-euas-when-public-health-emergency-ends.
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c. Medicare Part B Coverage and Payment of COVID-19 Vaccine and 
Therapeutic Monoclonal Antibody Products
    At the time of drafting this proposed rule, three COVID-19 vaccines 
are authorized or approved for use in the US to prevent COVID-19.\309\ 
FDA has approved licensure of Pfizer-BioNTech and Moderna COVID-19 mRNA 
vaccines for use in certain individuals, but there are also individuals 
for whom these vaccines continue to be available under an EUA. FDA has 
limited the authorized use of the Janssen-manufactured COVID-19 viral 
vector vaccine to individuals 18 years of age and older for whom other 
FDA-authorized or licensed COVID-19 vaccines are not accessible or 
clinically appropriate, and to individuals 18 years of age and older 
who elect to receive the Janssen COVID-19 vaccine because they would 
otherwise not receive a COVID-19 vaccine. In addition, there are other 
COVID-19 vaccines that are not licensed or authorized under an EUA, but 
are in Phase 3 clinical trial.\310\
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    \309\ Viewed 5/6/2022. https://www.cdc.gov/coronavirus/2019-ncov/vaccines/stay-up-to-date.html#about-vaccines.
    \310\ Viewed 5/6/2022. https://www.medicalcountermeasures.gov/app/barda/coronavirus/COVID19.aspx?filter=vaccine.
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    Regarding availability of COVID-19 monoclonal antibody products, 
there are no monoclonal antibody products approved for the treatment or 
prevention of COVID-19. There are five authorized monoclonal antibody 
COVID-19 products; four are authorized for the treatment of COVID-19 
and one is authorized as pre-exposure prophylaxis for prevention of 
COVID-19.\311\ We note that each of the four monoclonal antibody 
products for treatment or post-exposure prevention of COVID-19 that 
have been granted an EUA is not authorized for use in geographic 
regions where infection was likely caused by a non-susceptible variant. 
Due to data indicating decreased activity for three of these treatments 
against Omicron variants currently in wide circulation, only one of 
these treatments is currently authorized in any U.S. region until 
further notice by FDA.
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    \311\ Viewed 5/6/2022. https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization.
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    In the interim final rule with comment (IFC) period titled, 
``Additional Policy and Regulatory Revisions in Response to the COVID-
19 Public Health Emergency,'' which appeared in the November 6, 2020 
Federal Register, we discussed how we believed it is appropriate for 
Medicare to consider any EUA under section 564 of the FD&C Act issued 
for a COVID-19 vaccine during the PHE to be tantamount to a license 
under section 351 of the PHS Act for the sole purpose of considering 
such a vaccine to be described in section 1861(s)(10)(A) of the Act (85 
FR 71145 through 71148). That is, even though section 3713 of the CARES 
Act refers to a COVID-19 vaccine ``licensed under section 351 of the 
PHS Act,'' CMS could consider any vaccine for which FDA issued an EUA 
during the PHE, when furnished consistent with terms of the EUA, to be 
eligible for Medicare coverage and payment.
    Subsequent to the November 6, 2020 IFC and discussed in the CY 2022 
PFS final rule (86 FR 65190 through 65194), when COVID-19 monoclonal 
antibody products were granted EUAs during the PHE for COVID-19, we 
made the determination to cover and pay for them under the Part B 
vaccine benefit in section 1861(s)(10) of the Act. This determination 
effectively extended the policy decision for COVID-19 vaccines to 
COVID-19 monoclonal antibody products, that is, that an EUA under 
section 564 of the FD&C Act issued for a COVID-19 monoclonal antibody

[[Page 46225]]

product during the PHE is tantamount to a license under section 351 of 
the PHS Act for the sole purpose of considering such a COVID-19 
monoclonal antibody product to be described in section 1861(s)(10)(A) 
of the Act.
    The decision to cover and pay for monoclonal antibody products used 
to treat COVID-19 under the Part B vaccine benefit prioritized access 
to these products during the COVID-19 pandemic by allowing almost all 
Medicare enrolled providers and suppliers, as permitted by State law 
and consistent with the terms of the EUA, to furnish and bill for 
administering these products across settings of care. Covering and 
paying for these services under the Part B vaccine benefit also means 
that beneficiaries are not responsible for any cost sharing for the 
product or the service to administer it.
    We note that under the Part B preventive vaccine benefit, Medicare 
pays for the vaccine product (when such product is not free to the 
provider/supplier, as is the case for COVID-19 vaccines as of the 
publication of this rule) and its administration. Typically, payment 
for the vaccine product is made at 95 percent of the AWP, but some 
healthcare settings, such as RHCs, are paid at 100 percent of their 
reasonable cost. Typically, payment for the administration of the 
preventive vaccine shots is approximately $30 per dose, but again, some 
healthcare settings are paid at 100 percent of their reasonable cost. 
In contrast, payment for administration of COVID-19 monoclonal antibody 
products under the Part B preventive vaccine benefit depends on the 
route of administration, and whether the product is furnished in a 
healthcare setting or in the beneficiary's home. As discussed in more 
detail in the CMS COVID-19 Monoclonal Toolkit, payment for 
administration of monoclonal antibodies can range from $150.50 to 
$750.00.\312\
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    \312\ https://www.cms.gov/monoclonal.
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    In the CY 2022 PFS final rule (86 FR 65179 through 65193) we 
discussed several steps CMS has taken to promote broad and timely 
access to COVID-19 vaccines and monoclonal antibody products used to 
treat COVID-19 paid for under the Part B preventive vaccine benefit, 
during the PHE for COVID-19. We specifically discussed the unique 
circumstances providers and suppliers face when administering COVID-19 
vaccines and recognized the difficulty to predict when resource costs 
relating to COVID-19 vaccination will align with those for other 
vaccinations after the PHE ends, as we believe the scale of this PHE is 
unique in Medicare payment history. We finalized the policy to maintain 
the current payment rate of $40 per dose for the administration of the 
COVID-19 vaccines through the end of the calendar year in which the PHE 
ends; effective January 1 of the year following the year in which the 
PHE ends, the payment rate for COVID-19 vaccine administration will be 
set at a rate that aligns with the per dose payment rate for 
administration of other Part B preventive vaccines (86 FR 65186).
    In the CY 2022 PFS final rule, we contemplated how to cover and pay 
for COVID-19 monoclonal antibody products following the end of the PHE 
for COVID-19, including whether we should align their payment and 
coverage with other biologicals (86 FR 65190 through 65194). After 
review of the comments received, we agreed with commenters who 
recommended CMS transition to treating monoclonal antibody therapies 
used to treat COVID-19 as biologicals that are paid using methodologies 
under section 1847A of the Act following the end of the calendar year 
in which the PHE expires. We noted that Medicare considers other 
monoclonal antibody products--that is, monoclonal antibody products 
used in the treatment of other health conditions--to be 
``biologicals,'' and Medicare pays for them based on the methodology in 
section 1847A of the Act when they are furnished in physician offices 
or ambulatory infusion clinics, and under a similar methodology under 
the hospital OPPS. For these care settings, we typically rely on the 
applicable AMA CPT codes to describe and pay for drug administration 
services performed by providers and suppliers.
    In the CY 2022 PFS final rule, we also explained that the public 
health needs that prompted coverage of monoclonal antibody products 
used to treat COVID-19 paid for under the Medicare Part B vaccine 
benefit will gradually stabilize following the end of the PHE, and that 
extending the current payment approach to the end of the year will give 
healthcare providers adequate time to prepare for the change in payment 
methodology while continuing to maximize access to beneficiaries, 
including those who receive these treatments in the home. In addition, 
we stated that since we do not expect those needs or costs to diminish 
immediately with the end of the PHE, we believe it would be appropriate 
to continue to provide payment and coverage for COVID-19 monoclonal 
antibody therapies under the Medicare Part B vaccine benefit in place 
through the end of the CY in which the PHE ends, when such treatments 
are used consistent with the scope and conditions of authorization in 
the relevant EUA (while in effect). In the CY 2022 PFS final rule, we 
recognized that once an EUA declaration is terminated,\313\ EUAs issued 
under that declaration will no longer remain in effect,\314\ which may 
affect the availability of some products either for the diagnosis, 
treatment, or prevention of COVID-19, because they will need to have 
the requisite marketing authorization to remain on the market. To the 
extent there are products that would no longer have the requisite 
marketing authorization to remain on the market after a revocation of 
an EUA, we believe a transition period would be appropriate to allow 
for adjustments, as needed, to care plans that included such products 
(86 FR 65192).
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    \313\ Subsequent to the issuance of the final rule, we found 
that we incorrectly stated `once the COVID-19 PHE declaration is 
terminated.' The correct statement is `once the EUA declaration is 
terminated.'
    \314\ https://www.fda.gov/media/97321/download.
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d. Clarification of Medicare Part B Policies
    In light of the timing distinctions between a PHE declared under 
section 319 of the PHS Act and an EUA declaration under section 564 of 
the FD&C Act, we have reconsidered the policies finalized in the CY 
2022 PFS final rule and believe a clarification is necessary. 
Throughout our discussions and specifically in policy statements 
related to payment and coverage for COVID-19 vaccines and monoclonal 
antibody products, we have used phrases such as, ``through the end of 
the calendar year in which the PHE ends'' and ``effective January 1 of 
the year following the year in which the PHE ends.'' While we 
acknowledge that the intent at the time was to refer to the declaration 
under section 319 of the PHS Act, we have reconsidered this position in 
light of the fact that the March 27, 2020 EUA declaration under section 
564 of the FD&C Act is distinct from, and not dependent on, the PHE 
declaration under section 319 of the PHS Act. Therefore, an EUA for a 
drug or biological product issued pursuant to the March 27, 2020 EUA 
declaration may remain in effect beyond the duration of the section 319 
declaration if all statutory conditions are met.\315\ On further 
consideration, we believe that

[[Page 46226]]

our goal to promote broad and timely access to COVID-19 vaccines and 
COVID-19 monoclonal antibody products, will be better served if our 
policies with respect to payment for these products, as addressed in 
the November 2020 IFC and CY 2022 PFS final rule, continue until the 
EUA declaration for drugs and biological products (see 85 FR 18250) is 
terminated. Therefore, we propose to clarify our policies as stated 
below. In section III.H.4.f of this proposed rule, Table 71 displays 
the CY 2023 Part B payment for preventive vaccine administration if the 
EUA declaration persists into CY 2023 and Table 72 displays the Part B 
payment for preventive vaccine administration beginning January 1, 
2023, if the EUA declaration ends on or before December 31, 2022.
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    \315\ https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/faqs-what-happens-euas-when-public-health-emergency-ends.
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i. COVID-19 Vaccines and Their Administration
    CMS will maintain the current payment rate of $40 per dose for the 
administration of the COVID-19 vaccines through the end of the calendar 
year in which the March 27, 2020 EUA declaration under section 564 of 
the FD&C Act (EUA declaration) for drugs and biological products ends. 
Effective January 1 of the year following the year in which the EUA 
declaration ends, the payment rate for COVID-19 vaccine administration 
will be set at a rate to align with the payment rate for the 
administration of other Part B preventive vaccines. We note a summary 
of proposals for Part B preventive vaccine administration for CY 2023 
is discussed in section III.H.2.e. of this proposed rule.
ii. In-Home Administration of COVID-19 Vaccines
    We note that the policy for in-home administration of COVID-19 
vaccines was also discussed in the CY 2022 PFS final rule and we 
finalized that CMS will continue the additional payment of $35.50 for 
COVID-19 vaccine administration in the home under certain circumstances 
through the end of the calendar year in which the PHE ends. However, in 
section III.H.3 of this proposed rule, we discuss proposals for this 
policy for CY 2023. We are proposing to continue the in-home additional 
payment of $35.50 for administering COVID-19 vaccines for CY 2023, 
which is no longer tied to the end of the declaration under section 319 
of the PHS Act.
iii. Monoclonal Antibody Products Used for Treatment or for Post-
Exposure Prophylaxis of COVID-19
    We propose to continue to pay for COVID-19 monoclonal antibody 
products under the Medicare Part B vaccine benefit through the end of 
the calendar year in which the EUA declaration under section 564 of the 
FD&C Act for drugs and biological products is terminated. Until the end 
of the calendar year in which the EUA declaration for drugs and 
biological products is terminated, we will maintain the payment rate 
for administering a COVID-19 monoclonal antibody product used for 
treatment or for post-exposure prophylaxis of COVID-19 in a healthcare 
setting, as well as the payment rates for administering a COVID-19 
monoclonal antibody product in the home as described on the CMS COVID-
19 Monoclonal Toolkit.\316\ Effective January 1 of the year following 
the year in which the EUA declaration for drugs and biological products 
ends, CMS would pay physicians and other suppliers for covered COVID-19 
monoclonal antibody products used for the treatment or for post-
exposure prophylaxis of COVID-19 as biological products paid under 
section 1847A of the Act; healthcare providers and practitioners will 
be paid under the applicable payment system, and using the appropriate 
coding and payment rates, for administering COVID-19 monoclonal 
antibody therapies similar to the way they are paid for administering 
other complex biological products (86 FR 65192).
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    \316\ https://www.cms.gov/monoclonal.
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    As we explain above, since an EUA for a drug or biological product 
issued pursuant to the March 27, 2020 EUA declaration may remain in 
effect beyond the duration of the section 319 declaration, we 
contemplated our proposed policies summarized in section III.H.2.e of 
this proposed rule. Since we do not know when FDA would terminate the 
March 27, 2020 EUA declaration, we believe that we need to give notice 
on how these proposals would impact payments for administering COVID-19 
monoclonal antibody products in the event the EUA declaration persists 
in CY 2023. Therefore, beginning January 1, 2023, we propose to apply 
the GAF to the payment amount for the administration of monoclonal 
antibody products used for treatment or for post-exposure prophylaxis 
of COVID-19 so long as the EUA declaration is still in place. We 
believe that it is appropriate to continue to adjust this payment 
amount to reflect cost differences for each geographic area.
    Regarding an update based upon the MEI beginning January 1, 2023, 
we would not extend the proposal to update the payment amount for the 
administration of these products. We believe that the payment amounts 
established for the administration of monoclonal antibody products used 
for treatment or for post-exposure prophylaxis of COVID-19 were 
approximations intended to reflect resource costs associated with 
furnishing these particular services during the pandemic response and 
generally corresponding to the time frame the EUA declaration is 
effective. We also note that some of the resource costs reflected in 
those rates, such as costs to establish the necessary operational 
infrastructure, may dissipate over time, even as the pandemic persists. 
Consequently, we do not believe it would be appropriate to establish 
annual updates to reflect increased costs that would likely be offset 
to some extent by reduced costs given the more established 
infrastructure and delivery approaches. We point out, too, that the 
current payment rates effective during the years in which the PHE 
continues correspond with OPPS New Tech payment amounts that are 
intended to serve as estimates of overall costs, in contrast to more 
finely tuned amounts that are typically subject to annual updates 
(increases or reductions) to reflect greater efficiency. Therefore, we 
are proposing to maintain the current rates for CY 2023 for 
administration of a COVID-19 monoclonal antibody product used for 
treatment or for post-exposure prophylaxis of COVID-19, and to not 
update these rates based on the increase in the MEI.
e. Monoclonal Antibody Products Used as Pre-Exposure Prophylaxis for 
Prevention of COVID-19
    As we mention in section III.H.4.c of this proposed rule, there are 
no monoclonal antibody products approved by the FDA for the treatment 
or prevention of COVID-19 as of the publication of this proposed rule. 
However, there are currently three COVID-19 products authorized under 
an EUA; two are authorized for the treatment of COVID-19, and one is 
authorized as pre-exposure prophylaxis for prevention of COVID-19.\317\ 
The

[[Page 46227]]

monoclonal antibody product for use as pre-exposure prophylaxis 
prevention of COVID-19 was granted an EUA subsequent to the CY 2022 PFS 
final rule. Therefore, our policies regarding coverage of COVID-19 
monoclonal antibody products as finalized in the CY 2022 PFS final 
rule, and clarified in section III.H.4. of this proposed rule, do not 
address monoclonal antibody products used as pre-exposure prophylaxis 
for prevention of COVID-19. Nevertheless, we note that when this COVID-
19 monoclonal antibody pre-exposure prophylactic product was granted an 
EUA, we promptly provided payment and coverage for it under the Part B 
vaccine benefit in section 1861(s)(10) of the Act as we discuss in 
section III.H.4.c and as we have done for the other COVID-19 monoclonal 
antibody products.\318\
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    \317\ Viewed 5/6/2022. https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization.
    \318\ https://www.cms.gov/monoclonal.
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    We recognize that there are certain individuals for whom these pre-
exposure prophylactic products may be their only preventive option 
against COVID-19. These individuals would include, for example, those 
who are not currently infected with COVID-19, who have not had a known 
recent exposure to an individual infected with COVID-19, and for whom 
vaccination with any available COVID-19 vaccine is not recommended due 
to a history of severe adverse reaction (for example, severe allergic 
reaction) to a COVID-19 vaccine(s) and/or COVID19 vaccine component(s). 
Therefore, we are proposing to clarify that our policy of coverage and 
payment under the Part B vaccine benefit for monoclonal antibody 
products includes those used as pre-exposure prophylaxis for prevention 
of COVID-19. In addition, to ensure the aforementioned beneficiaries 
have access to COVID-19 pre-exposure prophylactic products, we propose 
to continue the existing policy to pay for these products and their 
administration under the Part B vaccine benefit even after the EUA 
declaration for drugs and biological products is terminated, so long as 
after the EUA declaration is terminated, such products have market 
authorization.
    Since we propose to pay for pre-exposure prophylaxis monoclonal 
antibody products for COVID-19 under the Part B vaccine benefit, we 
also propose to apply the GAF to the payment amount for the 
administration of those monoclonal antibody products, effective January 
1, 2023. However, at this time we are not proposing to update the 
payment amount with the MEI beginning January 1, 2023. The payment 
amounts established for the administration of monoclonal antibody 
products used as pre-exposure prophylaxis for COVID-19 were intended to 
account for resource costs associated with pandemic response, and like 
the payment amounts for administration of other COVID-19 mAbs, reflects 
an approximation. Therefore, we are proposing to maintain the current 
amount without a specified update mechanism, but also seek comment on 
how best to consider refining rates for administration of this specific 
kind of product in the future. We solicit comment on these proposals.
f. Summary of Payment Amounts for CY 2023 With or Without an EUA 
Declaration for Drugs and Biologicals
    Due to the uncertainty surrounding the future of the EUA 
declaration for drugs and biological products, and our proposed 
policies that plan for both a continuation or termination of that EUA, 
we are including Tables 71 and 72 that summarize our proposals in both 
scenarios.
[GRAPHIC] [TIFF OMITTED] TP29JY22.113


[[Page 46228]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.114

5. Regulatory Updates and Conforming Changes
    In the interim final rule with comment (IFC) period titled, 
``Additional Policy and Regulatory Revisions in Response to the COVID- 
19 Public Health Emergency,'' which appeared in the November 6, 2020 
Federal Register, we published several changes to the regulations 
governing Part B preventive vaccines and their administration, in order 
to include the COVID-19 vaccine and its administration (85 FR 71147). 
Since Section 3713 of the CARES Act added the COVID-19 vaccine and its 
administration to section 1861(s)(10)(A) of the Act in the same 
subparagraph as the flu and pneumococcal vaccines and their 
administration, the COVID-19 vaccine was similarly added in several 
regulations regarding the influenza, pneumococcal, and hepatitis B 
virus (HBV) vaccinations. We intend to finalize the following 
regulatory changes, which were adopted in the November 6, 2020 IFC:
    <bullet> Sec.  [thinsp]410.152 (l)(1), which includes the COVID-19 
vaccine to the list of vaccines for which Medicare Part B pays 100 
percent of the Medicare payment amount.
    <bullet> Sec.  [thinsp]410.160 (b)(2), which includes the COVID-19 
vaccine in the list of vaccines that are not subject to the Part B 
annual deductible and do not count toward meeting that deductible.
    <bullet> Sec.  [thinsp]411.15 (e)(5), which adds an exception for 
COVID-19 vaccinations to the general exclusion of coverage for 
immunizations.
    <bullet> Sec.  [thinsp]414.701, which includes the COVID-19 vaccine 
in the list of statutorily covered drugs.
    <bullet> Sec.  [thinsp]414.707 (a)(2)(iii), which includes the 
COVID-19 vaccine in the list of vaccines with a payment limit 
calculated using 95 percent of the AWP.
    <bullet> Sec.  [thinsp]414.900(b)(3), which includes the COVID-19 
vaccine in the list of statutorily covered drugs.
    <bullet> Sec.  [thinsp]414.904(e)(1), which includes the COVID-19 
vaccine in the list of vaccines with payment limits calculated using 95 
percent of the AWP.
    In the course of developing the proposed changes to Sec.  
[thinsp]410.152 described above at III.H.2.c., we came across several 
outdated and incomplete regulations regarding Part B preventive 
vaccines and vaccine administration. We propose updates and corrections 
to the following regulations:
    <bullet> At Sec.  [thinsp]410.10, Medical and other health 
services: Included services, we are proposing to amend paragraph (l) to 
list pneumococcal, influenza, and COVID-19 vaccines and their 
administration.
    <bullet> At Sec.  [thinsp]410.10, Medical and other health 
services: Included services, we are proposing to amend paragraph (p) to 
list both Hepatitis B vaccine and its administration, as defined in 
Sec.  410.63(a).
    <bullet> At Sec.  [thinsp]410.57, we are proposing to amend the 
section title to read ``Preventive Vaccinations,'' to amend paragraph 
(a) to state only that Medicare Part B pays for pneumococcal vaccine 
and its administration, to remove the remainder of the outdated 
language, and to add paragraph (d) to state that Medicare Part B pays 
for the Hepatitis B vaccine and its administration, as defined in Sec.  
410.63(a).
    <bullet> At Sec.  [thinsp]410.63, Hepatitis B vaccine and blood 
clotting factors: Conditions, we are proposing to amend the 
introductory paragraph to replace the outdated reference to Sec.  
405.310 with an updated reference to Sec.  [thinsp]411.15.
    <bullet> At Sec.  [thinsp]414.707, Basis of Payment, we are 
proposing to amend paragraph (a)(2)(iii) to replace the phrase in 
parentheses with ``as defined in Sec.  410.63(a) of this subchapter.''
    <bullet> At Sec.  [thinsp]414.904, Average sales price as the basis 
for payment, we are amending paragraph (e)(1) to replace the 
parentheses with ``as defined in Sec.  410.63(a) of this subchapter.''

I. Medical Necessity and Documentation Requirements for Nonemergency, 
Scheduled, Repetitive Ambulance Services

1. Background-Nonemergency, Scheduled, Repetitive Ambulance Service
a. General Discussion
    Section 1861(s)(7) of the Act states that, for the purposes of 
Medicare, the term ``medical and other health services'' includes 
ambulance services, but only ``where the use of other methods of 
transportation is contraindicated by the individual's condition, but 
only to the extent provided in regulations.'' Regulations at Sec.  
410.40 govern Medicare coverage of ambulance services. Under Sec.  
410.40(e), Medicare Part B covers ground (land and water) and air 
(fixed-wing and rotary-wing) ambulance transport services only if they 
are furnished to a

[[Page 46229]]

Medicare beneficiary whose medical condition is such that other means 
of transportation are contraindicated. The beneficiary's condition must 
require both the ambulance transportation itself and the level of 
service provided for the billed services to be considered medically 
necessary.
    Section 410.40(e) provides that nonemergency transportation by 
ambulance is appropriate if either the beneficiary is bed-confined, and 
it is documented that the beneficiary's condition is such that other 
methods of transportation are contraindicated; or, if his or her 
medical condition, regardless of bed confinement, is such that 
transportation by ambulance is medically required. For a beneficiary to 
be considered bed-confined, Sec.  410.40(e) states that all of the 
following criteria must be met: (1) the beneficiary is unable to get up 
from bed without assistance; (2) the beneficiary is unable to ambulate; 
and (3) the beneficiary is unable to sit in a chair or wheelchair. 
Section 410.40(e) further provides that bed confinement is not the sole 
criterion in determining the medical necessity of ambulance 
transportation, but is one factor that is considered in medical 
necessity determinations. In all cases, a beneficiary's condition must 
be documented appropriately for coverage of services.
    In the ``Medicare Program; Coverage of Ambulance Services and 
Vehicle and Staff Requirements'' final rule with comment period \319\ 
(64 FR 3637, January 25, 1999) (hereinafter referred to as the 
``January 25, 1999 final rule''), we finalized language at Sec.  
410.40(d)(3) to require ambulance providers or suppliers, in the case 
of nonemergency, unscheduled, ambulance services to obtain a physician 
certification statement (PCS). There, we explained that: (1) 
nonemergency ambulance service is a Medicare service furnished to a 
beneficiary for whom a physician is responsible, and, therefore, the 
physician is responsible for the medical necessity determination; and 
(2) the PCS would help to ensure that the claims submitted for 
ambulance services are reasonable and necessary, because other methods 
of transportation are contraindicated (64 FR 3648).
---------------------------------------------------------------------------

    \319\ https://www.govinfo.gov/content/pkg/FR-1999-01-25/pdf/99-1547.pdf.
---------------------------------------------------------------------------

    We further stated that we believed the requirement would help to 
avoid Medicare payment for unnecessary ambulance services that are not 
medically necessary even though they may be desirable to beneficiaries. 
However, in the January 25, 1999 final rule we also addressed the 
ability of ambulance providers or suppliers to obtain a written order 
from the beneficiary's attending physician and agreed with interested 
parties that while it is reasonable to expect that an ambulance 
provider or supplier could obtain a pre-transport PCS for routine, 
scheduled trips, it is less reasonable to impose such a requirement on 
unscheduled transports, and that it was not necessary that the 
ambulance providers and suppliers have the PCS in hand prior to 
furnishing the service. To avoid unnecessary delays for unscheduled 
transports, we finalized a requirement that required documentation can 
be obtained within 48 hours after the ambulance transportation service 
has been furnished.
    In the ``Medicare Program; Fee Schedule for Payment of Ambulance 
Services and Revisions to the Physician Certification Requirements for 
Coverage of Nonemergency Ambulance Services'' final rule with comment 
period \320\ (67 FR 9100) (hereinafter referred to as the ``February 
27, 2002 final rule''), in response to interested parties response, we 
modified our documentation regulations, noting that we had been made 
aware of instances in which ambulance providers and suppliers, despite 
having provided ambulance transports, were experiencing difficulty in 
obtaining the necessary PCS within the required 48-hour timeframe 
through no fault of their own. We stated that the 48-hour period 
remained the appropriate period of time, but, with respect to 
unscheduled, or scheduled but non-repetitive nonemergency ambulance 
transports, created alternatives for ambulance providers and suppliers 
unable to obtain a PCS. We finalized an alternative at Sec.  
410.40(e)(3)(iii) where ambulance providers and suppliers unable to 
obtain a PCS from the attending physician could obtain a signed 
certification (not a physician certification statement) from certain 
other staff. At that time, we identified, at Sec.  410.40 (a)(iii), 
several staff members, including a physician assistant (PA), nurse 
practitioner (NP), clinical nurse specialist (CNS), registered nurse 
(RN), and a discharge planner as staff members able to sign such a non-
physician certification statement. The only additional constraints 
were: (1) that the staff be employed by the beneficiary's attending 
physician or by the hospital or facility where the beneficiary is being 
treated and from which the beneficiary is transported; and (2) that the 
staff have personal knowledge of the beneficiary's condition at the 
time the ambulance transport is ordered or the service is furnished.
---------------------------------------------------------------------------

    \320\ https://www.govinfo.gov/content/pkg/FR-2002-02-27/pdf/02-4548.pdf.
---------------------------------------------------------------------------

    Since being finalized in the February 27, 2002 final rule, Sec.  
410.40(e)(2) has stated that Medicare covers medically necessary 
nonemergency, scheduled, repetitive ambulance services if the ambulance 
provider or supplier, before furnishing the service to the beneficiary, 
obtains a written order from the beneficiary's attending physician 
certifying that the medical necessity requirements of paragraph (e)(1) 
of this section are met (67 FR 9132).
    In the November 16, 2012 final rule with comment period \321\ (77 
FR 68892), we finalized provisions currently at Sec.  410.40(e)(2), 
incorporating nearly the same provision found at Sec.  410.40(e)(3)(v) 
to clarify that a PCS does not, in and of itself, demonstrate that a 
nonemergency, scheduled, repetitive ambulance service is medically 
necessary for Medicare coverage. As we note above, the 1861(s)(7) 
definition of ``ambulance service'' in the context of Medicare 
expresses the clinical medical necessity requirement that the use of 
other methods of transportation is contraindicated by the individual's 
condition, but only to the extent provided in regulations.
---------------------------------------------------------------------------

    \321\ Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule, DME Face-to-Face Encounters, Elimination of 
the Requirement for Termination of NonRandom Prepayment Complex 
Medical Review and Other Revisions to Part B for CY 2013; https://www.govinfo.gov/content/pkg/FR-2012-11-16/pdf/2012-26900.pdf.
---------------------------------------------------------------------------

    In the November 15, 2019 final rule \322\ (84 FR 62568), in 
response to interested parties' requests, we clarified the requirements 
for certification statements based on potential confusion surrounding 
the format, content, and use of both PCS and non-physician 
certification statements. Further, we added licensed practical nurses 
(LPNs), social workers and case managers as individuals listed at Sec.  
410.40 (a)(iii) who may sign the non-physician certification

[[Page 46230]]

statement if the ambulance provider or supplier is unable to obtain the 
attending physician's signature within 48 hours of the transport.
---------------------------------------------------------------------------

    \322\ Medicare Program; CY 2020 Revisions to Payment Policies 
Under the Physician Fee Schedule and Other Changes to Part B Payment 
Policies; Medicare Shared Savings Program Requirements; Medicaid 
Promoting Interoperability Program Requirements for Eligible 
Professionals; Establishment of an Ambulance Data Collection System; 
Updates to the Quality Payment Program; Medicare Enrollment of 
Opioid Treatment Programs and Enhancements to Provider Enrollment 
Regulations Concerning Improper Prescribing and Patient Harm; and 
Amendments to Physician Self-Referral Law Advisory Opinion 
Regulations Final Rule; and Coding and Payment for Evaluation and 
Management, Observation and Provision of Self-Administered 
Esketamine Interim Final Rule; https://www.govinfo.gov/content/pkg/FR-2019-11-15/pdf/2019-24086.pdf.
---------------------------------------------------------------------------

    Other factors have significantly altered the Medicare ambulance 
benefit, notably section 637 of the American Taxpayer Relief Act of 
2012 (Pub. L. 112-240, enacted January 2, 2013) (ATRA), which required 
a 10-percent reduction in fee schedule payments for nonemergency (BLS 
transports of beneficiaries with ESRD) to and from both hospital-based 
and freestanding renal dialysis treatment facilities, for non-emergent 
dialysis services. Section 53108 of the Bipartisan Budget Act of 2018 
(Pub. L. 115-123, enacted February 9, 2018) increased the payment 
reduction of fee schedule payments for BLS transports to and from renal 
dialysis treatments, from ATRA's 10 percent to 23 percent.
    The Department of Health and Human Services (HHS) Office of 
Inspector General (OIG) has published numerous reports about Medicare's 
ambulance benefit and has concluded that this benefit is highly 
vulnerable to abuse. In September 2015, in a report titled, 
``Inappropriate Payments and Questionable Billing for Medicare Part B 
Ambulance Transports,'' \323\ the OIG reported that approximately one 
in five ambulance suppliers had questionable billing, and that 
suppliers that had questionable billing provided nonemergency basic 
life support transports more often than other suppliers.
---------------------------------------------------------------------------

    \323\ Inappropriate Payments and Questionable Billing for 
Medicare Part B Ambulance Transports (OEI-09-12-00351; 09/15) 
(hhs.gov).
---------------------------------------------------------------------------

    In addition, in June 2013, MedPAC published a report that included 
an analysis of nonemergent ambulance transports to dialysis facilities. 
The report showed that transports to and from dialysis facilities 
continue to grow and represent a large share of non-emergent ambulance 
claims. In the 5-year period between 2007 and 2011, the volume of 
transports to and from a dialysis facility increased 20 percent, more 
than twice the rate of all other ambulance transports combined. In 
2011, ambulance transports to and from dialysis facilities accounted 
for nearly $700 million in Medicare spending or approximately 13 
percent of Medicare expenditures on ambulance services. The report 
further found that certain States had dramatically higher spending on 
ambulance transportation for dialysis treatment than other States. We 
believe that the provisions that we propose here are consistent with 
MedPAC's recommendations that the agency promulgate national guidelines 
to more precisely define medical necessity requirements. This will 
ensure consistent application of the benefit across beneficiary 
populations, regardless of geographic location.
    Under section 1115A of the Act, CMS initiated the testing of the 
Repetitive, Scheduled Non-Emergent Ambulance Transport (RSNAT) Prior 
Authorization Model, which tested whether prior authorization helped to 
reduce expenditures while maintaining or improving quality of care. 
Beneficiaries who qualify for these services are typically transported 
to receive either cancer treatment or dialysis, although there are 
other services for which this type of transportation is needed. Section 
515 of the Medicare Access and CHIP Reauthorization Act (Pub. L. 114-
10, enacted April 16, 2015) (MACRA), required this model to be expanded 
to include eight States and the District of Columbia, not later than 
January 1, 2016. Also in section 515 of MACRA, Congress amended section 
1834(l) of the Act to require the model be expanded to all States, 
beginning January 1, 2017, to the extent that the expansion that 
Congress required above satisfied certain criteria specified at 
1115A(c) of the Act.
    We released two Interim Evaluation Reports \324\ and a Final 
Evaluation Report \325\ on the model. The Final Evaluation Report, 
similar to the two Interim Evaluation Reports, found that the model was 
successful in reducing nonemergency, scheduled, repetitive ambulance 
transport spending and total Medicare spending while maintaining the 
overall quality of and access to care. In comparison to groups of 
similar States, the model reduced nonemergency, scheduled, repetitive 
ambulance transport use by 72 percent and expenditures by 76 percent, 
for Medicare beneficiaries with end-stage renal disease (ESRD) and/or 
severe pressure ulcers in the model States, resulting in a reduction of 
approximately $750 million in expenditures. This decrease in 
nonemergency, scheduled, repetitive ambulance transport expenditures 
contributed to a 2.4 percent ($1 billion over the first 5 years of the 
model) decrease in total Medicare fee-for-service (FFS) expenditures 
among beneficiaries with ESRD and/or pressure ulcers relative to the 
comparison groups. Overall, the findings suggested that the model had 
few to no adverse effects on quality of care or access to care.
---------------------------------------------------------------------------

    \324\ https://innovation.cms.gov/files/reports/rsnat-firstintevalrpt.pdf and https://innovation.cms.gov/data-andreports/2020/rsnat-secondintevalrpt.
    \325\ https://innovation.cms.gov/data-and-reports/2021/rsnat-finalevalrpt.
---------------------------------------------------------------------------

    On March 28, 2018, CMS' Chief Actuary certified that expansion of 
the model would reduce program spending under the Medicare program, 
thereby satisfying the requirements of section 1115A(c)(2) of the Act 
for expansion of the model. Based on the CMS Chief Actuary 
certification and the first Interim Evaluation Report, the HHS 
Secretary determined that the model met the statutory criteria for 
expansion under sections 1115A(c)(1) and (c)(3) of the Act. Therefore, 
on September 22, 2020, CMS announced that it would expand the model 
nationwide under section 1834(l)(16) of the Act.\326\ The 8 
participating States and the District of Columbia were transitioned to 
the national model on December 2, 2020. After a delay due to the COVID-
19 public health emergency, HHS began expanding the model nationwide 
through multiple phases starting on December 1, 2021. HHS continues the 
expansion throughout fiscal year 2022.
---------------------------------------------------------------------------

    \326\ https://www.cms.gov/newsroom/press-releases/cms-expand-successful-ambulance-program-integrity-payment-model-nationwide.
---------------------------------------------------------------------------

    Inconsistent application of payments for medically necessary, 
nonemergent, repetitive, scheduled ambulance services has the potential 
to disproportionately and substantially impact communities of color, 
underserved communities (including rural communities), and modest-
income beneficiaries. Further, these communities may disproportionately 
suffer from conditions for which nonemergent, repetitive, scheduled 
ambulance services are necessary, creating access to care issues with 
corresponding clinical complications. We believe that improving clarity 
in our regulatory provisions will have positive impacts on the health 
and well-being of beneficiaries. Therefore, we are proposing and 
requesting public comment on policy clarifications to ensure 
beneficiaries receive the care they need.
b. Legal Authorities
    The legal authority for our proposed provision is section 
1861(s)(7) of the Act that provides general authority for the ambulance 
benefit and grants the Secretary authority to prescribe regulations for 
the administration of the benefit.
2. Proposed Revision to Sec.  410.40
    We seek public comment on proposed language that clarifies 
documentation and medical necessity requirements for

[[Page 46231]]

nonemergency, scheduled, repetitive ambulance services, by modifying 
Sec.  410.40(e)(2)(ii).
    Section 410.40 describes the Medicare Part B ambulance benefit, 
generally. Because medical necessity is a requirement of the statutory 
requirement at section 1861(s)(7) of the Act, the requirements for 
coverage are more fully explained in paragraph (e) of Sec.  410.40, 
starting with general rules covering all Part B ambulance services, and 
the special rules that only apply to nonemergency, scheduled, 
repetitive ambulance services are situated in paragraph (e)(2). For the 
reasons discussed above, we propose to modify existing language in 
Sec.  410.40(e)(2)(ii) and add additional language to provide needed 
clarity and ensure consistent application of the nonemergency, 
scheduled, repetitive ambulance service benefit. We solicit comments on 
our proposal.
    We propose at Sec.  410.40(e)(2)(ii) to retain the existing 
language stating that in all cases, the provider or supplier must keep 
appropriate documentation on file and, upon request, present it to CMS 
(OMB control number 0938-0969). We are maintaining the language that 
states that the ambulance service must meet all program coverage 
criteria including vehicle and staffing requirements. We are also 
maintaining the language that states that a signed PCS does not alone 
demonstrate that transportation by ground ambulance was medically 
necessary. We are clarifying that the PCS, and additional documentation 
from the beneficiary's medical record, may be used to support a claim 
that transportation by ground ambulance is medically necessary. 
Further, we are clarifying that the PCS and additional documentation 
must provide detailed explanations, that are consistent with the 
beneficiary's current medical condition, that explains the 
beneficiary's need for transport by an ambulance, as described at 
410.41(a). Finally, we are clarifying that coverage includes 
observation or other services rendered by qualified ambulance 
personnel, as described in 410.41(b).
J. Medicare Provider and Supplier Enrollment and Conditions of DMEPOS 
Payment
1. Enrollment Process
a. General Discussion
    Section 1866(j)(1)(A) of the Act requires the Secretary to 
establish a process for the enrollment of providers and suppliers into 
the Medicare program. The overarching purpose of the enrollment process 
is to help confirm that providers and suppliers seeking to bill 
Medicare for services and items furnished to Medicare beneficiaries 
meet all Federal and State requirements to do so. The process is, to an 
extent, a ``gatekeeper'' that prevents unqualified and potentially 
fraudulent individuals and entities from entering and inappropriately 
billing Medicare. Since 2006, we have undertaken rulemaking efforts to 
outline our enrollment procedures. These regulations are generally 
codified in 42 CFR part 424, subpart P (currently Sec. Sec.  424.500 
through 424.570 and hereafter occasionally referenced as subpart P). 
They address, among other things, requirements that providers and 
suppliers must meet to obtain and maintain Medicare billing privileges.
    As outlined in Sec.  424.510, one such requirement is that the 
provider or supplier must complete, sign, and submit to its assigned 
Medicare Administrative Contractor (MAC) the appropriate enrollment 
form, typically the Form CMS-855 (OMB Control No. 0938-0685). The Form 
CMS-855, which can be submitted via paper or electronically through the 
internet-based Provider Enrollment, Chain, and Ownership System (PECOS) 
process (SORN: 09-70-0532, PECOS), collects important information about 
the provider or supplier. Such data includes, but is not limited to, 
general identifying information (for example, legal business name), 
licensure and/or certification data, and practice locations. After 
receiving the provider's or supplier's initial enrollment application, 
CMS or the MAC reviews and confirms the information thereon and 
determines whether the provider or supplier meets all applicable 
Medicare requirements. We believe this screening process has greatly 
assisted CMS in executing its responsibility to prevent Medicare fraud, 
waste, and abuse.
    As previously mentioned, over the years we have issued various 
final rules pertaining to provider enrollment. These rules were 
intended not only to clarify or strengthen certain components of the 
enrollment process but also to enable us to take further action against 
providers and suppliers: (1) engaging (or potentially engaging) in 
fraudulent or abusive behavior; (2) presenting a risk of harm to 
Medicare beneficiaries or the Medicare Trust Funds; or (3) that are 
otherwise unqualified to furnish Medicare services or items. Consistent 
with this, and as discussed further in section III.J. of this proposed 
rule, we propose several changes to our existing Medicare provider 
enrollment regulations. (We note that section III.K of this proposed 
rule addresses a proposed change to one of our Medicaid provider 
enrollment provisions.)
b. Legal Authorities
    There are two principal categories of legal authorities for our 
proposed Medicare provider enrollment provisions:
    <bullet> Section 1866(j) of the Act furnishes specific authority 
regarding the enrollment process for providers and suppliers.
    <bullet> Sections 1102 and 1871 of the Act provide general 
authority for the Secretary to prescribe regulations for the efficient 
administration of the Medicare program.
    With respect to our Medicaid proposal in section III.K. of this 
proposed rule:
    <bullet> Section 1902(kk)(3) of the Act,\327\ as amended by section 
6401(b) of the Affordable Care Act, which mandates that States require 
providers and suppliers to comply with the same disclosure requirements 
established by the Secretary under section 1866(j)(5) of the Act.\328\
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    \327\ Because section 6401(b) of the Affordable Care Act 
erroneously added a duplicate section 1902(ii) of the Act, the 
Congress enacted a technical correction in the Medicare and Medicaid 
Extenders Act of 2010 (MMEA) (Pub. L. 111-309) to redesignate 
section 1902(ii) of the Act as section 1902(kk) of the Act, a 
designation we will use in this final rule with comment period.
    \328\ Section 1304 of the Health Care and Education 
Reconciliation Act (Pub. L. 111-152) added a new paragraph (j)(4) to 
section 1866 of the Act, thus re-designating the subsequent 
paragraphs. Accordingly, we are interpreting the reference in 
section 1902(kk)(3) of the Act to ``disclosure requirements 
established by the Secretary under section 1866(j)(4)'' of the Act 
to mean the disclosure requirements described in section 1866(j)(5) 
of the Act.
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    <bullet> Section 2107(e)(1) of the Act, as amended by section 
6401(c) of the Affordable Care Act, which makes the requirements of 
section 1902(kk) of the Act, including the disclosure requirements, 
applicable to CHIP.
2. Proposed Medicare Enrollment Provisions
a. Expansion of Authority To Deny or Revoke Based on OIG Exclusion and 
Associated Definitions
i. OIG Exclusions
    Under Sec. Sec.  424.530(a)(2) and 424.535(a)(2), respectively, CMS 
denies or revokes a provider's or supplier's enrollment if the provider 
or supplier, or any owner, managing employee, authorized or delegated 
official, medical director, supervising physician, or other health care 
or administrative or management services personnel furnishing services 
payable by a Federal health care program, of the provider or

[[Page 46232]]

supplier is excluded by the OIG. We propose several changes related to 
these authorities.
    First, we would expand the categories of parties listed within 
these denial and revocation provisions to include: (1) managing 
organizations; and (2) officers and directors of the provider or 
supplier if the provider or supplier is a corporation. Consistent with 
sections 1124 and 1124A of the Act (and depending upon the specific 
enrollment transaction and provider type involved), these parties must 
be reported on the provider's or supplier's Form CMS-855 or, for 
Medicare diabetes prevention program (MDPP) suppliers, the Form CMS-
20134. Although they are not explicitly listed in Sec. Sec.  
424.530(a)(2) and 424.535(a)(2), we have generally considered these 
individuals and entities to be parties that exercise managing control 
over the provider or supplier in a vein similar to managing employees. 
Section 1124(a)(3) of the Act specifically includes officers and 
directors within its definition of persons with an ownership or control 
interest. (Emphasis added.). To clarify our longstanding position via 
rulemaking and to help prevent excluded managing organizations, 
officers, and directors from posing a program integrity threat to 
Medicare, we propose to incorporate these persons and organizations 
within the two aforementioned regulatory paragraphs.
ii. Definitions
    In light of our addition of ``managing organization,'' ``officer'', 
and ``director'' to Sec. Sec.  424.530(a)(2) and 424.535(a)(2), as well 
as some uncertainty in the provider community regarding the scope of 
these terms, we propose to define them in Sec.  424.502.
    ``Managing organization'' would mean an entity that exercises 
operational or managerial control over, or who directly or indirectly 
conducts, the day-to-day operations of the provider or supplier, either 
under contract or through some other arrangement. This definition 
mirrors the definition of ``managing employees'' in Sec.  424.502, with 
the exception of the latter's references to individuals. To maintain 
consistency with the ``managing employee'' definition and to ensure 
that all parties exercising any degree of operational control over the 
provider or supplier are reported on the Form CMS-855 and Form CMS-
20134 applications, we believe our proposed definition is appropriate.
    We would define ``officer'' as an officer of a corporation, 
regardless of whether the provider or supplier is a non-profit entity. 
Section 1124(a) of the Act requires the disclosure of officers if the 
entity is a corporation; we propose to include the same reference to 
corporations to align with this statutory provision. In addition, 
providers have sometimes inquired as to whether officers of a non-
profit corporation must be reported. While section 1124(a) of the Act 
does not mention the for-profit or non-profit status of the 
corporation, we have always required non-profit corporation officers to 
be disclosed. In our view, the particular proprietary status of the 
corporation is less important from a program integrity standpoint than 
ensuring that persons who exercise control over the provider or 
supplier do not present payment safeguard risks. We believe this 
warrants the inclusion of non-profit corporations within our proposed 
definition.
    In a similar context, we propose to define ``director'' as a 
director of a corporation, regardless of whether the provider or 
supplier is a non-profit entity. To further clarify the definition, 
however, we propose that ``director'' includes any member of the 
corporation's governing body irrespective of the precise title of 
either the board or the member; said body could be a board of 
directors, board of trustees, or similar body. We have received 
questions over the years from non-profit corporations regarding the 
need to disclose information on the application about volunteer or 
ceremonial board members. We have long required such persons to be 
reported for two reasons. First, we believe section 1124(a) of the Act 
is clear that all directors must be listed. Again, it does not 
distinguish between for-profit and non-profit entities, nor, for that 
matter, between paid and voluntary board members. Therefore, we have 
concluded that our interpretation of section 1124(a) of the Act is 
fully consistent with the language therein. Second, the corporate 
governing body of a provider or supplier usually exercises clear 
control over the latter. Even if certain members, such as volunteers, 
have less day-to-day control of the provider or supplier than other 
members, they can still (depending on the board's specific powers) 
influence the entity's operations and oversight, perhaps more so than 
certain individuals currently included within Sec. Sec.  424.530(a)(2) 
and 424.535(a)(2), such as administrative personnel. Consequently, we 
believe that our proposed definition of ``director'' aligns with both 
the Act and our existing policy.
iii. Contracted Personnel
    We also propose to add a new paragraph to Sec. Sec.  424.530(a)(2) 
and 424.535(a)(2) to clarify that the persons and entities listed in 
those two regulatory provisions include, but are not limited to, W-2 
employees and contracted parties of the provider or supplier. We have 
traditionally applied Sec. Sec.  424.530(a)(2) and 424.535(a)(2) to 
affected parties (such as supervising physicians) regardless of their 
W-2 status; this is consistent with the definition of ``managing 
employee'' in Sec.  424.502, which does not exclude contracted 
personnel from its purview. We believe, and it has been our experience, 
that parties with whom the provider or supplier contracts are often as 
involved with the provider's or supplier's operations as W-2 employees; 
for instance, a provider may contract with medical personnel to furnish 
the majority of the health care services it furnishes. Given our stance 
that the specific employment status of the party is less crucial from a 
payment safeguard perspective than the fact that the person or entity 
is acting on the provider's or supplier's behalf, we believe that this 
regulatory clarification is needed.
    Under this change, we would redesignate the introductory paragraph 
of existing Sec.  424.530(a)(2) as Sec.  424.530(a)(2)(i). Current 
Sec. Sec.  424.530(a)(2)(i) and (ii) would be redesignated as Sec.  
424.530(a)(2)(i)(A) and (B), respectively. Our new paragraph concerning 
contracted personnel would be new Sec.  424.530(a)(2)(ii). Similar 
structural revisions would be made to Sec.  424.535(a)(2).
b. Expansion of Authority To Deny or Revoke Based on a Felony 
Conviction
    Under Sec. Sec.  424.530(a)(3) and 424.535(a)(3), respectively, CMS 
may deny or revoke enrollment if the provider or supplier, or any owner 
or managing employee of the provider or supplier was, within the 
preceding 10 years, convicted of a Federal or State felony offense that 
CMS determines is detrimental to the best interests of the Medicare 
program and its beneficiaries. We propose to expand these two 
regulatory provisions to include therein managing organizations, 
officers, and directors (as we proposed to define those terms in Sec.  
424.502.) As previously explained, we are obligated to protect the 
Medicare program, the Trust Funds, and beneficiaries. Similar to 
exclusions, we are concerned that persons and entities that have 
engaged in felonious behavior could, through their association with the 
provider or

[[Page 46233]]

supplier, present program integrity risks. We again acknowledge that, 
for instance, certain directors (in their individual capacity) might 
not have as much daily oversight of the provider's or supplier's 
operations as other persons within the organization. Yet we maintain 
that membership on a governing body involves the exercise of at least a 
minimum degree of control. Accordingly, we believe that our proposed 
expansion of Sec. Sec.  424.530(a)(3) and 424.535(a)(3) is warranted.
    For reasons similar to those behind proposed Sec. Sec.  
424.530(a)(2)(ii) and 424.535(a)(2)(ii), we would add new paragraphs at 
Sec. Sec.  424.530(a)(3)(iii) and 424.535(a)(3)(iv) clarifying that 
these two provisions also apply to contracted parties.
c. Reversal of Revocation or Denial
    Sections 424.535(e) and 424.530(c) state that if a revocation or 
denial, respectively, was due to a prior adverse action (such as a 
sanction, exclusion, or felony) against a provider's or supplier's 
owner, managing employee, authorized or delegated official, medical 
director, supervising physician, or other health care or administrative 
or management services personnel furnishing services payable by a 
Federal health care program, the revocation or denial may be reversed 
if the provider or supplier terminates and submits proof that it has 
terminated its business relationship with that party within 30 days of 
the revocation or denial notification. To maintain consistency with our 
aforementioned changes to Sec. Sec.  424.530(a) and 424.535(a), we 
propose to add managing organizations, officers, and directors to 
Sec. Sec.  424.535(e) and 424.530(c).
d. Medicare Revocation Based on Other Program Termination
    Sections 424.535(a)(12)(i) states, in part, that CMS can revoke 
enrollment if the provider or supplier is terminated, revoked, or 
otherwise barred from participation in a State Medicaid program or any 
Federal health care program. However, under Sec.  424.535(a)(12)(ii) 
revocation cannot occur unless and until the provider or supplier has 
exhausted all applicable appeal rights. The meaning of the latter 
language has caused uncertainty regarding situations where the provider 
or supplier does not appeal the program termination at all. Our 
position has always been that, in such cases, revocation under Sec.  
424.535(a)(12)(i) can ensue once the initial period to file an appeal 
has ended; that is, CMS need not wait until the expiration of every 
subsequent appellate period that would have applied had the provider or 
supplier appealed. To clarify this via rulemaking, we propose to add 
the language ``or the timeframe for filing an appeal has expired 
without the provider or supplier filing an appeal'' to the end of Sec.  
424.535(a)(12)(ii).
e. Categorical Risk Designation--Ownership Changes and Adverse Actions
i. Background
    Under the authority granted to us by section 6401(a) of the 
Affordable Care Act (which amended section 1866(j) to the Act), Sec.  
424.518 outlines levels of screening by which CMS and its MACs review 
initial applications, revalidation applications, and applications to 
add a practice location. These screening categories and requirements 
are based on a CMS assessment of the level of risk of fraud, waste, and 
abuse posed by a particular type of provider or supplier. In general, 
the higher the level of risk that a certain provider or supplier type 
poses, the greater the level of scrutiny with which CMS will screen and 
review providers or suppliers within that category.
    There are three levels of screening in Sec.  424.518: high, 
moderate, and limited. Irrespective of which level a provider or 
supplier type falls within, the MAC performs the following screening 
functions upon receipt of an initial enrollment application, a 
revalidation application, or an application to add a new location:
    <bullet> Verifies that a provider or supplier meets all applicable 
Federal regulations and State requirements for their provider or 
supplier type.
    <bullet> Conducts State license verifications.
    <bullet> Conducts database checks on a pre- and post-enrollment 
basis to ensure that providers and suppliers continue to meet the 
enrollment criteria for their provider or supplier type.
    Providers and suppliers at the moderate and high categorical risk 
levels must also undergo a site visit. Furthermore, for those at the 
high screening level, the MAC performs two additional functions under 
Sec.  424.518(c)(2). First, the MAC requires the submission of a set of 
fingerprints for a national background check from all individuals who 
maintain a 5 percent or greater direct or indirect ownership interest 
in the provider or supplier. Second, it conducts a fingerprint-based 
criminal history record check of the Federal Bureau of Investigation's 
Integrated Automated Fingerprint Identification System on all 
individuals who maintain a 5 percent or greater direct or indirect 
ownership interest in the provider or supplier. These additional 
verification activities are meant to correspond to the heightened risk 
involved.
    There currently are only four provider or supplier types that fall 
within the high categorical risk level under Sec.  424.518(c)(1): 
newly/initially enrolling home health agencies (HHAs); newly/initially 
enrolling DMEPOS suppliers; newly/initially enrolling Medicare Diabetes 
Prevention Program (MDPP) suppliers; and newly/initially enrolling 
opioid treatment programs (OTPs).
ii. Current Grounds for Risk Level Increase (or ``Bump Up'')
    Under Sec.  424.518(c)(3)(i) and (ii), CMS adjusts a particular 
provider's or supplier's screening level from ``limited'' or 
``moderate'' to ``high'' if the provider or supplier:
    <bullet> Has had a payment suspension within the previous 10 years;
    <bullet> Has been excluded by the OIG;
    <bullet> Has had its Medicare billing privileges revoked within the 
previous 10 years and is attempting to establish additional Medicare 
billing privileges by (i) enrolling as a new provider or supplier or 
(ii) adding a new practice location;
    <bullet> Has been terminated or is otherwise precluded from billing 
Medicaid;
    <bullet> Has been excluded from any Federal health care program; or
    <bullet> Has been subject to any final adverse action (as defined 
at Sec.  424.502) within the previous 10 years.
    The screening level will also be raised to ``high'' under Sec.  
424.518(c)(3)(iii) if: (1) CMS lifts a temporary moratorium (per Sec.  
424.570) for a particular provider or supplier type; and (2) a provider 
or supplier that was prevented from enrolling (based on the moratorium) 
applies for Medicare enrollment within 6 months after the moratorium 
was lifted.
    The general purpose of Sec.  424.518(c)(3) is to ensure that 
providers and suppliers that have certain adverse actions imposed 
against them are reviewed with a concomitant level of scrutiny.
iii. Analysis
    Section 424.518 was implemented in 2011, and we have been screening 
providers and suppliers in accordance therewith since then. However, we 
have been concerned that Sec.  424.518 lacks clarity on two critical 
matters.
    First, and as alluded to previously, Sec.  424.518 outlines 
screening requirements for initial enrollment applications, 
revalidation applications, and practice location additions. Yet it does 
not specifically address:
    <bullet> Change of ownership (CHOW) applications under Sec.  
489.18; or

[[Page 46234]]

    <bullet> The reporting of a new owner when a formal Sec.  489.18 
CHOW is not involved (such as disclosing a new 10 percent owner per 
Sec.  424.516(e)(1)).
    Section 424.518's current dearth of clear applicability to these 
two situations effectively means that a high-risk level provider or 
supplier can have a new owner without the latter having to undergo the 
important scrutiny that fingerprint-based criminal background checks 
furnish. That is, in promulgating Sec.  424.518 in 2011, we recognized 
the uniquely critical role that owners often play in the provider's or 
supplier's operations by restricting our fingerprinting requirement to 
such persons. To mandate the fingerprinting of owners with initial 
applications, revalidations, and new practice locations but not with 
the aforementioned two transactions that specifically focus on the 
disclosure of new owners would be both an inconsistency and a program 
integrity risk.
    The second issue involves the risk-level elevation criteria in 
Sec.  424.518(c)(3). There are numerous health care entities that have 
multiple enrollments under their organizational umbrella. (To 
illustrate, Health Care System X, Inc. may have within its corporate 
structure a small hospital, four physician groups, two skilled nursing 
facilities, a DMEPOS supplier, and an OTP provider, all of which are 
separately enrolled in Medicare but with Health Care System X, Inc. 
identified as their legal business name.) Situations can arise where an 
organization with multiple enrollments has had an action described in 
Sec.  424.518(c)(3) imposed against it or against one of its 
enrollments. Consider the following examples:
    <bullet> Example 1--Entity Y has three separately enrolled 
physician groups (A, B, and C), each at the limited-risk level of 
categorical screening. Group C has just been revoked under Sec.  
424.535(a)(1) for non-compliance with enrollment requirements.
    <bullet> Example 2--Organization Z has within its structure an 
enrolled HHA, an enrolled nurse practitioner group, and an enrolled 
independent diagnostic testing facility (IDTF). The organization itself 
has recently been convicted of a felony (which is identified as a final 
adverse action under Sec.  424.502). All three of its enrollments are 
accordingly revoked.
    The adverse actions described in these two examples fall within the 
scope of events that would trigger an increase in risk level under 
Sec.  424.518 to ``high.'' There has been uncertainty among interested 
parties, particularly provider organizations with multiple enrollments, 
as to the extent of the risk-level elevation in these cases. That is, 
the issue is whether an adverse action imposed with respect to a 
particular enrollment applies strictly to said enrollment or also 
applies to all of the provider's or supplier's other enrollments, 
meaning that the screening level for these additional enrollments 
would, too, be raised to ``high.'' Under this latter approach, which 
has generally been our policy, the following would occur under 
aforementioned Examples 1 and 2:
    <bullet> Example 1--All initial enrollment applications, 
revalidations, and additions of practice locations involving Group 
Practice A, B, or C (for instance, Group C sought to re-enroll in 
Medicare after the expiration of its reenrollment bar under Sec.  
424.535(c)) would be processed at the ``high'' level of categorical 
screening. In addition, if Entity Y sought to enroll new Group Practice 
D, the latter's initial application would be subject to the ``high'' 
screening category.
    <bullet> Example 2--As with Example 1, all of Organization Z's 
enrollments would be elevated to ``high'' under Sec.  424.518(c)(3). If 
any of the revoked providers and suppliers sought to reenroll in 
Medicare after their reenrollment bars expire, their enrollments would 
be processed at the high-risk level.
    We believe the foregoing approach is warranted because we have 
historically viewed Sec.  424.518(c)(3) in the broad context of 
applying to the controlling provider or supplier at large and not 
necessarily being confined to one of its enrollments. The central 
consideration, in our view, is the risk that the behavior at issue 
poses to the Trust Funds and to the safety of our beneficiaries. Even 
if, for instance, a Medicaid termination occurred with only one of the 
entity's enrollments, this raises serious questions about the 
organization's oversight of the enrolled providers and suppliers under 
its control. We believe that the overriding need to protect the 
Medicare program justifies heightened examination of the other 
enrollments within the organization's domain.
iv. Specific Regulatory Revisions
    Given the prior discussion and for reasons already outlined, we 
propose the following changes to Sec.  424.518.
    First, the opening paragraph of Sec.  424.518 references initial 
applications, revalidation applications, and practice location 
additions as falling within Sec.  424.518's purview. We propose to add 
to this paragraph the following transactions:
    <bullet> Change of ownership applications under Sec.  489.18.
    The reporting of any new owner (regardless of ownership percentage) 
via a change of information or other enrollment transaction (such as a 
full or partial certified supplier ownership change) under Title 42.
    Second, we propose to clarify in Sec.  424.518(c)(1) that the 
provider and supplier types included therein--once enrolled--are 
subject to high-risk screening if they are submitting a Sec.  489.18 
change of ownership application or an application to report a new owner 
(as described in the previous paragraph). As a technical elucidation, 
we would also change the language in paragraph (c)(1) that reads, CMS 
has designated the following home health agencies and suppliers of 
DMEPOS as ``high'' categorical risk to CMS has designated the following 
provider and supplier types as ``high'' categorical risk. This would 
merely clarify that certain providers and suppliers other than HHAs and 
DMEPOS suppliers (such as OTPs) fall within the purview of paragraph 
(c)(1).
    Third, the introductory language in Sec.  424.518(c)(3) states that 
CMS adjusts the screening level from limited or moderate to high if any 
of the previously cited adverse actions against the provider or 
supplier occur. To clarify the extent of such adjustments, we propose 
to add a new paragraph (c)(4). We would state therein that any 
adjustment under paragraph (c)(3) would also apply to all other 
enrolled and prospective providers and suppliers that have the same 
legal business name (LBN) and tax identification (TIN) number as the 
provider or supplier for which the risk level under (c)(3) was 
originally raised. We believe using an LBN-TIN combination as the 
barometer for application of (c)(3) to other providers and suppliers is 
proper for two reasons. First, providers and suppliers with the same 
LBN and TIN are generally closely related in certain legal and 
operational aspects (for instance, similar ownership or management). 
Such alignment between these parties, in our view, warrants a 
concomitant level of review in the event paragraph (c)(3) is invoked. 
Second, utilizing an LBN-TIN standard in paragraph (c)(4) would likely 
offer more clarity and definiteness for interested parties regarding 
paragraph (c)(3)'s applicability than a potentially more nebulous 
standard, such as ``within a common business structure.''

[[Page 46235]]

f. Categorical Risk Designation--Skilled Nursing Facilities (SNFs)
    SNFs are currently in the limited-risk screening category under 
Sec.  424.518. However, CMS in recent years has become increasingly 
concerned about certain problems within the SNF community, particularly 
potential and actual criminal behavior. Indeed, a specific concern 
raised in several government reports involves patient abuse. For 
instance, the United States Government Accountability Office (GAO) 
published an analysis on January 14, 2022 titled ``Health Care Capsule: 
Improving Nursing Home Quality and Information'' (GAO-22-105422). In 
this report, the GAO identified gaps in CMS' prior oversight of nursing 
homes that make it more difficult to prevent patient abuse. Another GAO 
report, titled ``Nursing Homes: Better Oversight Needed to Protect 
Residents from Abuse'' (GAO-19-433), was published in June 2019.\329\ 
The study aimed to: (1) determine the trends and types of nursing home 
patient abuse in recent years; and (2) evaluate CMS' oversight that is 
intended to ensure residents are free from abuse. The report concluded, 
among other things, that patient abuse deficiencies found on State 
surveys more than doubled between 2013 and 2017.\330\ It also noted 
inconsistencies as to when State survey abuse findings or allegations 
of abuse are referred to law enforcement.\331\ The subject of 
background checks was also addressed. The GAO interviewed various 
interested parties and determined that nursing homes without adequate 
staff screening mechanisms (such as background checks) could result in 
hiring staff with histories of abuse.\332\ It added that because 
``staff screening through background checks and the nurse aide registry 
is not coordinated across the country, there are gaps that could enable 
individuals who committed crimes in one state to obtain employment at a 
nursing home in another state. . .Staff from a nursing home we visited 
said the prevention of abuse `starts with hiring the right staff' and 
noted the importance of conducting background checks and checking 
references for prospective employees.'' \333\
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    \329\ https://www.gao.gov/assets/gao-19-433.pdf.
    \330\ Ibid.
    \331\ Ibid., 42.
    \332\ Ibid., 29.
    \333\ Ibid., 31-32.
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    The OIG, too, has opined on this matter. In a September 2020 report 
titled, ``National Background Check Program for Long-Term Care 
Providers: Assessment of State Programs Concluded in 2019'' (OEI-07-20-
00180), the OIG noted that patient abuse, patient neglect, and 
misappropriation of property have been detected as problems harmful to 
beneficiaries receiving long-term care. Somewhat akin to the previously 
mentioned June 2019 GAO report, the OIG stated that, per various 
studies, some nurse aides who were convicted of abuse, neglect, or 
theft had previous criminal convictions that could have been found 
through background checks of prospective employees.\334\ The OIG added 
that such employee background checks can help protect long-term care 
beneficiaries.\335\
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    \334\ OEI-07-20-00180, p. 1. Such employee background checks are 
conducted pursuant to the National Background Check Program, enacted 
by legislation in 2010. This is a voluntary grant program for States 
to develop systems to conduct Federal and State background checks. 
See https://www.bgcheckinfo.org/.
    \335\ Ibid.
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    Our aforementioned concerns regarding problematic activity in the 
nursing home arena are not limited to patient abuse. Numerous recent 
cases have highlighted issues regarding fraud or improper billing among 
nursing home owners or operators. For instance:
    <bullet> In April 2019, a jury found an owner of nursing homes and 
assisted living facilities in Florida guilty of 20 charges related to 
health care fraud. The United States Department of Justice (DOJ) noted 
that the owner's actions were part of the largest health care fraud 
scheme ever charged by the DOJ. It involved over $1.3 billion in 
fraudulent claims to Medicare and Medicaid for services that were not 
provided, were not medically necessary, or were procured through the 
payment of kickbacks.\336\
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    \336\ https://www.justice.gov/opa/pr/south-florida-health-care-facility-owner-convicted-role-largest-health-care-fraud-scheme-ever.
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    <bullet> In July 2021, a Virginia nursing home operator was 
sentenced to 2 years in prison for defrauding Medicaid after submitting 
more than $188,000 in false claims.\337\
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    \337\ https://www.justice.gov/usao-edva/pr/operator-residential-nursing-facility-sentenced-health-care-fraud.
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    <bullet> In March 2022, the DOJ settled a False Claims Act case 
with a Georgia nursing home for $400,000. The matter involved 
allegations that the nursing home deliberately billed Medicare for 
services that were not reasonable, necessary, and skilled.\338\
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    \338\ https://www.justice.gov/usao-ndga/pr/england-associates-lp-dba-new-london-health-center-pays-40000000-resolve-false-claims#:.
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    <bullet> A nursing home entity based in Georgia (which operates 
nursing homes across the country) agreed in May 2021 to pay $11.2 
million to resolve allegations that it: (1) violated the False Claims 
Act by causing its nursing homes to bill the Medicare program for 
rehabilitation therapy services that were not reasonable, necessary or 
skilled; and (2) billed Medicare and Medicaid for substandard skilled 
nursing services.\339\
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    \339\ https://www.justice.gov/opa/pr/savaseniorcare-llc-agrees-pay-112-million-resolve-false-claims-act-allegations.
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    <bullet> In January 2020, a New York man pled guilty in federal 
court to embezzlement and tax offenses related to his operation of 
nursing homes in Connecticut.\340\
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    \340\ https://www.justice.gov/usao-ct/pr/nursing-home-operator-pleads-guilty-embezzlement-and-tax-offenses.
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    <bullet> Also in 2020, a Pennsylvania nursing home chain and its 
related companies agreed to pay more than $15 million to settle claims 
that the chain provided medically unnecessary rehabilitation therapy to 
residents in order to meet revenue goals, instead of clinical 
needs.\341\
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    \341\ https://www.justice.gov/usao-edpa/pr/pennsylvania-nursing-home-chain-pay-155-million-settle-false-claims-act-allegations.
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    <bullet> A California corporation and 27 affiliated nursing homes 
in the State agreed in July 2020 to resolve allegations that they 
violated the False Claims Act by submitting false claims to Medicare 
for rehabilitation therapy services that were not reasonable or 
necessary.\342\
---------------------------------------------------------------------------

    \342\ https://www.justice.gov/usao-cdca/pr/27-skilled-nursing-facilities-controlled-longwood-management-corp-pay-167-million.
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    <bullet> In June 2019, four Illinois nursing facilities and a 
physical therapy center agreed to pay $9.7 million to resolve civil 
allegations that they violated the False Claims Act by providing 
unnecessary services to increase Medicare payments.\343\
---------------------------------------------------------------------------

    \343\ https://www.justice.gov/usao-ndil/pr/chicago-area-physical-therapy-center-and-4-nursing-facilities-pay-97-million-resolve.
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    <bullet> A Tennessee-based nursing home chain agreed in February 
2018 to pay more than $18 million in allowed claims to resolve a 
lawsuit brought by the DOJ and the State of Tennessee against them for 
billing the Medicare and Medicaid programs for substandard nursing home 
services.\344\
---------------------------------------------------------------------------

    \344\ https://www.justice.gov/opa/pr/vanguard-healthcare-agrees-resolve-federal-and-state-false-claims-act-liability.
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    The disconcerting number of recent cases involving fraud and 
improper billing by nursing home owners and operators, as well as the 
OIG and GAO reports concerning patient abuse at the nursing homes these 
individuals oversee, requires, in our view, strengthened protections of 
the Medicare program and its nursing home beneficiaries. Indeed, CMS 
has an obligation to safeguard the integrity of

[[Page 46236]]

both the Trust Funds and the services that nursing home patients 
receive. Financial malfeasance and beneficiary abuse are unacceptable, 
and we believe that more closely scrutinizing the owners of nursing 
homes through our existing criminal background checks under Sec.  
424.518 can help detect potential criminal or abusive behavior at the 
nursing home before it begins. To illustrate, if a SNF owner is found 
through a fingerprint-based background review to have been convicted of 
battery, sexual assault, or other serious crime, this could raise 
significant concerns as to whether this conduct will be repeated during 
the owner's oversight or management of the facility. A SNF owner with 
an embezzlement conviction might be more inclined to divert the SNF's 
funds to his personal use (and away from monies otherwise intended for 
beneficiary care) than a different owner; he or she might also be more 
willing to tolerate malfeasance in the nursing home or to hire persons 
with criminal records. As two of the aforementioned OIG and GAO reports 
indicated with respect to nursing home employees, background reviews 
can prove helpful in screening individuals for possible problematic 
behavior. We, too, have found our fingerprint-based criminal background 
checks of great assistance in detecting felonious behavior by the 
owners of high-risk providers and suppliers.
    Given the prevalence of recent unacceptable behavior by nursing 
home overseers and the OIG and GAO-documented instances of nursing home 
beneficiary abuse, we propose to revise Sec.  424.518 to move initially 
enrolling SNFs into the high-level of categorical screening; 
revalidating SNFs would be subject to moderate risk-level screening. 
Requiring all SNF owners with 5 percent or greater ownership to submit 
fingerprints for a criminal background check would help us detect 
parties potentially posing a risk of fraud, waste, or abuse and, with 
this, the threat of patient abuse. In addition, our proposal, which we 
believe would assist in protecting Medicare Trust Fund dollars and 
beneficiaries, aligns with the Biden-Harris Administration's initiative 
to improve nursing home accountability.\345\
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    \345\ See https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/28/fact-sheet-protecting-seniors-and-people-with-disabilities-by-improving-safety-and-quality-of-care-in-the-nations-nursing-homes/.
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    Previously, we referenced our authority under Sec. Sec.  
424.530(a)(3) and 424.535(a)(3) to deny or revoke enrollment based on a 
felony conviction within the previous 10 years; this includes a felony 
conviction against an owner of the provider or supplier. 
Notwithstanding our foregoing concerns about felonious activity by 
nursing home owners, we emphasize that our authority under Sec. Sec.  
424.530(a)(3) and 424.535(a)(3) is discretionary, meaning that we are 
not required to exercise it in every case.
g. DMEPOS Payment Denial Based on Violation of Supplier Standard
    In comparison to most other provider and supplier types, DMEPOS 
suppliers have long presented to the Medicare program an elevated risk 
of fraud, waste, and abuse. In recognizing this threat, CMS over the 
years has established particularly stringent requirements that DMEPOS 
suppliers must meet in order to enroll and maintain enrollment in 
Medicare. These include, but are not limited to, requiring:
    <bullet> The highest possible level of screening for initially 
enrolling DMEPOS suppliers, which includes site visits and the 
submission of fingerprints by each of the DMEPOS supplier's 5 percent 
or greater owners (Sec.  424.518(c)).
    <bullet> The DMEPOS supplier's accreditation under Sec.  424.58.
    <bullet> Acquisition and maintenance of a surety bond under Sec.  
424.57(d).
    The foregoing policies are meant to help ensure that Medicare 
enrolls and pays only those DMEPOS suppliers that are legitimate 
businesses capable of serving as reliable partners of the Medicare 
program. In furtherance of this aim, Sec.  424.57(b) contains five 
separate conditions of payment that DMEPOS suppliers must meet to 
receive payment. These include, for example: (1) submission of a 
completed application to enroll in Medicare; and (2) furnishing a 
DMEPOS item only on or after the date CMS issued the supplier a billing 
number. Noncompliance with any DMEPOS condition of payment in Sec.  
424.57(b) can result in a revocation under Sec.  424.57(e)(1). In 
addition, Sec.  424.57(c) lists a number of enrollment standards with 
which DMEPOS suppliers must comply at all times. Should the supplier 
fail to meet any of the 30 standards, revocation under Sec.  
424.57(e)(1) is warranted.
    One such enrollment standard, codified in Sec.  
424.57(c)(1)(ii)(A), provides that if the State requires licensure to 
furnish certain items or services, the DMEPOS supplier must be licensed 
to provide the item or service. We have encountered situations where an 
unlicensed DMEPOS supplier furnishes items for an extended period. The 
supplier then terminates its enrollment or CMS revokes the supplier's 
enrollment under Sec.  424.57(e)(1) effective 30 days after the DMEPOS 
supplier is sent notice of the revocation per Sec.  405.874. Tens of 
thousands of Medicare dollars were placed at great risk because the 
supplier was furnishing items and services while unlicensed up to the 
point of its termination of enrollment.
    We see this as a potential vulnerability. Notwithstanding the 
aforementioned guardrails to stop DMEPOS fraud, initially enrolling 
DMEPOS suppliers remain at a high-risk screening designation, which we 
believe warrants heightened scrutiny to help ensure that all DMEPOS 
requirements are met. It would be inconsistent with our obligation to 
protect the Medicare Trust Funds to permit payment for items and 
services furnished while the supplier was non-compliant with the 
licensure requirements of Sec.  424.57(c)(1)(ii)(A). Indeed, State 
licensure is a uniquely important program integrity protection because 
it helps ensure that the supplier meets certain minimum requirements of 
competency under State law to perform the services or furnish the items 
in question. Further, DMEPOS licensure, more than perhaps any other 
supplier standard in Sec.  425.57(c), constitutes an additional level 
of vetting (that is, at the State level) that, in conjunction with our 
provider enrollment screening under 42 CFR part 424, subpart P and the 
provisions of Sec.  424.57, is not necessarily duplicated with respect 
to requirements existing only at the Federal level. To illustrate, if a 
particular requirement in Sec.  424.57(c) is also a prerequisite for 
State licensure, two reviews of the supplier's compliance will be 
performed: once at the State level and once at the Medicare enrollment 
level. Such multiple levels of verification that State licensure 
combined with Federal requirements can help ensure that the supplier is 
a bonafide and legitimate business.
    Given the foregoing, we propose to add a new condition of payment 
in paragraph (b)(6) in Sec.  424.57. Said condition would state that in 
order to receive payment for a furnished DMEPOS item, the supplier must 
have been in compliance with all conditions of payment in 424.57(b) as 
well as with Sec.  424.57(c)(1)(ii)(A) at the time the item or service 
was provided. We note that section 1834(j)(1)(B)(ii)(I) of the Act 
requires, as a condition for obtaining a supplier number, that the 
DMEPOS supplier comply with all applicable State and Federal licensure 
and regulatory requirements. A DMEPOS supplier cannot receive payment 
unless it is enrolled and, as part of that, has a supplier number. 
Since compliance

[[Page 46237]]

with licensure requirements is a specific statutory prerequisite for a 
DMEPOS supplier to be enrolled and because payment cannot occur without 
enrollment, we believe it logically follows that section 
1834(j)(1)(B)(ii)(I) of the Act constitutes sufficient legal authority 
for our proposal.

K. State Options for Implementing Medicaid Provider Enrollment 
Affiliation Provision

    On September 10, 2019, we published a final rule with comment 
period in the Federal Register titled ``Program Integrity Enhancements 
to the Provider Enrollment Process'' (84 FR 47794). Several provisions 
therein implemented section 1866(j)(5) of the Act. Section 
1866(j)(5)(A) of the Act requires Medicare, Medicaid, and Children's 
Health Insurance Program (CHIP) providers and suppliers to disclose any 
current or previous direct or indirect affiliation with a provider or 
supplier that--(1) has uncollected debt; (2) has been or is subject to 
a payment suspension under a Federal health care program; (3) has been 
or is excluded by the OIG from Medicare, Medicaid, and CHIP; or (4) has 
had its Medicare, Medicaid, or CHIP billing privileges denied or 
revoked. Under section 1866(j)(5)(B) of the Act, the Secretary may deny 
enrollment based on such an affiliation if the Secretary determines 
that the affiliation poses an undue risk of fraud, waste, or abuse.
    The above-mentioned statutory requirements were implemented in 
Sec. Sec.  424.502 and 424.519 with respect to Medicare enrollment and 
42 CFR 455.101 and 455.107 for Medicaid and CHIP enrollment. The 
general purpose of the affiliation disclosure requirement is to help 
combat fraud, waste, and abuse by enabling CMS and the States to: (1) 
better track certain current and past relationships between and among 
different providers and suppliers; and (2) identify and take action on 
affiliations among providers and suppliers that pose an undue risk to 
Medicare, Medicaid, or CHIP.
    In terms of the scope and timing of the disclosure requirement, 
section 1866(j)(5)(A) of the Act states that providers and suppliers 
submitting an application for enrollment or revalidation of enrollment 
in Medicare, Medicaid, or CHIP must make the disclosures in a form and 
manner and at such time as determined by the Secretary. Based in part 
on concerns about the potential burden on the provider community in 
disclosing affiliations on every initial and revalidation application 
(and pursuant to the aforementioned statutory authorization regarding 
the form, manner, and timing for submitting disclosures), current 
regulations outline a ``phased in'' approach to implementing the 
disclosure requirements, pending further rulemaking. For Medicare 
enrollment, Sec.  424.519(b) states that providers and suppliers must 
submit affiliation disclosures upon a CMS request. CMS will make these 
requests when it determines that an initially enrolling or revalidating 
provider or supplier may have at least one affiliation meeting certain 
criteria specified in the regulation. For Medicaid and CHIP 
enrollments, Sec.  455.107(b) requires each State, in consultation with 
CMS, to select one of the following two options for implementing the 
disclosure requirement:
    <bullet> Under Option #1, all providers that are not enrolled in 
Medicare but are initially enrolling in Medicaid or CHIP or 
revalidating their Medicaid or CHIP enrollment information must 
disclose their affiliations.
    <bullet> Under Option #2, providers that are not enrolled in 
Medicare but are initially enrolling in Medicaid or CHIP or 
revalidating their Medicaid or CHIP enrollment information must 
disclose their affiliations only upon request from the State. (The 
State will make the request when, in consultation with CMS, it has 
determined that the initially enrolling or revalidating provider may 
have at least one affiliation meeting certain criteria specified in the 
regulation.)
    The central operational difference between these two Medicaid and 
CHIP options is that the first requires disclosures with every initial 
and revalidation application (assuming the provider is not Medicare-
enrolled) while the second requires disclosures with the applications 
only upon the State's request. On a broader level, the second option 
permits the State to undertake a slower, phased-in implementation. That 
is, rather than require all initially and revalidating non-Medicare-
enrolled providers to report their affiliations, the State may, in 
consultation with CMS, adopt the more targeted approach of requiring 
disclosures upon request, mirroring the approach adopted in Sec.  
424.519(b) for Medicare. We believe that affording options gives States 
greater flexibility in implementing the affiliation disclosure 
requirements.
    Despite this goal, existing Sec.  455.107(b)(1)(ii) holds that the 
State cannot change options once its selection has been made. Our 
concern at the time of promulgating Sec.  455.107(b) was that switching 
options after one of them is implemented could lead to logistical and 
administrative complications and, perhaps, confusion in the provider 
community as to what the State requires. However, after consultations 
with the States and after analyzing data regarding the submission of 
affiliation disclosures to date, we do not believe Sec.  
455.107(b)(1)(ii) needs be so restrictive. A number of States are 
seeking greater discretion in their operationalization of Sec.  
455.107(b). They believe that requiring the State to continue 
implementing its selected option without change could hinder its 
operations and/or its program integrity efforts if that option is 
proving impracticable or inefficient for that particular State.
    We share these States' concerns and agree that increased 
flexibility is warranted. To this end, we are proposing to revise Sec.  
455.107(b)(1)(ii) to read that a State may, in consultation with CMS, 
change its selection under Sec.  455.107(b) (after it has been made) 
from Sec.  455.107(b)(2)(ii) to Sec.  455.107(b)(2)(i). However, we 
would not permit a change from Sec.  455.107(b)(2)(i) to Sec.  
455.107(b)(2)(ii). This is because the former option more thoroughly 
implements section 1866(j)(5)(A) of the Act, and thus, furnishes 
greater program integrity protections by requiring all enrolling or 
revalidating providers to disclose affiliations while Sec.  
455.107(b)(2)(ii) requires disclosure in more limited circumstances. As 
noted in the previously mentioned September 10, 2019 final rule with 
comment period: ``Section 1866(j)(5) of the Act requires every provider 
and supplier (regardless of the relative risk they may pose) to 
disclose affiliations upon initial enrollment and revalidation. All 
States that choose the second option will therefore eventually be 
required to collect affiliation disclosures from their providers upon 
the submission of each initial and revalidation application'' (84 FR 
47816). Consistent with the phased-in approach adopted in that rule and 
in the interest of protecting the Medicaid program and CHIP from fraud, 
waste, and abuse, we believe it is appropriate to allow States the 
flexibility to move from the second, more limited implementation option 
to the first, more robust option. Conversely, we do not believe that 
States that chose the full implementation option in Sec.  
455.107(b)(2)(ii) should be permitted to scale back their approach by 
changing their selection to the more limited ``upon request'' option.

[[Page 46238]]

L. Requirement for Electronic Prescribing for Controlled Substances for 
a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD Plan

1. Previous Regulatory Action
    In the CY 2021 PFS final rule and CY 2022 PFS final rule, we 
finalized policies for the EPCS requirement specified in section 2003 
of the SUPPORT Act (Pub. L. 115-271, October 24, 2018). We refer 
readers to 86 FR 65361 through 65370 for the complete details of the 
statutory requirements and those finalized policies. Specifically, in 
the CY 2022 PFS final rule, we finalized multiple proposals related to 
EPCS. First, we finalized our proposal to extend the date of compliance 
actions to no earlier than January 1, 2023, and for prescribers writing 
Part D controlled substances prescriptions for beneficiaries in long-
term care (LTC) facilities, we extended the date on or after which we 
will pursue compliance actions from January 1, 2022 to January 1, 2025 
(86 FR 65364 and 65365). Second, we finalized our proposal to require 
prescribers to electronically prescribe at least 70 percent of their 
Schedule II, III, IV, and V controlled substances that are Part D 
drugs, except in cases where an exception or waiver applies (86 FR 
65366). Third, we finalized multiple proposals related to the classes 
of exceptions specified by section 2003 of the SUPPORT Act (86 FR 65366 
through 65369): (1) we amended Sec.  423.160(a)(5) by adding paragraph 
(a)(5)(i), which is the exception listed in section 1860D-4(e)(7)(B)(i) 
of the Act, for prescriptions issued where the prescriber and 
dispensing pharmacy are the same entity; (2) we amended Sec.  
423.160(a)(5) by adding paragraph (a)(5)(ii), which created an 
exception for prescribers who issue 100 or fewer controlled substance 
prescriptions for Part D drugs per calendar year as determined using 
prescription drug event (PDE) claims data as of December 31st of the 
preceding year; (3) we amended Sec.  423.160(a)(5) by adding paragraph 
(a)(5)(iii) to create an exception for prescribers located in the 
geographic area of an emergency or disaster declared by a Federal, 
State or local government entity; and (4) we amended Sec.  
423.160(a)(5) by adding paragraph (a)(5)(iv) to create an exception for 
prescribers who have received a CMS-approved waiver because the 
prescriber is unable to conduct EPCS due to circumstances beyond the 
prescriber's control, respectively. We did not adopt exemptions for 
prescribers issuing prescriptions for individuals who are residents of 
a nursing facility and eligible for Medicare and Medicaid benefits, or 
for prescribers issuing prescriptions for individuals enrolled in 
hospice. Finally, we finalized our proposal to limit compliance actions 
with respect to compliance from January 1, 2023 through December 31, 
2023, to a non-compliance letter sent to prescribers that we believe 
are violating the EPCS requirement (86 FR 65370).
2. Evaluation of Compliance
    In the CY 2022 PFS final rule, we discussed the EPCS policy, 
exceptions, and a compliance threshold. Specifically, we stated that 
starting in CY 2023, CMS would begin initial EPCS compliance actions 
(86 FR 65363). We believe it is important to provide a general timeline 
that describes the general process by which prescriber compliance will 
be evaluated. Previously, we stated that some exceptions would be 
evaluated on the basis of Prescription Drug Event (PDE) data from the 
preceding year as opposed to the evaluated year. We recognize that 
prescriber practices may change from year to year and believe it is 
inconsistent to evaluate exceptions and compliance on the basis of PDE 
data from the preceding year as opposed to the year under evaluation. 
To that end, we aim to use PDE data from the evaluated year (that is, 
the current year) as soon as it becomes available to ensure that the 
data is relevant to the prescriber's practices in the evaluated year. 
For example, evaluation of CY 2023 prescriber practices will be based 
on CY 2023 PDE data, though the evaluation will not begin until late CY 
2024 and will be based on the PDE data used in the Part D Payment 
Reconciliation for CY 2023. Following the PDE availability and our 
evaluation for exceptions and compliance, CMS will begin addressing 
prescriber noncompliance by issuing non-compliance letters as 
previously described in the CY 2022 PFS final rule (86 FR 65370).
    Additionally, in this proposed rule, we propose to extend the 
existing non-compliance action of sending letters to non-compliant 
prescribers for the EPCS program implementation year (January 1, 2023 
through December 31, 2023) to the following year (January 1, 2024 
through December 31, 2024). We are also proposing a change to the data 
source used to identify the geographic location of prescribers to 
inform the recognized emergency exception. Starting in CY 2025, CMS 
plans to begin increasing the severity of penalties for noncompliant 
prescribers, from issuance of non-compliance letters to other 
penalties, using the same timeline established here. Therefore, we are 
seeking further public comment on potential penalties for noncompliant 
prescribers in section III.L.4. of this proposed rule.
3. Proposed Changes to Exceptions
a. Cases Where Prescribers Issue Only a Small Number of Part D 
Prescriptions
    In the CY 2022 PFS final rule we finalized our proposal to amend 
Sec.  423.160(a)(5) by adding Sec.  423.160(a)(5)(ii), which created an 
exception for prescribers who issue 100 or fewer controlled substance 
prescriptions for Part D drugs per calendar year as determined using 
PDE claims data as of December 31st of the preceding year, so that 
these prescribers are not required to meet the EPCS requirement. We 
referred to this exception as one for small prescribers. For a complete 
discussion of this topic please see the CY 2022 PFS final rule (86 FR 
65366 and 65367). We note that we intended to implement this proposal 
by examining PDE claims as of December 31 of the prior year to 
determine which prescribers fall within this exception. We stated CMS 
will use the previous year's data to determine whether the prescriber 
falls under this exception for the year-in-question.
    We are now proposing to modify the exception to better align the 
timeframes of data used to evaluate each exception. We note that, other 
than the small prescriber exception, every exception described in the 
CY 2022 PFS final rule is evaluated based on data from the same year to 
which the exception is applied. For instance, in the case of a 
recognized emergency, an exception would be granted during the period 
of time in the year in which the emergency took place, and the 
emergency would not be considered for an exception in the following 
year's compliance evaluation, except to the extent that the emergency 
continued into the following year. Similarly, for purposes of Sec.  
423.160(a)(5)(ii), we believe that it is consistent to consider the 
prescriptions issued during the evaluation period, rather than the 
previous year, in case there are year-over-year changes. In this 
manner, we believe this proposal is a more consistent approach than the 
existing requirement to utilize claims data from the prior year to 
assess whether a prescriber issues 100 or fewer Part D controlled 
substance prescriptions.
    Therefore, we are proposing to change the year from which PDE data 
is used from the preceding year to the current evaluated year when CMS 
determines

[[Page 46239]]

whether a prescriber qualifies for an exception based on the number of 
Part D controlled substance claims. To effect this change, we are 
proposing to modify the exception at Sec.  423.160(a)(5)(ii), which 
states, ``Prescriber issues 100 or fewer controlled substance 
prescriptions for Part D drugs per calendar year as determined using 
CMS claims data as of December 31st of the preceding year,'' by 
changing ``CMS claims data as of December 31st of the preceding year'' 
to ``CMS claims data with dates of service as of December 31st of the 
current year.'' If finalized, this proposal would become effective for 
CY 2023 and for subsequent years. Thus, for CY 2023 EPCS compliance, 
the small prescriber exception would be assessed using CY 2023 PDE data 
based on our proposed change. Additionally, a prescriber's compliance 
status would be evaluated based on PDE data with a `Date of Service' 
within the evaluated calendar year using PDE data, which Part D 
sponsors must submit by mid-way through the following year. For an 
example of how we propose this to work in practice, consider the 
following illustration. Prescriber A had fewer than 100 Medicare Part D 
controlled substances prescriptions in CY 2022, and therefore, was 
excepted from EPCS compliance for CY 2022. During the first quarter of 
CY 2023, she issues 85 Part D controlled substance prescriptions. After 
Prescriber A crosses the threshold of more than 100 Part D controlled 
substance prescriptions, she must reach the compliance threshold of 
electronically prescribing at least 70 percent of all her prescribed 
Part D Schedule II, III, IV, and V controlled substances in CY 2023. If 
she does not utilize EPCS for at least 70 percent of Part D controlled 
substance prescriptions in CY 2023, including those prescribed prior to 
reaching the 100 Part D controlled substances prescriptions threshold, 
she would be subject to a compliance action based on failing to meet 
the requirement at Sec.  423.160(a)(5), unless another exception 
applied. PDEs with a Date of Service between January 1, 2023 to 
December 31, 2023 with a submission date on or before the PDE 
submission deadline for 2023 (that is, June 28, 2024) would be included 
in the compliance analysis.
    If our proposal is finalized, neither CMS nor an individual 
prescriber will be able to determine until after the evaluation year 
whether or not the individual prescriber qualifies as a ``small 
prescriber'' for purposes of Sec.  423.160(a)(5)(ii), unless the 
prescriber tracks the number of Medicare Part D controlled substance 
prescriptions the prescriber issues during the evaluation year. This is 
in comparison to our existing policy, where CMS would not determine if 
prescribers qualify as a ``small prescriber'' until the middle of the 
evaluation year when the PDE data from the prior year becomes 
available. Despite the delay in identifying which prescribers qualify 
for the small prescriber exception, we believe this proposal will 
better identify small prescribers for purposes of EPCS compliance and 
simplify the program by aligning the time periods of the exceptions. We 
also believe that prescribers will be able to more clearly understand 
their Medicare Part D controlled substance prescribing patterns 
throughout the first two years of the EPCS program, where the only 
action for non-compliance is a letter.
    We seek comment on our proposal to modify the exception at Sec.  
423.160(a)(5)(ii) and on the possibility that prescribers would avoid 
prescribing controlled substances to Medicare beneficiaries, 
particularly where they are approaching the 100 Part D controlled 
substances prescriptions threshold late in a calendar year, in order to 
remain a small prescriber.
    Additionally, recognizing some prescribers are expecting CMS to use 
the CY 2022 PDE to assess whether the exception at Sec.  
423.160(a)(5)(ii) applies for purposes of CY 2023 EPCS compliance, we 
seek comment on an alternative for the CY 2023 year only. In the 
alternative, we would recognize a prescriber as a small prescriber for 
purposes of the exception at Sec.  423.160(a)(5)(ii) if the prescriber 
had fewer than 100 Part D controlled substances prescriptions in 2022 
or fewer than 100 Part D controlled substances prescriptions in 2023. 
We did not propose this option because we thought it would be simpler 
to have a single set of exceptions for the program versus different 
rules for different years. Additionally, we believed the risk to 
prescribers who may change their small prescriber status would be low 
as the action for non-compliance for CY 2023 is a letter.
b. Cases of Recognized Emergencies
    In the CY 2022 PFS final rule (86 FR 65367 and 65368), we finalized 
our proposal to adopt an exception at Sec.  423.160(a)(5)(iii), for 
prescribers who are prescribing during a recognized emergency, such as 
a natural disaster, a pandemic, or a similar situation where there is 
an environmental hazard. We stated that to qualify for this exception, 
this circumstance will have to arise from an emergency or disaster 
declared by a Federal, State, or local government entity. We finalized 
our proposal to determine whether a prescriber qualifies for this 
exception based on whether the prescriber's National Council for 
Prescription Drug Programs (NCPDP) Pharmacy Database address is located 
in the geographic area of an emergency or disaster declared by a 
Federal, State or local government entity, which is reflected in the 
text of Sec.  423.160(a)(5)(iii). Since, as stated in the CY 2022 PFS 
proposed and final rules, we had intended this exception to avoid 
unduly burdening prescribers during difficult situations, CMS would 
like to again clarify that this exception would be applicable only if 
the dispensing date of the medication occurs during the time period 
that the declared disaster is occurring.
    We have determined that the NCPDP Pharmacy Database contains 
pharmacy addresses as opposed to prescriber addresses. Because it is 
likely that the address of a prescriber differs from that of the 
pharmacy where a prescription is filled, and the prescriber might be 
located at an address within an emergency or disaster area when the 
pharmacy is not, we believe the NCPDP database may not always be an 
appropriate data source to inform the exception based on emergencies 
such as natural disasters, pandemics, or similar situations where there 
is an environmental hazard. It is our intention that the EPCS exception 
apply to where the prescriber is located, not where the pharmacy is 
located, to the extent that the locations differ. We believe the 
Medicare Provider Enrollment, Chain, and Ownership System (PECOS) would 
have the most current address information for prescribers who are 
enrolled in Medicare. Additionally, this is the data source that the 
Quality Payment Program's Merit-based Incentive Payment System (MIPS) 
uses to determine if a MIPS eligible clinician is located in an area 
that has been affected by extreme and uncontrollable circumstances (82 
FR 53895 through 53900). Therefore, for prescribers who have an address 
in PECOS, we propose to use the PECOS address instead of the of the 
NCPDP Pharmacy Database address to determine whether the exception at 
Sec.  423.160(a)(5)(iii) is applicable. We are concerned however, that 
not all prescribers would be enrolled in Medicare and therefore their 
addresses would not be in PECOS. In situations where prescribers do not 
have a PECOS address, we propose to use the prescriber address in the 
National Plan and Provider Enumeration System

[[Page 46240]]

(NPPES) data. We propose to revise the text of Sec.  423.160(a)(5)(iii) 
accordingly. Additionally, we seek public comment on whether using 
NPPES, NCPDP, or some other database is appropriate when there is no 
prescriber address in PECOS.
    We also seek comment on an alternative of using NPPES as the source 
of addresses for all prescribers. We believe this data may have 
information for all prescribers, but that providers may not update 
their address as often as they do in PECOS. Finally, we seek comment on 
other potential data sources that could be used to verify a 
prescriber's address for purposes of Sec.  423.160(a)(5)(iii).
4. Penalties
    Section 1860D-4(e)(7)(D) of the Act gives the Secretary the 
authority to enforce and specify appropriate penalties for non-
compliance with the EPCS requirement through rulemaking. In the CY 2022 
PFS proposed and final rules, we sought feedback from interested 
parties on whether CMS should impose penalties and if so, what 
penalties should be imposed. We are continuing to examine State EPCS 
requirements and their accompanying penalties. However, because these 
requirements have only been recently implemented and most States do not 
have penalties for failing to adopt EPCS, we have not been able to 
evaluate what type of penalties have been effective to enforce State 
mandates.
    In our ongoing implementation of the EPCS requirement, we continue 
to seek input to ensure that we do not place too much of a burden on 
prescribers, as we do not want this requirement to have an unintended 
consequence of incentivizing prescribers to stop prescribing controlled 
substances to Part D beneficiaries, where appropriate, should they not 
have EPCS set-up. We continue to need additional time to gather more 
feedback from interested parties on the most effective and most 
appropriate type of penalties. In the CY 2022 PFS final rule, we 
finalized our proposal to limit CY 2023 compliance actions to a non-
compliance letter sent to prescribers that are violating the EPCS 
requirement.
a. Timing for Issuing Non-Compliance Letters
    In this proposed rule, we are proposing to adjust the period of 
time during which CMS will issue non-compliance letters. With respect 
to the period of time during which CMS non-compliance actions will 
consist of sending letters to prescribers that we believe are violating 
EPCS requirements, we are proposing to extend the existing compliance 
action of sending letters to non-compliant prescribers from the CY 2023 
EPCS program implementation year (January 1, 2023 through December 31, 
2023) to the CY 2024 year (January 1, 2024 through December 31, 2024). 
If adopted, CMS compliance actions will consist of CMS sending letters 
to prescribers who we believe are violating the EPCS requirement 
between January 1, 2023 and December 31, 2024. The content of the 
letters would remain unchanged. These letters would consist of a 
notification to prescribers that they are violating the EPCS 
requirement, information about how they can come into compliance, the 
benefits of EPCS, an information solicitation as to why they are not 
conducting EPCS, and a link to the CMS portal to request a waiver. We 
are seeking public comment on this proposal.
b. Request for Information Relating to Potential Future EPCS Penalties
    Consistent with the CY 2022 PFS final rule, we continue to be 
interested in identifying additional meaningful penalties to enforce 
the EPCS requirement. Therefore, we are seeking public comment on 
additional penalties that CMS may impose to enforce the EPCS 
requirement. Such penalties would go into effect no sooner than January 
1, 2025 if we extend the timeframe during which we will issue non-
compliance letters, as we have proposed. There are a range of options 
that we are exploring, and we believe feedback from interested parties 
will help us to develop meaningful and appropriate penalties in the 
future. We are currently considering the following non-exhaustive list 
of penalties for non-compliant prescribers:
    <bullet> Requiring a non-compliant prescriber to enter into a 
corrective action plan, which would require the non-compliant 
prescriber to comply with the EPCS requirement within 2 years prior to 
applying other potential actions outlined in this section. Some 
commenters previously recommended corrective action plans be used prior 
to applying penalties. CMS seeks comment on what types of elements and 
actions should be in a corrective action plan that encourages use of 
EPCS without being overly burdensome. We seek comment on whether a 
corrective action plan would be perceived as overly burdensome to non-
compliant prescribers and whether a 2-year timeframe is reasonable and 
appropriate. We also seek comment on whether a corrective action plan 
should be applied prior to other potential actions described in this 
section or whether a corrective action plan should be established in 
parallel with other actions.
    <bullet> Posting a non-compliant prescriber's name on the CMS 
website and identifying the prescriber as non-compliant. CMS seeks 
comment on whether this action would be sufficient to persuade 
prescribers to alter their behavior. We seek comment on whether 
beneficiaries and interested parties would be able to utilize this 
information to their benefit.
    <bullet> Public reporting of EPCS compliance status, including that 
a prescriber is non-compliant, on the Care Compare website. CMS seeks 
comment on whether this action would be sufficient to persuade 
prescribers to alter their behavior. We seek comment on whether 
beneficiaries and interested parties would be able to utilize this 
information to their benefit.
    <bullet> Referral of non-compliant prescribers to the DEA to 
support potential investigations. We request comment on an option under 
which CMS would provide the list of the EPCS non-compliant prescribers 
to the DEA to supplement current investigations and activities. The DEA 
would have the sole authority to use the information as permitted under 
DEA regulations and applicable law. CMS seeks comment on whether 
interested parties envision this as being an effective option for 
enforcing EPCS compliance. We seek comment on whether interested 
parties have any recommendations that increase the effectiveness of 
this potential option. We seek comment on whether CMS should consider 
the duration of EPCS non-compliance prior to referring the prescriber 
to the DEA and whether a corrective action plan should be considered 
prior to referring the prescriber.
    <bullet> Sharing the list of EPCS non-compliant prescribers with 
the States. CMS seeks comment on whether interested parties believe 
sharing the list of EPCS non-compliant prescribers with State level 
entities would be beneficial to the enforcement of EPCS compliance. We 
seek comment on how States may use this information to further assist 
CMS' efforts to enforce the EPCS requirement.
    <bullet> Referral for potential fraud, waste and abuse review. CMS 
seeks comment on whether it should refer Medicare enrolled prescribers 
who consistently do not comply with the EPCS requirement for a fraud, 
waste, and abuse investigation to be undertaken by CMS. Multiple years 
of non-compliance may be a significant enough issue to consider a 
review for potential fraud, waste and abuse investigation. We seek

[[Page 46241]]

comment on whether we should consider the duration of EPCS non-
compliance when considering such a referral and whether other factors 
should also warrant an internal referral.
    <bullet> For penalties involving referral of non-compliant 
prescribers to the DEA and other entities, our intent is to supplement 
the current activities of these entities rather than to create new 
regulatory actions. We envision that information sent to these entities 
would be for use at the discretion of the recipient. We are interested 
to know if interested parties believe there is any utility in referring 
non-complaint prescribers to the DEA, other CMS internal centers, or 
the States. If so, we seek comment on in what manner this data can be 
used to supplement EPCS compliance enforcement.
    Any penalty involving the posting of compliance status on CMS 
websites would be done in a manner consistent with relevant statutory 
authority. For instance, we note that any potential posting of 
compliance information on the Care Compare website would have to be 
done consistent with statutory authority potentially including, but not 
necessarily limited to, authority in section 10331 of the Patient 
Protection and Affordable Care Act (ACA), Public Law 111-148 (March 23, 
2010); section 1848(q)(9) of the Act; and regulatory authority at 42 
CFR 414.1395. Section 10331(a)(2)(G) of the ACA states that to the 
extent scientifically sound measures that are developed consistent with 
the requirements of this section are available, such information, to 
the extent practicable, shall include other information as determined 
appropriate by the Secretary.
    As we stated above and in the CY 2022 PFS final rule, we believe 
there are multiple advantages to the electronic prescribing of 
controlled substances: improved workflow efficiencies; deterring and 
detecting prescription fraud and irregularities by requiring an extra 
layer of identity proofing, two-factor authentication and digital 
signature processes; enhanced patient safety through patient identity 
checks, safety alerts, medication menus, electronic history files, and 
medication recommendations that lower the risk of errors and 
potentially harmful interactions; and providing more timely and 
accurate data than paper prescriptions by avoiding data entry errors 
and pharmacy calls to a prescriber to clarify written instructions. We 
also stated that EPCS may reduce the burden on prescribers who need to 
coordinate and manage paper prescriptions among staff, patients, 
facilities, other care sites, and pharmacies. For these and potentially 
other reasons, we believe the EPCS compliance efforts directly relate 
to prescriber performance and quality, and related patient experience, 
as contemplated by section 10331(a)(2) of the ACA. We are seeking 
comment from interested parties on these and other options they may 
suggest for penalties to enforce EPCS compliance. We are interested in 
public comments that address:
    <bullet> Whether any penalties described above are appropriate as 
compliance actions without being overly burdensome;
    <bullet> Whether interested parties believe these penalties will be 
effective at increasing prescriber compliance;
    <bullet> Whether penalties should be phased in over time and, if 
so, after what date CMS should first impose them;
    <bullet> The utility of posting compliance information to the CMS 
website or more specifically to the Care Compare website; and
    <bullet> Whether there are any other penalties not mentioned here 
which CMS should consider to enforce EPCS compliance.
    <bullet> How best CMS can enforce EPCS compliance by prescribers 
who are not billing under Medicare but who prescribe controlled 
substances to Medicare Part D beneficiaries.

M. Medicare Ground Ambulance Data Collection System (GADCS)

1. Background on Ambulance Services
    Section 1861(s)(7) of the Act establishes an ambulance service as a 
Medicare Part B service where the use of other methods of 
transportation is contraindicated by the individual's condition, but 
only to the extent provided in regulations. Since April 1, 2002, 
payment for ambulance services is made under the ambulance fee schedule 
(AFS), which the Secretary established under section 1834(l) of the 
Act. Payment for an ambulance service is made at the lesser of the 
actual billed amount or the AFS amount, which consists of a base rate 
for the level of service, a separate payment for mileage to the nearest 
appropriate facility, a geographic adjustment factor (GAF), and other 
applicable adjustment factors as set forth at section 1834(l) of the 
Act and Sec.  414.610 of the regulations. In accordance with section 
1834(l)(3) of the Act and Sec.  414.610(f), the AFS rates are adjusted 
annually based on an inflation factor. The AFS also incorporates two 
permanent add-on payments and three temporary add-on payments to the 
base rate and/or mileage rate. The two permanent add-on payments at 
Sec.  414.610(c)(5)(i) are: (1) a 50 percent increase in the standard 
mileage rate for ground ambulance transports that originate in rural 
areas where the travel distance is between 1 and 17 miles; and (2) a 50 
percent increase to both the base and mileage rate for rural air 
ambulance transports. The three temporary add-on payments at sections 
1834(l)(12)(A) and (13)(A) of the Act and Sec.  414.610 are: (1) a 3 
percent increase to the base and mileage rate for ground ambulance 
transports that originate in rural areas; (2) a 2 percent increase to 
the base and mileage rate for ground ambulance transports that 
originate in urban areas; and (3) a 22.6 percent increase in the base 
rate for ground ambulance transports that originate in ``super rural'' 
areas. Section 50203(a)(1) and (2) of the Bipartisan Budget Act (BBA) 
of 2018 (Pub. L. 115-123, February 9, 2018) includes an extension of 
the temporary add-on payments through December 31, 2022.
    Our regulations relating to coverage of and payment for ambulance 
services are set forth at 42 CFR part 410, subpart B, and 42 CFR part 
414, subpart H.
2. Statutory Requirements for the Ground Ambulance Providers and 
Suppliers To Submit Cost and Other Information Background
    Section 50203(b) of the BBA of 2018 added paragraph (17) to section 
1834(l) of the Act, which requires ground ambulance providers of 
services and suppliers (ground ambulance organizations) to submit cost 
and other information. Specifically, section 1834(l)(17)(A) of the Act 
requires the Secretary to develop a data collection system (which may 
include use of a cost survey) to collect cost, revenue, utilization, 
and other information determined appropriate by the Secretary for 
providers and suppliers of ground ambulance services. Section 
1834(l)(17)(B)(i) of the Act required the Secretary to specify the data 
collection system by December 31, 2019, and to identify the ground 
ambulance providers and suppliers that would be required to submit 
information under the data collection system. Section 1834(l)(17)(D) of 
the Act required that beginning January 1, 2022, the Secretary apply a 
10 percent payment reduction to payments made under section 1834(l) of 
the Act for the applicable period to a ground ambulance provider or 
supplier that is required to submit information under the data 
collection system and does not sufficiently submit such information. 
The term ``applicable period'' is defined under section 
1834(l)(17)(D)(ii) of the Act to mean, for

[[Page 46242]]

a ground ambulance provider or supplier, a year specified by the 
Secretary not more than 2 years after the end of the period for which 
the Secretary has made a determination that the ground ambulance 
provider or supplier has failed to sufficiently submit information 
under the data collection system. Section 311 of the Consolidated 
Appropriations Act, 2022 (Pub. L. 117-103) amended section 
1834(l)(17)(F)(i) to delay the deadline for MedPAC to submit its report 
to Congress on the ground ambulance data collection system study until 
the second June 15th following the date the Secretary transmits data 
for the first representative sample of ground ambulance organizations. 
Section 1834(l)(17)(I) of the Act states that the Paperwork Reduction 
Act (PRA) (44 U.S.C. 3501 et seq.) does not apply to the collection of 
information required under section 1834(l)(17) of the Act.
    In the CY 2020 PFS final rule (84 FR 62864 through 62897), we 
implemented section 1834(l)(17) of the Act and codified regulations 
governing data reporting by ground ambulance organizations at 
Sec. Sec.  414.601, 414.605, 414.610(c)(9), and 414.626. In the CY 2020 
PFS final rule (84 FR 62863 through 629897), we finalized a data 
collection system that collects detailed information on ground 
ambulance provider and supplier characteristics including service 
areas, service volume, costs, and revenue through a data collection 
instrument, commonly referred to as the Medicare Ground Ambulance Data 
Collection Instrument, via a web-based system. This instrument includes 
the specific questions that will be asked of ground ambulance 
organizations about the total service volume, costs, and revenue 
associated with a provider or supplier's entire ground ambulance 
organization in such a way that MedPAC could use to calculate an 
average cost per ground ambulance transport. We refer the reader to our 
CY 2020 PFS final rule (84 FR 62863 through 62897) for more specifics 
on the establishment of the Medicare Ground Ambulance Data Collection 
System.
    In the CY 2022 PFS final rule (86 FR 65306 through 65317), we 
finalized a number of updates to the Medicare Ground Ambulance Data 
Collection System, including: (1) a new data collection period 
beginning between January 1, 2023, and December 31, 2023, and a new 
data reporting period beginning between January 1, 2024, and December 
31, 2024, for selected ground ambulance organizations in year 3; (2) 
aligning the timelines for the application of penalties for not 
reporting data with our new timelines for data collection and reporting 
and the data collected will be publicly available beginning in 2024; 
and (3) revisions to the Medicare Ground Ambulance Data Collection 
Instrument that include better accounting for labor hours across 
different categories of personnel and better distinguishing between 
accrual and cost basis accounting methodologies. We refer the reader to 
our CY 2022 PFS final rule (86 FR 65306-65317) for more specifics on 
the revisions to the Medicare Ground Ambulance Data Collection System.
3. Proposed Revisions to the Medicare Ground Ambulance Data Collection 
Instrument
    As described in the CY 2020 PFS final rule (84 FR 62867), the 
Medicare Ground Ambulance Data Collection Instrument uses screening 
questions and skip patterns so that it is applicable to all ground 
ambulance organizations regardless of their size, scope of operations 
and services offered, and structure. We stated that we believe this 
approach is easier to navigate and less time consuming to complete than 
a cost report template or instrument and that it minimizes respondent 
burden by directing ground ambulance organizations to only view and 
respond to questions that apply to their specific type of organization, 
all while still collecting the information required in sections 
1834(l)(17)(A) of the Act.
    The CY 2020 PFS final rule provided a detailed overview of the 
elements of the data collection instrument, including questions to 
collect information on costs, revenues, utilization (which CMS defines 
for the purposes of the data collection instrument as service volume 
and service mix), as well as the characteristics of ground ambulance 
organizations. Table 73 includes a high-level summary of the 13 
sections of the Medicare Ground Ambulance Data Collection Instrument.
BILLING CODE 4120-01-P

[[Page 46243]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.115

BILLING CODE 4120-01-C
    As described in the CY 2022 PFS final rule (86 FR 65307), we made 
several changes to the instrument instructions and questions to improve 
clarity and reduce burden for respondents. A printable version of the 
current instrument instructions and questions is available in English 
and Spanish on the CMS website at https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html.
    We continue to receive ad hoc questions and feedback related to the 
Medicare Ground Ambulance Data Collection System and the Medicare 
Ground Ambulance Data Collection Instrument via four primary channels. 
First, we receive email and other written communication from ground 
ambulance organizations via the CMS Ambulance Data Collection email 
inbox (<a href="/cdn-cgi/l/email-protection#9fdef2fdeaf3fef1fcfadbfeebfedcf0f3f3fafcebf6f0f1dffcf2ecb1f7f7ecb1f8f0e9"><span class="__cf_email__" data-cfemail="bbfad6d9ced7dad5d8deffdacfdaf8d4d7d7ded8cfd2d4d5fbd8d6c895d3d3c895dcd4cd">[email protected]</span></a>) and through other channels 
(for example, inquiries sent by organizations to Medicare 
Administrative Contractors (MACs) and then forwarded to CMS). These 
emails and other communications often include questions seeking 
clarification of instrument questions and their applicability to 
specific ground ambulance organization scenarios and context. We 
continue to update a Medicare Ground Ambulance Data Collection System 
Frequently Asked Questions (FAQ) document with answers to commonly 
asked questions. This document is available on the CMS website at 
https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html. Through review of questions and feedback, we have 
identified some instances where a clarification to the instrument 
language itself will likely be more useful and less burdensome to 
respondents than having to respond with reference to the FAQ document. 
Second, we answer questions live from interested parties during 
webinars, dedicated question and answer sessions, and other educational 
sessions. As with the emailed questions described above, live question 
and answer exchanges sometimes identify opportunities for clarifying 
instrument language. Third, our contractor asked a small number of 
ground ambulance organizations to test the most recent version of the 
Medicare Ground Ambulance Data Collection Instrument. Feedback from 
this preliminary testing effort was helpful to identify some additional 
opportunities for clarification. Fourth, we continue to identify 
opportunities to clarify instructions and correct a small number of 
typos as we work to develop the web-based, programmed version of the 
Medicare Ground Ambulance Data Collection Instrument.
    Based on information that we received via the four sources 
described above, we are proposing the following further changes and 
clarifications to the Medicare Ground Ambulance Data Collection 
Instrument. The changes and clarifications aim to reduce burden on 
respondents, improve data quality, or both. We group our proposed 
changes and clarifications into four broad categories:
    <bullet> Editorial changes for clarity and consistency.
    <bullet> Updates to reflect the web-based system.
    <bullet> Clarifications responding to feedback from questions from 
interested parties and testing.
    <bullet> Typos and Technical Corrections.
    A draft of the updated instrument that includes all of the CY 2023 
proposed changes to review and provide

[[Page 46244]]

comments on is posted on the CMS website at https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html.
a. Editorial Changes for Clarity and Consistency
    We are proposing 14 editorial changes to improve the clarity of 
instrument instructions and questions. We do not believe these changes 
substantively affect the meaning of any instruction or question.
    The first three proposed changes would apply throughout the entire 
Medicare Ground Ambulance Data Collection Instrument. Specifically, we 
are proposing to:
    <bullet> Use the past tense to refer to data collected during 
selected ground ambulance organizations' continuous 12-month data 
collection periods throughout the instrument. All organizations are 
currently required to complete their data collection prior to reporting 
the data. Using the present tense may be confusion by implying 
organizations should report data beyond their 12-month data collection 
period.
    <bullet> Consistently refer to ``ground ambulance'' rather than 
only ``ambulance'' throughout the instrument to clarify that the scope 
of the Medicare Ground Ambulance Data Collection System (GADCS) is 
limited to ground ambulance operations and not air ambulance 
operations.
    <bullet> Edit sentences written in the passive voice to the active 
voice for editorial consistency.
    The fourth and fifth proposed changes focus on Section 1 (General 
Survey Instructions) in the instrument as we are proposing to:
    <bullet> Refer to organizations' ``continuous 12-month data 
collection period'' rather than just ``12-month data collection 
period'' throughout the instrument. We believe this will help remind 
organizations that their data collection period must cover a 
continuous, 12-month period.
    <bullet> Align the description of how organizations must provide 
their data collection start date prior to data reporting in Section 1 
(General Survey Instructions) with the process codified at Sec.  
414.626(b)(1).
    The remainder of proposed changes in this category focus on 
editorial changes to specific instrument questions or instructions in 
Sections 2 (Organizational Characteristics) through Section 6 (Service 
Mix). Specifically, we are proposing to:
    <bullet> Edit response Option d in Section 2, Question 9 from 
``Another health care organization (excluding hospitals, skilled 
nursing facilities, or other Medicare provider of services),'' to 
``Other health care delivery operations such as a clinic or urgent care 
center (excluding hospitals, skilled nursing facilities, or other 
Medicare provider of services in Option c).'' In a previous 
clarification, we reworded Section 2, Question 9 from ``Does your 
ground ambulance operation share any operational costs, such as 
building space or personnel, with one of the following?'' to ``Does 
your organization provide any of the following services or operations 
(select all that apply)?'' Given the change in the structure of the 
question asking about types of services/operations as opposed to types 
of organizations, we are proposing to reword one answer option to 
better reflect the question.
    <bullet> Clarify Section 4 (Emergency Response Time), Question 4b, 
which asks whether the organization is penalized if it exceeds response 
time targets, to focus specifically on monetary penalties. We are 
concerned that the current phrasing is too subjective and will be 
difficult for respondents to answer.
    <bullet> Clarify that the definition of ``total response'' in the 
Section 5 (Ground Ambulance Service Volume) instructions and Section 5, 
Question 1 applies to ``emergency responses'' rather than ``EMS 
responses.'' In some organizations, the initial responders to a call 
for service may not be EMS responders.
    <bullet> Clarify that estimates of the share of responses that are 
joint with another organization are acceptable in Section 5, Question 
3c, to better align with Section 5, Question 3a where estimates are 
explicitly permitted.
    <bullet> Specify in Sections 5 and 6 (Service Mix) and elsewhere in 
the Medicare Ground Ambulance Data Collection Instrument when questions 
ask for information on ``ground ambulance transports'' rather than just 
``transports'' to avoid confusion with services that may colloquially 
be referred to as transports but that do not meet the definition of a 
``ground ambulance transport'' in the instrument, which is defined as 
``the use of a fully staffed and equipped ground ambulance responding 
to a request for service to provide a medically necessary transport 
(based on the rules relevant to the applicable payer).''
    The 11th and 12th proposed changes apply to Section 7 (Labor Costs) 
where we are proposing to:
    <bullet> Standardize the example staff categories listed under 
``other medical staff'' across all Section 7 tables. Currently, the 
first table in Section 7 lists ``respiratory therapist'' among example 
staff categories while none of the subsequent tables do. We are 
proposing to remove ``respiratory therapist'' as an example from the 
first table in Section 7 for consistency and brevity. However, 
respiratory therapists should continue to be included in this category, 
along with all other medical staff, even if they are not specifically 
cited as an example.
    <bullet> Add a reminder (``do not include medical directors'') in 
Section 7.3 (Volunteer Labor), Question 3 on administrative/facility 
volunteer hours to ensure respondents do not include medical directors 
in this category (medical director hours are reported separately).
    The 13th proposed change applies to Section 9 (Vehicle Costs) as we 
are proposing to:
    <bullet> Define ``Quick Response Vehicle'' alongside the acronym 
(QRV) throughout the instrument and particular in Section 9 (Vehicle 
Costs). The current Section 9 instructions sometimes refer to ``QRV'' 
without elaboration. We believe this may be confusing to some ground 
ambulance organizations.
    The 14th and final proposed change in this category relates to 
Section 13 (Revenue). Specifically, we are proposing to:
    <bullet> Edit the warning that applies to organizations operating 
both ground and air ambulances in Section 13 to clarify that air 
ambulance revenue should not be included in Section 13 except in the 
organization's response to Section 13, Question 1. This question 
explicitly asks organizations to report on revenue across their entire 
organization, including revenue related to services other than ground 
ambulance services, and so the current warning may seem to be 
contradictory.
    We invite comments on these 14 proposed editorial changes for 
clarity and consistency.
b. Updates To Reflect the Web-Based System
    We are in the process of developing the web-based GADCS portal and 
programmed instrument that ground ambulance organizations will use to 
report data. The printable instrument noted several cases where the 
ultimate instrument functionality and wording hinges on the 
specifications and implementation of the GADCS portal and programmed 
instrument, for example around account creation, programmed skip logic, 
and pop-up warnings.
    We are proposing 13 changes to the printable instrument so that it 
better matches our current plans and

[[Page 46245]]

expectations for the programmed instrument. We believe these changes 
will help ground ambulance organizations referencing the printable 
instrument understand how the data they have collected should be 
entered in the programmed instrument on the GADCS portal. We are 
proposing to:
    <bullet> Update the brief description of the programmed 
instrument's functionality in Section 1.
    We propose the specific text: ``Your organization must report the 
required information prior to [INSERT DATE], which is 5 months after 
the end of its data collection period. You can enter the required 
information over multiple sittings. The system will save your responses 
after every screen, or whenever you hit the ``Save'' button at the 
bottom of your screen. When you log in again later, you can pick up 
where you left off. After you enter all required information, a 
Certifier at your organization will review the entire response and 
either request changes or certify the information. [Note: This 
instruction will be updated to reflect the capabilities of the 
programmed instrument.]'' This description provides readers of the 
printable instrument a clearer sense of the functionality they should 
expect from the programmed instrument.
    <bullet> Add specific pop-up window text from Section 2, Question 1 
in the programmed instrument to the printable instrument. Section 2, 
Question 1 confirms that the ground ambulance organization billed 
Medicare for ground ambulance services during its continuous, 12-month 
data collection period. A response of ``no'' effectively ends the 
organization's reporting requirement under GADCS. As a result, the 
programmed instrument includes pop-up warnings asking the respondent to 
confirm that they did not bill Medicare for ground ambulance services. 
We believe describing the pop-up boxes as programming notes in the 
printable instrument will help organizations no longer providing ground 
ambulance organizations understand how they will progress through the 
GADCS.
    <bullet> Edit the printable instrument to refer to ``your 
organization's data collection period'' in rather than ``calendar year 
202X [or fill fiscal year as appropriate]'' throughout the document. 
Given CMS' approach to collecting data collection period start dates 
and contact information from organizations within 30 days of 
notification, we expect to know the data collection period start date 
ahead of the organization entering the web-based GADCS. We believe it 
will be clearer for organizations if the question text refers 
consistently to the organization's data collection period.
    <bullet> Move Section 7.2, Question 4 (``Does your organization 
contract with a medical director, rather than employing them 
directly?'') to earlier in Section 7, immediately following Section 7, 
Question 1, to become Section 7, Question 2. The existing Section 7, 
Question 2 item (asking about staff categories not used by the 
organization) would be renumbered as Section 7, Question 3. With the 
current flow of Section 7 in the printable instrument, organizations 
contracting with a medical director must confusingly answer a question 
on why they do not employ a medical director before they report that 
they contract with one. Asking whether the organization contracts with 
a medical director earlier in Section 7 enables the programmed 
instrument to better adapt later questions in Section 7 related to 
medical directors. For example, organizations indicating earlier in 
Section 7 that they contract with a medical director will not need to 
be asked why they do not employ a medical director.
    <bullet> Clarify the instructions for Section 8.1 (Facility 
Information) Question 1, Section 9.1 (Ground Ambulance Vehicle Costs), 
Questions 1 and 2, and Section 9.2 (Other Vehicle Costs (Non-
Ambulance)), Questions 1 and 2 so that they note the number of 
facilities and vehicles that users report as answers to these questions 
will adjust the number of rows that they subsequently see in Section 
8.2 (Annual Lease, Mortgage, and Other Costs of Ownership for 
Facilities), Section 9.1, and Section 9.2 tables, respectively. We 
believe this clarification will help users understand the linkages 
between these initial questions and the later tables that they need to 
fill out. This clarification may also help users appreciate that 
changing earlier answers to these initial questions will have 
ramifications for the tables that follow, including the potential 
addition or deletion of rows.
    <bullet> Allow organizations to enter information by hand or via an 
uploaded file for the facility-level tables in Section 8.1 and for the 
vehicle-level tables in Section 9.1 and Section 9.2. These tables 
require organizations to report on the characteristics and expenses 
related to individual facilities and vehicles. Ground ambulance 
organizations with many facilities and/or vehicles may find it 
burdensome to enter information on each facility and vehicle 
individually in the web-based GADCS. Other organizations may find it 
easier or preferable to enter information by hand. Organizations 
choosing to import responses for these three tables would use Microsoft 
Excel templates with the same structure as the tables in the web-based 
instrument. Organizations would download these templates prior to or 
while reporting information to the GADCS, complete the template, and 
then import the completed template into the GADCS. The GADCS would 
validate completed templates and request modifications (if necessary) 
prior to accepting completed templates. Organizations importing 
responses for these tables would have an opportunity to review their 
responses before continuing to later Section 8 and/or Section 9 
questions. This proposed change would require clarification in the 
Section 8 and Section 9 instructions to describe the two alternative 
data entry approaches. The revised instructions would stress that the 
use of the import templates is optional and that the exact same 
information is required regardless of whether information is entered by 
hand or via the template. We believe offering the option to import 
responses to these tables will substantially reduce response burden 
particularly for larger ground ambulance organizations with many 
facilities and/or vehicles.
    The remaining proposed changes in this category (changes 6-12) aim 
to harmonize and clarify programming notes throughout the instrument 
related to ground ambulance organizations that also provide other 
services (for example, fire departments, or ``shared services'' as we 
describe them in the instrument). The programming notes in the 
printable instrument are meant to provide context to readers on the 
ultimate functionality of the programmed instrument within the 
constraints of a static document. Some of these programming notes have 
been broadened and updated since the initial version of the printable 
instrument while others have not. We believe some ground ambulance 
organizations may want to respond to questions as if they were shared 
services, even if they do not meet the specific programming notes laid 
out in the printable instrument. Broadly, we are proposing to expand or 
remove programming notes restricting certain responses for follow-up 
questions for shared services. We believe this will provide respondents 
with more flexibility to respond to questions in a way that best 
matches their characteristics, services, and organizational structure.
    Specifically, for changes to programming notes, we are proposing 
to:

[[Page 46246]]

    <bullet> Edit the Section 2, Question 9 note to read: `[Note: For 
the remainder of the data collection instrument, instructions and items 
related to fire, police, or other public safety department-based ground 
ambulance organizations are shown to organizations that answer Section 
2, Question 7= ``a'' or ``b'' AND Question 8 = Yes (1) OR answer 
Question 9 = Yes (1) to one or both of a and b. To streamline the skip 
logic, the answers to these questions are referred to as ``Public 
Safety = Yes'' for the remainder of the document.]'
    <bullet> Clarify the definition of ``total responses'' in the 
Section 5 (Service Volume) instructions and Question 1 which currently 
reads: ` ``[If Section 2, Question 7 is ``a'' also display] ``Include 
emergency responses that did not involve a ground ambulance, such as 
those involving only fire trucks and/or other fire/rescue vehicles;'' 
[if ``b''] ``Include emergency responses that did not involve a ground 
ambulance, such as those involving only police cars and/or other public 
safety vehicles.'' ' These instructions do not account for those who 
indicated public safety services in Section 2, Question 9. We propose 
to use the new ``public safety'' definition and to decrease 
repetitiveness for those with both fire and other public safety 
services: ``[If Public Safety=Yes] Include emergency responses that did 
not involve a ground ambulance, such as those involving only fire 
trucks, other fire/rescue vehicles, police cars and/or other public 
safety vehicles.''
    <bullet> Edit programming notes throughout Section 7 (Labor Costs) 
instructions to refer to ``If Public Safety=Yes'' rather than ``if 
appropriate for shared services.''
    <bullet> Make the skip logic more precise and consistent throughout 
Section 7.1 by changing ``[Include only if relevant based on responses 
to Section 7, Question 1] Total hours worked annually related to fire, 
police, and/or other public safety operations'' and ``[Include only if 
Section 2, Question 7 = ``a'' or ``b.'']'' to ``[Include if any paid 
EMT/response staff with fire, police, and/or other public safety role 
was indicated in Section 7, Question 1].''
    <bullet> Change ``[Include only if Section 2, Question 7 = ``a'' or 
``b.'']'' to ``[Include if any paid Administration/Facilities or 
medical director staff with fire, police, and/or other public safety 
role were indicated in Section 7, Question 1]'' in Section 7.2.
    <bullet> Change ``[Include only if Section 2, Question 7 = ``a'' or 
``b.'']'' to ``[Include if any volunteer EMT/response staff with fire, 
police, and/or other public safety role were indicated in Section 7, 
Question 1]'' in Section 7.3, Question 2.
    <bullet> Change ``[Include only if relevant based on responses to 
Section 7, Question 1 and populate with ``fire,'' ``police,'' and/or 
``other public safety'' as appropriate]'' to ``[Include if any 
volunteer administrative/facilities staff with fire, police, and/or 
other public safety role were indicated in Section 7, Question 1]'' in 
Section 7.3, Question 4.
    We invite comments on these proposals aiming to better align the 
printable instrument with the functionality of the programmed 
instrument and system.
c. Clarifications Responding to Feedback From Interested Parties 
Questions and Testing
    We are proposing 12 instrument changes stemming from feedback we 
received from emailed questions, during live question and answer and 
other educational sessions, and via preliminary testing. Specifically, 
we are proposing to:
    <bullet> Clarify when and how to report expenses paid for by a 
local municipality in the Section 1 General Survey Instructions. 
Several organizations have asked CMS for guidance on how to collect and 
report data in this scenario. The GADCS FAQ includes several entries 
related to this question. In brief, whether or not municipal expenses 
for dispatch services, fuel, facility space, employee benefits, or in 
any other category must be reported under GADCS depends on the 
relationship between the ground ambulance organization and the 
municipality. If the ground ambulance organization is owned and 
operated by the same municipality paying for the expense, then the 
expense is in-scope and must be reported. If not, for example in cases 
where a municipality provides dispatch services to local ground 
ambulance organizations free of charge, then the expense should not be 
included. In many cases, ground ambulance organizations can report when 
a particular input or resource is donated, which likely applies in 
these cases. To help resolve any ambiguity, we propose to replace the 
Section 1 text starting with ``If your organization is part of a local 
government . . .'' with the following text adapted from existing FAQ 
entries: ``If your organization was part of a municipal government or 
larger entity that paid for certain ground ambulance expenses (for 
example, if your municipality pays for rent, benefits, fuel, or 
dispatch), you must report information on these expenses. This applies 
only in cases where you are owned or operated by or have a partnership 
or joint venture with the entity that covers expenses for your ground 
ambulance operation. In other cases, do not estimate or report the 
value of donated vehicles, supplies, equipment, or other resources or 
labor used in your ground ambulance operation. For example, if your 
local hospital provided drugs at no cost, but you are not a hospital-
based ground ambulance organization, then do not report the expense 
associated with the donated drugs.''
    <bullet> Remove the text ``in your primary service area (the area 
in which you usually provide service and where the majority of your 
transport pickups occur)'' from Section 4 (Emergency Response Time), 
Question 1, which asks the organization to describe its approach to 
measuring response times. The intent is for this question to ask about 
how the organization measures response times across all responses, not 
just those in their primary service area. Some interested parties 
shared that they expected to see a corresponding question for their 
secondary service area. We think this clarification should resolve any 
ambiguity.
    <bullet> Add programming notes to the printable instrument noting 
that a response to Section 4 (Emergency Response Time) questions 
related to their primary and secondary service areas should be answered 
only when the organization provided emergency responses in such areas. 
For example, an organization with both primary and secondary service 
areas that provided emergency responses in their primary service area 
but not in their secondary service area should report response time 
information for their primary but not secondary area. Several 
organizations have asked how to report information in Section 4 in this 
case.
    <bullet> Clarify that the scope of GADCS is limited to ground 
ambulance operations. For the many ground ambulance organizations that 
are fire department-based, a Medicare provider, or provide other 
services beyond ground ambulance services, only a portion of total 
expenses and revenue are associated with ground ambulance operations. 
As a result, with the exception of two specific questions (Section 12, 
Question 1, and Section 13, Question 1), information on expenses and 
revenue must be reported to GADCS in such a way that CMS can identify 
an amount associated with or allocated to ground ambulance operations.
    <bullet> Add guidance throughout Sections 7 through 13 related to 
allocating a share of expenses and revenue attributable to ground 
ambulance operations versus other operations (for example, fire, 
police, or hospital operations). Several ground ambulance

[[Page 46247]]

organizations and other interested parties have posed questions to CMS 
asking for clarification on the specific methods they should use to 
allocate certain amounts prior to reporting information to GADCS. 
Allocating expenses is crucial for ground ambulance organizations that 
also provide other services or functions. If amounts are not allocated 
appropriately, the expenses and revenue reported to GADCS may be higher 
or lower than the actual expenses and revenue related to organizations' 
ground ambulance operations. The current instrument instructions allow 
ground ambulance organizations to use their current allocation approach 
or any reasonable alternative. The additional guidance in the 
instrument would provide an example allocation approach relevant to 
each section. For example, in fire department-based organizations, 
respondents can allocate dispatch, fire truck, and firefighter/EMT 
labor expenses using the share of total responses that are medical 
calls for service and/or involve a fully staffed and equipped 
ambulance. As another example relevant to fire department-based 
organizations, Medicare providers, and some other organizations, 
respondents can allocate facility expenses based on the share of square 
footage used by ground ambulance operations. While organizations 
looking for guidance on an approach could adopt these allocation 
methods, all organizations would remain free to use alternative 
allocation methods.
    <bullet> Add a new screening question asking whether the ground 
ambulance organization broadly contracts out their ground ambulance 
organization. We have heard that in some cases a Medicare provider or 
supplier billing for ground ambulance services and selected to 
participate in GADCS will pay another organization to provide the 
entirety of the selected organization's emergency medical services 
capability, including ambulances, facilities, and EMT/response staff. 
In other cases, a selected organization may provide ambulances and 
facilities while some or all EMT/response labor is contracted out to 
another company. The current instrument instructions ask respondents to 
report the expenses associated with these broad contracts in Section 
11, Question 1. However, the instrument instructions in Sections 7 
through 11 do not specify whether the sampled organization should 
report on staff, facilities, and vehicles that are not owned or leased 
by the organization itself but instead are provided by the organization 
with which the sample organization contracts to provide ground 
ambulance services. If selected organizations that broadly contract out 
staffing or ground ambulance capabilities report the total contract 
expenses in Section 11 but do not report on the staff, facilities, and 
vehicles that their contractor used to provide services in Sections 7 
through 9, then the selected organization's expenses will appear very 
high relative to the inputs they report as necessary to run their 
ground ambulance operation.
    <bullet> Add a new screening question in Section 2 that will ask 
whether organizations contract out some or all of their labor, 
facilities, vehicles, or other key inputs used to furnish ground 
ambulance services. We propose that organizations answering ``yes'' to 
this initial screening question will see new instructions in Sections 7 
through 13 asking them to report only select information on inputs 
provided by their contractors, including staff hours in Section 7, the 
number of facilities in Section 8, and counts of vehicles in Section 9. 
Importantly, the additional instruction will stress that organizations 
should not report on expenses for these contracted inputs in these 
sections. Organizations should continue to report the total expense for 
the broadly contracted service in Section 11, Question 1, following the 
existing instrument instructions. We believe this change will allow 
those analyzing data collected via GADCS to better align expenses for 
organizations that broadly contract out their ground ambulance services 
with the inputs reported via GADCS.
    <bullet> Clarify (in Chapter 7 (Labor Costs)) for interested 
parties how to report labor hours and costs for staff categories not 
explicitly listed in the instrument. The Section 7 instructions already 
include a note that respondents should include Advanced-EMTs in the 
EMT-Intermediate category. To more prominently note how to collect and 
report data on Advanced-EMTs, and to provide more general guidance for 
other EMT/response labor categories that are State or locality-
specific, we propose to add the following instruction in Section 7: 
``If your State uses levels of certification and licensure that differ 
from these categories, use your best judgement to assign staff to the 
CMS categories available.''
    <bullet> Revise Section 7 labor category definitions from ``. . . 
with Fire/Police/Public Safety role'' to read ``. . . with role 
supporting fire, police, and/or other public safety operations.'' The 
Section 7 instructions require that staff with fire, police, or other 
public safety roles be included in separate ``with Fire/Police/Public 
Safety roles'' categories, regardless of whether they respond to calls 
for service (for example, as firefighter/EMTs); have a fire, police, or 
other public safety administrative or management role; or a combination 
of response and administrative roles. We learned that some ground 
ambulance organizations interpreted ``with Fire/Police/Public Safety 
roles'' in Section 7 labor categories to refer only to public safety 
responses role (that is, responding to calls for service) and not to 
other fire, police, or other public safety roles (for example, 
administrative or management roles). We believe this should clarify 
that our intent is not to limit the question to just fire, police, and 
other public safety response roles.
    The remaining proposed changes in this category relate to 
clarifying skip logic and response categories. Specifically, we are 
proposing to:
    <bullet> Remove the shared service programming note from that 
question so that all organizations are able to provide a response. When 
speaking to ambulance organizations, we noted that some organizations 
that do not meet our definition of shared services (that is, share 
services with public safety, hospital, or other medical organization) 
may nonetheless have shared costs with other types of operations. For 
example, a government-based ground ambulance organization may have 
computers and printers which are shared by other municipal services. 
The shared service skip logic programming note was inadvertently 
included Section 9.2, Question 4. Even without the skip logic, 
respondents will still be able to report that 100 percent of expenses 
are related to their ground ambulance operation.
    <bullet> Streamline the categories and examples presented in the 
Section 11, Question 3 question on ground ambulance expenses not 
otherwise reported. We received many questions on how to report certain 
specific expenses in the provided categories and whether it was 
appropriate to include a specific expense the ``Other'' category. 
Specifically, we are proposing to:
    ++ Change the note in this question that reads ``(excluding labor 
for medical director if accounted for in Question 1 above or in the 
labor section)'' to read ``(excluding labor for medical director which 
must be included in Section 11 Question 1 or in the labor section)'' 
because expenses associated with Medical Directors may be reported 
either in Section 7 (Labor Costs) or in Section 11, Question 1.
    ++ Delete the cost category ``Overhead allocation from parent 
organization/central office'' as we already provide

[[Page 46248]]

places to report these costs throughout relevant sections of the 
instrument.
    ++ Move the ``Miscellaneous administrative fees/costs . . .'' 
category to the end of the ``Administrative and General Expenses'' 
section to improve flow.
    ++ Clarify that fees for ``Licenses'' should ``(Include 
professional or any other license fees not reported elsewhere in the 
instrument. Do not include any vehicle license fees previously reported 
in the Vehicles Section.)''
    We invite comments on these proposals focusing on improving 
instrument clarity and consistency in response to feedback from 
interested parties.
d. Typos and Technical Corrections
    The final category of our proposed changes to the instrument 
address technical corrections and typos. We propose 10 corrections to 
the data collection instrument. Specifically, we propose to:
    <bullet> Clarify that Section 4, Question 3 refers to twice the 
average as intended and as respondents will infer given the flow of 
questions. The Section 4, Question 3, item refers to the ``90th 
percentile'' rather than ``twice the average.'' When we removed the 
question referring to the 90th percentile response time and replaced it 
with a question asking about the share of responses longer than twice 
the average response time, as finalized in the CY 2022 PFS final rule 
(86 FR 65310), we should have but did not also adjust the text in this 
question.
    <bullet> Update the Section 7.2 definition to read ``total hours 
worked by paid administrative/facilities and medical director staff.'' 
The Section 7.2 instructions define total hours worked as ``total hours 
worked by paid administrative staff.'' While medical directors are also 
included in Section 7.2, the current definition inadvertently excludes 
medical directors.
    <bullet> Address in the same instrument section, an inadvertent 
omission in Question 3. This question refers to ``administrative labor 
costs'' which excludes facility labor costs as is specified throughout 
the remainder of the section. We would correct this inadvertent 
omission by replacing ``administrative labor costs'' with 
``administrative/facilities costs.''
    <bullet> Implement a technical correction in Section 8.1, Question 
3 which states ``for each of the following types of facilities'' when 
it should read ``for each of the following facilities.'' The question 
asks for information at the facility level (not by type of facilities).
    <bullet> Insert ``rent,'' which was inadvertently omitted, into the 
Section 8.2, Question 3 text so that it reads ``Please report the 
allocated portion of rent, lease, or ownership facilities costs. . .''.
    <bullet> Remove the skip logic and programming note in Section 9.2, 
Question 4 which erroneously specifies that the total number of statute 
miles traveled by non-ambulance water vehicles only be asked of 
organizations that noted in Section 2 that they operated water 
ambulances. Because organizations may have water rescue vehicles, but 
no water ambulances, we believe this correction is warranted.
    <bullet> Remove an extraneous ``ground ambulance'' term in the 
middle of Section 9.3, Question 4. As a result, the question would read 
``What was the total maintenance cost of all vehicles (ground ambulance 
and non-ambulance) used to respond to ground ambulance calls or support 
ground ambulance operations ground ambulances during your 
organization's data collection period?''
    <bullet> Revise the Section 11 instructions asking for information 
on allocated central office expenses. The revised question would read 
``(Questions 2 and 5)'' instead of just ``(Question 2)'' to align with 
prior changes in the CY 2022 PFS final rule (86 FR 65313) to ensure 
respondents can report allocated central office costs throughout the 
instrument.
    <bullet> Edit a comma splice in the first sentence of the Section 
11 instructions so they begin ``This section asks about . . .''
    <bullet> Remove the word ``approximate'' as it was erroneously 
included in Section 13, Question 2b and does not align with any of the 
other questions in this section.
    We invite comments on these proposals to address typos and 
technical clarifications.
4. Proposed Automation Process for Submitting a Hardship Exemption 
Request and Informal Review Request
    In the CY 2020 PFS final rule (84 FR 62895), we codified the 
hardship exemption requirement at Sec.  414.626(d). We stated that a 
ground ambulance organization can apply for a hardship exemption 
request based on a significant hardship, such as a natural disaster, 
bankruptcy, or other similar situation, that the Secretary determines 
interfered with the ability of the ground ambulance organization to 
submit such information in a timely manner for the data collection 
period selected by the ground ambulance organization.
    Specifically, Sec.  414.626(d)(1) states that to request a hardship 
exemption, the ground ambulance organization must submit a request form 
(accessed on the Ambulances Services Center website (https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html) to 
CMS within 90 calendar days of the date that CMS notified the ground 
ambulance organization that it would receive a 10 percent payment 
reduction as a result of not submitting sufficient information under 
the data collection system. The request form must include all of the 
following: Ground ambulance organization name; NPI number; Ground 
ambulance organization address; Chief executive officer and any other 
designated personnel contact information, including name, email 
address, telephone number and mailing address (must include a physical 
address, a post office box address is not acceptable); Reason for 
requesting a hardship exemption; Evidence of the impact of the hardship 
(such as photographs, newspaper or other media articles, financial 
data, bankruptcy filing, etc.); Date when the ground ambulance 
organization would be able to begin collecting data under paragraph (b) 
of this section; and Date and signature of the chief executive officer 
or other designated personnel of the ground ambulance organization. 
Section 414.626 (d)(2) states that CMS will provide a written response 
to the hardship exemption request within 30 days of its receipt of the 
hardship exemption form.
    In the CY 2020 PFS final rule (84 FR 62896), we also codified the 
process to request an informal review process under which a sampled 
ground ambulance organization may seek an informal review of a 
determination that is subject to the 10 percent reduction in payment at 
Sec.  414.626(e). Section 414.626(e) outlines the notification of non-
compliance and informal review. First, for notification of non-
compliance, a ground ambulance organization selected under Sec.  
414.626 (c) for a year that does not sufficiently report data under 
paragraph (b) of this section will receive written notification from 
CMS that it will receive a payment reduction under Sec.  414.610(c)(9). 
Second, with respect to informal review, a ground ambulance 
organization that receives a written notification under Sec.  414.610 
(e)(1) of a payment reduction under Sec.  414.610(c)(9) may submit a 
request for an informal review within 90 days of the date it received 
the notification by submitting all of the following information: ground 
ambulance organization name; NPI number; chief executive officer and 
any other designated personnel contact

[[Page 46249]]

information, including name, email address, telephone number and 
mailing address with the street location of the ground ambulance 
organization; ground ambulance organization's selected data collection 
period and data reporting period; and a statement of the reasons why 
the ground ambulance organization does not agree with CMS' 
determination and any supporting documentation.
    In the CY 2020 PFS final rule (84 FR 62897), we stated that the 
hardship exemption and informal review requests should be submitted to 
the Ambulance ODF mailbox (<a href="/cdn-cgi/l/email-protection#c48589869188858a87818b808284a7a9b7eaacacb7eaa3abb2"><span class="__cf_email__" data-cfemail="16575b54435a5758555359525056757b65387e7e6538717960">[email protected]</span></a>). We have been 
looking for ways to streamline both the hardship exemption request and 
informal review request and have determined that the most efficient 
method would be to require that the ground ambulance organizations 
submit a web-based form via the Medicare Ground Ambulance Data 
Collection System instead of submitting the requests via our Ambulance 
ODF mailbox. This method would be simpler, less burdensome, and less 
prone to error to track and process all incoming hardship exemption 
requests and informal review requests. We intend to launch the web-
based portal that ground ambulance organizations can use to submit 
their hardship exemption and informal review requests in late 2022. We 
will share more information about the web-based portal when available.
    We are also proposing in this proposed rule to update our 
regulations to give us the necessary flexibility to specify how ground 
ambulance organizations should submit these requests, including to our 
web-based portal once that portal is operational. Specifically, we are 
proposing to revise Sec.  414.626(d)(1) and (e)(2) to state that these 
requests must be submitted in the form and manner specified by CMS.
    As we stated in the CY 2020 PFS final rule (84 FR 62895) and in 
Sec.  414.626(d)(1), the hardship exemption request form may be 
accessed on the Ambulances Services Center website for reference.
    We invite comments on this proposal.

N. Proposal To Revise HCPCS Level II Coding Procedures for Wound Care 
Management Products

1. Background
a. Healthcare Common Procedure Coding System (HCPCS) Level II Coding 
Procedures
    Section 1833(e) of the Act provides that no payment shall be made 
to any provider of services or other person under Medicare Part B 
unless there has been furnished such information as may be necessary in 
order to determine the amounts due such provider or other person under 
that part. In order to process claims and determine payment for items 
and services under Medicare, CMS needs a way to appropriately identify 
the items and services billed. CMS has established certain codes for 
providers and suppliers to use to identify items and services on 
claims. Medicare receives over 1 billion electronic claims per year.
    The HCPCS is a standardized coding system used to identify 
particular items and services on claims submitted to Medicare, 
Medicaid, and other health insurance programs in a consistent and 
orderly manner. The HCPCS is divided into two principal subsystems, 
referred to as HCPCS Level I and HCPCS Level II. The HCPCS Level I code 
set is comprised of Current Procedural Terminology (CPT[supreg]) codes 
\346\ and the HCPCS Level II code set is used primarily to identify 
items, services, supplies, and equipment that are not identified by 
CPT[supreg] codes.
---------------------------------------------------------------------------

    \346\ The CPT[supreg] is a uniform coding system consisting of 
descriptive terms and identifying codes that are used primarily to 
identify medical services and procedures furnished by physicians and 
other health care professionals. Decisions regarding the addition, 
deletion, or revisions of the CPT[supreg] codes are made and 
published by the American Medical Association (AMA) through the 
CPT[supreg] Editorial Panel. More information on CPT[supreg] codes 
can be found at www.ama-assn/about/cpt-editorial-panel/cpt-code-
process.
---------------------------------------------------------------------------

    HCPCS Level II codes were originally created for use by government 
insurers including Medicare. On August 17, 2000, HHS published a final 
rule (65 FR 50312) in which it adopted HCPCS Level II codes as the 
standard code set to be used by all payers for, among other things, 
health care equipment and supplies not described by CPT[supreg] codes, 
for use in Health Insurance Portability and Accountability Act of 1996 
(HIPAA) transactions (45 CFR 162.1002). The HCPCS Level II coding 
system was selected as the standard code set, in part, because of its 
wide acceptance among both public and private insurers. With few 
exceptions,\347\ HCPCS Level II codes are maintained by CMS, which is 
responsible for making decisions about additions, revisions, and 
discontinuations of the codes. CMS maintains the code set for Medicare 
but, because HCPCS Level II is a standard code set designated for use 
under HIPAA by all payers, CMS also considers the needs of other 
payers, including both government and private insurers, in establishing 
and maintaining codes.
---------------------------------------------------------------------------

    \347\ The Code on Dental Procedures and Nomenclature 
(CDT[supreg] code) represents a separate medical code set adopted 
under HIPAA. See 45 CFR 162.1002. Based on alpha-numeric format, 
they are considered HCPCS Level II series D-codes but are 
maintained, copyrighted, licensed and published separately by the 
American Dental Association. More information on CDT[supreg] codes 
can be found at https://www.ada.org/en/publications/cdt.
---------------------------------------------------------------------------

    HCPCS Level II codes are alpha-numeric codes that begin with an 
alphabetical letter followed by four numeric digits. Currently, there 
are almost 8,000 HCPCS Level II codes that represent categories of like 
items and services. Each code includes a text descriptor (code text) 
that identifies the category of items and services encompassed in the 
code. HCPCS Level II codes are generally organized into lettered 
categories that loosely describe the types of codes under that letter; 
\348\ however, the lettered categories are not dispositive, meaning 
that they are not all inclusive of the types of items and services 
described in the heading for each lettered category.
---------------------------------------------------------------------------

    \348\ A-codes: Transportation Services, Medical and Surgical 
Supplies, Miscellaneous; B-codes: Enteral and Parenteral Therapy; C-
codes: Hospital Outpatient Prospective Payment System; D-codes: 
Dental Procedures; E-codes: Durable Medical Equipment; G-codes: 
Temporary Codes for Procedures and Professional Services; H-codes: 
Rehabilitative Services; J-codes: Drugs Administered Other Than Oral 
Method, Chemotherapy Drugs; K-codes: Medicare National Codes for 
DMEPOS; L-codes: Orthotics, and Prosthetics; M-codes: Medical 
Services; P-codes: Pathology and Laboratory Services; Q-codes: 
Medicare National Codes; R-codes: Diagnostic Radiology Services; S-
codes: Non-Medicare National Codes; T-codes: State Medicaid Agency 
Codes; U-codes: Clinical Laboratory Tests; and V-codes: Vision and 
Hearing Services. 85 FR 70374.
---------------------------------------------------------------------------

    Anyone may submit a request to CMS for modifying the HCPCS Level II 
code set. Three types of coding revisions to the HCPCS may be 
requested: (1) that a new code be added (this may include requests to 
split an existing code category into its components or into 
subcategories); (2) that the language used to describe an existing code 
be changed; and (3) that an existing code be discontinued. Applicants 
that choose to submit a HCPCS Level II code application must submit 
their application using the online application portal known as the 
Medicare Electronic Application Request Information System<SUP>TM</SUP> 
(MEARIS\TM\).\349\
---------------------------------------------------------------------------

    \349\ OMB control number 0938-1042. Expiration Date: 07/31/2023.
---------------------------------------------------------------------------

    The procedures by which the public submits and CMS evaluates code 
applications to modify the HCPCS Level II code set have been primarily 
included in guidance documents released on the CMS website at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo. We update and release the 
HCPCS Level II dataset files to our contractors and the public via our 
website on a quarterly basis.

[[Page 46250]]

    Prior to 2020, CMS received and reviewed HCPCS Level II code 
applications and typically made related coding changes annually, 
including releasing updated coding files. However, in November 2019, we 
announced updates to our HCPCS Level II coding procedures to enable 
shorter and more frequent HCPCS Level II code application cycles 
beginning in January 2020, as part of our initiative to facilitate 
launching new products into the marketplace for providers and patients. 
Specifically, we implemented a process under which HCPCS Level II code 
applications for drugs and biological products may be submitted and are 
reviewed quarterly and HCPCS Level II code applications for non-drugs 
and non-biological products may be submitted and are reviewed 
biannually.
    The current coding procedures provide an opportunity for applicants 
who are dissatisfied with our coding decisions in a quarterly or 
biannual cycle an opportunity to reapply in a subsequent quarterly or 
biannual cycle. We release decisions on coding actions on both a 
quarterly and biannual basis for the respective coding cycle in the 
same format we used prior to 2020 to announce annual decisions. 
Additional information pertaining to CMS' HCPCS Level II coding 
decisions and procedures is available on the CMS website at https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo.
b. Food and Drug Administration (FDA) Regulation of Wound Care 
Management Products
    The FDA regulates wound care management products based on a variety 
of factors, including intended use. Certain wound care management 
products are considered Human Cells, Tissues, and Cellular and Tissue-
Based Products (HCT/Ps) that are regulated by the FDA solely under 
section 361 of the Public Health Service (PHS) Act and the regulations 
in 21 CFR part 1271 (``361 HCT/Ps''). To be regulated as a 361 HCT/P, 
the product must meet the four criteria set forth in 21 CFR 1271.10(a):
    <bullet> The HCT/P is minimally manipulated;
    <bullet> The HCT/P is intended for homologous use only, as 
reflected by the labeling, advertising, or other indications of the 
manufacturer's objective intent;
    <bullet> The manufacture of the HCT/P does not involve the 
combination of the cells or tissues with another article, except for 
water, crystalloids, or a sterilizing, preserving, or storage agent, 
provided that the addition of water, crystalloids, or the sterilizing, 
preserving, or storage agent does not raise new clinical safety 
concerns with respect to the HCT/P; and
    <bullet> Either, the HCT/P does not have a systemic effect and is 
not dependent upon the metabolic activity of living cells for its 
primary function or the HCT/P has a systemic effect or is dependent 
upon the metabolic activity of living cells for its primary function, 
and: (1) Is for autologous use; (2) Is for allogeneic use in a first-
degree or second-degree blood relative; or (3) Is for reproductive use.
    For 361 HCT/Ps, establishments that perform one or more steps in 
the manufacture of the HCT/Ps must register and list their HCT/Ps 
annually in FDA's electronic Human Cell and Tissue Establishment 
Registration System (eHCTERS), but premarket review and approval are 
not needed. FDA acceptance of an establishment registration and HCT/P 
listing form does not constitute a determination that an establishment 
is in compliance with applicable FDA rules and regulations or that the 
HCT/P is licensed or approved by FDA (21 CFR 1271.27(b)). Consistent 
with our proposal in section II.J. of this proposed rule to replace the 
term ``skin substitutes'' with ``wound care management products,'' we 
will use the term ``wound care management products'' in our description 
of the products and related to our proposals below.
    Other wound care management products that are regulated by the FDA 
as devices may be subject to premarket review through a 510(k) 
premarket notification submission in accordance with section 510(k) of 
the Federal Food, Drug, and Cosmetic Act (FD&C Act) and implementing 
regulations in subpart E of 21 CFR part 807, through the premarket 
approval (PMA) application process under section 515 of the FD&C Act 
and regulations in 21 CFR part 814, through a De Novo classification 
request (De Novo request) under the section 513(f)(2) of the FD&C Act, 
or are exempt from premarket notification requirements. A 510(k) is a 
premarket submission made to the FDA to demonstrate that the device to 
be marketed is as substantially equivalent to a legally marketed device 
that is not subject to PMA (section 510(k), 510(n), 513(f)(1), or 
513(i) of the FD&C Act).\350\ A PMA is the most stringent type of 
premarket device submission and is required for approval of Class III 
medical devices.\351\ The De Novo request provides a marketing pathway 
to classify novel medical devices for which general controls alone, or 
general and special controls, provide reasonable assurance of safety 
and effectiveness for the intended use, but for which there is no 
legally marketed predicate device. Devices that are classified into 
class I or class II through a De Novo request may be marketed and used 
as predicates for future premarket notification [510(k)] submissions, 
when applicable.\352\
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    \350\ https://www.fda.gov/medical-devices/premarket-submissions-
selecting-and-preparing-correct-submission/premarket-notification-
510k#:~:text=A%20510(k)%20requires%20demonstration,and%20effective%20
as%20the%20predicate.&text=the%20information%20submitted%20to%20FDA,a
s%20the%20legally%20marketed%20device.
    \351\ https://www.fda.gov/medical-devices/premarket-submissions-selecting-and-preparing-correct-submission/premarket-approval-pma.
    \352\ https://www.fda.gov/medical-devices/premarket-submissions-selecting-and-preparing-correct-submission/de-novo-classification-request.
---------------------------------------------------------------------------

2. Proposal To Revise the Requirements Necessary To Obtain a HCPCS 
Level II Code for Wound Care Management Products
    As of May 2022, there are approximately 150 unique HCPCS Level II 
codes that describe wound care management products. Prior to 2021, all 
of these products, including those regulated by the FDA as devices, 
were assigned a Q code as they were generally considered to be 
biological products and in the office-setting, these products were paid 
using the methodology under section 1847A of the Act, which, in many 
cases, is based on the average sales price (ASP) plus a statutorily 
mandated 6 percent add-on.
    In addition, as part of the HCPCS Level II application, CMS 
required proof of how the product was regulated by the FDA to assist in 
verification that the product was medical and legally on the market. 
For example, we required the 510(k) clearance letter or the PMA 
approval letter for wound care management products that were regulated 
by the FDA as devices.\353\ For 361 HCT/Ps, we required proof that the 
manufacturer registered and listed their HCT/P with the FDA pursuant to 
21 CFR part 1271, for products regulated as 361 HCT/Ps.
---------------------------------------------------------------------------

    \353\ To date, CMS has not received a HCPCS Level II application 
for any wound care management product regulated by the FDA as a 
device through a De Novo request, but a De Novo request approval 
letter would have been required as part of the application to assist 
in verification that the product was medical and legally on the 
market.
---------------------------------------------------------------------------

    Beginning in 2020, in accordance with section 1833(e) of the Act, 
CMS concluded that each application requesting a HCPCS Level II code 
for a wound care management product described in the application as a 
361 HCT/P include a letter from the FDA's Tissue Reference Group (TRG) 
recommending that the product appears

[[Page 46251]]

to meet the criteria for regulation solely under section 361 of the PHS 
Act and the regulation in 21 CFR part 1271. This information is 
necessary for CMS to determine, for coding purposes, how the product 
should be classified. For example, such information may be necessary to 
determine whether the product should be coded as a different type of 
single source biological product rather than as a 361 HCT/P wound care 
management product.\354\ The collection of this additional information 
was intended to assist us in appropriately classifying for purposes of 
assigning a HCPCS Level II code when these medical products are 361 
HCT/P wound care management products, biological products, drugs, or 
other.\355\
---------------------------------------------------------------------------

    \354\ Under a final rule promulgated by the FDA on August 31, 
2016, manufacturers of HCT/Ps that are regulated as drugs, devices, 
and/or biological products under section 351 of the PHS Act and/or 
the Federal Food, Drug, and Cosmetic Act, must register and list 
their HCT/Ps following the procedures in 21 CFR part 207 or 807, as 
applicable, rather than 21 CFR part 1271. FDA also maintains 
Frequently Asked Questions on this topic at https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/questions-and-answers-regarding-end-compliance-and-enforcement-policy-certain-human-cells-tissues-or.
    \355\ When a medical product is improperly grouped or described 
by CMS in the HCPCS Level II code set relative to our established 
conventions, payers may unintentionally apply inaccurate coverage 
and/or payment to the provider or supplier submitting a claim, and 
in that way, the beneficiary or enrollee may be subject to 
inaccurate cost-sharing. Each payer establishes its own methodology 
for coverage and payment but often rely on the HCPCS Level II 
groupings of similar types of medical products to accelerate the 
adoption process of new technologies.
---------------------------------------------------------------------------

    In the CY 2022 PFS final rule (86 FR 65121), we also finalized that 
ten specific 510(k)-cleared wound care management products for which we 
received a HCPCS Level II code application would be payable in the 
physician office setting as contractor priced products that are billed 
separately from the procedure to apply them. In the latter part of 
2021, we published final decisions that assigned an A code to each of 
these ten 510(k)-cleared wound care management products, with an 
effective date of January 1, 2022. These final decisions are located on 
the CMS website at https://www.cms.gov/files/document/2021-hcpcs-application-summary-supplemental-coding-cycle-updated-04062022.pdf.
    We subsequently discovered that we had inadvertently assigned an A 
code to one product (bio-ConneKt Wound Matrix) for which a Q code, 
Q4161, had already been assigned. As such, we updated the Supplemental 
Coding Cycle decision document in December 2021 to remove the A code 
assignment for bio-ConneKt Wound Matrix while retaining A code 
assignments for the other nine 510(k)-cleared wound care management 
products. Following the Supplemental Coding Cycle, we assigned 
additional A codes for three 510(k)-cleared wound care products with an 
effective date of April 1, 2022 for which we received a first-time 
HCPCS Level II application in the Second Biannual, 2021 HCPCS Coding 
Cycle.\356\
---------------------------------------------------------------------------

    \356\ https://www.cms.gov/files/document/2021-hcpcs-application-summary-biannual-2-2021-non-drug-and-non-biological-items-and-services.pdf.
---------------------------------------------------------------------------

a. General Coding Proposal for All Wound Care Management Products
    In this proposed rule, we are proposing to uniformly classify wound 
care management products (that are not regulated by FDA as drugs or 
biological products that would otherwise be eligible for separate 
payment under section 1847A of the Act) consistently in the HCPCS Level 
II code set based on information presented to CMS as described in 
additional detail below, effective January 1, 2024. That is, we propose 
that the assignment of A codes to all wound care management products 
that are not drugs or biological products would continue with respect 
to products for which a HCPCS Level II code is requested for the first 
time, as well as for wound care management products to which we 
previously assigned a Q code. See below for further details, as we 
propose that certain wound care management products will need to submit 
additional information to CMS prior to the assignment of an A code. 
This proposal aligns with our proposal in section II.J. of this 
proposed rule that all wound care management products would be eligible 
for coverage under section 1861(s)(2)(A) of the Act as incident to 
supplies that are commonly furnished in the physician office setting.
    As stated in the CY 2021 Durable Medical Equipment, Prosthetics, 
Orthotics and Supplies (DMEPOS) Policy Issues and HCPCS Level II 
Proposed Rule (85 FR 70374), HCPCS Level II codes are generally 
organized into lettered categories that loosely describe the types of 
codes under that letter. Q codes are used to identify products 
separately payable as drugs and biologicals under Medicare Part B; such 
products are priced using methodology in section 1847A of the Act, and 
in many cases, payment is based on the ASP plus a statutorily mandated 
6 percent add-on. A codes are used to identify transportation services 
and medical and surgical supplies. We believe that the assignment of an 
A code to all wound care management products that are not drugs or 
biological products \357\ that would otherwise be eligible for separate 
payment under section 1847A of the Act would better reflect what the 
product is for purposes of assigning a code as this approach aligns 
with the payment proposal in section II.J. of this proposed rule that 
would establish a consistent pricing methodology by pricing all wound 
care management products as incident to supplies. We also believe this 
proposed policy would provide a more consistent and transparent 
approach to coding for wound care management products.
---------------------------------------------------------------------------

    \357\ Drug and biological products would generally be coded as J 
or Q codes.
---------------------------------------------------------------------------

b. Further Detail on 361 HCT/P Proposals
    With respect to 361 HCT/P wound care management products, we 
propose to no longer evaluate HCPCS Level II coding applications for 
such products on a quarterly basis beginning January 1, 2024,\358\ and 
to instead evaluate them through our biannual coding cycles for non-
drugs and non-biological products. We believe our proposal to assign A 
codes to all wound care management products that are not drugs or 
biological products and to review these products in the same biannual 
coding cycle aligns with the payment proposal in section II.J. of this 
proposed rule, as CMS uses the biannual cycles to review code 
applications for non-drugs and non-biological products and section II.J 
is proposing to price these products as incident to supplies. We note 
that the biannual coding cycle includes preliminary coding 
determinations and an opportunity for written and public comment, which 
may assist manufacturers and CMS in reconciling any discrepancies with 
information submitted to us or addressing questions about a product 
that we may raise; we believe this dialogue will be productive for all 
involved.
---------------------------------------------------------------------------

    \358\ Manufacturers of wound care management products that 
received a 510(k) clearance, PMA approval, or a granted De Novo 
request are currently reviewed in the non-drugs and non-biologicals 
biannual coding cycle and will continue in that cycle.
---------------------------------------------------------------------------

    Manufacturers of products described as 361 HCT/Ps that have already 
been assigned a Q code must also provide documentation from the FDA 
(that is, the TRG recommendation letter) that indicates how the product 
is or appears to be regulated by the FDA.\359\ This

[[Page 46252]]

information would be part of a HCPCS Level II re-application submitted 
via MEARIS<SUP>TM</SUP> and would be part of a public meeting for 
consideration. We are proposing to allow a 12-month period from the 
effective date of the CY 2023 final rule (that is, January 1, 2024) to 
allow for re-application submissions. We believe this proposed deadline 
for re-application submission would provide sufficient time for 
applicants to communicate with the FDA in regard to the TRG 
recommendation letter, as applicable. Manufacturers with an existing Q 
code for products described as 361 HCT/Ps who would need to re-apply 
for an A code are encouraged to submit their request for a TRG 
recommendation to the FDA as soon as feasible to ensure that they 
receive the recommendation in time to include it with the re-
application. After a public meeting and appropriate review by CMS, we 
propose to discontinue all existing Q codes for wound care management 
products and to establish new A codes for such products that have 
submitted the appropriate documentation. We propose to make the 
effective date of the new A codes to coincide with the discontinuation 
date of the corresponding Q codes such that there would be no gap 
between the effective dates of the discontinued codes and the newly 
established codes. Based on our biannual coding process for non-drugs 
and non-biological products, we anticipate the new A codes would take 
effect on October 1, 2024. If a re-application is not submitted, CMS 
proposes to discontinue the Q code in the quarterly update cycle 
following the proposed deadline for re-application submission (that is, 
January 1, 2024), which we anticipate would take effect on April 1, 
2024.
---------------------------------------------------------------------------

    \359\ Manufacturers of wound care management products that 
received a 510(k) clearance, PMA approval, or a granted De Novo 
request do not need to resubmit documentation. These products will 
be reclassified to an A code at the same time as the established 361 
HCT/P products with Q codes are reclassified to an A code (that is, 
October 1, 2024).
---------------------------------------------------------------------------

    We are also proposing to collect additional information in support 
of HCPCS Level II code applications for these products. Under our 
proposal, all first-time applications for 361 HCT/Ps would need to 
continue to be supported, as we started in 2020, with documentation 
from the FDA (that is, the TRG recommendation letter) that indicates 
how the product is or appears to be regulated by the FDA. That is, for 
a product that is described by the applicant as a 361 HCT/P, we are 
proposing that the first-time application or re-application would need 
to provide a recommendation letter from the FDA's TRG which would aid 
in our determination of how the product should be classified for coding 
purposes. The FDA TRG recommendation letter assists us in recognizing 
whether a product is a wound care management product, separately 
payable drug or biological product, or otherwise and aids us in issuing 
an appropriate code consistent with our coding conventions.\360\ We 
note that a recommendation letter from FDA's TRG would be necessary in 
other circumstances, such as when a product manufacturer seeks a change 
to a current code descriptor or presents other information to us in 
which a product's market status or other event has changed and the 
manufacturer believes a code should be revised.
---------------------------------------------------------------------------

    \360\ Based on prior experience, CMS notes that we may identify 
discrepancies between the FDA TRG recommendation letter and the 
application presented to CMS, particularly in regard to indications 
of use and clinical claims. In cases of discrepancies, we may ask 
for clarification, encourage the applicant to consult further with 
the FDA, consult further with the FDA ourselves, and/or engage with 
the applicant through the public meeting process. In doing so, we 
are working to ascertain that the product is a wound care management 
product rather than another product, which may be more appropriately 
classified elsewhere in the HCPCS Level II code set.
---------------------------------------------------------------------------

    CMS will notify the public of all future coding decisions for wound 
care management products through its standard process of posting 
decisions for each coding cycle on the HCPCS web page on CMS.gov 
(https://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/Prior-Years-CMS-HCPCS-LevelII-Coding-Decisions-Narrative-Summary).
c. Summary
    In summary, we are proposing: (1) that the assignment of A codes to 
all wound care management products (that are not regulated by FDA as 
drugs or biological products that would otherwise be eligible for 
separate payment under section 1847A of the Act) would continue with 
respect to products for which a HCPCS Level II code is requested for 
the first time, as well as for wound care management products to which 
we previously assigned a Q code; (2) to discontinue all existing Q 
codes for wound care management products; (3) to, prior to the 
assignment of an A code, require products with an existing Q code that 
were described by the applicant as a 361 HCT/P to submit a HCPCS Level 
II re-application within 12 months of the effective date of the final 
rule (that is, January 1, 2024); (4) to require a recommendation letter 
from the FDA's TRG to be submitted as part of the HCPCS Level II 
application for all wound care management products described by the 
applicant as a 361 HCT/P, regardless if it is a first time application 
or re-application for a product with an existing Q code; and (5) to 
evaluate HCPCS Level II coding applications for all 361 HCT/P wound 
care management products through our biannual coding cycles for non-
drugs and non-biological products, rather than on a quarterly basis, 
beginning January 1, 2024.
    We are seeking comments on these proposals. We also seek comment on 
whether any codes have been unintentionally omitted from the list of 
wound care management products for which new code applications would 
need to be submitted or new A-codes would be issued for devices that 
are 510(k)-cleared, PMA-approved, or classified into class I or class 
II through a De Novo request (Table 74) and should similarly be subject 
to this proposal.
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    For all 361 HCT/Ps for which CMS has issued a Q code with an 
effective date on or after October 1, 2021, as shown in Table 75, we 
propose to discontinue the Q code and issue an A code, effective on the 
same date as the other products discussed in this proposal (that is, 
October 1, 2024). We are not proposing to require resubmission of a 
HCPCS Level II coding application for these HCT/P wound care management 
products because the applications already included a TRG recommendation 
letter from the FDA. We propose to take a similar approach for all new 
361 HCT/Ps in which Q codes are issued before January 1, 2024.

[[Page 46256]]

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BILLING CODE 4120-01-C
    We welcome comment on all of these proposals.

IV. Updates to the Quality Payment Program

A. CY 2023 Modifications to the Quality Payment Program

1. Executive Summary
a. Overview
    This section of the proposed rule sets forth changes to the Quality 
Payment Program starting January 1, 2023, except as otherwise noted for 
specific provisions. The CY 2023 performance period/2025 MIPS payment 
year continues to move the Quality Payment Program forward to focus 
more on our measurement efforts, refine how clinicians would be able to 
participate in a more meaningful way through the Merit-based Incentive 
Payment System (MIPS) Value Pathways (MVPs), and encourage 
participation in Advanced Alternative Payment Models (APMs).
    Authorized by the Medicare Access and CHIP Reauthorization Act of 
2015 (MACRA) (Pub. L. 114-10, April 16, 2015), the Quality Payment 
Program is an incentive program that includes two participation tracks, 
MIPS and Advanced APMs. MIPS eligible clinicians are subject to a MIPS 
payment adjustment based on their performance in four performance 
categories: cost, quality, improvement activities, and Promoting 
Interoperability. The weights of those four performance categories are 
specified in statute. For CY 2023, those weights are as follows: 30 
percent for the quality performance category, 30 percent for the cost 
performance category, 15 percent for the improvement activities 
performance category, and 25 percent for the Promoting Interoperability 
performance category. If an eligible clinician participates in an 
Advanced APM and achieves Qualifying APM Participant (QP) status, they 
are excluded from the MIPS reporting requirements and payment 
adjustment. Those that are qualifying APM participants (QPs) for the 
year are eligible to receive a 5 percent lump sum incentive payment 
during the corresponding payment year through CY 2024, or a 
differential payment update under the PFS for payment years beginning 
in 2026.
    We plan to continue developing Quality Payment Program policies 
that more effectively reward high-quality of care for patients and 
increase opportunities for Advanced APM participation. We are moving 
forward with MVPs to allow for a more cohesive participation experience 
by connecting activities and measures from the 4 MIPS performance 
categories that are relevant to a specialty, medical condition, or a 
particular population.
    As we make long-term improvements, continue evolving MIPS policies, 
and plan to begin implementing MVPs in 2023, we remain committed to our 
program goals. We are aligning with broader CMS initiatives, such as 
the CMS National Quality Strategy (https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/Legacy-Quality-Strategy), to unify strategic 
efforts to adopt measures most critical to providing high quality care 
and accelerate strategic improvements for quality programs and 
measures. The vision for the CMS National Quality Strategy is to shape 
a resilient, high-value American health care system to achieve high-
quality, safe, equitable, and accessible care for all. This strategy 
aims to promote the highest quality outcomes and safest care for all 
individuals. It also focuses on a person-centric approach as 
individuals journey across the continuum of care and across payer type. 
The goals of the strategy incorporate lessons learned from the PHE for 
COVID-19 to inform both short and long-term direction for our health 
care system as well as support the creation of a more equitable, safe, 
and outcomes-based health care system for all individuals. The planned 
implementation of MVPs aligns with many of the objectives and goals the 
CMS National Quality Strategy will strive to achieve.
    Through the proposals we describe below, we intend to continue 
improving the MIPS program through MVPs, promote the use of connected 
measures and activities, reward clinicians for providing high value 
care, and help all clinicians improve care and engage patients. We also 
intend to gather information from interested parties to help guide 
efforts to advance health equity throughout CMS quality programs. We 
previously finalized an MVP development process involving the 
submission of MVPs by interested parties for our consideration (85 FR 
84849 through 84850). We believe the MVP development process should 
also consider feedback from the general public outside of the notice 
and comment rulemaking process through which MVPs are adopted. 
Therefore, we are proposing to modify the MVP development process such 
that were

[[Page 46257]]

CMS to receive a new candidate MVP, evaluate it through the MVP 
development process and determine it ``ready'' for feedback, CMS would 
post a draft version of the MVP on the Quality Payment Program website 
(https://qpp.cms.gov/) and solicit feedback from interested parties as 
well as the general public for a 30-day period.
    In addition, we previously established a process for soliciting 
interested party recommendations for potential updates to established 
MVPs. On an annual basis, beginning in January, interested parties may 
submit their recommendations for the revision of an established MVP, 
and that input is accepted on a rolling basis throughout the year. We 
believe the MVP maintenance process should also consider feedback from 
the general public outside of the notice and comment rulemaking process 
through which MVPs are revised. Therefore, we are proposing that after 
we review the submitted recommendations to revise established MVPs, and 
identify any feasible and appropriate revisions to established MVPs, we 
would host an annual public facing webinar, open to interested parties 
and the general public through which they may offer their feedback on 
potential revisions to the MVPs.
    Moreover, in the CY 2022 PFS final rule (86 FR 65998 through 
66031), we finalized seven MVPs that will be available for reporting 
beginning with the CY 2023 performance period/2025 MIPS payment year.
    We are proposing revisions to these seven MVPs based on the 
proposed removals of certain activities from the improvement activities 
inventory and the addition of other relevant existing quality measures 
for MVP participants to select from. Through this rulemaking cycle, we 
are proposing five additional new MVPs:
    <bullet> Advancing Cancer Care;
    <bullet> Optimal Care for Kidney Health;
    <bullet> Optimal Care for Neurological Conditions;
    <bullet> Supportive Care for Cognitive-Based Neurological 
Conditions; and
    <bullet> Promoting Wellness.
    The MVP framework aims to reduce complexity and burden, move 
towards more meaningful measurement, capture the patient voice, and 
move to higher value care. We are continuing to explore opportunities 
to advance health equity in accordance with the CMS Framework for 
Health Equity 2022-2023,\361\ across all CMS programs and policies, 
including the MVP framework. We are considering how MVPs should evolve 
to better promote higher value care and APM participation by both 
primary care and specialist clinicians. We are seeking public comment, 
through a request for information (see section IV.A.7.b of this 
proposed rule), on ways to integrate MVPs into APP reporting and how to 
best facilitate specialty clinician reporting of quality performance 
measures (in addition to the APP) that reflect the specialty services 
provided.
---------------------------------------------------------------------------

    \361\ Centers for Medicare & Medicaid Services. CMS Framework 
for Health Equity 2022-2032., Available at https://www.cms.gov/files/document/cms-framework-health-equity.pdf.
---------------------------------------------------------------------------

b. Subgroup Reporting
    To support clinicians in their transition to subgroup reporting, 
subgroup reporting will be voluntary for the CY 2023, 2024, and 2025 
performance periods/2025, 2026, and 2027 MIPS payment years. 
Multispecialty groups that choose to report through an MVP will be 
required to participate as subgroups beginning with CY 2026 performance 
period/2028 MIPS payment year. As discussed in section IV.A.8.e. of 
this proposed rule, we are proposing the following policies for 
subgroups:
    <bullet> Subgroup description requirement: To allow flexibility for 
groups to explore the different ways they could utilize subgroups, we 
are not proposing any restrictions related to the composition of a 
subgroup. Instead, we are proposing that a group must submit a 
description of each subgroup at the time of registration. We believe 
that the subgroup description would help us understand the underlying 
rationale for how groups placed clinicians in a subgroup and help us 
utilize these characteristics to shape subgroup criteria in the future.
    <bullet> Limitation of one subgroup per TIN-NPI combination: A TIN 
could choose to form more than one subgroup for reporting MVPs. 
However, due to operational complexity, we are proposing that an 
individual eligible clinician, as represented by a TIN/NPI combination 
may register for no more than one subgroup within a group's TIN.
    <bullet> Subgroup determination period: We are proposing that CMS 
will apply the low-volume threshold criteria for a subgroup as 
described under Sec.  414.1318(a)(1) using information from the first 
segment of the applicable MIPS determination period.
    <bullet> Subgroup scores for administrative claims measures and 
cost measures: We are proposing that subgroups are scored on each 
selected population health measure based on their affiliated group 
score, if available and that if the subgroup's affiliated group score 
is not available, each such measure is excluded from the subgroup's 
total measure achievement points and total available measure 
achievement points. We are also proposing that subgroups are scored on 
the cost measures included in the MVP that they select, based on their 
affiliated group score, if available. If the affiliated group score is 
not available, the measure is excluded from the subgroup's total 
measure achievement points and total available measure achievement 
points, as described under Sec.  414.1380(b)(2)(i) through (v). We 
believe that these policies would help address the issues identified 
with assessing performance of the administrative claims measures at the 
subgroup level.
    <bullet> Scoring for subgroups that register but do not report: We 
are proposing that we will not assign a score for subgroups that 
register but do not submit data for an applicable performance period.
2. Major APM Provisions
(a) APM Entity Reporting
    We are proposing to introduce the option for APM Entities to report 
the Promoting Interoperability performance category at that APM Entity 
level.
(b) APM Entity Level Reporting of Promoting Interoperability 
Performance Category
    We are proposing to introduce a voluntary reporting option for APM 
Entities to report the promoting interoperability performance category 
at the APM Entity level beginning with the 2023 performance period.
(c) Request for Information Regarding QP Determination Calculations at 
the Individual Eligible Clinician Level
    We are including a comment solicitation regarding sunsetting the 
use of APM Entity level QP determinations and instead making QP 
determinations at the individual eligible clinician level only.
(d) Payment Based on Quality Measures
    We propose revisions to the regulations to clarify that the 
criterion for Advanced APMs that payment must be based on quality 
measures can be met through the use of a single quality measure that 
meets the criteria specified at Sec.  414.1415(b)(2) and (b)(3). We are 
also proposing conforming changes in the Other Payer Advanced APM 
regulations.
(e) Generally Applicable Nominal Amount Standard
    We are proposing to permanently establish the generally applicable 
revenue-based nominal amount standard at 8 percent of the average

[[Page 46258]]

estimated total Medicare Parts A and B revenue of all providers and 
suppliers in participating APM Entities for the applicable QP 
Performance Period, beginning with the 2023 QP Performance Period. We 
are also proposing conforming changes in the Other Payer Advanced APM 
regulations.
(f) Medical Home Model 50 Eligible Clinician Limit
    We propose to apply the 50 eligible clinician limit directly to the 
APM Entity participating in the Medical Home Model, and to no longer 
look to the parent organization for the APM Entity. We would identify 
the eligible clinicians in the APM Entity on each of the three QP 
determination dates (March 31, June 30, and August 31). This policy 
would become effective in Performance Year 2023. We are also proposing 
conforming changes in the Other Payer Advanced APM regulations which 
will require that the eligible clinician pursuing the option provide 
the relevant information.
(g) Request for Information Regarding the Transition From APM Incentive 
Payments to the Enhanced PFS Conversion Factor Update for QPs
    We are including a comment solicitation regarding the gap in 
statutory financial incentives for QPs in the 2025 payment year, and 
the difference in potential financial incentives between QPs and MIPS 
eligible clinicians in payment years beginning in 2026.
3. Other MIPS and APM Policies
(a) Quality Performance Category
    In section IV.A.10.c.(1)(b) of this proposed rule, we are proposing 
the following: expand the definition of the term high priority measure 
to include health equity quality measures; change the CAHPS for MIPS 
case-mix adjustor for ``Asian language survey completion'' to use 
instead the ``language other than English spoken at home'' variable; 
increase the data completeness criteria threshold from 70 percent to 75 
percent for the CY 2024 and 2025 performance periods/2026 and 2027 MIPS 
payment years; and establish a set of 195 quality measures. In section 
IV.A.10.c.(1)(d) of this proposed rule, we are seeking public comment 
regarding each of the following topics: the addition of questions 
related to health disparities and price transparency to the CAHPS for 
MIPS Survey; the development and implementation of health equity 
quality measures; and the development and implementation of quality 
measures that address amputation avoidance in diabetic patients.
(b) Cost Performance Category
    In section IV.A.3.b. of this proposed rule, we are proposing to 
update the operational list of care episode and patient condition 
groups and codes by adding the Medicare Spending Per Beneficiary (MSPB) 
Clinician cost measure as a care episode group.
(c) Improvement Activities Performance Category
    We are proposing to add four new, modify five existing, and remove 
five existing improvement activities from the Inventory. The new and 
modified activities help fill gaps we have identified in the Inventory 
as well as seek to ensure that activities reflect current clinical 
practice across the category. All four of the new activities being 
proposed relate to CMS Six Health Equity Priorities for Reducing 
Disparities in Health. We are also recommending the removal of five 
activities, both to align with current clinical guidelines and practice 
as well as to eliminate duplication, so that the Inventory offers 
flexibility and choice without a potentially burdensome number of 
activities available.
(d) Promoting Interoperability Performance Category
    We are proposing several changes to the Promoting Interoperability 
performance category. Specifically, we are proposing: (1) to require 
and modify the Electronic Prescribing Objective's Query of Prescription 
Drug Monitoring Program (PDMP) measure while maintaining the associated 
points at 10 points; (2) to expand the Query of PDMP measure to include 
not only Schedule II opioids, but also Schedule III, and IV drugs; (3) 
to add a new Health Information Exchange (HIE) Objective option, the 
Enabling Exchange under the Trusted Exchange Framework and Common 
Agreement (TEFCA) measure (requiring a yes/no response), as an optional 
alternative to fulfill the objective; (4) to consolidate the current 
options from three to two levels of active engagement for the Public 
Health and Clinical Data Exchange Objective and to require the 
reporting of active engagement for the measures under the objective; 
(5) to modify the scoring methodology for the Promoting 
Interoperability performance category; and (6) to continue to reweight 
the Promoting Interoperability performance category for certain types 
of non-physician practitioner MIPS eligible clinicians.
(e) Payment Adjustment
    We are proposing to use the CY 2019 MIPS payment year as the prior 
period and the rounded mean final score of 75 points from that prior 
period as the performance threshold for the CY 2025 MIPS payment year.
(f) Scoring
    For scoring of the quality performance category, we are proposing 
to score administrative claims measures using benchmarks calculate from 
data collected during the performance period and clarifying the topped-
out measure lifecycle in instances where a measure is suppressed or 
otherwise has a benchmark removed. We also include a request for 
information on which additional risk indicators and data sources we 
should consider for the complex patient bonus to better assess the 
social and medical complexity for the patients of MIPS eligible 
clinicians. Lastly, we are proposing to establish a maximum cost 
improvement score of 1 percentage point out of 100 percentage points 
available for the cost performance category starting with the CY 2022 
performance period/2024 MIPS payment year.
(g) Third Party Intermediaries
    We are proposing to update the definition of third party 
intermediary consistent with existing policies and to make other minor 
technical edits to the regulation text governing third party 
intermediaries accordingly. We are also proposing to revise QCDR 
measure self-nomination and measure approval requirements, including 
proposing to delay the QCDR measure testing requirement for traditional 
MIPS by an additional year, until the CY 2024 performance period/2026 
MIPS payment year. We are proposing to continue delaying this 
requirement based on our recognition of the continuing impact of the 
COVID-19 public health emergency on the ability of QCDRs to test 
measures. We are also proposing to revise remedial action and 
termination policies. Finally, we have included two requests for 
information on third party intermediary support of MVPs and national 
Continuing Medical Education (CME) organizations becoming a new type of 
third-party intermediary.
(h) Public Reporting/Physician Compare
    In an effort to expand the information available to patients and 
caregivers when choosing a doctor or clinician, we propose publicly 
reporting on individual clinician and group profile pages:
    <bullet> A telehealth indicator, as applicable, and technically 
feasible, for those clinicians furnishing covered telehealth services.

[[Page 46259]]

    <bullet> Utilization data related to applicable conditions treated 
and procedures performed by each clinician or group respectively.
    Additionally, we would like interested party feedback, through a 
request for information, on ways to incorporate health equity into 
public reporting on Care Compare.
c. Continuing To Advance to Digital Quality Measurement and the Use of 
Fast Healthcare Interoperability Resources (FHIR) in Physician Quality 
Programs--Request for Information
    In the CY 2022 PFS final rule, we stated our aim to move fully to 
digital quality measurement in CMS quality reporting and value-based 
purchasing programs (86 FR 65377 through 65382). As part of this 
modernization of our quality measurement enterprise, we are issuing 
this request for information to gather additional public input on the 
transition to digital quality measurement. Any updates to specific 
program requirements related to providing data for quality measurement 
and reporting provisions would be addressed through future notice-and-
comment rulemaking. This request for information contains five parts:
    <bullet> Background. This part provides an overview of our goals 
and strategies to achieve digital quality measurement, and notes input 
and learnings relevant to these goals and strategies.
    <bullet> Potential Refined definition of Digital Quality Measures 
(dQMs). This part outlines potential revisions for a future definition 
for dQMs.
    <bullet> Data Standardization Activities to Leverage and Advance 
Standards for Digital Data. This part discusses data standardization 
strategies and potential venues for advancing data standardization.
    <bullet> Approaches to Achieve FHIR[supreg] eCQM Reporting. This 
part describes activities we are undertaking and considering to achieve 
FHIR-based electronic clinical quality measure (eCQM) reporting (for 
example, via FHIR Application Programming Interfaces or APIs) as our 
initial implementation of dQMs.
    <bullet> Solicitation of Comments. This part lists all requests for 
input included in the sections of this request for information.
(1) Background
    In the CY 2022 PFS final rule, we noted the continued focus on use 
of digital data and advancements in technology and technical standards 
to improve interoperability of healthcare data which creates 
opportunity to significantly improve our quality measurement systems 
(86 FR 65377 through 65382). In a learning health system, standardized 
and interoperable digital data from a single point of collection can 
support multiple use cases, including quality measurement, quality 
improvement efforts, clinical decision support, research, and public 
health. We believe data used for quality measurement, as well as these 
other use cases, should be a seamless outgrowth of data generation from 
routine workflows. Data sharing should be standards-based to maximize 
interoperability, minimize burden, and facilitate the development and 
use of common tooling across use cases. This approach supports data 
analysis, rapid-cycle feedback, and quality measurement that are 
aligned for continuous improvement in patient-centered care.
    We are continuing to define how we can leverage existing policy to 
transform all CMS quality measurement to digital reporting, such as 
policy finalized in the Office of the National Coordinator for Health 
Information Technology's (ONC) 21st Century Cures Act: 
Interoperability, Information Blocking, and the ONC Health IT 
Certification Program final rule, hereinafter referred to as the ONC 
21st Century Cures Act final rule (85 FR 25642). In that rule, ONC 
finalized a ``Standardized API for patient and population services'' 
certification criterion (45 CFR 170.315(g)(10)) for certified health 
information technology (IT) requiring the use of FHIR Release 4.0.1 and 
several other implementation specifications, for health IT modules 
certified to that criterion. Health IT certified to this criterion will 
offer single patient and multiple patient services that can be accessed 
by third party applications (85 FR 25742). The ONC 21st Century Cures 
Act final rule (85 FR 25670) also required health IT developers to 
update their certified health IT to support the United States Core Data 
for Interoperability (USCDI) standard, Version 1 for all certification 
criteria that reference it.\362\ By aligning technology requirements 
for payers, healthcare providers, and health IT developers, HHS can 
advance an interoperable health IT infrastructure that ensures 
providers and patients have access to health data when and where it is 
needed.
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    \362\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
---------------------------------------------------------------------------

    In the CY 2022 PFS final rule, we outlined actions in four areas to 
transition to digital quality measures: (1) leverage and advance 
standards for digital data and obtain all electronic health record 
(EHR) data required for quality measures via provider FHIR-based 
application programming interfaces (APIs); (2) redesign our quality 
measures to be self-contained tools; (3) better support data 
aggregation; and (4) work to align measure requirements across our 
reporting programs, other Federal programs and agencies, and the 
private sector where appropriate (86 FR 65377 through 65382). The 
actions are further described in CMS' Digital Quality Measurement 
Strategic Roadmap available at https://ecqi.healthit.gov/dQM. In this 
request for information, we focus on data standardization activities 
related to leveraging and advancing standards for digital data and 
approaches to transition to FHIR eCQM reporting in the future, as 
initial steps in our transition to digital quality measurement.
    In the CY 2022 PFS final rule, we also stated our goal of moving to 
digital quality measurement for all CMS quality reporting and value-
based purchasing programs (86 FR 65377 through 65382). We further 
clarify that we plan to transition incrementally, beginning with the 
adoption of FHIR API technology and shifting to eCQM reporting using 
FHIR standards as described in section IV.A.4.d. of this proposed rule. 
We aim to achieve a quality measurement system fully based on digital 
measures. The goals of a fully digital measurement system include: 
reduced burden of reporting; provision of multi-dimensional data in a 
timely fashion, rapid feedback, and transparent reporting of quality 
measures; digital measures leveraged for advanced analytics to define, 
measure, and predict key quality issues; and quality measures that 
support development of a learning health system, which uses key data 
that are also used for care, quality improvement, public health, 
research, etc.
(2) Potential Future Definition of Digital Quality Measures (dQMs)
    In the CY 2022 PFS final rule (86 FR 65379), we suggested a 
potential future definition of dQM for advanced feedback. Based on 
comments received on the RFI that the term ``software'' is confusing, 
we are now further revising our potential future definition such that a 
dQM is a quality measure, organized as self-contained measure 
specification and code package, that uses one or more sources of health 
information that is captured and can be transmitted electronically via 
interoperable systems. We continue to note potential data sources for 
dQMs may include administrative systems, electronically submitted 
clinical assessment data, case

[[Page 46260]]

management systems, EHRs, laboratory systems, prescription drug 
monitoring programs (PDMPs), instruments (for example, medical devices 
and wearable devices), patient portals or applications (for example, 
for collection of patient-generated data such as a home blood pressure 
monitor, or patient-reported health data), health information exchanges 
(HIEs) or registries, and other sources. We are currently considering 
how eCQMs, which use EHR data, can be refined or repackaged to fit 
within the potential future dQM definition. While eCQMs meet the 
definition for dQMs in many respects, limitations in data standards, 
requirements, and technology have limited their interoperability. In 
the current state, there are multiple standards that must be supported 
(for example, Health Quality Measurement Format (HQMF) \363\ and 
Quality Reporting Document Architecture (QRDA) \364\) for eCQM data 
collection and reporting. Mapping EHR data can be challenging and 
burdensome for providers as there is often novel data collection 
occurring to support quality measurement. For example, eCQMs require 
steps to map data elements from the EHR to the appropriate format. 
Future dQMs would leverage interoperability standards to decrease 
mapping burden and align standards for quality measurement with 
interoperability standards used in other healthcare exchange methods.
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    \363\ https://www.hl7.org/implement/standards/product_brief.cfm?product_id=97.
    \364\ https://ecqi.healthit.gov/qrda.
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    We seek comment on this potential future refined definition of dQM 
and feedback on potential considerations or challenges related to non-
EHR data sources.
(3) Data Standardization Activities To Leverage and Advance Standards 
for Digital Data
    As noted in the CY 2022 PFS final rule (86 FR 65379), we are 
considering implementing eCQM quality reporting via FHIR-based APIs 
based on standardized, interoperable data. Advancing data 
standardization is a critical step for this implementation, and for 
long-term digital measurement strategies. Utilizing standardized data 
for EHR-based measurement (based on the FHIR standard) and aligning 
where possible with other interoperability requirements can reduce the 
data collection burden incurred by providers for the purpose of 
reporting quality measures. Utilizing standardized data also supports 
achieving the goals of transitioning to a fully digital quality 
measurement system identified in section IV.A.4.a. of this proposed 
rule, including provision of timely feedback, leveraging the same data 
for multiple use cases, and contributing to a learning health system.
    We intend to utilize standardized data for quality measurement as 
one use case of digital data in a learning health system. In a learning 
health system, standardized digital data can support multiple use 
cases, including quality measurement, quality improvement efforts, 
clinical decision support, research, and public health. We believe that 
standardization across data elements and data models is necessary to 
ensure data are accessible across use cases and enable the transmission 
of data through each stage of the health system's learning process. 
Standardized data and FHIR APIs are important for advancing 
interoperability; the goal is for data to be sent and received via 
trusted exchanges, and for patients to have access to their data. 
Operations activities (for example, prior authorization) are also 
dependent on standardized, interoperable data. Additionally, 
standardization is necessary across implementation guides, or rules for 
how a particular interoperability standard should be used,\365\ and 
across value sets that organize the specific terminologies and codes 
that define clinical concepts.\366\
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    \365\ Resource Implementation Guide--Content. Available at 
https://www.hl7.org/fhir/implementationguide.html.
    \366\ National Library of Medicine, Value Set Authority Center. 
Available at https://vsac.nlm.nih.gov/.
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    Commenters on the request for information in the CY 2022 PFS 
proposed rule encouraged the use of data elements for quality 
measurement that are consistent with ONC's USCDI standard (45 CFR 
170.213),\367\ where possible. We agree with this approach. To advance 
the use of standardized data, models, implementation guides, and value 
sets in quality measurement, we continue to focus on leveraging the 
interoperability data requirements for standardized APIs in certified 
health IT certified to certain certification criteria, set by the ONC 
21st Century Cures Act final rule and any future updates made in 
rulemaking, as a vehicle to support modernization of CMS quality 
measure reporting. These API requirements are being implemented as part 
of a series of updates to certified health IT (85 FR 84825), and 
include availability of data included in the USCDI via standards-based 
APIs. In the CY 2021 PFS final rule, we finalized that eligible 
clinicians and eligible hospitals and CAHs participating in MIPS and 
the Medicare Promoting Interoperability Program, respectively, must 
transition to use of certified technology updated consistent with the 
2015 Edition Cures Update by 2023 (85 FR 84825). We aim to align with 
these standardized data requirements as the basis for data used in 
quality measurement.
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    \367\ https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi.
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    We are collaborating with Federal agencies to define and prioritize 
additional data standardization needs and develop consensus with 
federal partners on recommendations for future versions of the USCDI. 
We are also directly collaborating with ONC to build requirements to 
support data standardization and alignment with requirements for 
quality measurement. ONC recently launched the USCDI+ initiative 
focused on supporting identification and establishment of domain 
specific datasets that build on the core USCDI foundation.\368\ A 
USCDI+ quality measurement domain currently being explored would 
support defining additional data specifications for quality measurement 
that harmonize, where possible, with other Federal agency data needs 
and inform supplemental standards necessary to support quality 
measurement.
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    \368\ USCDI+. Available at https://www.healthit.gov/topic/interoperability/uscdi-plus.
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    We also received feedback on the request for information in the CY 
2022 PFS proposed rule that the use of Health Level Seven (HL7[supreg]) 
Implementation Guides should be foundational to FHIR measure reporting. 
To advance implementation of standardized data, we continue to 
collaborate with consensus standards-setting bodies such as HL7. We are 
considering how best to leverage existing implementation guides that 
are routinely updated and maintained by HL7 to define data standards 
and exchange mechanisms for FHIR-based dQMs, in a fashion that supports 
the learning health system and alignment across use cases, including 
the following existing HL7 Implementation Guides:
    <bullet> U.S. Core Implementation Guide; \369\
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    \369\ HL7 FHIR US Core Implementation Guide. Available at http://hl7.org/fhir/us/core/.
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    <bullet> Quality Improvement Core (QI Core) Implementation Guide; 
\370\
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    \370\ HL7 FHIR QI Core Implementation Guide. Available at http://hl7.org/fhir/us/qicore/.
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    <bullet> Data Exchange for Quality Measures (DEQM) Implementation 
Guide; \371\ and
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    \371\ HL7 Data Exchange For Quality Measures. Available at 
http://hl7.org/fhir/us/davinci-deqm/.
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    <bullet> Quality Measure (QM) Implementation Guide.\372\
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    \372\ HL7 Quality Measure Implementation Guide. Available at 
http://hl7.org/fhir/us/cqfmeasures/.

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[[Page 46261]]

    We are also considering what, if any, additional CMS-specific 
implementation guides may be necessary to support future digital 
quality measurement such as guidance on aggregation mechanisms for 
reporting.
    We recognize the importance of considering how implementation 
guides used across quality measurement and other use cases (for 
example, public health reporting, clinical decision support) work 
together to support a learning health system. For example, the Clinical 
Guidelines (CPG) Implementation Guide \373\ connects computable 
guidelines, clinical decision support, quality reporting, and case 
reporting. The mechanisms for reporting across use cases are also 
critical to consider, as each time a different mechanism for reporting 
is needed across different use cases, it creates more burden. We are 
collaborating closely with federal partners, such as the Centers for 
Disease Control and Prevention (CDC), to align where possible.
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    \373\ HL7 FHIR Clinical Guidelines Implementation Guide. 
Available at http://hl7.org/fhir/uv/cpg/.
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    We believe developing appropriately defined implementation guides 
will be a key component of supporting standardized FHIR APIs that 
enable access to standardized data elements for particular use cases, 
such as quality measurement.
    We seek comment on the specific Implementation Guides noted 
previously, additional Implementation Guides we should consider, and 
other data and reporting components (for example, data vocabulary/
terminology, alignment with other types of reporting) where 
standardization should be considered to advance data standardization 
for a learning health system.
(4) Approaches To Achieve FHIR eCQM Reporting
    We previously noted in the CY 2022 PFS final rule (86 FR 65379) the 
activities we are conducting to begin structuring and reporting eCQMs 
using FHIR. eCQMs are a subset of dQMs. We consider the transition to 
FHIR-based eCQM reporting the first step to dQM reporting, and a 
potential model for how future digital reporting can occur.
    To support the transition, we continue to undertake and consider 
activities necessary for reporting of FHIR-based eCQMs and future dQMs:
    <bullet> In the near term, we plan to continue to convert current 
Quality Data Model (QDM)-based eCQMs to the FHIR standard and test the 
implementation of measures re-specified to FHIR and submission of data 
elements represented in FHIR through ongoing HL7 Connectathons.
    <bullet> In the near term, we also plan to develop a unified CMS 
FHIR receiving system. This system would allow for a singular point of 
data receipt to be used for quality reporting requirements, and 
modernization of programmatic data receiving systems to leverage 
opportunities related to digital data.
    <bullet> We are committed to working with implementers and partners 
to optimize interoperable data exchange to support FHIR-based eCQM 
reporting (for example, via FHIR APIs) and eventually other digital 
quality measures, while ensuring solutions and implementation that 
require patients to engage with technology also support health equity.
    <bullet> In the near term, we plan to identify opportunities for 
the public to provide feedback on FHIR-based measure specifications 
prior to implementation, such as during measure development/conversion 
activities.
    <bullet> We also plan to identify opportunities for collaboration 
with vendors and implementers via systems testing of FHIR-based eCQM 
reporting to ensure involvement in systems development.
    <bullet> Finally, we are exploring venues for continued feedback on 
CMS future measurement direction and data aggregation approaches in 
anticipation of FHIR-based API reporting of eCQMs.
    <bullet> To support both near term FHIR-based eCQMs and other 
future dQMs, as noted in section IV.A.4.a. of this proposed rule, we 
intend to continue engaging with standards development organizations to 
advance and maintain implementation guides to support the FHIR standard 
and API reporting of quality measures.
    <bullet> We also anticipate that prior to the implementation of any 
mandatory FHIR-based eCQM reporting requirements within our quality 
programs, it would be necessary to undertake voluntary reporting of 
FHIR-based eCQMs to allow time to learn and enhance systems and 
processes, both internally and among providers and vendors.
    We also continue to consider how best to leverage the ONC 
interoperability certification criteria related to implementing FHIR 
API technology to access and electronically transmit interoperable data 
for quality measurement. Based on feedback on the CY 2022 PFS proposed 
rule request for information, many supported the use of FHIR APIs, 
while others expressed concern around infrastructure readiness. We 
continue to explore how to leverage FHIR APIs to decrease reporting 
burden and support implementor readiness. We seek comment on approaches 
to optimize data flows for quality measurement to retrieve data from 
EHRs via FHIR APIs, and to combine data needed for measure score 
calculation for measures that require aggregating data across multiple 
providers (for example, risk-adjusted outcome measures) and multiple 
data sources (for example, hybrid claims-EHR measures). We are 
interested in data flows that support using the same data for 
measurement and to provide feedback to providers at multiple levels of 
accountability, such as at the individual clinician, group, accountable 
care organization and health plan levels, as are used for patient care 
and other use cases (for example, public health reporting).
    We seek comment on additional venues to engage with implementors 
during the transition to digital quality measurement, and other 
critical considerations during the transition. We also seek comment on 
data flow options to support FHIR-based eCQM reporting.
(5) Solicitation of Comments
    As noted previously, we seek input on the following:
    <bullet> Refined potential future Definition of dQMs. We are 
seeking feedback on the following as described in section IV.A.4.b. of 
this proposed rule:
    ++ Do you have feedback on the potential refined definition of 
digital quality measures (dQMs)?
    ++ Do you have feedback on potential considerations or challenges 
related to non-EHR data sources?
    <bullet> Data Standardization Activities to Leverage and Advance 
Standards for Digital Data. We are seeking feedback on the following as 
described in section IV.A.4.c. of this proposed rule:
    ++ Do you have feedback on the specific implementation guides we 
are considering, additional FHIR implementation guides we should 
consider, or other data and reporting components where standardization 
should be considered to advance data standardization for a learning 
health system?
    <bullet> Approaches to Achieve FHIR eCQM Reporting. We are seeking 
feedback on the following as described in section IV.A.4.d. of this 
proposed rule:
    ++ Are there additional venues to engage with implementors during 
the transition to digital quality measurement?
    ++ What data flow options should we consider for FHIR-based eCQM 
reporting, including retrieving data from EHRs via FHIR APIs and other 
mechanisms?

[[Page 46262]]

    ++ Are there other critical considerations during the transition?

B. Advancing the Trusted Exchange Framework and Common Agreement 
(TEFCA)--Request for Information

    Section 4003(b) of the 21st Century Cures Act (Cures Act) (Pub. L. 
114-255, enacted on December 13, 2016), amended section 3001(c) of the 
Public Health Service Act (42 U.S.C. 300jj-11(c)), and required HHS to 
take steps to advance interoperability for the purposes of ensuring 
full network-to-network exchange of health information. Specifically, 
Congress directed the National Coordinator to ``develop or support a 
trusted exchange framework, including a common agreement among health 
information networks nationally.'' Since the enactment of the Cures 
Act, HHS has pursued development of a Trusted Exchange Framework and 
Common Agreement (TEFCA). ONC's goals for TEFCA are as follows:
    Goal 1: Establish a universal policy and technical floor for 
nationwide interoperability.
    Goal 2: Simplify connectivity for organizations to securely 
exchange information to improve patient care, enhance the welfare of 
populations, and generate health care value.
    Goal 3: Enable individuals to gather their health care 
information.\374\
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    \374\ See https://www.healthit.gov/buzz-blog/interoperability/321tefca-is-go-for-launch.
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    On January 18, 2022, ONC announced a significant TEFCA milestone by 
releasing the Trusted Exchange Framework \375\ and Common Agreement 
Version 1.\376\ The Trusted Exchange Framework is a set of non-binding 
principles for health information exchange, and the Common Agreement 
for Nationwide Health Information Interoperability Version 1 (also 
referred to as Common Agreement) is a contract that advances those 
principles. The Common Agreement and the incorporated by reference 
Qualified Health Information Network (QHIN) Technical Framework Version 
1 (QTF) \377\ establish the technical infrastructure model and 
governing approach for different health information networks and their 
users to securely share clinical information with each other, all under 
commonly agreed to terms. The Common Agreement is a legal contract that 
QHINs \378\ sign with the ONC Recognized Coordinating Entity 
(RCE),\379\ a private-sector entity that implements the Common 
Agreement and ensures QHINs comply with its terms.
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    \375\ Trusted Exchange Framework (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf.
    \376\ Common Agreement for Nationwide Health Information 
Interoperability Version 1 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \377\ Qualified Health Information Network (QHIN) Technical 
Framework (QTF) Version 1.0 (Jan. 2022), https://rce.sequoiaproject.org/wp-content/uploads/2022/01/QTF_0122.pdf.
    \378\ The Common Agreement defines a QHIN as ``to the extent 
permitted by applicable SOP(s), a Health Information Network that is 
a U.S. Entity that has been Designated by the RCE and is a party to 
the Common Agreement countersigned by the RCE.'' See Common 
Agreement for Nationwide Health Information Interoperability Version 
1, at 10 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-.
    \379\ In August 2019, ONC awarded a cooperative agreement to The 
Sequoia Project to serve as the initial RCE. The RCE will 
operationalize and enforce the Common Agreement, oversee QHIN-
facilitated network operations, and ensure compliance by 
participating QHINs. The RCE will also engage interested parties to 
create a roadmap for expanding interoperability over time. See ONC 
Awards The Sequoia Project a Cooperative Agreement for the Trusted 
Exchange Framework and Common Agreement to Support Advancing 
Nationwide Interoperability of Electronic Health Information 
(September 3, 2019), https://sequoiaproject.org/onc-awards-the-sequoia-project-a-cooperative-agreement-for-the-trusted-exchange-framework-and-common-agreement-to-support-advancing-nationwide-interoperability-of-electronic-health-information.
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    The technical and policy architecture of how exchange occurs under 
TEFCA follows a network-of-networks structure, which allows for 
connections at different levels and is inclusive of many different 
types of entities at those different levels, such as health information 
networks, care practices, hospitals, public health agencies, and 
Individual Access Services (IAS) \380\ Providers.\381\ QHINs connect 
directly to each other to facilitate nationwide interoperability, and 
each QHIN can connect Participants, which can connect 
Subparticipants.\382\ Compared to most nationwide exchange today, the 
Common Agreement includes an expanded set of Exchange Purposes beyond 
Treatment to include Individual Access Services, Payment, Health Care 
Operations, Public Health, and Government Benefits Determination 
\383\--all built upon common technical and policy requirements to meet 
key needs of the U.S. health care system. This flexible structure 
allows interested parties to participate in the way that makes most 
sense for them, while supporting simplified, seamless exchange.
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    \380\ The Common Agreement defines Individual Access Services 
(IAS) as ``with respect to the Exchange Purposes definition, the 
services provided utilizing the Connectivity Services, to the extent 
consistent with Applicable Law, to an Individual with whom the QHIN, 
Participant, or Subparticipant has a Direct Relationship to satisfy 
that Individual's ability to access, inspect, or obtain a copy of 
that Individual's Required Information that is then maintained by or 
for any QHIN, Participant, or Subparticipant.'' See Common Agreement 
for Nationwide Health Information Interoperability Version 1, at 7 
(Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \381\ The Common Agreement defines ``IAS Provider'' as: ``Each 
QHIN, Participant, and Subparticipant that offers Individual Access 
Services.'' See Common Agreement for Nationwide Health Information 
Interoperability Version 1, at 7 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \382\ For the Common Agreement definitions of QHIN, Participant, 
and Subparticipant, see Common Agreement for Nationwide Health 
Information Interoperability Version 1, at 8-12 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \383\ For the Common Agreement definitions of Payment, Health 
Care Operations, Public Health, and Government Benefits 
Determination, see Common Agreement for Nationwide Health 
Information Interoperability Version 1, at 6-10 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
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    The QTF,\384\ which was developed and released by the RCE, 
describes the functional and technical requirements that a Health 
Information Network (HIN) \385\ must fulfill to serve as a QHIN under 
the Common Agreement. The QTF specifies the technical underpinnings for 
QHIN-to-QHIN exchange and certain other responsibilities described in 
the Common Agreement. The technical and functional requirements 
described in the QTF enable different types of information exchange, 
including querying and message delivery across participating entities.
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    \384\ Qualified Health Information Network (QHIN) Technical 
Framework (QTF) Version 1.0 (Jan. 2022), https://rce.sequoiaproject.org/wp-content/uploads/2022/01/QTF_0122.pdf.
    \385\ ``Health Information Network'' under TEFCA has the meaning 
assigned to the term ``Health Information Network or Health 
Information Exchange'' in the information blocking regulations at 45 
CFR 171.102.
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    In 2022, prospective QHINs are anticipated to begin signing the 
Common Agreement and applying for designation. The RCE will then begin 
onboarding and designating QHINs to share information. In 2023, HHS 
expects interested parties across the care continuum to have increasing 
opportunities to enable exchange under TEFCA. Specifically, this would 
mean such interested parties would be: (1) signatories to either the 
Common Agreement or an agreement that meets the flow-down requirements 
of the Common Agreement (called a Framework Agreement \386\ under the

[[Page 46263]]

Common Agreement), (2) in good standing (that is, not suspended) under 
that agreement, and (3) enabling secure, bi-directional exchange of 
information to occur, in production. TEFCA is expected to give 
individuals and entities easier, more efficient, access to more health 
information while requiring strong privacy and security protections.
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    \386\ The Common Agreement defines ``Framework Agreement(s)'' 
as: ``any one or combination of the Common Agreement, a Participant-
QHIN Agreement, a Participant-Subparticipant Agreement, or a 
Downstream Subparticipant Agreement, as applicable.'' See Common 
Agreement for Nationwide Health Information Interoperability Version 
1, at 6 (Jan. 2022) https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
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    We believe that exchange of health information enabled by the 
Common Agreement can advance CMS policy and program objectives related 
to care coordination, cost efficiency, and patient-centeredness in a 
variety of ways. We also believe that CMS policy and programs can help 
to accelerate nationwide connectivity through TEFCA by health care 
providers as well as other interested parties.
    As discussed in section IV.A.10.c.(4)(e) of this proposed rule, we 
are proposing to add a new Enabling Exchange Under TEFCA measure in the 
Promoting Interoperability performance category. This proposed measure 
would provide eligible clinicians with the opportunity to earn credit 
for the Health Information Exchange objective if they: are a signatory 
to a ``Framework Agreement'' as that term is defined in the Common 
Agreement; enable secure, bi-directional exchange of information to 
occur for all unique patients of eligible clinicians, and all unique 
patient records stored or maintained in the EHR; and use the functions 
of CEHRT to support bi-directional exchange.
    In addition to this proposal, we are considering other ways that 
available CMS policy and program levers can advance information 
exchange under TEFCA. For instance, similar to the proposal in the 
current rule, there may be opportunities for CMS to incentivize 
exchange under TEFCA through other programs that incentivize high 
quality care, or through program features in value-based payment models 
that encourage certain activities that can improve care delivery.
    In addition to programs focused on health care providers, we are 
interested in opportunities to encourage exchange under TEFCA through 
CMS regulations for certain health care payers, including Medicare 
Advantage, Medicaid Managed Care, and CHIP issuers. For instance, we 
believe there may be opportunities to encourage information exchange 
under TEFCA to support recently finalized requirements for these payers 
to make information available to patients and to make patient 
information available to other payers as beneficiaries transition 
between plans in the ``Medicare and Medicaid Programs; Patient 
Protection and Affordable Care Act; Interoperability and Patient Access 
for Medicare Advantage Organization and Medicaid Managed Care Plans, 
State Medicaid Agencies, CHIP Agencies and CHIP Managed Care Entities, 
Issuers of Qualified Health Plans on the Federally-Facilitated 
Exchanges, and Health Care Providers'' final rule (85 FR 25510). 
Finally, we are considering future opportunities to encourage 
information exchange under TEFCA for payment and operations activities 
such as submission of clinical documentation to support claims 
adjudication and prior authorization processes.
    We are requesting input from the public on the ideas described 
previously and related concepts for future exploration, as well as the 
following questions:
    <bullet> What are the most important use cases for different groups 
that could be enabled through widespread information exchange under 
TEFCA? What key benefits would be associated with effectively 
implementing these use cases, such as improved care coordination, 
reduced burden, or greater efficiency in care delivery?
    <bullet> What are key ways that the capabilities of TEFCA can help 
to advance the goals of CMS programs? Should CMS explore policy and 
program mechanisms to encourage exchange between different interested 
parties, including those in rural areas, under TEFCA? In addition to 
the ideas discussed previously, are there other programs CMS should 
consider in order to advance exchange under TEFCA?
    <bullet> How should CMS approach incentivizing or encouraging 
information exchange under TEFCA through CMS programs? Under what 
conditions would it be appropriate to require information exchange 
under TEFCA by interested parties for specific use cases?
    <bullet> What concerns do commenters have about enabling exchange 
under TEFCA? Could enabling exchange under TEFCA increase burden for 
some interested parties? Are there other financial or technical 
barriers to enabling exchange under TEFCA? If so, what could CMS do to 
reduce these barriers?

C. Definitions

    At Sec.  414.1305, we are proposing revisions to the definitions of 
the following terms:
    <bullet> Multispecialty group;
    <bullet> Single specialty group;
    <bullet> Facility-based group;
    <bullet> Facility-based MIPS eligible clinician
    <bullet> High priority measure; and
    <bullet> Third party intermediary.
    These terms and definitions are discussed in detail in the relevant 
sections of this proposed rule.
7. Transforming MIPS: MVP Strategy
a. MVP Vision Overview
    We are moving to MIPS Value Pathways (MVPs) to improve value, 
reduce burden, inform patient choice in selecting clinicians, and 
reduce barriers to participation in Alternative Payment Models (APMs). 
We intend to promote high value care by connecting performance on cost, 
quality, and patient experience of care to payment. We believe the MVP 
framework will move MIPS forward on the path to value by connecting the 
MIPS performance categories, better informing and empowering patients 
to make decisions about their healthcare, and by helping clinicians to 
achieve better outcomes using robust and accessible healthcare data and 
interoperability. The MVP framework aims to reduce complexity and 
burden, move towards more meaningful measurement, capture the patient 
voice, and move to higher value care. We intend for MVPs to drive value 
and help clinicians and practices prepare to take on and manage 
financial risk, for example, through Advanced APMs, as they build out 
their quality infrastructure components and gain experience with cost 
measurement. We envision that MVPs, in which there is aligned 
measurement of quality of care and cost, continuous improvement and 
innovation within the practice, and efficient management and transfers 
of information, will help clinicians deliver higher value care and 
remove barriers to APM participation. Combining linked performance 
measures and activities with more standardization and focused reporting 
of meaningful measures in MVPs will, we believe, produce data that can 
better assist patients in comparing clinician performance and in 
selecting clinicians. Such data can also assist clinicians in making 
care improvements and making appropriate specialist referrals. As more 
clinicians have applicable MVPs available, the performance data 
available to patients will expand, and in the future, information on 
specialists in

[[Page 46264]]

multispecialty groups will increase on our Compare Tools, enabling 
patients to make more informed choices for their care. MVPs will be 
available for voluntary reporting beginning with the CY 2023 MIPS 
performance period, and we intend for MVPs to become the only method to 
participate in MIPS in future years, although we have not yet finalized 
the timing for the sunset of traditional MIPS.\387\
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    \387\ 42 CFR 414.1365(a)(1).
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    We are continuing to explore opportunities to advance health equity 
across all CMS programs and policies. The CMS Office of Minority Health 
released Paving the Way to Equity: A Progress Report in 2021, which 
describes the CMS Equity Plan for Medicare and progress from 2015 to 
2021.\388\ The progress report considers emerging opportunities to 
build on progress with a focus on CMS current strategic initiatives, 
HHS priorities, and areas in which CMS quality improvement efforts will 
move forward.\389\ MIPS improvement activities that support and 
recognize impactful disparities reduction efforts are acknowledged in 
the CMS Equity Progress Report.\390\ More recently, on April 22, 2022, 
the CMS Office of Minority Health released the CMS Framework for Health 
Equity,\391\ which updates the CMS Equity Plan with an enhanced and 
more comprehensive 10-year approach to further embed health equity 
across CMS programs including Medicare, Medicaid, CHIP, and the Health 
Insurance Marketplaces. This CMS Framework for Health Equity outlines 
five priorities: (1) Expand the collection, reporting and analysis of 
standardized data; (2) Assess causes of disparities within CMS 
programs, and address inequities in policies and operations to close 
gaps; (3) Build capacity of health care organizations and the workforce 
to reduce health and health care disparities; (4) Advance language 
access, health literacy, and the provision of culturally tailored 
services; and (5) Increase all forms of accessibility to health care 
services and coverage.\392\ We intend to use this health equity 
framework across CMS to design, implement, and operationalize policies 
to support health for all people served by our programs, eliminating 
avoidable differences in health outcomes experienced by people who are 
disadvantaged or underserved, and providing the care and support that 
our beneficiaries need to thrive.
---------------------------------------------------------------------------

    \388\ CMS, Paving the Way to Equity: A Progress Report (2015-
2021) (2021) (hereinafter the ``CMS Equity Progress Report''), 
available at https://www.cms.gov/sites/default/files/2021-01/Paving%20the%20Way%20to%20Equity%20CMS%20OMH%20Progress%20Report.pdf;
 CMS, CMS Equity Plan for Improving Quality in Medicare (Sep. 2015), 
(hereinafter the ``CMS Equity Plan'') available at https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMS_EquityPlanforMedicare_090615.pdf.
    \389\ Ibid., at 2-3.
    \390\ CMS Equity Progress Report at 28.
    \391\ CMS, CMS Framework for Health Equity, available at https://www.cms.gov/sites/default/files/2022-04/CMS%20Framework%20for%20Health%20Equity_2022%2004%2006.pdf.
    \392\ Ibid., at 10-11.
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    We are considering ways that we can advance health equity via the 
Quality Payment Program. As we implement MVPs, we are considering how 
best to further the five priorities of the CMS Framework for Health 
Equity. We intend for both MVPs and APMs to advance health equity and 
increase the value of health care for all as we leverage improvement 
activities, quality measure performance data, and public reporting. We 
anticipate that MVPs and APMs will have greater impact on health equity 
as participation grows. The CMS Center for Medicare & Medicaid 
Innovation's (CMMI) strategy refresh white paper \393\ includes 
advancing health equity as one of five objectives that guide CMMI's 
models, priorities, and assessment of impact.\394\ In this CY 2023 PFS 
proposed rule we consider approaches for advancing health equity in 
MIPS in section IV.A.10.c.(1)(b) through IV.A.10.c.(1)(d) of this 
proposed rule. See section IV.A.10.c.(1)(c)(i) of this proposed rule 
regarding potential next steps related to a proposed social 
determinants of health quality measure. See sections IV.A.10.c.(1)(d) 
and IV.A.10.h.(3) for our request for comment on the inclusion of a 
health equity measure in MIPS and MIPS Compare Tool public reporting in 
the future.
---------------------------------------------------------------------------

    \393\ CMS, Innovation Center Strategy White Refresh (Oct. 2021), 
available at https://innovation.cms.gov/strategic-direction-
whitepaper.
    \394\ Ibid., at 18-21.
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    We presented our MVP vision and guiding principles in the CY 2021 
PFS final rule (85 FR 84844 through 84845). We intend for MVP 
implementation to drive value, obtain comparative performance data, and 
elevate the patient voice while reducing clinician burden. We strive to 
achieve meaningful performance measurement, burden reduction, scoring 
equity, and increased value. The MVP framework was discussed in the CY 
2020 and the CY 2021 PFS proposed rules (84 FR 40732 through 40734, and 
85 FR 50279, respectively) and CY 2021 PFS final rule (85 FR 84844 
through 84845). Our MVP framework calls for linking the quality, cost, 
and improvement activities performance categories, as well as a 
foundation of required reporting for the Promoting Interoperability 
performance category and population health claims-based quality 
performance category measures. We continue to consider how to best 
implement an MVP portfolio that balances our MVP goals for 
transformative change and our five MVP guiding principles as discussed 
in the CY 2021 PFS final rule (85 FR 84845 through 84546) within 
current CMS and clinician practice capabilities. We previously 
described in the CY 2022 PFS proposed rule (86 FR 39354) how we are 
beginning to implement the MVP guiding principles, and in the CY 2019 
PFS proposed rule (83 FR 40732 through 40733) we discussed how MVPs can 
help ready clinicians for APM participation. We finalized policies 
around MVP reporting by subgroups (CY 2022 PFS final rule, 86 FR 654398 
through 65401) that allow specialty clinicians to report meaningful 
performance information to MIPS and that better represents the non-
primary care, specialty services provided. We also continue to develop 
MVP subgroup reporting policies and propose a modification of the 
definition of single specialty and multispecialty group to include 
claims as the data source used in the specialty determination (see 
section IV.A.8.e.(2) of this proposed rule). We continue to contemplate 
how to support specialty clinician reporting for APM participants who 
report to MIPS through the APM Performance Pathway (APP) and 
potentially MVPs. See CY 2021 PFS final rule (85 FR 84860) and section 
IV.A.9.b. of this proposed rule for details on the APP. We are also 
considering how MVPs should evolve to better promote higher value care 
and APM participation by both primary care and specialist clinicians.
b. MVPs and APM Participant Reporting Request for Information
(1) Overview
    MVPs and APMs share a goal of meaningful performance measurement 
and burden reduction, along with objectives of scoring equity and 
advancing value. Interested parties have requested more options for 
meaningful specialty clinician participation within both the MVP 
framework and APMs (85 FR 84845 and 86 FR 65391). We have developed MVP 
and subgroup reporting policies to provide meaningful MIPS performance 
measurement for both primary care and specialist clinicians (86 FR 
65414). We received requests from interested parties to further define 
the relationship between MVPs and

[[Page 46265]]

APMs and previously requested public feedback on this topic (86 FR 
39354 and 39355). We sought public feedback via a request for comment 
in the CY 2022 PFS proposed rule on innovative approaches to achieving 
our desired MVP goals to improve value, reduce burden, help patients 
compare clinician performance, and reduce barriers to joining APMs (86 
FR 39353 and 39354). We discussed how to best coordinate and align MVPs 
and APMs and noted we would continue to explore the ideal MVP 
relationship with APMs to drive value (86 FR 39354). While we did not 
summarize the responses to this request for comment in the CY 2022 PFS 
final rule, several commenters requested to see close alignment between 
MVPs and APMs. Some commenters specifically suggested using APM 
measures in MVPs and others suggested we adopt a flexible MVP framework 
similar to APMs in that it centers on quality improvement, efficient 
resource use, patient reported outcomes and satisfaction, and enhanced 
technology to care for patients with specific medical conditions. A few 
commenters referred to challenges for specialists in reporting quality 
performance data under MIPS and their respective APM separately, 
resulting in additional reporting burden. We are considering what close 
alignment between MVPs and APMs would mean and welcome additional 
feedback as more MVPs are developed. We seek public comments on 
addressing the challenges commenters noted regarding specialist 
reporting of quality performance data and outline concepts in this 
section of this proposed rule.
    We recognize a gap in the availability of specialty clinician 
performance data for APM participants to inform patient selection of 
clinicians based on clinician quality and value improvement data. Of 
the 933,547 MIPS eligible clinicians receiving a MIPS payment 
adjustment for the 2020 performance year, 398,719 participated in MIPS 
as APM participants, a significant 42.7 percent (qpp.cms.gov).\395\
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    \395\ QUALITY PAYMENT PROGRAM PARTICIPATION IN 2020: RESULTS AT-
A-GLANCE, available at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1783/QPP%202020%20Participation%20Results%20Infographic.pdf.
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    We acknowledge the 2022-2024 APM Performance Pathway (APP) measure 
set (86 FR 65431) may not fully represent the services provided and the 
patients treated by all clinician types in a group, for example, when a 
group includes multiple specialties, such as emergency medicine, 
orthopedic surgery, and neurology in the Medicare program. We expect 
many clinicians who are part of APMs and do not attain QP status will 
report for MIPS using the APP. We seek ideas for how we could obtain 
more robust reporting of both primary care and specialty care 
performance measurement information from APM participants. We would 
like to consider policy ideas that would encourage the reporting of 
specialty services performance information in addition to the APP, for 
example and to the extent feasible, by extending APP scoring policies 
for the cost and improvement activities performance categories outside 
the APP, finding a way to roll MVP quality measure performance data 
into the APP, or by some other method. These policy options should be 
considered in conjunction with the proposals in sections IV.A.8.e.(3) 
and IV.A.9.b. of this proposed rule where we request input on policies 
to formalize subgroup registration and reporting of the APP.
    As we move forward with MVP implementation, we continue to seek 
feedback on ways to better align clinician experience between MVPs and 
APMs, and to ensure that MVP reporting serves as a bridge to APM 
participation. While we believe that MVPs will serve an important role 
in furthering specialty measurement, we also believe that primary care 
measurement will be integral to MIPS. We envision MVP reporting to 
complement APP reporting such that it will enhance performance 
measurement and available information while minimizing additional 
burden. We look for feedback on the benefits and disadvantages of 
various approaches, keeping in mind our goals of enhancing specialty 
specific performance measurement and available information for patients 
while also minimizing complexity where possible.
    We continue to solicit input as we consider solutions, the 
direction of our MVP framework, and its intersection with APMs.
(2) Solicitation of Comments
    We are seeking feedback on the following as described in section 
IV.A.7.b.(1) of this proposed rule:
    <bullet> How should we use MVPs to obtain more meaningful 
performance data from both primary care and specialty clinicians and 
drive improvements for APP reporters and APM participants? What are the 
associated pros and cons for the suggested solution(s)?
    <bullet> How should we better align clinician experience with MVPs 
and APMs, and ensure that MVP reporting serves as a bridge to APM 
participation?
    <bullet> How should we best limit burden and develop scoring 
policies for APM participants in multispecialty groups who choose to 
participate in MVPs and report specialty care performance data? Should 
we require APP participants to focus on those clinicians who work in 
the associated quality measurement clinical area and require subgroup 
reporting of relevant MVPs for others? Should we develop a process for 
a composite score that incorporates both APP measures and other MVP 
specialty measures?
    <bullet> What other policy options for MIPS specialty clinician 
performance data reporting should we consider?
8. MVP Development and Reporting Requirements
a. MVP Development
(1) Development of New MVPs
    We intend to develop MVPs, to the extent feasible and appropriate, 
by including interested parties in the process (85 FR 84849 and 84850). 
For a description of the current process for developing new MVPs, we 
refer readers to the CY 2021 PFS final rule (85 FR 84849 through 
84856). Commenters suggested that we work in tandem with clinicians and 
specialty societies to develop MVPs (84 FR 62948) and have supported 
the development of MVPs with robust input from interested parties and 
feedback opportunities. While this process has provided value in the 
development of meaningful MVPs for the program, we agree and believe 
that we should also consider feedback during the MVP development 
process from a wide range of interested parties and the general public 
before the notice and comment rulemaking process. By creating the 
opportunity for feedback earlier in the MVP development process, we 
hope to receive a broader set of perspectives on a draft MVP, including 
the perspectives of: patients, patient advocates, practices that serve 
underserved and rural areas, specialty organizations, health systems, 
and the general public. We believe it is important to receive feedback 
from interested parties and the general public early in the MVP 
development process to ensure the MVPs that are developed are 
meaningful and resonate with clinicians- including those who serve 
patients in small practices, or in rural or underserved areas where 
patient populations may face health equity barriers. Clinicians may use 
the results of MVP reporting results to determine areas of practice 
improvement, and identify gaps in clinical outcomes. In addition, 
patients may leverage the granular data ascertained through MVP 
reporting to make informed decisions

[[Page 46266]]

when selecting a clinician or specialist to participate in their care.
    Therefore, we propose to modify the MVP development process such 
that we would evaluate a submitted candidate MVP through the MVP 
development process, and if we determine it is ``ready'' for feedback, 
we would post a draft version of the submitted candidate MVP on the 
Quality Payment Program website (https://qpp.cms.gov/) and solicit 
feedback for a 30-day period. Interested parties and the general public 
would have the opportunity to submit feedback on the candidate MVP for 
CMS's consideration through an email inbox. We would review the 
feedback received, and determine if any changes should be made to the 
candidate MVP prior to potentially including the MVP in a notice of 
proposed rulemaking. If we determine changes should be made to the 
candidate MVP, we would not notify the interested parties who 
originally submitted the candidate MVP for CMS consideration in advance 
of the rulemaking process. We request comments on this proposal.
(2) MVP Maintenance Process and Engagement With Interested Parties
    In the CY 2022 PFS final rule (86 FR 65410), we finalized an annual 
maintenance process for MVPs that were previously finalized through 
notice and comment rulemaking. We established a process for soliciting 
recommendations from interested parties for potential updates to 
finalized MVPs. As part of this process, beginning in January of the 
year prior to the performance period, interested parties may submit 
recommendations to revise an MVP that was previously finalized through 
rulemaking. Recommendations from interested parties will be accepted on 
a rolling basis throughout the year. We stated that we would be unable 
to communicate with interested parties as to whether their 
recommendations were accepted ahead of rulemaking, and that we would 
ultimately determine whether updates to the established MVPs should be 
made (86 FR 65410). We stated that we would consult with the interested 
parties who originally nominated the MVP about any publicly recommended 
changes to the MVP (86 FR 65410).
    Similar to the proposed updates to the process for developing new 
MVPs, discussed in section IV.A.8.a.(1) of this proposed rule, and for 
the same reasons, we believe that we should also consider feedback 
during the MVP maintenance process, from a wide range of interested 
parties and the general public, prior to proposing changes to an 
existing MVP through the notice and comment rulemaking process. 
Therefore, we propose to modify the MVP maintenance process such that 
interested parties and the general public would be able to submit their 
recommendations for potential revisions to established MVPs on a 
rolling basis throughout the year. We would then review the submitted 
recommendations and determine whether any are potentially feasible and 
appropriate. If we identify any submitted recommendations that are 
potentially feasible and appropriate, we would host a public facing 
webinar, open to interested parties and the general public through 
which they may offer their feedback on the potential revisions we have 
identified. We would publish details related to the timing and 
registration process for the webinar through our Quality Payment 
Program Listserv. These proposed changes to the MVP maintenance process 
would enable us to receive a wide range of perspectives on potential 
revisions to MVPs earlier in the maintenance process, which we believe 
is important in developing MVPs that are meaningful to clinicians, 
patients, and the general public. If we decide to make any revisions to 
an established MVP based on the recommendations submitted, we would 
adopt such revisions through notice and comment rulemaking. We request 
comments on this proposal.
(3) Proposed Revisions to Previously Finalized MVPs
    In the CY 2022 PFS final rule (86 FR 65998 through 66031), we 
finalized seven MVPs that will be available for reporting beginning 
with the CY 2023 performance period/CY 2025 MIPS payment year. The 
seven MVPs are as follows: Advancing Rheumatology Patient Care; 
Coordinating Stroke Care to Promote Prevention and Cultivate Positive 
Outcomes; Advancing Care for Heart Disease; Optimizing Chronic Disease 
Management; Adopting Best Practices and Promoting Patient Safety within 
Emergency Medicine; Improving Care for Lower Extremity Joint Repair; 
and Patient Safety and Support of Positive Experiences with Anesthesia. 
We are proposing revisions to these seven MVPs based on the proposed 
removals of certain activities from the improvement activities 
inventory and the addition of other relevant existing quality measures 
for MVP participants to select from. We refer readers to Appendix 3: 
MVP Inventory of this proposed rule for these proposed revisions and 
our explanation of why we believe these changes are appropriate.
(4) Proposed New MVPs
    Through our established development processes for new MVPs (85 FR 
84849 through 84856) we aim to gradually develop MVPs that are relevant 
and meaningful for all clinicians who participate in MIPs. We are 
proposing five new MVPs:
    <bullet> Advancing Cancer Care;
    <bullet> Optimal Care for Kidney Health;
    <bullet> Optimal Care for Neurological Conditions;
    <bullet> Supportive Care for Cognitive-Based Neurological 
Conditions; and
    <bullet> Promoting Wellness.
    We continue to develop MVPs based on needs and priorities, as 
described in the MVP Needs and Priorities document at https://qpp-cm-prod-content.s3.amazonaws.com/uploads/1803/MIPS%20Value%20Pathways%20(MVPs)%20Development%20Resources.zip. The 
identification of priorities includes consideration of the various 
specialties and subspecialties that currently participate in MIPS, and 
identification of priorities of the Biden-Harris Administration, 
Department, and Agency. For example, in support of the Biden-Harris 
Administration's Cancer Moonshot Mission \396\ and the importance of 
cancer screening and care, we are proposing a new MVP related to cancer 
care.
---------------------------------------------------------------------------

    \396\ White House, Fact Sheet: President Biden Reignites Cancer 
Moonshot to End Cancer as We Knot It (Feb. 2. 2022), available at 
https://www.whitehouse.gov/briefing-room/statements-releases/2022/02/02/fact-sheet-president-biden-reignites-cancer-moonshot-to-end-cancer-as-we-know-it.
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    We refer readers to Appendix 3: MVP Inventory of this proposed rule 
where we discuss each proposed new MVP, including which specific 
measures and activities would be included, and the clinician types for 
which a proposed new MVP may be relevant.
b. MVP Reporting Requirements
(1) Promoting Interoperability
    In the CY 2021 PFS final rule (85 FR 84849 through 84854), we 
finalized that MVPs must include the full set of Promoting 
Interoperability performance category measures. In the CY 2022 PFS 
final rule (86 FR 65413), we stated that we do not intend to establish 
different reporting requirements for Promoting Interoperability 
measures in MVPs from what is established under traditional MIPS. As 
described at Sec.  414.1365(c)(4)(i), an MVP Participant is required to 
meet the Promoting Interoperability performance category reporting 
requirements described at Sec.  414.1375(b). We refer readers to

[[Page 46267]]

section IV.A.10.c.(4) of this proposed rule for proposed modifications 
to the Query of Prescription Drug Monitoring Program (PDMP) measure, 
the Public Health and Clinical Data Exchange Objective, and the Health 
Information Exchange Objective. In addition, section IV.A.10.c.(4) of 
this proposed rule includes proposals related to reweighting the 
Promoting Interoperability performance category for non-physician 
clinician types, and modifying the Promoting Interoperability scoring 
methodology beginning with the CY 2023 performance period/CY 2025 MIPS 
payment year. We intend for any changes that are finalized for the 
Promoting Interoperability performance category under traditional MIPS 
to apply to MVPs.
c. Reporting MVPs and Team-Based Care
    In the CY 2022 PFS final rule (86 FR 65406), we discussed that MVPs 
may be constructed to reflect the team-based healthcare model. This 
approach considers the patient's care from a holistic perspective, 
involving several clinician types in a manner that captures the 
patient's experience and outcomes. We have received questions from 
interested parties asking how a large multispecialty group that 
practices team-based care can report MVPs, and if subgroup reporting 
would mean that each individual specialty within the practice would 
have to report its own MVP. In this proposed rule, we are providing 
some clarification on a few options of how multispecialty groups who 
practice in a team-based care manner can report MVPs.
    In the CY 2022 PFS final rule (86 FR 65392 through 65394), we 
finalized that for the CY 2023, 2024, and 2025 performance periods, 
individual MIPS eligible clinicians, single specialty groups, 
multispecialty groups, subgroups and APM entities may report MVPs. We 
also finalized that beginning with the CY 2026 performance period, 
multispecialty groups must form subgroups to report MVPs (86 FR 65394). 
We encourage multispecialty groups to review the inventory of available 
MVPs that we have implemented to identify whether a relevant MVP is 
available to them. If a multispecialty group identifies an MVP that is 
relevant to its practice, the group may register through the MVP 
registration process to report that single MVP (86 FR 65415 through 
65418). We encourage a multispecialty group to choose an MVP that 
includes measures that are attributable to all clinician types that 
participate in its group, if it intends to report as a multispecialty 
group within the first few years of its MVP reporting. We believe that 
reporting data that is directly attributed to all clinicians in the 
group will better drive quality improvement and lead to improved 
patient outcomes.
    We encourage multispecialty groups to consider adopting subgroup 
reporting before it becomes mandatory in the CY 2026 performance 
period. Early adoption will allow clinicians within the subgroups to 
gain familiarity with reporting at the subgroup level before it becomes 
mandatory. We refer readers to the CY 2022 PFS final rule (86 FR 65398 
through 65405) and section IV.A.8.e. of this proposed rule where we 
discuss our proposals regarding subgroup policies and subgroup 
composition. In support of team-based care, we have not proposed any 
criteria which would limit the number of specialties within a subgroup. 
A multispecialty group should use its discretion in determining the 
most operationally feasible and appropriate way to report MVPs via 
subgroup reporting before mandatory subgroup reporting begins in CY 
2026. For example, choosing a few clinically relevant specialties from 
the group to form a subgroup (that is, orthopedic surgeons, physical 
therapists, nurse practitioners or physician assistants who are 
specialized in the area of orthopedics) to report on a single MVP 
related to orthopedic surgery. While we understand there may be an 
increase to the burden associated with requiring multispecialty groups 
to report through subgroups beginning with the CY 2026 performance 
period, we believe MVP reporting will have more value because the data 
will be directly attributed to the clinicians leading to actionable 
changes in the care provided to patients.
d. Scoring MVP Performance
    In the CY 2022 PFS final rule, we finalized policies for MVP 
scoring beginning with the CY 2023 performance period/CY 2025 MIPS 
payment year. We refer readers to 86 FR 65419 through 65427 for the 
details of those finalized policies. We previously finalized at Sec.  
414.1365(d)(2) that, unless otherwise indicated in Sec.  
414.1365(d)(2), the performance standards described at Sec.  
414.1380(a)(1)(i) through (iv) apply to the measures and activities 
included in the MVP (86 FR 65419 through 65421). We noted that in 
general, we intend to adopt scoring policies from traditional MIPS for 
MVP participants unless there is a compelling reason to adopt a 
different policy to further the goals of the MVP framework (86 FR 
65419).
    We refer readers to section IV.A.10.d.(1)(b)(i) of this proposed 
rule for our proposal on the determination of benchmarks for 
administrative claims quality measures, section IV.A.10.d.(1)(b)(ii) 
for our proposal on assigning measure achievement points for topped out 
quality measures, section IV.A.10.d.(1)(c)(i) for our proposal 
regarding improvement scoring for cost measures, and section 
IV.A.10.c.(4)(g) for our proposals regarding changes to the scoring 
methodology for the Promoting Interoperability performance category for 
the performance period in CY 2023. In the event these proposals and any 
other scoring policies for traditional MIPS are adopted as final 
policy, they would apply to the measures and activities included in the 
MVP, unless otherwise indicated.
    In the CY 2022 PFS final rule, we finalized the subgroup reporting 
option for clinicians choosing to report MVPs or the APP (86 FR 65392 
through 65394). We refer readers to section V.B.9.e.(7)(a)(ii) of this 
proposed rule for the discussion on estimated burden associated with 
subgroup reporting. The relevant burden will be submitted to OMB under 
control number 0938-1314 (CMS-10621). Subgroup reporting is a new 
option for clinicians, and, for clarity, we discuss all proposals 
regarding subgroups, including scoring, in a single section of this 
proposed rule at section IV.A.8.e. We refer readers to section 
IV.A.8.e.(4)(b) of this proposed rule for our proposals related to 
subgroup scoring for administrative claims and cost measures and 
section IV.A.8.e.(4)(c) of this proposed rule for our proposal related 
to scoring for subgroups that register but do not report.
e. Subgroup Reporting
(1) Background
    In the CY 2022 PFS final rule, we finalized an option for 
clinicians choosing to report MVPs to report through subgroups 
beginning with the CY 2023 performance period/CY 2025 MIPS payment year 
(86 FR 65392 through 65394). Additionally, we finalized: (1) A timeline 
for implementing subgroup reporting (86 FR 65396 and 65397); (2) 
registration requirements, reporting requirements, and scoring policies 
for clinicians desiring to report MVPs through subgroups (Sec.  
414.1365; 86 FR 65415 through 65426); (3) definitions of subgroup, 
single specialty group, multispecialty group, and special status (Sec.  
414.1305; 86 FR 65398 through 65401); (4) subgroup eligibility 
requirements (Sec.  414.1318; 86 FR 65401); (5) application of low-
volume threshold and special status designations for

[[Page 46268]]

subgroups (Sec.  414.1318(a)(2); 86 FR 65401 and 65402); and (6) 
subgroup inclusions and exclusions (Sec.  414.1318; 86 FR 65402 and 
65403).
    In this section, we propose to: (1) modify the definitions of 
single specialty group and multispecialty group; (2) add subgroup 
description requirements to the registration process; (3) limit the 
number of subgroups a clinician may participate in to one subgroup per 
TIN; (4) establish the subgroup determination period; (5) apply new 
policies for scoring administrative claims measures and cost measures 
for subgroups; and (6) not assign a subgroup final score to registered 
subgroups that do not submit data.
(2) Definitions of a Single Specialty Group and a Multispecialty Group
    We previously finalized at Sec.  414.1305 the definitions of a 
single specialty group as a group that consists of one specialty type, 
and a multispecialty group as a group that consists of two or more 
specialty types. We also finalized at Sec.  414.1305 the definition of 
an MVP participant for the purpose of MVP reporting. The definition of 
MVP Participant established in the CY 2022 PFS final rule (86 FR 65392 
through 65394) would only allow multispecialty groups to participate as 
a group for MVP reporting beginning with the CY 2023 performance 
period/CY 2025 MIPS payment year through the CY 2025 performance 
period/2027 MIPS payment year. Beginning with the CY 2026 performance 
period/CY 2028 MIPS payment year, only single specialty groups would be 
able to participate as a group for MVP reporting, and multispecialty 
groups will be required to form subgroups for reporting an MVP. We 
believe that the definitions of single specialty group and 
multispecialty group would allow groups to distinguish their specialty 
type or types and assess the requirement to participate as a subgroup 
in MVP reporting beginning with the CY 2026 performance period/CY 2028 
MIPS payment year. In the CY 2022 PFS proposed rule (86 FR 39360), we 
proposed to identify a group's specialty type or types using data from 
the Medicare Provider Enrollment, Chain, and Ownership System (PECOS). 
We received comments expressing concerns that the use of PECOS 
specialty designations would result in the exclusion of certain 
clinician types, such as NPs and PAs (86 FR 65398). We adopted 
definitions of a single specialty group and a multispecialty group in 
the CY 2022 PFS final rule but did not finalize PECOS as the data 
source or specify another data source that we would use to determine a 
group's specialty type. We noted that we needed additional time to 
better understand our options to utilize different data sources when 
making this determination (86 FR 65399).
    Having reviewed the available data sources, we believe that 
Medicare Part B claims data is the appropriate data source for 
determining a group's specialty type or types for purposes of MVP 
reporting. Currently, we use PECOS and Medicare Part B claims data to 
identify clinician specialty for certain purposes. For purposes of 
public reporting, we rely on PECOS as the primary data source, and for 
purposes of MIPS eligibility determination, we use both PECOS and 
claims data. Additionally, we use the information on claims to identify 
clinician specialty when attributing some of the measures in the cost 
and quality performance categories.
    A clinician's primary specialty designation in PECOS is identified 
by the clinician in the Medicare enrollment application for physicians 
and non-physician practitioners. Additionally, there may be instances 
when a clinician would be allowed to select more than one primary 
specialty in PECOS.\397\ For example, a primary specialty designation 
of cardiothoracic surgery is not available in PECOS, and therefore, a 
cardiothoracic surgeon would have two primary specialty designations, 
one for cardiac surgery and another for thoracic surgery. In such 
instances, it would be difficult for CMS to identify a clinician's 
primary specialty using their PECOS designation. The specialty codes 
used on Medicare Part B claims \398\ are not reported by clinicians but 
are assigned by the Medicare Administrative Contractors (MACs) and 
derived from the clinician-reported specialty information in PECOS. In 
instances where more than one specialty code appears on a claim, we 
determine primary specialty based on the specialty code used for the 
plurality of the services billed by the clinician. We analyzed the 
identification of specialty for clinicians using claims data and PECOS 
data and found a variance rate of less than 1 percent between the two 
data sources. Given the strong alignment between the data sources and 
our historical use of claims data to identify a clinician's specialty, 
we believe that Medicare Part B claims data would be the best data 
source to use to determine a group's specialty type or types for 
purposes of participation in MVPs.
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    \397\ https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/downloads/cms855i.pdf.
    \398\ https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c26pdf.pdf.
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    We note that in response to our proposal to use PECOS data in 
determining specialty, some commenters recommended that, instead of 
PECOS, CMS should utilize specialty taxonomy codes which they stated 
were more detailed than PECOS specialty codes (86 FR 65398). While 
these commenters were not specific in their request, we understood them 
to be referring to the provider taxonomy codes used on the application 
to receive a National Provider Identifier (NPI). We agree with the 
commenters that in some instances, the health care provider taxonomy 
code set may include more specificity than the information found in the 
specialty codes used on Medicare Part B claims. However, currently we 
do not use this data for other QPP purposes, and we are uncertain of 
the extent to which it is maintained by clinicians if their 
circumstances change. While we considered the use of this data as an 
alternative, we do not believe it is necessary to introduce a new data 
source at this point, given that subgroup reporting is voluntary at 
this time.
    For these reasons, we propose to modify the definition of a single 
specialty group at Sec.  414.1305 to state that single specialty group 
means a group that consists of one specialty type as determined by CMS 
using Medicare Part B claims. We also propose to modify the definition 
of a multispecialty group at Sec.  414.1305 to state that 
multispecialty group means a group that consists of two or more 
specialty types as determined by CMS using Medicare Part B claims. We 
seek public comment on these proposals and request comment on 
additional data sources CMS could use to determine a group's specialty 
type or types.
(3) Subgroup Registration Requirements
(a) Background
    We established at Sec.  414.1365(b) a registration process for 
clinicians who choose to report MVPs through a subgroup. Under this 
policy, a subgroup must register between April 1 and November 30 of the 
applicable calendar year performance period or a later date specified 
by CMS. A subgroup that elects to report the CAHPS for MIPS Survey 
\399\ associated with an MVP must complete their registration by June 
30 of the applicable performance period (86 FR 65416). At the time of 
registration, a subgroup must select an MVP on which it intends to 
report, and a population

[[Page 46269]]

health measure included in the foundational layer of the MVP (86 FR 
65416 and 65417). Additionally, a subgroup may select an outcomes-based 
administrative claims measure if available in an MVP (86 FR 65417). We 
finalized that a subgroup must submit a list of TIN/NPIs associated 
with the subgroup and a plain language name for the subgroup (Sec.  
414.1365(b)(2)(ii)). We note that we are not currently proposing any 
changes to the subgroup registration timeline. We refer readers to the 
CY 2022 PFS final rule (86 FR 65415 through 65418) for additional 
details on subgroup registration requirements.
---------------------------------------------------------------------------

    \399\ OMB control number 0938-1222; Expiration date 05/31/2022 
(pending re-approval).
---------------------------------------------------------------------------

(b) Subgroup Description Requirement
    In the CY 2022 PFS final rule (86 FR 65399), we defined a subgroup 
as a subset of a group which contains at least one MIPS eligible 
clinician and is identified by a combination of the group TIN, the 
subgroup identifier, and each eligible clinician's NPI. We did not 
propose any criteria for limiting the composition of a subgroup but did 
solicit comment on criteria that we could consider in the future (86 FR 
39362), such as establishing a threshold requiring 75 percent of the 
eligible clinicians in a group or subgroup to be of the same or a 
related specialty to form a subgroup. In response to that request, many 
commenters expressed concern that single specialty subgroups may 
discourage team-based care and that the primary specialty designation 
for certain clinicians may not adequately reflect their clinical role 
(86 FR 65399 and 65400). Several commenters particularly pointed to the 
challenges associated with NPs and PAs, who are designated as an NP or 
a PA based on their education credentials as opposed to a clinical 
specialty relevant to the scope of care provided (86 FR 65399). A few 
commenters requested further engagement with members of the public 
before limiting the composition of subgroups so that CMS could better 
understand how clinicians work together.
    We believe the comments we received reflect the reality that 
clinicians practice in many ways within a group TIN. While we 
anticipate we may need to establish requirements and/or restrictions on 
the composition of subgroups through rulemaking in future years, we are 
not proposing to establish such policies for the CY 2023 performance 
period/CY 2025 MIPS payment year. We believe that we may need to 
establish limits on subgroups in order to further our goals of 
measuring as many clinicians as possible using the measures that are 
most relevant to their practice. We are concerned that if we do not 
establish restrictions or requirements in the future we may not move 
meaningfully towards that goal. However, given that subgroups will be 
newly available for the CY 2023 performance period/CY 2025 MIPS payment 
year and will be voluntary, we do not believe we should yet establish 
those policies.
    To inform our future subgroup policies, we desire to better 
understand how group TINs form subgroups and how group TINs choose to 
organize their subgroups. For this reason, we propose that as part of 
the subgroup registration process, in addition to the previously 
established registration requirements, group TINs must provide a 
description of each subgroup that is registered. We would identify some 
key scenarios for subgroups to select from that we expect might reflect 
a typical subgroup, but also wish to offer an opportunity for group 
TINs to describe how they constructed their subgroups by providing a 
narrative in a text-only field, if the options we provide do not 
correctly describe the subgroup. We would not evaluate or approve the 
narrative description, if submitted. Rather, we intend to collect and 
review the information to better inform our understanding of subgroups 
and the different ways groups would choose to form subgroups. We 
believe that receiving the information about the subgroup directly from 
the group TIN itself would fill a gap in our understanding of the 
nature of subgroup formation during the transition to MVPs that cannot 
be filled merely by reviewing PECOS or claims-based group specialty 
information. We understand requiring such reporting would create some 
additional burden, but we believe such burden is modest and worth the 
effort to inform future development of subgroup policies. Furthermore, 
we are attempting to mitigate this burden by permitting subgroups to 
select from certain common scenarios for groups to form subgroups, when 
appropriate, instead of drafting a narrative description. We refer 
readers to section V.B.9.e.(7)(a) (ii) of this rule for the discussion 
of estimated burden related to this proposal.
    We note that we are not intending for these narratives to be 
lengthy but expect the narratives to be short descriptions of the 
nature of practice and appropriately reflect the composition of a 
subgroup. We offer some illustrative examples for the narrative 
description:
    <bullet> Example 1: This subgroup represents our cardiovascular 
service line, which includes cardiologists, cardiothoracic surgeons, 
and other associated professionals.
    <bullet> Example 2: This subgroup represents our west side 
practice, which uses one electronic health record (EHR) platform and 
collaborates on patient care across orthopedic surgeons, physical 
therapists, NPs, and other associated clinicians.
    We also believe that the availability of subgroups will facilitate 
our efforts to increase health equity. In part, we believe that by 
creating a smaller group of clinicians to analyze, we can better 
understand care at the patient and community level. This is important 
for measuring and improving health equity because subgroup data could 
be utilized to identify gaps in clinical outcomes, patient 
characteristics, and specialist care availability on a more targeted 
level than shown by examining TIN-level data. We also believe that 
group practices may share this same interest in improving health 
equity. For example, a group may have clinicians practicing in 
different locations and may choose to organize their subgroups to focus 
on certain underserved populations based on geography or income. We 
hope to better inform our understanding of clinicians supporting this 
goal through narrative descriptions of subgroup organization.
(c) Limitation of One Subgroup per TIN-NPI Combination
    In the CY 2022 PFS final rule (86 FR 65414 and 65415), we finalized 
at Sec.  414.1318(c)(2) that subgroups will have their performance 
assessed at the subgroup level across all the MIPS performance 
categories. Additionally, we did not propose any criteria for the 
composition of subgroups (86 FR 39362). We must nonetheless place some 
restrictions on the allocation of a group TIN's clinicians among 
subgroups to properly score each subgroup. Clinicians in small groups 
are eligible to register as subgroups and report using Medicare Part B 
claims. While we establish a subgroup identifier as part of the 
registration process, this subgroup identifier would not be present on 
any claims data. If we were to allow a clinician to register under more 
than one subgroup in a single group TIN, we would be unable to 
determine to which subgroup a particular claim should be connected. 
Therefore, we propose at Sec.  414.1318(a)(3) that an individual 
eligible clinician, as represented by a TIN-NPI combination may 
register for no more than one subgroup within a group's TIN. We are not 
proposing any other restrictions or requirements on the composition of 
subgroups at this time.
    We are also proposing to limit a clinician to a single subgroup per 
group TIN to overcome current limitations in

[[Page 46270]]

scoring certain cost and quality measures. In section IV.A.8.e.(4)(b) 
of this rule, we are proposing to evaluate clinicians in subgroups 
using measures in the cost performance category, and the population 
health measures and outcomes-based administrative claims measures in 
the quality performance category, based on their affiliated group's 
performance. We are making that proposal due to current technical 
limitations related to attribution and risk adjustment of such measures 
but are working to potentially overcome those challenges in the future. 
CMS calculates administrative claims measures using Medicare claims 
data. This does not require any additional reporting by clinicians. If 
we were to allow a clinician to be a part of more than one subgroup 
within a single group TIN, however, we would be unable to identify 
which subgroup the clinician was part of for the purposes of 
attributing cost measures, population health measures, and outcomes-
based administrative claims measures.
    We recognize that our proposal to limit each TIN-NPI combination to 
a single subgroup per group TIN would limit how a group may establish 
its subgroups. We believe there may be clinicians who work in different 
capacities within a single group TIN (for example, a clinician who 
works in a cardiology clinic on Mondays and the primary care clinic 
Tuesday-Friday) which could be considered to work in multiple subgroups 
in a single group TIN. For this reason, we are interested in hearing 
perspectives from groups on how common this is, and if there are ways 
that we could match a clinician to a subgroup for measures reported 
through Medicare Part B claims or calculated using administrative 
claims.
(d) Subgroup Determination Period
    In the CY 2022 PFS final rule, we established the definition of a 
subgroup at Sec.  414.1305 as a subset of a group which contains at 
least one MIPS eligible clinician and is identified by a combination of 
the group TIN, the subgroup identifier, and each eligible clinician's 
NPI (86 FR 65399). We also codified at Sec.  414.1318(a) that, for a 
MIPS payment year, low-volume threshold criteria and special status for 
subgroups are determined at the group level in accordance with 
Sec. Sec.  414.1305 and 414.1310. We also established at Sec.  
414.1365(b) a process for clinicians to register as a subgroup for the 
purpose of reporting the measures and activities in an MVP (86 FR 65415 
through 65418). Previously, we defined a MIPS determination period--the 
period of activity we review to identify clinicians who are eligible to 
participate in MIPS--to mean, in relevant part, a 24-month assessment 
period consisting of: (1) An initial 12-month segment beginning on 
October 1 of the calendar year 2 years prior to the applicable 
performance period and ending on September 30 of the calendar year 
preceding the applicable performance period, and that includes a 30-day 
claims run out; and (2) A second 12-month segment beginning on October 
1 of the calendar year preceding the applicable performance period and 
ending on September 30 of the calendar year in which the applicable 
performance period occurs (Sec.  414.1305; 83 FR 59727 through 59730). 
In order to determine their eligibility to participate in MIPS for the 
applicable performance year, an individual clinician or a group must 
meet or exceed the low-volume threshold criteria specified under Sec.  
414.1305 during the MIPS determination period. An individual eligible 
clinician or group that is identified as not exceeding the low-volume 
threshold during the initial 12-month segment will continue to be 
excluded under Sec.  414.1310(b)(1)(iii) for the applicable year 
regardless of the results of the second 12-month segment analysis. 
Additionally, an individual eligible clinician or group for which the 
unique billing TIN and NPI combination is established during the second 
12-month segment of the MIPS determination period will be assessed 
based solely on the results of such segment.
    In the CY 2022 PFS final rule, we did not discuss how CMS would 
assess the low-volume threshold for individual clinicians and groups 
for the purpose of subgroup participation. Specifically, we did not 
discuss whether any special considerations were necessary when applying 
the MIPS determination period for clinicians participating as 
subgroups. Currently, we review claims and PECOS data from a MIPS 
determination period to determine MIPS eligibility for an individual 
clinician and a group. The initial 12-month segment of the MIPS 
determination period spans from October 1 of the calendar year 2 years 
prior to the applicable performance period to September 30 of the 
calendar year preceding the applicable performance period and includes 
a 30-day claims run out. Individual clinicians and groups receive their 
initial eligibility information prior to the applicable performance 
period but do not know their final eligibility determination until 
November or December of the applicable performance period.
    Using a 2-year MIPS determination period is incompatible with the 
framework we have established for subgroup participation in MVPs. For 
example, for the CY 2023 performance period/CY 2025 MIPS payment year, 
individual clinicians and groups that choose to participate as 
subgroups would only know their preliminary eligibility at the time of 
subgroup registration. We believe that by using the preliminary 
eligibility information, clinicians and groups could assess their 
ability to participate as subgroups early in the performance period and 
we do not wish to limit subgroup participation for groups that are 
otherwise eligible based on an eligibility assessment that is not made 
until after registration is completed. Therefore, we are proposing to 
add at Sec.  414.1318(a)(4) that CMS will apply the low-volume 
threshold criteria for a subgroup as described under Sec.  
414.1318(a)(1) using information from the initial 12-month segment of 
the applicable MIPS determination period. Under this proposal, an 
individual eligible clinician or group determined to be MIPS eligible 
based on the low-volume threshold determination under Sec.  414.1305 
during the initial 12-month segment of the MIPS determination period 
would continue to be eligible for an applicable performance period 
regardless of the results of the second segment of the low-volume 
threshold determination. Additionally, we propose to make conforming 
changes at Sec.  414.1318(a)(1) to state that, except as provided under 
paragraph (a)(2) of this section and subject to (a)(4) of this section, 
for a MIPS payment year, determinations of meeting the low-volume 
threshold criteria and special status for a subgroup is determined at 
the group level in accordance with Sec. Sec.  414.1305 and 414.1310. We 
note that we are not making any further changes to the application of 
low-volume threshold and special status as described under Sec.  
414.1318(a)(1).
    In summary, to form a subgroup, a group would need to be eligible 
to participate in MIPS as a group and have at least one MIPS eligible 
clinician in the subgroup who was also a MIPS eligible clinician during 
the initial 12-month segment of the determination period. Such an 
individual eligible clinician or group would continue to be identified 
as such for the applicable MIPS payment year regardless of the results 
of the second segment of the MIPS determination period. A subgroup may 
thus include an individual clinician who does not exceed the low-volume 
threshold during the first segment of the MIPS determination

[[Page 46271]]

period only if the subgroup has at least one MIPS eligible clinician 
during the first 12-month segment of the MIPS determination period and 
the affiliated group also meets the low-volume threshold during the 
first 12-month segment of the MIPS determination period. We believe 
this would also allow practices to identify and place clinicians in 
appropriate subgroups, choose the measures and activities relevant to 
subgroups, make administrative changes to their workflows and EHR 
systems, and comprehensively capture clinician performance through 
subgroups. Using the first segment of the determination period would 
also be consistent with the use of the first segment of the MIPS 
determination period for Virtual Groups (Sec.  414.1315(c)(1)(ii); 83 
FR 59743 and 59744).
    We seek public comment on this proposal.
(4) Subgroup Reporting and Scoring
(a) Subgroups Reporting the APP
    We refer readers to section IV.A.9.b of this proposed rule for our 
proposals with regard to subgroups reporting the APP.
(b) Subgroup Scores for Administrative Claims Measures and Cost 
Measures
    In the CY 2022 PFS final rule, we established at Sec.  
414.1318(c)(2) that subgroups will have their performance assessed at 
the subgroup level across all the MIPS performance categories (86 FR 
65414 through 65415). We also established in the quality performance 
category that subgroups are scored on each selected population health 
measure that does not have a benchmark or meet the case minimum 
requirement based on their affiliated group score, if available (86 FR 
65421 through 65422). In establishing this policy, we noted our concern 
about the ability of subgroups to meet the case minimum for an 
administrative claims measure and our interest in including population 
health measures in the subgroup's score for the MVP.
    In establishing our policies for scoring the cost performance 
category in MVPs, we received a comment that expressed concern that 
multi-specialty groups may take advantage of the option to report at 
the subgroup level to avoid being assessed on cost measures (86 FR 
65422). While we intend to monitor subgroup implementation and assess 
the potential for gaming, we acknowledge the risk of a multi-specialty 
group forming subgroups in order to avoid being measured in the cost 
performance category.
    Measures in the cost performance category, as well as population 
health measures (which are part of the foundational layer of MVPs) and 
outcomes-based administrative claims measures in the quality 
performance category, are not reported directly by clinicians. Instead, 
CMS calculates these measures based on Medicare administrative claims 
data. Each measure includes an attribution and risk adjustment 
methodology within the specifications, which are available for review 
at https://qpp.cms.gov/. These measures are created and tested for 
validity and reliability using Medicare administrative claims data, 
which includes the identification of the TIN and the clinician's NPI. 
However, because subgroups are established exclusively for the purpose 
of participation in the Quality Payment Program, we are unable to 
identify a subgroup using existing or future claims data, and 
therefore, it may not be possible to test these measures for validity 
and reliability for subgroups using claims data. While we believe in 
general that subgroups can be measured in the same manner as we measure 
groups, there are complications related to the establishment of 
subgroups. Subgroups differ from groups in a couple of key ways: First, 
the creation of a subgroup does not change the nature of the group, so 
a patient could be attributed to both a group and a subgroup. In 
addition, a group TIN is not required to allocate all clinicians into 
subgroups. This affects measures in different ways depending on the 
attribution methodology of a measure. For example, in the total per 
capita cost measure, months are attributed to a particular group TIN or 
TIN-NPI based on specific primary care services. In this measure, costs 
are assigned to a single group TIN for the purpose of measuring the 
group TIN and a single TIN-NPI for the purpose of measuring the TIN-
NPI. We believe we could assign a patient to a single subgroup, as we 
have also proposed to limit NPIs to a single subgroup per TIN. However, 
since we do not have an existing data source for subgroup composition, 
we are unable to examine the data to determine if performance on the 
measure is reliable and valid at the subgroup level.
    For these reasons, we propose to assess subgroups on measures in 
the cost performance category, and population health measures and 
outcomes-based administrative claims measures in the quality 
performance category, based on their affiliated group. We propose to 
modify Sec.  414.1365(d)(3)(i)(A)(1) to read that a subgroup is scored 
on each selected population health measure based on their affiliated 
group score, if available, and that if the subgroup's affiliated group 
score is not available, each such measure is excluded from the 
subgroup's total measure achievement points and total available measure 
achievement points. We also propose to add Sec.  
414.1365(d)(3)(i)(B)(1) so that a subgroup is scored on each selected 
outcomes-based administrative claims measure based on its affiliated 
group score, if available, and that if the subgroup's affiliated group 
score is not available, each such measure will receive zero measure 
achievement points. We also propose to add Sec.  414.1365(d)(3)(ii)(A) 
to state that a subgroup is scored on each cost measure included in the 
MVP that they select and report based on its affiliated group score for 
each such measure, if available. If the subgroup's affiliated group 
score is not available for a measure, the measure is excluded from the 
subgroup's total measure achievement points and total available measure 
achievement points, as described under Sec.  414.1380(b)(2)(i) through 
(v).
    We are concerned that measuring subgroups based on their affiliated 
group score for these measures may detract from our efforts to generate 
more clinically relevant and granular information about clinician 
performance. For this reason, we intend to pursue potential technical 
solutions to these issues in the future, to enable us to measure 
clinicians in subgroups on these measures at the subgroup level. Even 
if we address these technical issues, we are still concerned that 
clinicians may use the opportunity to form subgroups to avoid being 
measured on cost as discussed in the public comment we received (86 FR 
65422). If we are able to address the technical limitations in the 
future and evaluate performance at the subgroup level, we would 
anticipate developing policies similar to our existing policy for 
population health measures to use the affiliated group score if we are 
unable to calculate the measures for the subgroup. This would allow us 
to focus our measurement at the subgroup level but limit the 
opportunity of groups to use the formation of subgroups to avoid being 
measured in the cost performance category. Since we are uncertain if we 
will be able to address these technical issues, we are not proposing a 
policy at this time.
    We also believe the registration information we receive from 
subgroups for CY 2023 performance period/CY 2025 MIPS payment year will 
help us to

[[Page 46272]]

learn more about the nature of subgroups and better test our measures.
    We seek public comment on these proposals.
(c) Scoring for Subgroups That Register But Do Not Report
    As described in the CY 2022 PFS rule (86 FR 65415 through 65418), 
groups interested in participating as subgroups for reporting the 
measures and activities in an MVP must adhere to the registration 
process established at Sec.  414.1365(b). To be assessed on their 
performance at a subgroup level, clinicians participating as subgroups 
would need to meet the reporting requirements outlined at Sec.  
414.1365(c). We expect subgroups to register with the intent to submit 
data for the measures and activities in an MVP because they wish to be 
assessed based on their performance at the subgroup level. We also 
believe there will be instances where a subgroup would register but not 
submit data for the applicable performance period or clinicians in a 
registered subgroup would choose to participate in MIPS via a different 
reporting option instead of reporting as a subgroup. We considered 
whether we should assign a score for a subgroup regardless of their 
submission status. At this point in time, we want to encourage groups 
to explore the subgroup reporting option and not penalize subgroups 
that do not submit data. During the voluntary years of subgroup 
reporting, we do not intend to assign a subgroup score in instances 
when we do not receive any MVP data for clinicians in registered 
subgroups. However, we expect that MIPS eligible clinicians in 
registered subgroups would participate in MIPS via another available 
reporting option as they would be subject to the MIPS payment 
adjustment under the TIN. Under the existing scoring hierarchy 
established in the CY 2022 PFS final rule (86 FR 65536 and 65537), a 
clinician is assigned the highest of the available final scores 
associated with the clinician's TIN/NPI.
    For these reasons, we propose at Sec.  414.1318(b)(1) that we will 
not assign a final score for a subgroup that registers and does not 
submit data as a subgroup for the applicable performance period. 
Additionally, we propose to make conforming changes at Sec.  
414.1318(b) to state that, except as provided under Sec.  414.1317(b) 
and paragraph (b)(1) of this section, each MIPS eligible clinician in 
the subgroup receives a final score based on the subgroup's combined 
performance. We intend to continue monitoring the participation trends 
for subgroup reporting and reevaluate scoring for registered subgroups 
that do not submit data as we move towards mandatory subgroup reporting 
in the future.
(d) Subgroup Examples
    In the CY 2022 PFS final rule (86 FR 65400), we stated that during 
the initial years of subgroup reporting, the affiliated group will 
continue to include subgroup reporters in their traditional MIPS 
submission across all four performance categories. Additionally, we 
updated the scoring hierarchy to include subgroups and to specify that 
the scoring hierarchy will apply with respect to any available final 
score that is associated with a TIN/NPI from MVPs, traditional MIPS, 
and/or the APP (86 FR 65537). We have provided examples below to 
illustrate how the final score is applied for a clinician who is part 
of a TIN where only some of the clinicians in that TIN choose to 
participate in MIPS through subgroups. The MVPs used in the below 
examples are for illustrative purposes only and are not intended to be 
exhaustive of the different ways clinicians could participate in MIPS.
    Scenario 1: In this example, we illustrate a TIN that is eligible 
as a group and includes individual MIPS eligible clinicians. For the 
purposes of this example, we illustrate scoring for three clinicians 
who are individually eligible represented by letters for simplicity. A 
portion of the clinicians under the TIN form one subgroup to report the 
measures and activities in the Coordinating Stroke Care to Promote 
Prevention and Cultivate Positive Outcomes MVP. The TIN also forms 
another subgroup to report the measures and activities in the Advancing 
Care for Heart Disease MVP. The group TIN submits data for the 
Optimizing Chronic Disease Management MVP. The group submission will 
include the performance of the clinicians in the subgroup. The three 
individual MIPS eligible clinicians, clinicians A, D, and G, submit 
data as individuals in traditional MIPS in addition to their 
submissions as part of a subgroup or the group as a whole. In Table 76, 
we illustrate the calculated final score for their submissions at the 
full group, subgroup, and individual level. In Table 77, we illustrate 
the final scores for the individual TIN/NPI based on the existing 
scoring hierarchy finalized in the CY 2022 PFS final rule (86 FR 
65537).
[GRAPHIC] [TIFF OMITTED] TP29JY22.666


[[Page 46273]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.120

    Scenario 2: In contrast to scenario 1, in this example, we 
illustrate final scoring for a TIN when a portion of the clinicians 
under the TIN form one subgroup for reporting an MVP and the whole TIN 
participates as a group only for reporting traditional MIPS. Similar to 
scenario 1, the TIN is eligible as a group and includes individual 
eligible clinicians. We note that the TIN does not participate as a 
group for MVP reporting. For the purposes of this example, we 
illustrate scoring for three clinicians who are individually eligible 
represented by letters for simplicity. A portion of the clinicians 
under the TIN form only one subgroup to report the measures and 
activities in the Advancing Care for Heart Disease MVP. The group TIN 
submits data for traditional MIPS. The group submission will include 
the performance of the clinicians in the subgroup. The three individual 
MIPS eligible clinicians, clinicians A, D, and G, submit data as 
individuals in traditional MIPS in addition to their submissions as 
part of the subgroup or the whole group. In Table 78, we illustrate the 
calculated final score for their submissions at the full group, 
subgroup, and individual level. In Table 79, we illustrate the final 
scores for the individual TIN/NPI based on the existing scoring 
hierarchy finalized in the CY 2022 PFS final rule (86 FR 65537).
[GRAPHIC] [TIFF OMITTED] TP29JY22.121


[[Page 46274]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.122

    Scenario 3: In contrast to scenarios 1 and 2, in this scenario, we 
illustrate final scoring for a TIN that does not participate as group. 
Similar to scenarios 1 and 2, we have a TIN that is eligible as a group 
and includes individual eligible clinicians. In this scenario, a 
portion of the clinicians under the TIN form two subgroups for 
reporting an MVP and the TIN does not submit data at the group level. 
For the purposes of this example, we illustrate scoring for three 
clinicians who are individually eligible represented by letters for 
simplicity. A portion of the clinicians under the TIN form one subgroup 
to report the measures and activities in the Coordinating Stroke Care 
to Promote Prevention and Cultivate Positive Outcomes MVP. The TIN also 
forms another subgroup to report the measures and activities in the 
Optimizing Chronic Disease Management MVP. Three individual MIPS 
eligible clinicians, clinicians A, D, and G, submit data as individuals 
in traditional MIPS in addition to their submissions as part of a 
subgroup. In Table 81, we illustrate the calculated final score for 
their submissions at the full group, subgroup, and individual level. In 
Table 81, we illustrate the final scores for the individual TIN/NPI 
based on the existing scoring hierarchy finalized in the CY 2022 PFS 
final rule (86 FR 65537).
[GRAPHIC] [TIFF OMITTED] TP29JY22.123


[[Page 46275]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.124

9. APM Performance Pathway
a. Overview
    In the CY 2021 PFS final rule (85 FR 84859 through 84866), we 
finalized the APM Performance Pathway (APP) at Sec.  414.1367 beginning 
in performance year 2021, which was designed to provide a predictable 
and consistent MIPS reporting option to reduce reporting burden and 
encourage continued APM participation.
b. APP Reporting Options
    Under the APP, MIPS eligible clinicians in an APM Entity that 
participates in a MIPS APM may report to MIPS and be scored (subject to 
certain limitations) at the individual clinician, group, or APM Entity 
level (85 FR 84859 through 84866).\400\ \401\ In that rule, we excluded 
Virtual Groups from reporting the APP. At that time, the concept of 
MIPS Value Pathway (MVP) subgroup reporting, through which a subset of 
MIPS eligible clinicians within a group TIN may report and be scored as 
a standalone MVP Participant, had not yet been introduced; however, we 
note that our subsequent use of the term ``subgroup'' may have caused 
confusion in light of its use in MVPs. In the CY 2022 PFS final rule, 
we codified policies related to subgroups at Sec.  414.1318 (86 FR 
65671), by which we meant the reporting of the APP by a subset of MIPS 
eligible clinicians within an APM Entity. In that rule, we stated that 
because we already identify the MIPS eligible clinicians who are MIPS 
APM participants based on Participation Lists for each APM, it is 
unnecessary to require MIPS APM participants to register as subgroups 
for purposes of reporting the APP (86 FR 65397 and 65398). We stated 
that beginning with performance year 2023, we will use Participation 
Lists to identify the MIPS eligible clinicians within a group TIN that 
should be included in the subgroup of APM participants for purposes of 
reporting the APP (86 FR 65398). We also codified at Sec.  
414.1318(c)(2) that subgroups would be scored according to the 
applicable MVP or APP scoring rules. However, under Sec.  414.1367, 
which governs APP reporting and scoring, no changes were made to 
reflect the introduction of subgroup-level reporting of the APP.
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    \400\ Paperwork Reduction Act: CMS-10621, OMB 0938-1314.
    \401\ In that rule, we excluded Virtual Groups from reporting 
via the APP.
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    Recognizing that there is ambiguity in our current rules, we are 
proposing to modify the text at Sec.  414.1318(c)(2) to remove the 
reference to subgroup scoring of the APP, and therefore, disallow 
reporting of the APP by a subset of a group. This proposed change is 
not intended as a change in policy; as described previously in this 
section of the proposed rule, it was not our intent to permit MIPS 
eligible clinicians within an APM entity to be scored at a level in 
between a group and the individual clinician.
    Notwithstanding the foregoing, we recognize that MIPS eligible 
clinicians may have an interest in reporting as subgroups in the APP, 
and as we describe further later in this section of the propose rule, 
we are considering as an alternative to our above proposed conforming 
change whether to permit subgroups as a level of reporting the APP, and 
to modify Sec.  414.1367 accordingly. We believe there could be 
scenarios where a group may have an interest in reporting the APP 
through subgroups. For example, if a large multi-specialty TIN had 
specialists of different types participating in MIPS APMs, and, 
therefore, who are eligible for APP scoring, it would be possible that 
a subgroup within that TIN--perhaps primary care providers working out 
of a single EHR or practice site--would be interested in reporting the 
APP using only the data generated by MIPS eligible clinicians in that 
subgroup. Additionally, particularly after MVP reporting is more widely 
performed, we recognize that clinicians using subgroup reporting for 
MVPs may have an easier time joining APMs and reporting the APP if they 
are able to maintain their reporting at the same level, thereby 
strengthening MVPs as a glide path to APM participation.
    To permit subgroup reporting of the APP, we would need to enable a 
subgroup registration option for APP reporters, which would inevitably 
introduce additional administrative burden for the subgroups that would 
report. Aside from needing to register in order to be recognized as a 
subgroup, all other aspects of APP reporting for subgroups under this 
alternative proposal would be the same as for other reporting levels as 
established at Sec.  414.1367. We request comments on the proposed 
conforming change and the alternative we considered. In particular, we 
are interested in commenters' input from the public on which option 
would best balance the reporting flexibilities with administrative 
burdens, with the understanding that it may be necessary to revisit 
these policies in future rulemaking as MVP and APP policies continue to 
develop, we seek comment on this proposal.
10. MIPS Performance Category Scoring
a. Quality Performance Category
    As discussed in section III.J.4 and elsewhere in this proposed 
rule, we are

[[Page 46276]]

seeking comment on the potential addition of new Consumer Assessment of 
Healthcare Providers and Systems (CAHPS) for the Merit-based Incentive 
Payment System (MIPS) Survey Questions.
    In this proposed rule, we are seeking feedback on the potential 
future inclusion of two new measures in the APP measure set: MUC21-136: 
Screening for Social Drivers of Health and MUC21-134: Screen Positive 
Rate for Social Drivers of Health. The National Quality Forum (NQF) 
provided conditional support for these two social determinants of 
health measures during the 2021-2022 cycle and indicated the measures 
would be appropriate for consideration in the Shared Savings 
Program.\402\ The measure MUC21-136: Screening for Social Drivers of 
Health assesses the percentage at which providers screen their adult 
patients for health-related social needs, which is consistent with the 
priorities of the agency and program including Meaningful Measures 2.0 
priority areas.\403\ The measure MUC21-134: Screen Positive Rate for 
Social Drivers of Health assesses the percentage of patients who 
screened positive for health-related social needs.
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    \402\ https://www.qualityforum.org/setting_priorities/partnership/map_final_reports.aspx.
    \403\ https://www.cms.gov/meaningful-measures-20-moving-measure-reduction-modernization.
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    We encourage readers to review the Social Determinants of Health 
Measure and Future Measure Development--Request for Information (RFI) 
discussed at section III.J.4. of this proposed rule.
b. Improvement Activities Performance Category
    Section 414.1367(c)(3) provides that the improvement activities 
performance category score for MIPS eligible clinicians, groups, and 
APM Entities reporting via the APP is calculated in accordance with 
Sec.  414.1380(b)(3) based on the activities required by the MIPS APM 
that are included in the MIPS final inventory of improvement 
activities. We assign scores to each MIPS eligible clinician in the 
improvement activity performance category for participating in MIPS 
APMs, and MIPS eligible clinicians must earn 40 points in order to 
receive full credit in this performance category. On an annual basis, 
we conduct a review of the governing documentation of all MIPS APMs to 
determine the Improvement Activities that are required by each such 
APM, and have in all cases found that each MIPS APM requires 
participants to engage in such Improvement Activities as would earn 
participants a performance category score of no less than 40 points, 
which as discussed previously in this section of the propose rule is 
the maximum score for this performance category (Sec.  
414.1380(a)(1)(iii)). The list of required activities for each MIPS APM 
is compared to the MIPS list of improvement activities and the MIPS 
APM's participants that report the APP are scored in accordance with 
MIPS to determine if the APM meets the requirements for awarding full 
credit (40 points) for Improvement Activities to the participants in 
the MIPS APM.
    We would like to clarify that, even though Sec.  414.1367(c)(3) 
permits the reporting of additional improvement activities, such 
reporting would not supersede the automatic award of the maximum score 
described previously in this section of the proposed rule. Because the 
reporting of additional improvement activities does not serve any 
Improvement Activity scoring purpose, we would not use any Improvement 
Activity performance category submissions for scoring under the APP 
where the participants were already entitled to full credit for this 
performance category. This clarification is particularly relevant in 
instances where an APM Entity is eligible for reweighting of the two 
remaining performance categories of quality and promoting 
interoperability. We understand it is possible that, for example, a 
data submission from the Application Programming Interface (API) of a 
TIN or individual within an APM Entity could contain incidental 
Improvement Activity performance information that was collected 
automatically, though not for the purpose of a MIPS submission or 
scoring. We clarify that the submission of Improvement Activity 
performance information in this type of circumstance would not 
constitute a submission of data for the purpose of scoring the 
improvement activities performance category under the APP. Therefore, 
incidental submissions such as the type in this example would never be 
the sole basis for an APM Entity to be scored under the APP.
c. MIPS Performance Category Measures and Activities
(1) Quality Performance Category
(a) Background
    Section 1848(q)(1)(A)(i) and (ii) of the Act requires the Secretary 
to develop a methodology for assessing the total performance of each 
MIPS eligible clinician according to certain specified performance 
standards and, using such methodology, to provide for a final score for 
each MIPS eligible clinician. Section 1848(q)(2)(A)(i) of the Act 
provides that the Secretary must use the quality performance category 
in determining each MIPS eligible clinician's final score, and section 
1848(q)(2)(B)(i) of the Act describes the measures that must be 
specified under the quality performance category.
    We refer readers to Sec. Sec.  414.1330 through 414.1340 and the CY 
2017 and CY 2018 Quality Payment Program final rules (81 FR 77097 
through 77162 and 82 FR 53626 through 53641, respectively), and the CY 
2019, CY 2020, CY 2021, and CY 2022 PFS final rules (83 FR 59754 
through 59765, 84 FR 63949 through 62959, 85 FR 84866 through 84877, 
and 86 FR 65431 through 65445, respectively) for a description of 
previously established policies and statutory basis for policies 
regarding the quality performance category.
    In this proposed rule, we are proposing to:
    <bullet> Amend the definition of the term ``high priority measure'' 
to include quality measurement pertaining to health equity.
    <bullet> Replace the ``Asian language survey completion'' variable 
with ``language other than English spoken at home'' variable in the 
case-mix adjustment model for the Consumer Assessment of Healthcare 
Providers and Systems (CAHPS) for MIPS Survey.
    <bullet> Increase the data completeness criteria threshold to at 
least 75 percent for CY 2024 and CY 2025 performance periods/2026 and 
2027 MIPS payment years.
    <bullet> Modify the MIPS quality measure set as described in 
Appendix 1 of this final rule, including through the addition of new 
measures, updates to specialty sets, the removal of existing measures, 
and substantive changes to existing measures.
(b) Quality Data Submission Criteria
(i) Submission Criteria for Quality Measures, Excluding the CAHPS for 
MIPS Survey Measure
    The Meaningful Measures Initiative provides for the identification 
of high priority areas for quality measurement and quality improvement, 
which identifies the core quality of care issues that advances our work 
to improve patient outcomes (83 FR 59719). In order to further identify 
priority areas for MIPS quality measurement, we defined the term high 
priority measure at Sec.  414.1305, for years beginning with the CY 
2019 performance period/2021 MIPS payment year, as an outcome 
(including intermediate-outcome and

[[Page 46277]]

patient-reported outcome), appropriate use, patient safety, efficiency, 
patient experience, care coordination, or opioid-related quality 
measure (83 FR 59761). Generally, if an applicable outcome measure is 
not available, a MIPS eligible clinician must report a high priority 
measure (Sec.  414.1335(a)(1)). To incentivize the voluntary adoption 
of high priority measures, a MIPS eligible clinician may earn bonus 
points for reporting such a measure (Sec.  414.1380(b)(1)(v)(A)). As 
significant and persistent inequities in healthcare outcomes exist in 
the United States, we are committed to developing innovative solutions 
that support access to high quality care and promote health equity, 
including the exploration of solutions to measure health equity within 
MIPS. Health equity is a priority area across CMS programs, including 
MIPS.
    Thus, we are proposing to amend the definition of the term high 
priority measure to include health equity measures. Specifically, 
starting with the CY 2023 performance period, we are amending the 
definition of the term high priority measure at Sec.  414.1305 to mean 
an outcome (including intermediate-outcome and patient-reported 
outcome), appropriate use, patient safety, efficiency, patient 
experience, care coordination, opioid, or health equity-related quality 
measure. We believe that it is imperative to include quality measures 
pertaining to health equity as high priority measures in order to 
incentivize the adoption of health equity measures by MIPS eligible 
clinicians.
    We seek public comment on our proposal to amend the definition of 
the term high priority measure.
(ii) Submission Criteria for the CAHPS for MIPS Survey Measure
    The CAHPS for MIPS Survey measures patients' experience of care 
within a group, virtual group, and APM Entity, including Shared Savings 
Program ACOs. The survey measures ten dimensions of patient experience 
of care, known as summary survey measures, for which patients may be 
the best, if not only source of information. The CAHPS for MIPS Survey 
is optional for all groups, virtual groups, and APM Entities of 2 or 
more eligible clinicians reporting via traditional MIPS, and is 
required for Shared Savings Program ACOs reporting via the APM 
Performance Pathway (APP).
(A) CAHPS for MIPS Survey Measure Case-Mix Adjustment Model
    Under the CAHPS for MIPS Survey measure, we adjust summary survey 
measure scores for case-mix to promote meaningful comparison of the 
performance of MIPS groups despite differences in their patient 
populations (81 FR 77120). The case-mix adjustment model for CAHPS for 
MIPS Survey measure includes the following case-mix adjustors as of the 
CY 2022 performance period: age; education; self-reported general 
health status; self-reported mental health status; proxy response; 
Medicaid dual eligibility; eligibility for Medicare's low-income 
subsidy; and Asian language survey completion (86 FR 65444 and 65445).
    Only a small percentage of CAHPS for MIPS Survey participants who 
report speaking a language other than English at home actually complete 
the survey in that language. We believe that collecting information on 
the language spoken by the participant at home as a case-mix adjustor 
rather than the language used by the respondent to complete the survey 
is likely to capture language preference more accurately, as well as 
response patterns of participants with similar experiences, for a more 
meaningful comparison of performance between MIPS groups. Furthermore, 
more accurately capturing preferred language aligns with CMS's effort 
to provide culturally and linguistically appropriate services (CLAS), 
which are intended to advance health equity, improve quality, and help 
eliminate health care disparities.\404\ Other CMS-administered CAHPS 
Surveys, such as the CAHPS for Hospice Survey and the Hospital CAHPS 
Survey, include preferred language variables rather than survey 
language variables for case-mix adjustment. Furthermore, analysis of CY 
2019 performance period for CAHPS for MIPS Survey measure data found 
that adding case-mix adjustors for Spanish language spoken at home, 
Asian language(s) spoken at home, and other language spoken at home has 
minimal impacts on scoring for most groups, and slightly positively 
impacts the scores of groups with substantial patient populations who 
speak a language other than English at home. Therefore, we are 
proposing to revise the CAHPS for MIPS Survey measure case-mix 
adjustment model to remove the existing adjustor for Asian language 
survey completion and to add adjustors for Spanish language spoken at 
home, Asian language spoken at home, and other language spoken at home.
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    \404\ Centers for Medicare & Medicaid Services. Achieving Health 
Equity. Available at https://www.cms.gov/Outreach-and-Education/MLN/WBT/MLN1857916-OMH-AHE/OMHAHE/ahe/lesson01/09/index.html.
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    We seek public comment on our proposal to revise the CAHPS for MIPS 
Survey measure case-mix adjustment model.
(aa) Adding Items Related to Health Disparity and Price Transparency to 
the CAHPS for MIPS Survey Measure
    We are interested in gathering information directly from patients 
related to health disparities and price transparency. In section 
III.G.4.g. of this proposed rule, we discuss the request for 
information regarding the future consideration of additional and 
modified questions related to health disparities and price transparency 
to the CAHPS for MIPS Survey measure. Specifically, we are seeking 
public comment on the following items in the request for information as 
outlined in section III.G.4.g. of this proposed rule: (1) the potential 
future inclusion of health disparities and price transparency questions 
and whether there are other questions that should be considered for 
potential future inclusion in the CAHPS for MIPS Survey measure; and 
(2) the potential for creating a shortened version of the CAHPS for 
MIPS Survey measure such that it would be more applicable to specialty 
groups. Therefore, we refer readers to section III.G.4.g. of this 
proposed rule for further information regarding this request for 
information.
(iii) Data Completeness Criteria
    In the CY 2017 and CY 2018 Quality Payment Program final rules and 
the CY 2020 PFS final rule, we noted that we would increase the data 
completeness criteria threshold over time (81 FR 77121, 82 FR 53632, 
and 84 FR 62951). For the CY 2017 performance period/2019 MIPS payment 
year (first year of the implementation of MIPS), the data completeness 
criteria threshold was established to reflect a threshold of at least 
50 percent (81 FR 77125). The data completeness criteria threshold 
increased from at least 50 percent to at least 60 percent for the CY 
2018 performance period/2020 MIPS payment year (81 FR 77125 and 82 FR 
53633) and was maintained at a threshold of at least 60 percent for the 
CY 2019 performance period/2021 MIPS payment year (82 FR 53633 and 
53634). For the CY 2020 performance period/2022 MIPS payment year, the 
data completeness criteria threshold was increased from at least 60 
percent to at least 70 percent (84 FR 62952). The data completeness 
criteria threshold of at least 70 percent was maintained for the CY 
2021, CY 2022, and CY 2023 performance periods/2023, 2024, and 2025 
MIPS payment years (86 FR 65435 through 65438). We continue to believe 
that it is important to incrementally

[[Page 46278]]

increase the data completeness criteria as MIPS eligible clinicians, 
groups, and virtual groups gain experience with MIPS.
    We believe that the incorporation of higher data completeness 
thresholds in future years ensures a more accurate assessment of a MIPS 
eligible clinician's performance on quality measures and prevent 
selection bias to the extent possible (81 FR 77120, 82 FR 53632, 83 FR 
59758, and 86 FR 65436). We have encouraged all MIPS eligible 
clinicians to perform the quality actions associated with the quality 
measures on their patients (82 FR 53632 and 86 FR 65436). The data 
submitted for each measure is expected to be representative of the 
individual MIPS eligible clinician, group, or virtual group's overall 
performance for that measure. The data completeness threshold of less 
than 100 percent is intended to reduce burden and accommodate 
operational issues that may arise during data collection during the 
initial years of the program (82 FR 53632 and 86 FR 65436).
    We previously noted concerns raised regarding the unintended 
consequences of accelerating the data completeness thresholds too 
quickly, which may jeopardize a MIPS eligible clinicians' ability to 
participate and perform well under MIPS (81 FR 77121, 82 FR 53632, and 
84 FR 62951). We want to ensure that an appropriate, yet achievable, 
data completeness threshold is applied to all eligible clinicians 
participating in MIPS. Based on our analysis of data completeness rates 
from data submission for the CY 2017 performance period (as outlined in 
the CY 2020 PFS final rule (84 FR 62951), the average data completeness 
rates were as follows: for individual eligible clinicians, it was 
76.14; for groups, it was 85.27; and for small practices, it was 
74.76), we believe that it is feasible for eligible clinicians and 
groups to achieve a higher data completeness threshold without 
jeopardizing their ability to participate and perform well under MIPS.
    We are now proposing to raise the data completeness criteria from 
70 percent to 75 percent for the CY 2024 and CY 2025 performance 
periods/2026 and 2027 MIPS payment years. Specifically, we propose in 
Sec.  414.1340(a)(4) that, for the CY 2024 and CY 2025 performance 
periods/2026 and 2027 MIPS payment years, a MIPS eligible clinician or 
a group submitting quality measures data on QCDR measures, MIPS CQMs, 
eCQMs must submit data on at least 75 percent of the MIPS eligible 
clinician or group's patients that meet the measure's denominator 
criteria, regardless of payer. Similarly, we are proposing in Sec.  
414.1340(b)(4), for the CY 2024 and CY 2025 performance periods/2026 
and 2027 MIPS payment years, that a MIPS eligible clinician or a group 
submitting quality measures data on Medicare Part B claims measures 
would need to submit data on at least 75 percent of the MIPS eligible 
clinician or group's patients seen during the corresponding performance 
period to which the measure applies. We believe that increasing the 
data completeness criteria threshold to 75 percent for the CY 2024 
performance period/2026 MIPS payment year and the CY 2025 performance 
period/2027 MIPS payment year provides MIPS eligible clinicians with 
ample time prepare for a higher standard as most clinicians already 
meet or exceed this standard.
    We seek public comment on our proposal to increase the data 
completeness criteria threshold from at least 70 percent to at least 75 
percent for the CY 2024 and CY 2025 performance periods/2026 and 2027 
MIPS payment years.
(c) Selection of MIPS Quality Measures
    Section 1848(q)(2)(D)(i) of the Act requires the Secretary, through 
notice and comment rulemaking, to establish an annual final list of 
quality measures from which MIPS eligible clinicians may choose for the 
purpose of assessment under MIPS. Section 1848(q)(2)(D)(i)(II) of the 
Act requires that the Secretary annually update the list by removing 
measures from the list, as appropriate; adding to the list, as 
appropriate, new measures; and determining whether measures that have 
undergone substantive changes should be included on the updated list.
    Previously finalized MIPS quality measures can be found in the CY 
2022 PFS final rule (86 FR 65687 through 65968); CY 2021 PFS final rule 
(85 FR 85045 through 85377); CY 2020 PFS final rule (84 FR 63205 
through 63513); CY 2019 PFS final rule (83 FR 60097 through 60285); CY 
2018 Quality Payment Program final rule (82 FR 53966 through 54174); 
and CY 2017 Quality Payment Program final rule (81 FR 77558 through 
77816). Proposed changes to the MIPS quality measure set, as described 
in Appendix 1 of this proposed rule, include the following: the 
addition of new measures; updates to specialty sets; removal of 
existing measures, and substantive changes to existing measures. For 
the CY 2023 performance period, we are proposing a measure set of 194 
MIPS quality measures in the inventory.
    The new MIPS quality measures that we are proposing to include in 
MIPS for the CY 2023 performance period and future years can be found 
in Table Group A of Appendix 1 to this proposed rule. For the CY 2023 
performance period, we are proposing 9 new MIPS quality measures, which 
includes 1 administrative claims measure; 1 composite measure; 5 high 
priority measures, and 2 patient-reported outcome measures).
    In addition to the establishment of new individual MIPS quality 
measures, we also develop and maintain specialty measure sets to assist 
MIPS eligible clinicians with selecting quality measures that are most 
relevant to their scope of practice. We are proposing modifications to 
existing specialty sets and new specialty sets as described in Table 
Group B of Appendix 1 to this proposed rule. Specialty sets may 
include: new measures, previously finalized measures with 
modifications, previously finalized measures with no modifications, the 
removal of certain previously finalized quality measures, or the 
addition of existing MIPS quality measures. Specialty and subspecialty 
sets are not inclusive of every specialty or subspecialty.
    On January 3, 2022, we announced that we would be accepting 
recommendations for potential new specialty measure sets or revisions 
to existing specialty measure sets for year 7 of MIPS under the Quality 
Payment Program.\405\ These recommendations were based on the MIPS 
quality measures finalized in the CY 2021 PFS final rule and the 2021 
Measures Under Consideration List; the recommendations include the 
addition or removal of current MIPS quality measures from existing 
specialty sets, or the creation of new specialty sets. All specialty 
set recommendations submitted for consideration were assessed and 
vetted, and as a result, the recommendations that we agree with are 
being proposed in this proposed rule.
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    \405\ Message to the Quality Payment Program listserv on January 
3, 2022, entitled: ``The Centers for Medicare & Medicaid Services 
(CMS) is Soliciting Stakeholder Recommendations for Potential 
Consideration of New Specialty Measure Sets and/or Revisions to the 
Existing Specialty Measure Sets for the 2023 Performance Year of the 
Merit-based Incentive Payment System (MIPS).''
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    In addition to establishing new individual MIPS quality measures 
and modifying existing specialty sets and new specialty sets as 
outlined in Tables Group A and Group B of Appendix 1 of this proposed 
rule, we refer readers to Table Group C of Appendix 1 of this proposed 
rule for a list of quality measures and rationales for measure removal. 
We have previously specified certain criteria that will be used when

[[Page 46279]]

we are considering the removal of a measure (81 FR 77136 and 77137; 83 
FR 59763 through 59765; 84 FR 62957 through 62959). For the CY 2023 
performance period, we are proposing to remove 15 MIPS quality measures 
and partially remove 2 MIPS quality measures that are proposed for 
removal from traditional MIPS and proposed for retention for use in 
MVPs. We refer readers to Table Group DD of Appendix 1 of this proposed 
rule for further information regarding the proposals to retain such 
measures for retention for use in relevant MVPs. Of the 15 MIPS quality 
measures proposed for removal, the following pertains to such measures: 
1 MIPS quality measure is duplicative to a proposed new MIPS quality 
measure; 4 quality measures are duplicative of current measures; 7 MIPS 
quality measures that do not align with the Meaningful Measure 
Initiative (that is, measures that are unable to produce a benchmark or 
have limited adoption, or are a standard of care); 2 MIPS quality 
measures that are under the topped out lifecycle; and 1 measure is 
extremely topped out. We have continuously communicated to interested 
parties our desire to reduce the number of process measures within the 
MIPS quality measure set (83 FR 59763 through 59765). We noted our 
belief that our proposal to remove the quality measures outlined in 
Table Group C of this proposed rule would lead to a more parsimonious 
inventory of meaningful, robust measures in the program, and that our 
approach to removing measures should occur through an iterative process 
that includes an annual review of the quality measures to determine 
whether they meet our removal criteria.
    Also, we are proposing substantive changes to several MIPS quality 
measures, which can be found in Table Group D of Appendix 1 of this 
proposed rule. We have previously established criteria that would apply 
when we are considering making substantive changes to a quality measure 
(81 FR 77137, and 86 FR 65441 and 65442). We are proposing substantive 
changes to 75 MIPS quality measures, which includes 2 quality measures 
proposed to be retained for utilization under MVPs (we refer readers to 
Table Group DD of Appendix 1 of this proposed rule for such measures 
that are proposed for retention for use in relevant MVPs). On an annual 
basis, we review the established MIPS quality measure inventory to 
consider updates to the measures. Possible updates to measures may be 
minor or substantive.
    Lastly, we are proposing substantive changes to CMS Web Interface 
measures that are available as a collection and submission type for 
Medicare Shared Savings Program ACOs meeting reporting requirements 
under the APP. The substantive changes to the CMS Web Interface 
measures can be found in Table Group E of Appendix 1 of this proposed 
rule. Also, in section III.G.4.c.(2) of this proposed rule, the 
establishment of CMS Web Interface benchmark policies for the APP under 
Medicare Shared Savings Program are being proposed, in which the 
establishment of such benchmark policies for the APP (at Sec.  425.512) 
would be applied retroactively starting with the CY 2022 performance 
year. The CMS Web Interface benchmark policies previously established 
at Sec.  425.502(b) under the Medicare Shared Savings Program were 
revised in the CY 2021 PFS final rule, in which the provisions under 
Sec.  425.502(b) were sunset with the CY 2020 performance year and not 
applied to the APP under the Medicare Shared Savings Program. For 
performance year CY 2021, it was noted in the CY 2021 PFS final rule 
that the CMS Web Interface measure benchmarks developed for the 
Medicare Shared Savings Program for performance year CY 2020 would be 
utilized (85 FR 84724). However, as a result of the inadvertent failure 
to consider the policies that would apply for purposes of establishing 
benchmarks for the CMS Web Interface measures applicable to the APP 
starting with performance year CY 2022, benchmarks policies for the CMS 
Web Interface measures were not established for the APP under the 
Medicare Shared Savings Program. We note that the absence of benchmark 
policies for the APP under the Medicare Shared Savings Program impacts 
MIPS. The CMS Web Interface measure benchmarks established for the 
Medicare Shared Savings Program are utilized for purposes of MIPS 
(Sec.  414.1380(b)(1)(ii)(B)). Due to the absence of benchmark policies 
for the APP under the Medicare Shared Savings Program, CMS Web 
Interface measure benchmarks are not able to be established starting 
with performance year 2022. As outlined in section III.G.4.c.(2) of 
this proposed rule, the establishment of CMS Web Interface benchmark 
policies for the APP under Medicare Shared Savings Program are being 
proposed, in which the retroactive adoption of benchmark policies 
previously established at Sec.  425.502(b) would be applied for 
performance year CY 2022 (and future performance years as applicable 
under the Medicare Shared Savings Program). Thus, for the CY 2022 
performance period/2024 MIPS payment year (last year in which the CMS 
Web Interface is available as a collection and submission type under 
traditional MIPS for groups, virtual groups, and APM Entities), the CMS 
Web Interface benchmarks created for the APP under the Medicare Shared 
Savings Program would be utilized under MIPS.
    We are requesting public comment on our proposals to modify the 
quality performance category measure set.
(i) Screening for Social Drivers of Health Proposed Measure
    Established evidence demonstrates that factors beyond the clinical 
realm are directly associated with patient health outcomes as well as 
healthcare utilization, costs, and performance in quality-based payment 
programs.<SUP>406 407</SUP> Specifically, social risk factors account 
for 50 to 70 percent of health outcomes.<SUP>408 409 410</SUP> Indeed, 
the Physicians Foundation surveyed 8,500 physicians in 2018 and found 
that almost 90 percent of respondents reported their patients had a 
serious health problem linked to poverty or other social 
conditions.\411\
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    \406\ Zhang, Y., Li, J., Yu, J., Braun, R.T., Casalino, L.P. 
(2021). Social Determinants of Health and Geographic Variation in 
Medicare per Beneficiary Spending. JAMA Network Open. 
2021;4(6):e2113212. doi:10.1001/jamanetworkopen.2021.13212.
    \407\ Khullar, D., Schpero, W.L., Bond, A.M., Qian, Y., & 
Casalino, L.P. (2020). Association Between Patient Social Risk and 
Physician Performance Scores in the First Year of the Merit-based 
Incentive Payment System. JAMA, 324(10), 975-983. Available at 
https://doi.org/10.1001/jama.2020.13129.
    \408\ Kaiser Family Foundation. (2021). Racial and Ethnic Health 
Inequities and Medicare. Available at https://www.kff.org/medicare/report/racial-and-ethnic-health-inequities-and-medicare/.
    \409\ Khullar, D. (September, 2020). Association Between Patient 
Social Risk and Physician Performance American academy of Family 
Physicians. Addressing Social Determinants of Health in Primary Care 
Team-Based Approach for Advancing Health Equity.
    \410\ The Physicians Foundation. (2021). Viewpoints: Social 
Determinants of Health. Available at https://physiciansfoundation.org/wp-content/uploads/2019/08/The-Physicians-Foundation-SDOH-Viewpoints.pdf.
    \411\ The Physicians Foundation. (2019). Viewpoints: Social 
Determinants of Health. Available at https://physiciansfoundation.org/wp-content/uploads/2019/08/The-Physicians-Foundation-SDOH-Viewpoints.pdf.
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    Health-related social needs (HRSNs), which we have previously 
defined as individual-level, adverse social conditions that negatively 
impact a person's health or healthcare, are significant risk factors 
associated with worse health outcomes as well as increased healthcare 
utilization.\412\ In

[[Page 46280]]

2017, the CMS Innovation Center launched the Accountable Health 
Communities (AHC) Model to test the impact of addressing the HRSNs of 
Medicare and Medicaid beneficiaries.<SUP>413 414 415 416</SUP> Although 
there are other models of care that address HRSNs, the AHC Model is one 
of the first Federal pilots to test whether systematically identifying 
and addressing core HRSNs--through screening, referral, and community 
navigation--improves healthcare costs, utilization, and outcomes.\417\ 
Moreover, as described in the CMS Equity Plan for Improving Quality in 
Medicare, complex interactions among individual need, clinician 
practice/behavior, and availability of community resources 
significantly impact healthcare access, quality, and ultimately 
costs.<SUP>418 419</SUP>
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    \412\ Centers for Medicare & Medicaid Services. (2021). A Guide 
to Using the Accountable Health Communities Health-Related Social 
Needs Screening Tool: Promising Practices and Key Insights. June 
2021. Available at https://innovation.cms.gov/media/document/ahcm-screeningtool-companion.
    \413\ Centers for Medicare & Medicaid Services. (June, 2021). A 
Guide to Using the Accountable Health Communities Health-Related 
Social Needs Screening Tool: Promising Practices and Key Insights. 
Available at https://innovation.cms.gov/media/document/ahcm-screeningtool-companion.
    \414\ Alley, D.E., Asomugha, C.N., Conway, P.H., & Sanghavi, 
D.M. 2016. Accountable Health Communities-Addressing Social Needs 
through Medicare and Medicaid. The New England Journal of Medicine 
374(1):8-11. Available at https://doi.org/10.1056/NEJMp1512532.
    \415\ Billioux, A., Verlander, K., Anthony, S., & Alley, D. 
(2017). Standardized Screening for Health-Related Social Needs in 
Clinical Settings: The Accountable Health Communities Screening 
Tool. NAM Perspectives, 7(5). Available at https://doi.org/10.31478/201705b.
    \416\ Centers for Medicare & Medicaid Services. (2021). 
Accountable Health Communities Model. Accountable Health Communities 
Model [verbar] CMS Innovation Center. Available at https://innovation.cms.gov/innovation-models/ahcm.
    \417\ RTI International. (2020). Accountable Health Communities 
(AHC) Model Evaluation. Available at https://innovation.cms.gov/data-and-reports/2020/ahc-first-eval-rpt.
    \418\ Centers for Medicare & Medicaid Services. (2021). Paving 
the Way to Equity: A Progress Report. Available at https://www.cms.gov/files/document/paving-way-equity-cms-omh-progress-report.pdf.
    \419\ Centers for Medicare & Medicaid Services, Office of 
Minority Health. (2021). The CMS Equity Plan for Improving Quality 
in Medicare. 2015-2021. Available at https://www.cms.gov/About-CMS/Agency-Information/OMH/OMH_Dwnld-CMS_EquityPlanforMedicare_090615.pdf.
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    Conceptually, HRSNs exist along a continuum with other equity-
related terms--such as ``social determinants of health'' and ``social 
risk factors''--used to describe upstream factors that can adversely 
affect the health of individuals and communities. Often conflated and 
even used interchangeably, the variety of terms has created both 
confusion as well as concern, prompting leaders in the field to adopt 
``drivers of health'' (DOH) instead.\420\ Hereafter, we utilize DOH 
terminology to more holistically capture aforementioned and related 
concepts, while minimizing potential misinterpretation and/or negative 
connotation.
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    \420\ ``What We Need To Be Healthy--And How To Talk About It,'' 
Health Affairs Blog, May 3, 2021. doi:10.1377/hblog20210429.335599. 
Available at https://www.healthaffairs.org/do/10.1377/forefront.20210429.335599/.
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    We believe that consistently addressing DOH will have two 
significant benefit for MIPS. First, because DOH disproportionately 
impact individuals and communities that are disadvantaged and/or 
underserved by the healthcare system, the promotion of screening for 
these factors would support clinician practices and health systems in 
actualizing an expressed commitment to address disparities in care, 
implementing associated equity measures to track progress, and 
improving overall health equity.\421\
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    \421\ American Hospital Association. (December, 2020). Health 
Equity, Diversity & Inclusion Measures for Hospitals and Health 
System Dashboards. Available at https://ifdhe.aha.org/system/files/media/file/2020/12/ifdhe_inclusion_dashboard.pdf.
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    Second, patient-level DOH data through screening is essential in 
the long-term to encourage meaningful collaboration among clinicians 
and community-based organizations, and implement and evaluate related 
innovations in healthcare and social service delivery.
    As a first step towards addressing DOH to close health equity gaps 
among patients served by MIPS-eligible clinicians, we propose the 
adoption of an evidence-based DOH measure (we refer readers to Table 
Group A.3 of Appendix 1 to this proposed rule for the proposed measure 
information) that would support identification of specific DOH 
associated with inadequate healthcare access and adverse health 
outcomes among patients. We note that the measure would enable 
systematic collection of DOH data. This standardized measure would 
enable clinicians to systematically address DOH affecting individual 
patients; thereby, improving not only early identification of risk and/
or need, but also prompt referral to relevant resources as well as 
stronger clinical-community linkages. Further, collecting DOH data 
could promote more focused collaboration between clinicians/health 
systems and appropriate community-based organizations to guide cross-
sector resource allocation and ultimately improved patient outcomes.
    The ``Screening for Social Drivers of Health'' measure assesses the 
percent of patients who are 18 years or older screened for food 
insecurity, housing instability, transportation problems, utility 
difficulties, and interpersonal safety. Under our Meaningful Measures 
Framework,\422\ the measure addresses the quality priority of ``Work 
with Communities to Promote Best Practices of Healthy Living'' through 
the Meaningful Measures Area of ``Equity of Care.'' Additionally, 
pursuant to Meaningful Measures 2.0, this measure addresses the 
``healthcare equity'' priority area and aligns with our commitment to 
introduce plans to close equity gaps and promote health equity through 
quality measures, including to ``develop and implement measures that 
reflect social and economic determinants.'' \423\ The development and 
proposal of this measure also aligns with the CMS strategic pillar to 
advance health equity by addressing the health disparities that 
underlie our health system \424\ and the 5 CMS health equity priorities 
for reducing disparities in health: \425\
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    \422\ Centers for Medicare & Medicaid Services. Meaningful 
Measures Framework. Available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/CMS-Quality-Strategy.
    \423\ Centers for Medicare & Medicaid Services. Meaningful 
Measures 2.0: Moving from Measure Reduction to Modernization. 
Available at https://www.cms.gov/medicare/meaningful-measures-framework/meaningful-measures-20-moving-measure-reduction-modernization. We note that Meaningful Measures 2.0 is still under 
development.
    \424\ Brooks-LaSure, C. (2021). My First 100 Days and Where We 
Go From Here: A Strategic Vision for CMS. Available at https://www.cms.gov/blog/my-first-100-days-and-where-we-go-here-strategic-vision-cms.
    \425\ Centers for Medicare & Medicaid Services, CMS Framework 
for Health Equity 2022-2032. Available at https://www.cms.gov/files/document/cms-framework-health-equity.pdf.
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    <bullet> Priority 1: Expand the Collection, Reporting, and Analysis 
of Standardized Data.
    <bullet> Priority 2: Assess Causes of Disparities Within CMS 
Programs, and Address Inequities in Policies and Operations to Close 
Gaps.
    <bullet> Priority 3: Build Capacity of Health Care Organizations 
and the Workforce to Reduce Health and Health Care Disparities.
    <bullet> Priority 4: Advance Language Access, Health Literacy, and 
the Provision of Culturally Tailored Services.
    <bullet> Priority 5: Increase All Forms of Accessibility to Health 
Care Services and Coverage.
(d) MIPS Quality Performance Category Health Equity Request for 
Information
    Significant and persistent inequities in healthcare outcomes exist 
in the United States. Belonging to a racial or

[[Page 46281]]

ethnic minoritized group; being a member of a religious minority; 
living with a disability; being a member of lesbian, gay, bisexual, 
transgender, and queer (LGBTQ+) community; living in a rural area; or 
being near or below the poverty level is often associated with worse 
health outcomes.<SUP>426 427 428 429 430 431 432 433 434</SUP>
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    \426\ Joynt, K.E., Orav, E., & Jha, A.K. (2011). Thirty-Day 
Readmission Rates for Medicare Beneficiaries by Race and Site of 
Care. JAMA, 305(7):675-681.
    \427\ Vu, M., et al. (2016). Predictors of Delayed Healthcare 
Seeking Among American Muslim Women. J Womens Health (Larchmt) 
25(6): 586-93.
    \428\ Lindenauer, P.K., Lagu, T., Rothberg, M.B., et al. (2013). 
Income Inequality and 30-Day Outcomes After Acute Myocardial 
Infarction, Heart Failure, and Pneumonia: Retrospective Cohort 
Study. British Medical Journal, 346.
    \429\ Trivedi, A.N., Nsa, W., Hausmann, L.R.M., et al. (2014). 
Quality and Equity of Care in U.S. Hospitals. New England Journal of 
Medicine, 371(24):2298-2308.
    \430\ Polyakova, M., et al. (2021). Racial Disparities in Excess 
All-Cause Mortality During the Early COVID-19 Pandemic Varied 
Substantially Across States. Health Affairs, 40(2): 307-316.
    \431\ Rural Health Research Gateway. (2018). Rural Communities: 
Age, Income, and Health Status. Rural Health Research Recap. 
Available at https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
    \432\ U.S. Department of Health and Human Services, Office of 
the Secretary, HHS Office of Minority Health. Progress Report to 
Congress. 2020 Update on the Action Plan to Reduce Racial and Ethnic 
Health Disparities. FY 2020. Available at https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
    \433\ Heslin, K.C., & Hall, J.E. (2021). Sexual Orientation 
Disparities in Risk Factors for Adverse COVID-19-Related Outcomes, 
by Race/Ethnicity--Behavioral Risk Factor Surveillance System, 
United States, 2017-2019. Morbidity and Mortality Weekly Report 
(MMWR), 70(5):149-154. Centers for Disease Control and Prevention. 
February 5, 2021. Available at https://www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm?s_cid=mm7005a1_w.
    \434\ Poteat, T.C., Reisner, S.L., Miller, M., Wirtz, A.L. 
(2020). COVID-19 Vulnerability of Transgender Women With and Without 
HIV Infection in the Eastern and Southern U.S. medRxiv [Preprint]. 
2020 Jul 24:2020.07.21.20159327. doi:10.1101/2020.07.21.20159327. 
PMID: 32743608; PMCID: PMC7386532.
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    One approach being employed to reduce health inequity across CMS 
programs is the expansion of efforts to report quality measure results 
stratified by patient social risk factors and demographic variables. In 
the CY 2023 IPPS/LTCH PPS proposed rule (87 FR 28570 through 28576), 
there is a Request for Information regarding the Overarching Principles 
for Measuring Healthcare Quality Disparities Across CMS Quality 
Programs, which describes key considerations that we believe should be 
accounted for across all CMS quality programs, including MIPS, when 
advancing the use of measure stratification to address healthcare 
disparities and advance health equity across our programs. We refer 
readers to the CY 2023 IPPS/LTCH PPS proposed rule for further 
information regarding this Request for Information).
    To facilitate efforts to reduce health inequities, we are 
considering the development of broadly applicable health equity 
measures for potential use within traditional MIPS and MVPs. As noted 
in section IV.A.10.c.(1)(d) of this proposed rule, we are proposing one 
health equity measure for purposes of MIPS, ``Screening for Social 
Drivers of Health,'' while other CMS programs are proposing two health 
equity measures, ``Screening for Social Drivers of Health'' and 
``Screen Positive Rate for Social Drivers of Health,'' as proposed in 
the CY 2023 IPPS/LTCH PPS proposed rule (87 FR 28498 through 28506). As 
we consider the possible future inclusion of additional health equity 
measures in MIPS in future years (may include, but not limited to, a 
measure similar to the MUC2021-134 Screen Positive Rate for Social 
Drivers of Health measure included on the 2021 Measures Under 
Consideration (MUC) List),\435\ we seek public comment on the following 
questions in order to better understand the type and structure of 
health equity measures that would be appropriate for the implementation 
in MIPS.
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    \435\ Centers for Medicare & Medicaid Services. Overview of the 
List of Measures Under Consideration for December 1, 2021. Available 
at https://www.cms.gov/files/document/overview-2021-muc-list-20220308-508.pdf.
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    <bullet> How would a measure best capture health equity needs under 
MIPS in the future ?
    <bullet> How would a measure's quality action provide actionable 
information and link to improvement in the quality of care provided to 
populations with health inequities? Would a measure be meaningful to 
clinicians in small practices or Federally Qualified Health Centers 
that may have limited or no access to referral services?
    <bullet> What, if any, would be the limitations in data 
interpretation if a future health equity-related measure would not be 
risk-adjusted?
    <bullet> Would there be any concerns if a future health equity-
related measure did not specify requirements for use of consistent 
tool(s) for data collection under such a measure? Should such a future 
measure support flexibility in choice of tools while requiring 
standardized coding of responses to support interoperability?
    Also, we seek public comment on the following two potential 
approaches for measuring health equity in MIPS and MVPs: assessing the 
collection and use of self-reported patient characteristics; and 
assessing patient-clinician communication.
(i) Assessing the Collection and Use of Self-Reported Patient 
Characteristics
    A prerequisite for measuring and reporting quality for patients 
with social risk factors (that is, stratifying quality measures by 
patient characteristics) is collecting standardized, complete, and 
accurate patient data. These data include patient demographics and 
social drivers of health (referred to as ``patient characteristics''), 
which are not routinely or systematically collected across the health 
care system.<SUP>436 437</SUP> We are considering ways to encourage 
clinicians to collect social risk information, including through the 
development of a measure that tracks the completeness of self-reported 
patient characteristics such as race, ethnicity, preferred language, 
gender identity, sexual orientation, disability status, income, 
education, employment, food insecurity, housing instability, 
transportation problems, utility help needs, and interpersonal safety. 
Patient-reported data are considered to be the gold standard for 
evaluating quality of care for patients with social risk factors.\438\
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    \436\ CMS Health Services Advisory Group. (2021). CMS Quality 
Measure Development Plan 2020 Population Health Environmental Scan 
and Gap Analysis Report for the Quality Payment Program.
    \437\ U.S. Department of Health and Human Services, Office of 
the Assistant Secretary for Planning and Evaluation. (June 2020). 
Second Report to Congress on Social Risk Factors and Medicare's 
Value-Based Purchasing Program. Available at https://aspe.hhs.gov/social-risk-factors-and-medicares-value-based-purchasing-programs.
    \438\ Jarr[iacute]n, O.F., Nyandege, A.N., Grafova, I.B., Dong, 
X., & Lin, H. (2020). Validity of Race and Ethnicity Codes in 
Medicare Administrative Data Compared with Gold-Standard Self-
Reported Race Collected During Routine Home Health Care Visits. Med 
Care. 58(1): e1-e8. doi: 10.1097/MLR.0000000000001216. PMID: 
31688554; PMCID: PMC6904433.
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    We seek public comment on the following questions in order to 
understand the feasibility and usefulness of a measure that promotes 
the collection of self-reported patient characteristics data to provide 
potential opportunities for the use of patient characteristics data to 
understand the status of health and health care equity.
    <bullet> Which self-reported patient characteristics, including but 
not limited to those listed above, are important to collect in a 
standardized format to facilitate future use in quality measures, such 
as stratification? Which characteristics would you consider lower 
priority for CMS to collect for use in quality measurement?
    <bullet> Are there certain characteristics that are important to 
collect together to more meaningfully categorize patient populations 
(for example, examining the

[[Page 46282]]

intersection of race and gender identity)?
    <bullet> How important is it to use a standardized tool with coded 
questions and data elements to collect self-reported patient 
characteristics across clinicians and practices and what challenges and 
limitations present without use of a coded and standardized instrument?
    <bullet> Would the use of a consistent screening tool(s) to collect 
social drivers of health information improve our ability to 
meaningfully compare performance across clinicians, such as performance 
on a measure assessing referrals for identified social needs or if 
measures are stratified based on identified needs? How are clinicians 
collecting and using this type of health information to inform clinical 
care?
    <bullet> What is a meaningful approach for monitoring improvement 
in standardized collection of self-reported patient characteristic data 
while minimizing reporting burden?
    <bullet> In addition to quality measures, cost measures, and 
improvement activities applicable to the clinical aspect of an MVP, 
each MVP includes a foundational layer of population health and 
promoting interoperability measures, broadly applicable to most, if not 
all, clinicians. Is the proposed quality measure, ``Screening for 
Social Drivers of Health,'' appropriate for use in the foundational 
layer of MVPs (we refer readers to section IV.A.10.c.(1)(d) and Table 
Group A of Appendix 1 of this proposed rule for the proposed measure)? 
If so, then such inclusion would require most or all eligible 
clinicians to screen for social drivers of health during patient 
encounters.
    <bullet> Is it appropriate to develop a quality measure to assess 
clinician referrals to community-based services upon screening positive 
for a social driver of health, including food insecurity, housing 
instability, transportation problems, utility help needs, and 
interpersonal safety?
    We are interested in understanding differences in clinician's 
performance on MIPS measures for different patient populations. We 
understand that patient outcomes, especially for those patients who 
belong to underserved communities, may be influenced by factors outside 
of the clinician's control. We seek public comment on the following 
question. Would it be beneficial to: stratify either outcome or process 
measures by patient demographics; and/or stratify either outcome or 
process measures by identified social needs, such as food insecurity, 
housing instability, transportation problems, utility help needs, or 
interpersonal safety?
(ii) Assessing Patient-Clinician Communication
    Effective communication is critical to ensuring mutual clinician-
patient understanding, empowering patients, and providing high-quality 
care across all patient care settings and clinician types. Reliance on 
unqualified individuals to interpret medical information can lead to 
misunderstandings, devastating outcomes, or even 
death.<SUP>439 440</SUP> To promote access to care for patients in need 
of foreign language services, we developed the Guide to Developing a 
Language Access Plan \441\ in February of 2018. The Guide to Developing 
a Language Access Plan outlines steps organizations can take to provide 
high-quality and appropriate language assistance services to all 
individuals they serve. While resources are available, currently, there 
are not clinician-level measures in MIPS that assess the receipt of 
language services.\442\ We are considering the development of a 
patient-reported outcome measure that assesses the receipt of 
appropriate language services and/or the extent of clinician-patient 
communication. We are seeking feedback on the feasibility and 
usefulness of such a measure(s).
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    \439\ The Colorado Trust. (2013). How Language Access Issues 
Affect Patients, Policymakers, and Health Care Providers. Available 
at http://www.coloradotrust.org/sites/default/files/CT_LanguageAccessBrief_final-1.pdf.
    \440\ Chen, A.H., Youdelman, M.K., & Brooks, J. (2007). The 
Legal Framework for Language Access in Healthcare Settings: Title VI 
and Beyond. Journal of General Internal Medicine, 22 Suppl2, 326-
327. Available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2150609.
    \441\ Centers for Medicare & Medicaid Services. Guide to 
Developing a Language Access Plan. 2018. Available at https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Language-Access-Plan-508.pdf.
    \442\ CMS Health Services Advisory Group. (2021). CMS Quality 
Measure Development Plan 2020 Population Health Environmental Scan 
and Gap Analysis Report for the Quality Payment Program.
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    If we developed such measure(s), it may be considered for the 
foundational layer of MVPs, meaning this measure would be required of 
most, if not all, eligible clinicians. Given the variance in patient 
needs and organizational resources, we are seeking feedback on the 
appropriateness of requiring all clinicians to report on such 
measure(s).
(e) Developing Quality Measures That Address Amputation Avoidance in 
Diabetic Patients Request for Information
    Diabetes affects 34 million, or 13 percent, of adults in the United 
States. A serious potential complication of diabetes is lower extremity 
amputation (LEA), resulting from peripheral neuropathy (nerve damage), 
peripheral arterial disease (PAD, reduced blood flow to the 
extremities), or both. Patients with neuropathy or PAD are vulnerable 
to developing ulcers on the feet, which, if they become infected and do 
not heal, can lead to amputation. LEAs occur at a rate of 5.6 per 1000 
persons with diabetes, affecting approximately 130,000 patients in 
2016,\443\ and evidence indicates that amputations are on the rise.
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    \443\ Centers for Disease Control and Prevention. (2020). 
National Diabetes Statistics Report. Available at https://www.cdc.gov/diabetes/data/statistics-report/index.html.
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    The COVID-19 pandemic has likely accelerated rates of amputation, 
due in part to delayed wound care and preventive 
care.<SUP>444 445</SUP> LEA has devastating consequences for a 
patient's health and quality of life; \446\ the 5-year mortality rate 
following LEA is estimated at 50 percent.\447\ There are known 
disparities in LEA, with rates of amputation substantially higher among 
Black, Native American, and Hispanic patients as compared to White non-
Hispanic patients.<SUP>448 449</SUP> Evidence indicates that there may 
be gaps in care for certain populations, which contribute to these 
disparities.\450\ For

[[Page 46283]]

example, evidence has demonstrated that Black patients are less likely 
to undergo potentially limb-saving interventions, such as 
revascularization or wound debridement, prior to having an amputation, 
as compared to White patients.\451\ Disparities are also observed by 
socioeconomic status and region (with rural regions experiencing higher 
amputation rates).<SUP>452 453</SUP>
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    \444\ Casciato, D.J., Yancovitz, S., Thompson, J., Anderson, S., 
Bischoff, A., Ayres, S., & Barron, I. (2020). Diabetes-Related Major 
and Minor Amputation Risk Increased During the COVID-19 Pandemic. 
Journal of the American Podiatric Medical Association, 20-224. 
Available at https://doi.org/10.7547/20-224.
    \445\ Caruso, P., Longo, M., Signoriello, S., Gicchino, M., 
Maiorino, M.I., Bellastella, G., Chiodini, P., Giugliano, D., & 
Esposito, K. (2020). Diabetic Foot Problems During the COVID-19 
Pandemic in a Tertiary Care Center: The Emergency Among the 
Emergencies. Diabetes Care, 43(10), e123-e124. Available at https://doi.org/10.2337/dc20-1347.
    \446\ Crocker, R.M., Palmer, K.N.B., Marrero, D.G., & Tan, T.W. 
(2021). Patient Perspectives on the Physical, Psycho-Social, and 
Financial Impacts of Diabetic Foot Ulceration and Amputation. 
Journal of Diabetes and Its Complications, 35(8), 107960. Available 
at https://doi.org/10.1016/j.jdiacomp.2021.107960.
    \447\ Matheson, E.M., Bragg, SW, & Blackwelder, R.S. (2021). 
Diabetes-Related Foot Infections: Diagnosis and Treatment. American 
Family Physician, 104(4), 386-394.
    \448\ Suckow, B.D., Newhall, K.A., Bekelis, K., Faerber, A.E., 
Gottlieb, D.J., Skinner, J.S., Stone, D.H., & Goodney, P.P. (2016). 
Hemoglobin A1c Testing and Amputation Rates in Black, Hispanic, and 
White Medicare Patients. Annals of Vascular Surgery, 36, 208-217. 
Available at https://doi.org/10.1016/j.avsg.2016.03.035.
    \449\ Tan, T.W., Shih, C.D., Concha-Moore, K.C., Diri, M.M., Hu, 
B., Marrero, D., Zhou, W., & Armstrong, D.G. (2019). Disparities in 
Outcomes of Patients Admitted with Diabetic Foot Infections. PLoS 
ONE, 14(2), e0211481. Available at https://doi.org/10.1371/journal.pone.0211481.
    \450\ Rivero, M., Nader, N.D., Blochle, R., Harris, L.M., 
Dryjski, M.L., & Dosluoglu, H.H. (2016). Poorer Limb Salvage in 
African American Men with Chronic Limb Ischemia Is Due to Advanced 
Clinical Stage and Higher Anatomic Complexity at Presentation. 
Journal of Vascular Surgery, 63(5), 1318-1324. Available at https://doi.org/10.1016/j.jvs.2015.11.052.
    \451\ Rivero, M., Nader, N.D., Blochle, R., Harris, L.M., 
Dryjski, M.L., & Dosluoglu, H.H. (2016). Poorer Limb Salvage in 
African American Men with Chronic Limb Ischemia Is Due to Advanced 
Clinical Stage and Higher Anatomic Complexity at Presentation. 
Journal of Vascular Surgery, 63(5), 1318-1324. Available at https://doi.org/10.1016/j.jvs.2015.11.052.
    \452\ Sutherland, B.L., Pecanac, K., Bartels, C.M., & Brennan, 
M.B. (2020). Expect delays: Poor Connections Between Rural and Urban 
Health Systems Challenge Multidisciplinary Care for Rural Americans 
with Diabetic Foot Ulcers. Journal of Foot and Ankle Research, 13, 
32. Available at https://doi.org/10.1186/s13047-020-00395-y.
    \453\ Hughes, K., Mota, L., Nunez, M., Sehgal, N., & Ortega, G. 
(2019). The Effect of Income and Insurance on the Likelihood of 
Major Leg Amputation. Journal of Vascular Surgery, 70(2), 580-587. 
Available at https://doi.org/10.1016/j.jvs.2018.11.028.
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    High-quality care can reduce the risk of amputation, through 
activities such as regular foot exams to identify ulcers, screening for 
risk factors such as neuropathy and PAD, patient engagement in foot 
self-care, therapeutic footwear for patients at high risk of developing 
ulcers, offloading treatment for patients who develop ulcers, and 
revascularization to restore blood flow to the limbs.\454\
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    \454\ Bus, S.A., Lavery, L.A., Monteiro Soares, M., et al. 
(2020). Guidelines on the Prevention of Foot Ulcers in Persons with 
Diabetes (IWGDF 2019 update). Diabetes Metabolism Research and 
Reviews. 36(S1):e3269. Available at https://doi.org/10.1002/dmrr.3269.
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    We are exploring the development of a process quality measure, as 
well as a composite measure, for inclusion in MIPS, designed to reduce 
the risk of LEA among patients with diabetes. Based on review of the 
literature, technical expert panel (TEP) feedback, and prioritization 
of health equity, we are prioritizing the following process quality 
measure concept for potential future development: Ulcer Risk Assessment 
and Follow-Up. The measure would assess the percent of patients with 
diabetes who receive neurologic and vascular assessments of their lower 
extremities to determine ulcer risk, have a documented ulcer risk 
level, and who receive a follow-up plan of care if identified as high 
risk for ulcer. We intend to consider either adoption and modification 
of an existing measure or development of a new measure to achieve this 
measure concept. We are seeking feedback on the following questions in 
order to understand, account for, and address challenges that may be 
experienced during development, testing, and implementation of the 
process measure.
    <bullet> Are neurological and vascular assessments, and the 
determination of risk the most important care processes in the 
prevention of foot ulceration among individuals with diabetes?
    <bullet> Once a process quality measure concept would be fully 
developed and implemented, would high performance on the measure 
contribute to a reduction in diabetes-related LEA? Why or why not?
    <bullet> Once a process quality measure concept would be fully 
developed and implemented, would clinicians be able to report 
performance without undue burden? Why or why not?
    <bullet> Once a process quality measure concept would be fully 
developed and implemented, should performance be measured at the 
clinician level or group level? Is the measure appropriate for all 
clinicians? If not, to whom should the measure apply?
    <bullet> What would be the benefits and/or unintended consequences 
of the process quality measure concept?
    <bullet> Would a process quality measure concept contribute to 
health equity? Why or why not?
    We may also consider the development of a composite quality 
measure. A composite measure is a measure that combines two or more 
individual measures and yields a single score. Composite measures are 
intended to capture information about complex, multidimensional care 
processes. Within the context of diabetes and LEA, a composite measure 
may include individual measures focused on A1C control, cardiovascular 
risk factors (such as blood pressure control, tobacco non-use), 
peripheral neuropathy screening, PAD screening, evaluation of footwear, 
and offloading when ulcers occur. We are seeking feedback on the 
following questions in order to understand, account for, and address 
challenges that may be experienced during development, testing, and 
implementation of a composite quality measure.
    <bullet> Would the single measures comprising the composite be 
appropriate? Why or why not?
    <bullet> Once a composite quality measure concept would be fully 
developed and implemented, would high performance on the measure 
contribute to a reduction in diabetes-related LEA?
    <bullet> Once a process quality measure concept would be fully 
developed and implemented, should performance be measured at the 
clinician level or group level? Would the measure be appropriate for 
all clinicians? If not, to whom should the measure apply?
    <bullet> Once a quality measure concept would be fully developed 
and implemented, would clinicians be able to report performance without 
undue burden? Why or why not?
    <bullet> What would be the benefits and/or unintended consequences 
of a composite quality measure concept?
    <bullet> Would a composite quality measure concept contribute to 
health equity? Why or why not?
(2) Cost Performance Category
(a) Background
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules, and the CY 2019, CY 2020, CY 2021, and CY 2022 PFS final 
rules (81 FR 77162 through 77177, 82 FR 53641 through 53648, 83 FR 
59765 through 59776, 84 FR 62959 through 62979, 85 FR 84877 through 
84881, and 86 FR 65445 through 65461, respectively) for a description 
of the statutory basis for and existing policies pertaining to the cost 
performance category.
    In this rule, we are proposing to update the operational list of 
care episode and patient condition groups and codes by adding the 
Medicare Spending Per Beneficiary (MSPB) Clinician cost measure as a 
care episode group.
(b) Proposed Revisions to the Operational List of Care Episode and 
Patient Condition Groups and Codes
    Section 1848(r) of the Act specifies a series of steps and 
activities for the Secretary to undertake to involve physicians, 
practitioners, and other interested parties in enhancing the 
infrastructure for cost measurement, including for purposes of MIPS and 
APMs. Section 1848(r)(2) of the Act requires the development of care 
episode and patient condition groups, and classification codes for such 
groups, and provides for care episode and patient condition groups to 
account for a target of an estimated one-half of expenditures under 
Parts A and B (with this target increasing over time as appropriate). 
Sections 1848(r)(2)(E) through (G) of the Act require the Secretary to 
post on the CMS website a draft list of care episode and patient 
condition groups and codes for solicitation of input from interested 
parties, and subsequently, post an operational list of such groups and

[[Page 46284]]

codes. Section 1848(r)(2)(H) of the Act requires that not later than 
November 1 of each year (beginning with 2018), the Secretary shall, 
through rulemaking, revise the operational list as the Secretary 
determines may be appropriate, and that these revisions may be based on 
experience, new information developed under section 1848(n)(9)(A) of 
the Act, and input from physician specialty societies and other 
interested parties. For more information about past revisions to the 
operational list, we refer readers to 84 FR 62968 through 62969 and 86 
FR 65452 through 65453. The current operational list is available at 
the MACRA Feedback page at https://www.cms.gov/Medicare/Quality-Payment-Program/Quality-Payment-Program/Give-Feedback. Additionally, as 
required by section 1848(r)(2)(I) of the Act, information on resource 
use (or cost) measures currently in use in MIPS, cost measures under 
development and the time-frame for such development, potential future 
cost measure topics, a description of engagement with interested 
parties, and the percent of expenditures under Medicare Parts A and B 
that are covered by cost measures must be provided on the website of 
CMS not later than December 31 of each year.
    In prior rulemaking, we have included episode-based measures that 
focus on specific procedures and conditions in the operational list of 
care episode and patient condition groups and codes (84 FR 62968 
through 62969 and 86 FR 65452 through 65453). Section 1848(r)(2)(D)(ii) 
of the Act specifies that in establishing the care episode groups, we 
must take into account the patient's clinical problems at the time 
items and services are furnished during an episode of care, such as the 
clinical conditions or diagnoses, whether or not inpatient 
hospitalization occurs, and the principal procedures or services 
furnished, as well as other factors we determine appropriate. Section 
1848(r)(2)(D)(iii) of the Act specifies that in establishing the 
patient condition groups, we must take into account the patient's 
clinical history at the time of a medical visit, such as the patient's 
combination of chronic conditions, current health status, and recent 
significant history (such as hospitalization and major surgery during a 
previous period, such as 3 months), as well as other factors we 
determine appropriate. Currently, in the operational list there are 21 
care episode groups, which served as the basis for the 15 procedural 
episode-based measures and the 6 acute inpatient medical episode-based 
measures that have been established for the cost performance category 
(83 FR 59767 through 59773, 84 FR 62962 through 62968, and 86 FR 65446 
through 65453), and 2 patient condition groups, which served as the 
basis for the 2 chronic condition episode-based measures that have been 
established for the cost performance category (86 FR 65446 through 
65453). Given that population-based measures, such as the MSPB 
Clinician and total per capita cost measures, focus on a broader range 
of patient care, CMS and interested parties have considered them to be 
distinct from episode-based measures. Therefore, we did not include 
these two population-based measures in the operational list after they 
were comprehensively re-evaluated in 2019 and revised for use in MIPS 
beginning with the CY 2020 performance period/2022 MIPS payment year 
(84 FR 62974 through 62977). This distinction between episode-based 
measures and population-based measures also reflects development status 
as episode-based measures were developed specifically for use in MIPS, 
while the original versions of the MSPB Clinician and total per capita 
cost measures were first used in the Value Modifier (VM) program before 
being adapted for MIPS for the CY 2017 performance period/2019 MIPS 
payment year (81 FR 77166 through 77168). For additional background on 
the population-based measures currently in use in MIPS please refer to 
84 FR 62969 through 62977.
    We propose to add the MSPB Clinician measure to the operational 
list as a care episode group. Consistent with section 1848(r)(2)(D)(ii) 
of the Act, the MSPB Clinician measure takes into account the patient's 
clinical diagnoses at the time of an inpatient hospitalization and 
includes the costs of various items and services furnished during an 
episode of care. The MSPB Clinician measure is constructed using many 
aspects of the same logic as episode-based measures based on the care 
episode groups currently on the operational list. Both the MSPB 
Clinician and the episode-based measures are based on clearly-defined 
episodes and include the services that are clinically related to the 
clinician's role in the care being assessed. Further, the MSPB 
Clinician measure attributes episodes under medical Medicare Severity--
Diagnosis Related Groups (MS-DRGs) to clinician groups billing at least 
30 percent of evaluation and management (E/M) services during an 
inpatient stay, which is the same attribution logic as the one used for 
acute inpatient medical episode-based measures. Therefore, designating 
the MSPB Clinician measure as a care episode group alongside the 
episode-based measures would ensure that these similarities are 
reflected in the operational list. For more information on the MSPB 
Clinician measure, we refer readers to the CY 2020 PFS final rule (84 
FR 62974 through 62977) and to the measure specification documents that 
are available on the QPP Resource Library at https://qpp.cms.gov/about/resource-library.
    We note that at this time we are not proposing to add the total per 
capita cost measure to the operational list as a care episode group or 
patient condition group. The measure is not constructed based on 
episodes of care; rather, it includes all costs after a primary care-
type relationship has been identified. It also does not focus on 
specific patient conditions as it aims to include all patients where 
this clinician-patient relationship has been identified. More detailed 
information on the total per capita cost measure is included in the 
measure specifications documents available at the Quality Payment 
Program Resource Library website at https://qpp.cms.gov/resources/resource-library.
    We do not intend for our proposal to detract from the importance of 
episode-based measures or affect our plans to continue developing 
episode-based measures for potential use in MIPS. There are 7 episode-
based measures under development and 4 anticipated episode-based 
measures to begin development this year. The operational list as 
revised to reflect the proposal is available on the MACRA Feedback Page 
at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/MACRA-MIPS-and-APMs/MACRA-Feedback.html. We seek public comment on our proposal.
(3) Improvement Activities Performance Category
(a) Background
    For previous discussions on the general background of the 
improvement activities performance category, we refer readers to the CY 
2017 Quality Payment Program final rule (81 FR 77177 and 77178), the CY 
2018 Quality Payment Program final rule (82 FR 53648 through 53661), 
the CY 2019 PFS final rule (83 FR 59776 and 59777), the CY 2020 PFS 
final rule (84 FR 62980 through 62990), CY 2021 PFS final rule (85 FR 
84881 through 84886) and the CY 2022 PFS final rule (86 FR 65462 
through 65466). We also refer readers to 42 CFR 414.1305 for the 
definitions of improvement activities and attestation,

[[Page 46285]]

Sec.  414.1320 for standards establishing the performance period, Sec.  
414.1325 for the data submission requirements, Sec.  414.1355 for 
standards related to the improvement activity performance category 
generally, Sec.  414.1360 for data submission criteria for the 
improvement activity performance category, and Sec.  414.1380(b)(3) for 
improvement activities performance category scoring.
    We are not proposing any changes to the traditional MIPS 
improvement activities policies for the CY 2023 performance period/2025 
MIPS payment year. However, we are proposing changes to the improvement 
activities Inventory for the CY 2023 performance period/2025 MIPS 
payment year and future years as follows: adding four new improvement 
activities; modifying five existing improvement activities; and 
removing six previously adopted improvement activities.
(b) Improvement Activities Inventory
(i) Annual Call for Activities Background
    In the CY 2017 Quality Payment Program final rule (81 FR 77190), 
for the transition year of MIPS, we implemented the initial improvement 
activities Inventory consisting of approximately 95 activities (81 FR 
77817 through 77831). We took several steps to ensure the Inventory was 
inclusive of activities in line with statutory and program 
requirements. We discussed that we had conducted numerous interviews 
with highly performing organizations of all sizes and had conducted an 
environmental scan to identify existing models, activities, or measures 
that met all or part of the improvement activities performance 
category, including the patient-centered medical homes, the 
Transforming Clinical Practice Initiative (TCPI), CAHPS surveys, and 
AHRQ's Patient Safety Organizations. In addition, we reviewed the CY 
2016 PFS final rule with comment period (80 FR 71259) and the comments 
received in response to the MIPS and APMs RFI in relation to the 
improvement activities performance category, which sought input on what 
activities could be classified as clinical practice improvement 
activities according to the definition under section 
1848(q)(2)(C)(v)(III) of the Act.
    For the CY 2018 performance period/2020 MIPS payment year, we 
provided an informal process for submitting new improvement activities 
or modifications for potential inclusion in the comprehensive 
improvement activities Inventory for the Quality Payment Program CY 
2018 performance period/2020 MIPS payment year and future years through 
subregulatory guidance.\455\ In the CY 2018 Quality Payment Program 
final rule (82 FR 53656 through 53659), for the CY 2019 performance 
period/2021 MIPS payment year and for future years, we finalized a 
formal Annual Call for Activities process for the addition of possible 
new activities and for possible modifications to current activities in 
the improvement activities Inventory. This process included the 
requirement to submit a nomination form similar to the one we utilized 
for CY 2018 performance period/2020 MIPS payment year (82 FR 53656 
through 53659). In order to submit a request for a new activity or a 
modification to an existing improvement activity, the stakeholder must 
submit a nomination form (OMB control #0938-1314) available at 
www.qpp.cms.gov during the Annual Call for Activities.
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    \455\ CMS, Annual Call for Measures and Activities: Fact Sheet, 
https://www.cms.gov/Medicare/Quality-IniCtiatives-Patient-Assessment-Instruments/MMS/Downloads/Annual-Call-for-Measures-and-Activities-for-MIPS_Overview-Factsheet.pdf.
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(ii) Proposed Changes to the Improvement Activities Inventory
    In the CY 2018 Quality Payment Program final rule (82 FR 53660), we 
finalized that we would establish improvement activities through 
notice-and-comment rulemaking. We refer readers to Table H in the 
Appendix to the CY 2017 Quality Payment Program final rule (81 FR 77177 
through 77199), Tables F and G in the Appendix to the CY 2018 Quality 
Payment Program final rule (82 FR 54175 through 54229), Tables A and B 
in the Appendix 2 to the CY 2019 PFS final rule (83 FR 60286 through 
60303), Tables A, B, and C in the Appendix 2 to the CY 2020 PFS final 
rule (84 FR 63514 through 63538), Tables A, B, and C in the Appendix 2 
to the CY 2021 PFS final rule (85 FR 85370 through 85377), and Tables 
A, B, and C in the Appendix 2 to the CY 2022 PFS final rule (86 FR 
65969 through 65997) for our previously finalized improvement 
activities Inventories. We also refer readers to the Quality Payment 
Program website under Explore Measures and Activities at https://qpp.cms.gov/mips/explore-measures?tab=improvementActivities&py=2020 for 
a complete list of the current improvement activities. In the CY 2017 
Quality Payment Program final rule (81 FR 77539), we codified the 
definition of improvement activities at Sec.  414.1305 to mean an 
activity that relevant MIPS eligible clinicians, organizations, and 
other relevant stakeholders identify as improving clinical practice or 
care delivery and that the Secretary determines, when effectively 
executed, is likely to result in improved outcomes.
    In this proposed rule, we are proposing to add four new improvement 
activities, modify five existing improvement activities, and remove six 
previously adopted improvement activities for the CY 2023 performance 
period/2025 MIPS payment year and future years. We refer readers to 
Appendix 2 to this proposed rule for more details.
    All of our proposed new improvement activities are responsive to 
the Administration's goal of advancing health equity for all, as 
outlined in the President's January 20, 2021, Executive Order 13985, 
``Advancing Racial Equity and Support for Underserved Communities 
Through the Federal Government'' (https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-and-support-for-underserved-communities-through-the-federal-government/). Additionally, all of the proposed new improvement 
activities address Priorities for Reducing Disparities in Health, as 
described in the CMS Framework for Health Equity (https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/framework-for-health-equity).
    The first proposed new improvement activity, IA_AHE_XX titled ``Use 
Security Labeling Services Available in Certified Health Information 
Technology (IT) for Electronic Health Record (EHR) Data to Facilitate 
Data Segmentation'' would promote the adoption of technology certified 
to the Security tags--summary of care--send and Security tags--summary 
of care--receive criteria at 45 CFR 170.315(b)(7) and (b)(8) in the ONC 
Health IT Certification Program.<SUP>456 457</SUP> ONC finalized 
updated versions of these criteria as part of the ONC 21st Century 
Cures Act Final Rule (85 FR 25702), which are available for 
certification by health IT developers. Security tagging allows sharing 
of certain portions of an EHR while not sharing others, such as 
sensitive information related to drivers of health. We refer readers to 
the 2015 Edition final rule (80 FR 62647) for further details. This 
proposed improvement activity would involve

[[Page 46286]]

clinicians working with their EHR vendors to implement technology 
meeting the security tags criteria in practice systems and clinic 
workflows. We believe that implementing this technology would improve 
interoperability while protecting patient privacy, thus improving care 
delivery and patients' care experience.\458\ We believe this activity 
is likely to improve patient outcomes because protection of patient 
privacy and increased interoperability helps improve patient care 
delivery. This proposed improvement activity would address the CMS 
Framework for Health Equity Priority 1, Expand the Collection, 
Reporting, and Analysis of Standardized Data.\459\
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    \456\ For more information see: HealthIT.gov. (2020). Sec.  
.(b)( ) Security tags--summary of care--receive. https://www.healthit.gov/test-method/data-segmentation-privacy-receive#cures_ccg.
    \457\ For more information see: HealthIT.gov. (2020). Sec.  
.(b)( ) Security tags--summary of care--send. https://www.healthit.gov/test-method/data-segmentation-privacy-send#cures_ccg.
    \458\ For information about the standards in the certification 
criteria as well as other standards supporting security tags, see: 
HealthIT.gov. Security tags for sensitive information. https://www.healthit.gov/isa/security-tags-sensitive-information.
    \459\ Centers for Medicare and Medicaid Services. (2022). CMS 
framework for health equity. https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/framework-for-health-equity.
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    The proposed new improvement activity IA_AHE_XX titled ``Create and 
Implement a Plan to Improve Care for Lesbian, Gay, Bisexual, 
Transgender, and Queer Patients'' supports both CMS Framework for 
Health Equity Priority 1 and Priority 3, Build Capacity of Health Care 
Organizations and the Workforce to Reduce Health and Health Care 
Disparities. Eligible clinicians would receive improvement activity 
credit for creating and implementing a plan to improve care for 
lesbian, gay, bisexual, transgender, and queer (LGBTQ+) patients by 
understanding and addressing health disparities for this population, 
which may include analysis of sexual orientation and gender identity 
(SO/GI) data to identify and address disparities in care. Actions to 
implement this activity may include identifying target goals for 
addressing disparities in care, collecting and using patients' pronouns 
and chosen names, training clinicians and staff on SO/GI terminology 
(including as supported by certified health IT and ONC's United States 
Core Data for Interoperability [USCDI] as finalized as 45 CFR 170.213), 
identifying risk factors or behaviors specific to LGBTQ+ individuals, 
communicating SO/GI data security and privacy practices with patients, 
and/or utilizing anatomical inventories when documenting patient health 
histories. LGBTQ+ individuals face health disparities and challenges 
navigating and accessing healthcare.<SUP>460 461</SUP> We refer readers 
to the ONC USCDI website at https://www.healthit.gov/isa/united-states-core-data-interoperability-uscdi for further information. Due to lack 
of clinician training about providing culturally competent and 
sensitive care for LGBTQ+ individuals, several studies indicate that 
LGBTQ+ patients, especially gender minority patients, have high rates 
of negative healthcare experiences.<SUP>462 463 464</SUP> This 
improvement activity would fill a gap in the Inventory, which does not 
currently include an activity focused on improving care for LGBTQ+ 
patients. We believe this activity has the potential to improve 
clinical practice and care delivery because training clinicians about 
working with LGBTQ+ patients may lead to more positive care experiences 
and health outcomes.\465\
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    \460\ Bosse, J.D., Leblanc, R.G., Jackman, K., & Bjarnadottir, 
R.I. (2018). Benefits of implementing and improving collection of 
sexual orientation and gender identity data in electronic health 
Records. Computers, Informatics, Nursing, 36(6), 267-274. https://doi.org/10.1097/CIN.0000000000000417.
    \461\ Zatloff, J.P., von Esenwein, S.A., Cook, S.C., Schneider, 
J.S., & Haw, J.S. (2021). Transgender-competent health care: Lessons 
from the community. Southern Medical Journal, 114(6), 334-338. 
https://doi.org/10.14423/SMJ.0000000000001261.
    \462\ Chisolm-Straker, M., Jardine, L., Bennouna, C., Morency-
Brassard, N., Coy, L., Egemba, M.O., & Shearer, P.L. (2017). 
Transgender and gender nonconforming in emergency departments: A 
qualitative report of patient experiences. Transgender Health, 2(1), 
8-16. https://doi.org/10.1089/trgh.2016.0026.
    \463\ Samuels, E.A., Tape, C., Garber, N., Bowman, S., & Choo, 
E.K. (2018). ``Sometimes you feel like the freak show'': A 
qualitative assessment of emergency care experiences among 
transgender and gender-nonconforming patients [Article]. Annals of 
Emergency Medicine, 71(2), 170-182. https://doi.org/10.1016/j.annemergmed.2017.05.002.
    \464\ Kronk, C.A., Everhart, A.R., Ashley, F., Thompson, H.M., 
Schall, T.E., Goetz, T.G., Hiatt, L., Derrick, Z., Queen, R., Ram, 
A., Guthman, E.M., Danforth, O.M., Lett, E., Potter, E., Sun, 
S.E.D., Marshall, Z., & Karnoski, R. (2021). Transgender data 
collection in the electronic health record: Current concepts and 
issues. Journal of the American Medical Informatics Association: 
JAMIA. https://doi.org/10.1093/jamia/ocab136.
    \465\ Lund, E.M., & Burgess, C.M. (2021). Sexual and gender 
minority health care disparities: Barriers to care and strategies to 
bridge the gap. Primary Care, 48(2), 179-189. https://doi.org/10.1016/j.pop.2021.02.007.
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    Another proposed new improvement activity, IA_EPA_XX titled 
``Create and Implement a Language Access Plan'' directly responds to 
the CMS Framework for Health Equity Priority 4, Advance Language 
Access, Health Literacy, and the Provision of Culturally Tailored 
Services. This activity involves eligible clinicians' creating and 
implementing a language access plan to address communication barriers 
for individuals with limited English proficiency. These language access 
plans should align with standards for communication and language 
assistance defined in the National Standards for Culturally and 
Linguistically Appropriate Services (CLAS) in Health and Health Care. 
We believe that accurate patient-clinician communication, delivered and 
received in a culturally competent manner, is an essential aspect of 
improving equity in healthcare and patient outcomes.<SUP>466 467</SUP> 
This proposed improvement activity would fill a gap in the Inventory, 
which does not currently include an activity focused on language 
access. We believe this proposed improvement activity has the potential 
to improve clinical practice and care delivery and is likely to result 
in improved patient outcomes, because research indicates the importance 
of accurate clinical communication in achieving positive patient 
outcomes.\468\
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    \466\ Regenstein, M., Huang, J., West, C., Mead, H., Trott, J., 
& Stegun, M. (2008). In any language: Improving the quality and 
availability of language services in hospitals. Robert Wood Johnson 
Foundation (RWJF). https://www.ahrq.gov/downloads/pub/advances2/vol2/Advances-Regenstein_54.pdf.
    \467\ Green, A. R., & Nze, C. (2017). Language-based inequity in 
health care: Who is the ``Poor Historian''? AMA journal of ethics, 
19(3), 263-271. https://doi.org/10.1001/journalofethics.2017.19.3.medu1-1703.
    \468\ Wasserman, M., Renfrew, M.R., Green, A.R., Lopez, L., Tan-
McGrory, A., Brach, C., & Betancourt, J.R. (2014). Identifying and 
preventing medical errors in patients with limited English 
proficiency: Key findings and tools for the field. Journal for 
Healthcare Quality, 36(3), 5-16. https://doi.org/10.1111/jhq.12065.
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    The fourth proposed new improvement activity, IA_ERP_XX titled 
``COVID-19 Vaccine Promotion for Practice Staff'' supports CMS 
Framework for Health Equity Priority 3. COVID-19 vaccination rates in 
the U.S. can be improved significantly, particularly in underserved 
communities.\469\ Disparities in COVID-19 vaccination rates have been 
observed specifically among healthcare workers, with physicians and 
advanced practiced staff being more likely to be vaccinated than nurses 
and support staff. Also, it has been reported that Black and younger 
health care workers have lower vaccination rates than other groups of 
healthcare workers.\470\ This proposed improvement activity would fill 
a gap in

[[Page 46287]]

the Inventory, which does not currently include an activity focused on 
COVID-19 vaccination. We believe this activity has the potential to 
improve clinical practice and is likely to result in improved outcomes 
and public health, as research indicates the importance of vaccination 
in reducing the severity and spread of COVID-19.\471\
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    \469\ Diesel, J., Sterrett, N., Dasgupta, S., Kriss, J.L., 
Barry, V., Esschert, K.V., Whiteman, A., Cadwell, B.L., Weller, D., 
Qualters, J.R., Harris, L., Bhatt, A., Williams, C., Fox, L.M., 
Delman, D.M., Black, C.L., Barbour, K.E., Vanden Esschert, K., & 
Meaney Delman, D. (2021). COVID-19 vaccination coverage among 
adults--United States, December 14, 2020-May 22, 2021. MMWR: 
Morbidity and Mortality Weekly Report, 70(25), 922-927. https://doi.org/10.15585/mmwr.mm7025e1.
    \470\ Farah W., Breeher L., Shah V., Hainy C., Tommaso C.P., 
Swift M.D. Disparities in COVID-19 vaccine uptake among health care 
workers. Vaccine. 2022 Apr 26;40(19):2749-2754. doi: 10.1016/
j.vaccine.2022.03.045. Epub 2022 Mar 25. PMID: 35361500; PMCID: 
PMC8947975.
    \471\ Johnson, A.G., Amin, A.B., Ali, A.R., Hoots, B., Cadwell, 
B.L., Arora, S., Avoundjian, T., Awofeso, A.O., Barnes, J., Bayoumi, 
N.S., Busen, K., Chang, C., Cima, M., Crockett, M., Cronquist, A., 
Davidson, S., Davis, E., Delgadillo, J., Dorabawila, V. . . . 
(2022). COVID-19 incidence and death rates among unvaccinated and 
fully Vaccinated adults with and without booster doses during 
periods of delta and omicron variant emergence--25 U.S. 
jurisdictions, April 4-December 25, 2021. Morbidity and Mortality 
Weekly Report (MMWR), 71(4), 132-138. https://doi.org/10.15585/mmwr.mm7104e2.
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    We are also proposing a number of modifications focused on 
combining activities where possible and other administrative changes. A 
particularly important proposed modification to an existing activity is 
focused on Priority 1 of the CMS Framework for Health Equity, Expand 
the Collection, Reporting, and Analysis of Standardized Data. We are 
proposing to: (1) recategorize the IA_CC_14 improvement activity, 
currently titled ``Practice improvements that engage community 
resources to support patient health goals,'' from the Care Coordination 
subcategory to the Achieving Health Equity subcategory, and (2) re-name 
and re-focus the improvement activity on obtaining and acting on 
drivers of health data. More specifically, the proposed updated 
improvement activity with a new ID, IA_AHE_XX, would be titled 
``Practice Improvements that Engage Community Resources to Address 
Drivers of Health.'' We are proposing to modify this improvement 
activity description to include `drivers of health' terminology, which 
better encompasses both `social determinants of health (SDOH)' and 
`health-related social needs (HSRN)' concepts. We are also proposing to 
update the list of these factors in the description to reflect a more 
comprehensive array of drivers of health. These proposed modifications 
build on ongoing efforts to advance health equity in accordance with 
the Advance Equity Pillar of the CMS Strategic Plan (https://www.cms.gov/cms-strategic-plan). We believe the proposed modifications 
will better enable eligible clinicians to not only improve clinical 
practice by screening for and addressing drivers of health, but to also 
receive credit for their efforts. Furthermore, we anticipate such 
efforts will be associated with improved clinical outcomes because of 
the potential impact of social drivers of health and other upstream 
factors on both healthcare and health status.<SUP>472 473</SUP> 
Finally, these proposed modifications would also more clearly align 
this activity with available evidence and other CMS work in this area, 
including the CMS Innovation Center's Accountable Health Communities 
(AHC) Model, designed to test how ``addressing health-related social 
needs through enhanced clinical-community linkages can improve health 
outcomes and reduce costs.'' \474\
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    \472\ Raphael, K., Frakt, A., Jha, A., & Glied, S. (2019). 
Social and health-systems factors that affect health: What's known 
and knowable? A review of literature. https://driversofhealth.org/wp-content/uploads/SDH.whitepaper_v8.pdf.
    \473\ G[oacute]mez, C.A., Kleinman, D.V., Pronk, N., Wrenn 
Gordon, G.L., Ochiai, E., Blakey, C., Johnson, A., & Brewer, K.H. 
(2021). Addressing health equity and social determinants of health 
through healthy people 2030. Journal of Public Health Management and 
Practice, 27, S249-S257. https://doi.org/10.1097/phh.0000000000001297.
    \474\ Accountable Health Communities Model [verbar] CMS 
Innovation Center.
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(4) Promoting Interoperability Performance Category
(a) Background
    Section 1848(q)(2)(A) of the Act includes the meaningful use of 
certified electronic health record technology (CEHRT) as a performance 
category under the MIPS. We refer to this performance category as the 
Promoting Interoperability performance category (and in past 
rulemaking, we referred to it as the advancing care information 
performance category). For our previously established policies 
regarding the Promoting Interoperability performance category, we refer 
readers to Sec.  414.1375 and the CY 2017 Quality Payment Program final 
rule (81 FR 77199-77245), CY 2018 Quality Payment Program final rule 
(82 FR 53663 through 53688), CY 2019 PFS final rule (83 FR 59785 
through 59820), CY 2020 PFS final rule (84 FR 62991 through 63006), CY 
2021 PFS final rule (85 FR 84886 through 84895), and CY 2022 PFS final 
rule (86 FR 65466-65490).
(b) Promoting Interoperability Performance Category Performance Period
    As finalized in the CY 2021 PFS final rule at Sec.  414.1320(g)(1) 
(85 FR 84886) (subsequently re-designated as Sec.  414.1320(h)(1) (86 
FR 65671)), for the 2024 MIPS payment year, and each subsequent MIPS 
payment year, the performance period for the Promoting Interoperability 
performance category is a minimum of any continuous 90-day period 
within the calendar year that occurs 2 years prior to the applicable 
MIPS payment year, up to and including the full calendar year. Thus, 
for the CY 2025 MIPS payment year, the performance period for the 
Promoting Interoperability performance category is a minimum of any 
continuous 90-day period within CY 2023, up to and including the full 
CY 2023 (January 1, 2023 through December 31, 2023). We are not 
proposing any changes to the Promoting Interoperability performance 
category performance period that we established under Sec.  
414.1320(h)(1).
(c) CEHRT Requirements
    The Promoting Interoperability Program and the QPP require the use 
of CEHRT as defined at 42 CFR 495.4 and 414.1305, respectively. Since 
2019, in general, this has consisted of EHR technology (which could 
include multiple technologies) certified under the Office of the 
National Coordinator for Health Information Technology (ONC) Health IT 
Certification Program that meets the 2015 Edition Base EHR definition 
(as defined at 45 CFR 170.102) and has been certified to certain other 
2015 Edition health IT certification criteria as specified in the 
definition.
    The ``21st Century Cures Act: Interoperability, Information 
Blocking, and the ONC Health IT Certification Program'' final rule 
(also referred to as the ``ONC 21st Century Cures Act final rule''), 
published in the May 1, 2020 Federal Register (85 FR 25642 through 
25961), finalized a number of updates to the 2015 Edition of health IT 
certification criteria (also referred to as the 2015 Edition Cures 
Update) and introduced new 2015 Edition certification criteria. In 
connection with these updates, ONC also finalized that health IT 
developers have 24 months from the publication date of the final rule 
(until May 2, 2022) to make technology available that is certified to 
the updated, or new criteria. In response to additional calls for 
flexibility in response to the public health emergency (PHE) for COVID-
19, ONC published an interim final rule with comment period on November 
4, 2020 entitled, ``Information Blocking and the ONC Health IT 
Certification Program: Extension of Compliance Dates and Timeframes in 
Response to the COVID-19 Public Health Emergency'' (hereinafter the 
``ONC interim final rule'') (85 FR 70064). In this interim final rule, 
ONC finalized extended compliance dates for certain 2015 Edition 
certification criteria. Specifically, where the ONC 21st Century Cures 
Act final rule provided that developers of certified health IT have 24 
months from the publication

[[Page 46288]]

date of the final rule to make technology certified to new or updated 
criteria available, ONC extended the timeline until December 31, 2022 
(and until December 31, 2023 for 45 CFR[thinsp]170.315(b)(10), 
``electronic health information ((EHI) export'').
    In the CY 2021 PFS final rule (85 FR 84815 through 84825), we 
finalized that the technology used by health care providers to satisfy 
the definitions of CEHRT at Sec. Sec.  495.4 and 414.1305 must be 
certified under the ONC Health IT Certification Program, in accordance 
with the updated 2015 Edition certification criteria as finalized in 
the ONC 21st Century Cures Act final rule (85 FR 25642). We further 
finalized aligning the transition period during which health care 
providers participating in the Promoting Interoperability Program or 
QPP may use technology certified to either the existing or updated 2015 
Edition certification criteria, with the December 31, 2022 date 
established in the ONC interim final rule for health IT developers to 
make updated certified health IT available. After this date, health 
care providers will be required to use only certified technology 
updated to the 2015 Edition Cures Update for an EHR reporting period or 
performance period in CY 2023. We are not proposing any changes to this 
final policy within this proposed rule.
    We remind readers that health care providers would not be required 
to demonstrate that they are using updated technology to meet the CEHRT 
definitions immediately upon the transition date of December 31, 2022. 
In accordance with the EHR reporting period and performance period 
established for the Promoting Interoperability Program and the MIPS 
Promoting Interoperability performance category, participants are only 
required to use technology meeting the CEHRT definitions during a self-
selected EHR reporting period or performance period of a minimum of any 
consecutive 90 days in CY 2023, including the final 90 days of 2023 (86 
FR 45460 through 45462 and 86 FR 65466, respectively). The eligible 
hospital, CAH, or MIPS eligible clinician is not required to 
demonstrate meaningful use of technology meeting the 2015 Edition Cures 
Update until the EHR reporting period or performance period they have 
selected.
(d) Promoting Interoperability Performance Category Measures for MIPS 
Eligible Clinicians
i. Changes to the Query of Prescription Drug Monitoring Program Measure 
Under the Electronic Prescribing Objective
(A) Measure Background
    We have adopted a Query of Prescription Drug Monitoring Program 
(PDMP) measure under the Electronic Prescribing objective. For 
background on this measure, we refer readers to the CY 2019 PFS final 
rule (83 FR 59800 through 59803) and the CY 2020 PFS final rule (84 FR 
62992 through 62994). In the CY 2021 PFS final rule (85 FR 84887 
through 84888), we finalized that the Query of PDMP measure will remain 
optional and eligible for 10 bonus points for the CY 2021 performance 
period/CY 2023 MIPS payment year. In the CY 2022 PFS final rule (86 FR 
65466 through 65467), we finalized that the Query of PDMP measure will 
remain optional and eligible for 10 bonus points for the CY 2022 
performance period/CY 2024 MIPS payment year.
(B) State PDMPs' Progress and Previous Interested Parties' Feedback
    In the CY 2020, CY 2021, and CY 2022 PFS final rules (84 FR 62992 
through 62994, 85 FR 84887 through 84888 and 86 FR 65467), we described 
the concerns expressed by interested parties that they believed it was 
premature for the Promoting Interoperability performance category to 
require the Query of PDMP measure and score it based on performance. In 
the CY 2022 PFS proposed rule (86 FR 39410) we discussed our support of 
efforts to expand the use of PDMPs, describing Federally supported 
activities aimed at developing a more robust and standardized approach 
to EHR-PDMP integration, and additional discussions on the feedback we 
have received from health IT vendors and MIPS eligible clinicians thus 
far. For more detailed information, we refer readers to the CY 2022 PFS 
proposed rule (86 FR 39410).
    We heard extensive feedback from EHR developers that effectively 
incorporating the ability to count the number of PDMP queries in the 
EHR would require more robust measurement specifications. These 
interested parties stated that EHR developers may face significant cost 
burdens if they fully develop numerator and denominator calculations 
and are then required to change the specification at a later date. 
Interested parties have stated that the costs of additional development 
would likely be passed on to health care providers without additional 
benefit, as this development would be solely for the purpose of 
calculating the measure, rather than furthering the clinical goal of 
the measure. While we recognize that a numerator/denominator-based 
measure remains challenging, we also note (as discussed in more detail 
later in this section) that the widespread availability of PDMPs across 
the country, and recent progress toward solutions for connecting PDMPs 
with health care provider EHR systems, has made use of PDMPs feasible 
through a wide variety of approaches.
(C) Current Status of PDMP Adoption
    Today, all 50 States and several localities host PDMPs.\475\ The 
final State to establish a PDMP, the State of Missouri, passed 
legislation to address this issue in 2021, and is currently working to 
make its PDMP operational. A 2021 American Medical Association report 
found that physicians and others used State PDMPs more than 910 million 
times in 2020.\476\ An assessment of PDMPs conducted by the PDMP 
Training and Technical Assistance Center (TTAC) at the Institute for 
Intergovernmental Research (IIR) found an increase in the number of 
PDMPs that are integrated with Health Information Exchanges (HIEs), 
EHRs, and/or Pharmacy Dispensing Systems (PDSs), with 44 PDMPs 
integrated in 2021 reflecting an increase from 28 PDMPs with at least 
one type of integration in 2017. We refer readers to Table 82 for the 
report's findings on the type of integration and the number of PDMPs 
that have implemented that type of integration in 2021.
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    \475\ Prescription Drug Monitoring Program Training and 
Technical Assistance Center, PDMP Policies and Capabilities: Results 
From 2021 State Assessment, September 2021, https://www.pdmpassist.org/pdf/PDMP%20Policies%20and%20Capabilities%202021%20Assessment%20Results_20210921.pdf.
    \476\ American Medical Association, 2021 Overdose Epidemic 
Report, https://www.ama-assn.org/system/files/ama-overdose-epidemic-report.pdf.

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[[Page 46289]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.125

    Moreover, a number of enhancements to PDMPs are occurring across 
the country, including enhancements to RxCheck, which is a free, 
Federally supported interstate exchange hub for PDMP data. RxCheck is 
connected to 50 out of 54 PDMPs in states and territories and does not 
require providers to pay to have the PDMP data integrated into the EHR.
    The goal of the project is to allow any health care provider who is 
live on the eHealth Exchange to use that existing connection to query a 
patient's record on the RxCheck Hub, which routes the query to 
individual State PDMPs that are also live on RxCheck. This solution 
enables health care providers to query PDMPs via existing connections 
to health information exchange networks. Most States use either RxCheck 
or Prescription Monitoring Program (PMP) InterConnect or both to 
facilitate the sharing of PDMP information between States, allowing 
health care providers to query other States' PDMP information from 
within their own State PDMP.\477\
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    \477\ GAO-21-22, PRESCRIPTION DRUG MONITORING PROGRAMS: Views on 
Usefulness and Challenges of Programs.
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    We also note that the Substance Use-Disorder Prevention that 
Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and 
Communities Act (Pub. L. 115-271), enacted in 2018, has focused on ways 
to address the nation's opioid epidemic. The SUPPORT for Patients and 
Communities Act included new requirements for PDMP enhancement and 
integration, to help reduce opioid misuse and overprescribing and 
promote the effective prevention and treatment of opioid use disorder 
beginning in October of 2021. Enhanced Federal matching funds were 
available to States to support related PDMP design, development, and 
implementation activities during FYs 2019 and 2020.
    (D) Proposed Changes to the Query of PDMP Measure and Related 
Policies
(aa) Proposal To Change the Query of PDMP Measure Description
    The description of the Query of PDMP measure provides that for at 
least one Schedule II opioid electronically prescribed using CEHRT 
during the performance period, the MIPS eligible clinician uses data 
from CEHRT to conduct a query of a PDMP for prescription drug history, 
except where prohibited and in accordance with applicable law. In 
section IV.A.10.c.(4)(d)(i)(D) of this proposed rule, beginning with 
the performance period in CY 2023, we are proposing to require the 
Query of PDMP measure for MIPS eligible clinicians participating in the 
Promoting Interoperability performance category. In section 
IV.A.10.c.(4)(d)(iii) of this proposed rule, we note that should we 
finalize our proposal to require the Query of PDMP measure beginning 
with CY 2023, we are proposing two exclusions beginning with the 
performance period in CY 2023: (1) Any MIPS eligible clinician who is 
unable to electronically prescribe Schedule II opioids and Schedule III 
and IV drugs in accordance with applicable law during the performance 
period, and (2) Any MIPS eligible clinician who writes fewer than 100 
permissible prescriptions during the performance period.
    Should we finalize the proposals to require the Query of PDMP 
measure and the associated exclusions, we believe the inclusion of the 
phrase ``except where prohibited and in accordance with applicable 
law'' in the description of the Query of PDMP measure and in the 
language of the exclusion would be duplicative and potentially cause 
confusion. Therefore, we are proposing to remove the phrase ``except 
where prohibited in accordance with applicable law'' from the measure 
description should our proposals to require the Query of PDMP measure 
and the associated exclusions be finalized. We refer readers to section 
IV.A.10.c.(4)(d)(i)(D) of this proposed rule for our proposed measure 
description that would reflect this proposed change and additional 
proposed policy changes for the Query of PDMP measure.
(ab) Proposal to Require the Query of PDMP Measure
    In the CY 2022 PFS final rule (86 FR 65466 through 65467), we noted 
that the decision to maintain the Query of PDMP as an optional measure 
for CY 2022 considered the current efforts to improve the technical 
foundation for EHR-PDMP integration, the continued implementation of 
the SUPPORT for Patients and Communities Act, our ongoing review of 
alternative measure approaches, and concerns from interested parties 
about the current readiness across States for implementation of the 
existing measure. We also noted that this measure can play an important 
role in helping health care providers to improve clinical decision 
making by utilizing this information to identify potential opioid use 
disorders, inform the development of care plans, and develop effective 
interventions (86 FR 65467); maintaining it as an optional measure with 
bonus points signals to the clinician and vendor community that this is 
an important measure which can help spur development and innovation to 
reduce barriers and challenges (86 FR 65467).
    We continue to believe that PDMPs play an important role in patient 
safety by assisting in the identification of patients who have multiple 
prescriptions for controlled substances or may be misusing or overusing 
them. Querying the PDMP is important for tracking dispensed controlled 
substances and improving prescribing practices. Efforts to expand the 
use of PDMPs and integrate PDMPs with health information technology 
systems are supported by Federal interested parties including ONC, the 
Centers for Disease Control and Prevention (CDC),

[[Page 46290]]

the Department of Justice (DOJ), and the Substance Abuse and Mental 
Health Services Administration (SAMHSA). The Query of PDMP measure 
offers a way to reward health care providers who participate in current 
PDMP initiatives, including those supported by Federal partners.
    While work continues to improve standardized approaches to PDMP and 
EHR interoperability, we believe that it is feasible at this time to 
require MIPS eligible clinicians to report the current Query of PDMP 
measure, which requires reporting a ``yes/no'' response. Given our 
policies for the Query of PDMP measure that included increasing the 
eligible bonus points to reward MIPS eligible clinicians that could 
report the measure, as well as the recent progress in the availability 
of PDMPs in all 50 States, and solutions which support accessibility of 
PDMPs to health care providers, we believe MIPS eligible clinicians 
have had time to grow familiar with what this measure requires of them, 
even as technical approaches to the use of PDMPs continue to advance. 
By requiring a ``yes/no'' response the measure allows MIPS eligible 
clinicians to use a variety of technical solutions to conduct a query 
of the PDMP and receive credit for the measure.
    Therefore, beginning with the performance period in CY 2023, we are 
proposing to require MIPS eligible clinicians to report the Query of 
PDMP measure (which requires reporting a ``yes/no'' response) for the 
Promoting Interoperability performance category. We would maintain the 
associated points at 10 points and refer readers to section 
IV.A.10.c.(4)(l) of this proposed rule for a discussion of our scoring 
methodology and proposed concurrent changes. As a result of this 
proposal, the maximum total points available for the Electronic 
Prescribing Objective would remain at 20 points for CY 2023.We are 
inviting public comment on these proposals. We are also seeking 
feedback on ways CMS can ensure coordination and alignment with varying 
State requirements for PDMPs. Additionally, we invite public comment on 
what information returned from the PDMP query would be clinically 
significant.
(ii) Proposed Changes to the Query of PDMP Measure To Include Schedules 
II, III and IV
    The Query of PDMP measure was adopted in the CY 2019 PFS final rule 
(83 FR 59800 through 59803) as one of two measures under the Electronic 
Prescribing Objective intended to support HHS initiatives related to 
the treatment of opioid and substance use disorders by helping health 
care providers avoid inappropriate prescriptions, improving 
coordination of prescribing amongst health care providers, and focusing 
on the advanced use of CEHRT. The measure description for the Query of 
PDMP measure is as follows: for at least one Schedule II opioid 
electronically prescribed using CEHRT during the performance period, 
the MIPS eligible clinician uses data from CEHRT to conduct a query of 
a PDMP for prescription drug history, except where prohibited and in 
accordance with applicable law (83 FR 59800 through 59803).
    Under the Controlled Substances Act (CSA),\478\ the Drug 
Enforcement Administration classifies drugs, substances, and certain 
chemicals used to make drugs into five distinct categories or schedules 
depending upon the drug's acceptable medical use and the drug's abuse 
or dependency potential. A drug's abuse rate is a factor used to 
determine its classification; for example, Schedule I medications have 
the highest abuse potential while medications in Schedule V have a low 
abuse potential. We refer readers to Table 83 for information on each 
Schedule, including abuse potential, medicinal use, if any, and drug 
examples. For additional information, we refer readers to the listing 
of drugs and their schedule located at CSA Scheduling at https://www.deadiversion.usdoj.gov/schedules/orangebook/c_cs_alpha.pdf.\479\
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    \478\ Public Law 91-513, tit. II, 84 Stat. 1236, 1242-84 (1970); 
codified, as amended, at 21 U.S.C. 801 et seq.
    \479\ See also https://www.dea.gov/sites/default/files/2020-04/Drugs%20of%20Abuse%202020-Web%20Version-508%20compliant-4-24-20_0.pdf.

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[GRAPHIC] [TIFF OMITTED] TP29JY22.126

    PDMPs are operated at the State level and individual State 
requirements for reporting and use differ from State to State.\480\ 
Currently, every State collects data on schedules II, III, and IV.\481\ 
Some States collect information about certain non-controlled substances 
that are potentially subject to abuse or on all prescription 
drugs.\482\ While State laws vary, we note that most State PDMPs 
require physicians and dispensing pharmacists to review a patient's 
prescribing information for the past 12 months prior to prescribing or 
dispensing any Schedule II, III, and IV controlled substances.\483\
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    \480\ For additional information, we refer readers to https://www.cdc.gov/drugoverdose/pdf/Leveraging-PDMPs-508.pdf; https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4605194/; and https://www.pdmpassist.org/Policies/Legislative/StatutesAndRegulations.
    \481\ https://www.pdmpassist.org/State.
    \482\ GAO report, GAO-21-22 Prescription Drug Monitoring 
Programs.
    \483\ https://www.pdmpassist.org/State.
---------------------------------------------------------------------------

    PDMPs play an important role in patient safety by assisting in the 
identification of patients who have multiple prescriptions for 
controlled substances or may be misusing or overusing them. We believe 
that expanding the requirements of the Query of PDMP measure to include 
Schedule III and IV drugs in addition to Schedule II opioids would 
further support HHS initiatives related to the treatment of opioid and 
substance use disorders by expanding the types of drugs included in the 
Query of PDMP measure while aligning with the PDMP requirements in a 
majority of States. We also believe this expansion to include 
additional Scheduled drugs would facilitate more informed prescribing 
practices and improve patient outcomes. Therefore, beginning with the 
performance period in CY 2023, we are proposing to expand the Query of 
PDMP measure to include Schedule III and IV drugs in addition to 
Schedule II opioids.
    Proposed Measure Description: For at least one Schedule II opioid 
or Schedule III or IV drug electronically prescribed using CEHRT during 
the performance period, the MIPS eligible clinician uses data from 
CEHRT to conduct a query of a PDMP for prescription drug history.
    To align with policy for the Query of PDMP measure with regard to 
Schedule II opioids, we are proposing the query of the PDMP for 
prescription drug history must occur prior to the electronic 
transmission of an electronic prescription for a Schedule II opioid or 
Schedule III or Schedule IV drug. We also note that this measure would 
include all permissible prescriptions and dispensing of Schedule II, 
III, or IV drugs no matter how small the amount prescribed during an 
encounter in order for MIPS eligible clinicians to identify multiple 
health care provider episodes (physician shopping), prescriptions of 
dangerous combinations of drugs, and controlled substances prescribed 
in high quantities. We also note that multiple prescriptions for 
Schedule II opioids or Schedule III and IV drugs prescribed on the same 
date by the same MIPS eligible clinician would not require multiple 
queries of the PDMP and only one query would have to be performed for 
this measure. MIPS eligible clinicians would have flexibility to query 
the PDMP using data from CEHRT in any manner allowed under State law.
    We are inviting public comment on these proposals. We are also 
inviting public comment on whether to expand this measure to include 
Schedule V or other drugs with potential for abuse.
(iii) Exclusions
    In CY 2019 PFS proposed rule, we proposed an exclusion for MIPS 
eligible clinicians from reporting the Query of PDMP measure beginning 
with CY 2020 when the measure would have been required by the Promoting 
Interoperability performance category (83 FR 35922 through 35923). The 
proposed exclusion was: Any MIPS eligible clinician who is unable to 
electronically prescribe Schedule II opioids in accordance with 
applicable law during the performance period. In the CY 2019 PFS final 
rule, we finalized the Query of PDMP measure as optional for CY 2019, 
and thus we did not finalize the proposed exclusion (83 FR 59803). We 
also stated that we would propose policy for CY 2020 in future 
rulemaking. To date, we have not adopted any exclusions for this 
measure because it has remained optional for CY 2020 (84 FR 62992 
through 62994), CY

[[Page 46292]]

2021 (85 FR 84887 through 84888) and CY 2022 (86 FR 65466 through 
65467).
    In section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule, 
beginning with the performance period in CY 2023, we are proposing to 
require MIPS eligible clinicians to report the Query of PDMP measure 
for the Promoting Interoperability performance category. Should we 
finalize our proposal to require the Query of PDMP measure beginning 
with CY 2023, we believe that an exclusion for the measure would be 
needed for MIPS eligible clinicians. Therefore, we have revisited the 
exclusion we proposed in the CY 2019 PFS proposed rule (83 FR 35922 
through 35923) and are proposing a modified version here. Specifically, 
if we finalize our proposal to require the Query of PDMP measure in 
section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule, we are 
proposing the following exclusion beginning with the performance period 
in CY 2023: Any MIPS eligible clinician who is unable to electronically 
prescribe Schedule II opioids and Schedule III and IV drugs in 
accordance with applicable law during the performance period. In 
addition, if we finalize our proposal to require the Query of PDMP 
measure in section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule, we 
are proposing a second exclusion beginning with the performance period 
in CY 2023: Any MIPS eligible clinician who writes fewer than 100 
permissible prescriptions during the performance period. We adopted 
this same exclusion previously for the e-Prescribing measure (82 FR 
53679). We believe this exclusion is also applicable to the Query of 
PDMP measure based on similar feedback we received from prior 
rulemaking, where fewer than 100 encounters were supported as an 
appropriate cutoff number (82 FR 53680). We are also proposing that if 
a MIPS eligible clinician claims an exclusion for the Query of PDMP 
measure, we would redistribute the points associated with the Query of 
PDMP measure to the e-Prescribing measure under the Electronic 
Prescribing Objective.
    We are inviting public comment on these proposals. We are also 
asking commenters to provide feedback on barriers to reporting on this 
measure, barriers related to technology solutions, cost, and workflow, 
that should be considered for MIPS eligible clinicians. We also request 
comment on any additional exclusions that we should consider proposing 
for this measure in future rulemaking.
(iv) Future Direction
    While we believe that proposing to require the Query of PDMP 
measure is feasible and appropriate at this time, we are continuing to 
work with industry and other Federal partners to advance common 
standards for exchange of information between PDMPs, EHRs, pharmacy 
information systems, and exchange networks. We believe this work will 
ultimately allow us to achieve our ideal State, under which we would 
modify the Query of PDMP measure to be numerator/denominator-based and 
require use of standardized functionality within certified health IT 
systems to support the actions associated with the measure and 
reporting of a numerator and denominator. We will continue to 
collaborate with ONC to monitor developments across the industry and 
efforts to advance relevant standards, and plan to revisit this measure 
in the future to explore further specifying health IT requirements if 
they become available and are incorporated into the ONC Health IT 
Certification Program.
    Federally supported activities continue to focus on developing and 
refining standards-based approaches to enable effective integration 
into clinical workflows; exploring emerging technical solutions to 
enhance access to and use of PDMP data; and providing technical 
resources to a variety of interested parties to advance and scale the 
interoperability of health IT systems and PDMPs. Moreover, updates to 
certified health IT systems incorporating application programming 
interfaces (APIs) based on HL7[supreg] FHIR[supreg] standard version 
Release 4 (85 FR 25642) can help support future technical approaches 
that enable more seamless exchange of data between CEHRT and PDMP 
systems. For more information about current and emerging standards 
related to PDMP data capture and exchange, we refer readers to the ONC 
Interoperability Standards Advisory.\484\
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    \484\ https://www.healthit.gov/isa/allows-a-provider-request-a-patients-medication-history-a-state-prescription-drug-monitoring.
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(e) Health Information Exchange (HIE) Objective: Proposed Addition of 
an Alternative Measure for Enabling Exchange Under the Trusted Exchange 
Framework and Common Agreement (TEFCA)
(i) Background on the Health Information Exchange Objective
    The Health Information Exchange (HIE) Objective and its associated 
measures for MIPS eligible clinicians hold particular importance 
because of the role they play within the care continuum. In addition, 
these measures encourage and leverage interoperability on a broader 
scale and promote health IT-based care coordination. The Health 
Information Exchange Objective currently includes three measures: 
Support Electronic Referral Loops by Sending Health Information; 
Support Electronic Referral Loops by Receiving and Reconciling Health 
Information; and Health Information Exchange Bi-Directional Exchange. 
For background on this objective and its associated measures, we refer 
readers to the CY 2019 PFS final rule (83 FR 59807 through 59812) and 
the CY 2021 PFS final rule (85 FR 84888 through 84893).
    In the CY 2021 PFS final rule (85 FR 84888 through 84893), we 
finalized the HIE Bi-Directional Exchange measure, under the Health 
Information Exchange Objective. The HIE Bi-Directional Exchange measure 
is worth 40 points, the maximum number of points of the Health 
Information Exchange Objective, and was finalized as an alternative to 
reporting on the two existing Health Information Exchange Objective 
measures: The Support Electronic Referral Loops by Sending Health 
Information measure and the Support Electronic Referral Loops by 
Receiving and Reconciling Health Information measure. To meet the 
measure, MIPS eligible clinicians must attest to the following 
statements:
    <bullet> Statement 1: I participate in an HIE to enable secure, bi-
directional exchange to occur for every patient encounter, transition 
or referral and record stored or maintained in the EHR during the 
performance period in accordance with applicable law and policy.
    <bullet> Statement 2: The HIE that I participate in is capable of 
exchanging information across a broad network of unaffiliated exchange 
partners including those using disparate EHRs, and not engaging in 
exclusionary behavior when determining exchange partners.
    <bullet> Statement 3: I use the functions of CEHRT to support bi-
directional exchange with an HIE.
    We stated that, by enabling bi-directional exchange of information 
between health care providers and aggregating data across health care 
providers with disparate systems, HIEs (including a wide range of 
organizations facilitating health information exchange) can bring 
together the information needed to create a true longitudinal care 
record and support improved care coordination by facilitating timely 
access to robust health information across care settings (CY 2021 PFS 
proposed rule, 85 FR

[[Page 46293]]

50300). We further described how participation in HIEs can amplify 
health care providers' capacity to share information beyond what a 
health care provider can achieve through the sending and receiving 
actions described in the existing measures under the Health Information 
Exchange Objective, for instance, by facilitating information exchange 
when a health care provider is unaware of another health care 
provider's need to receive information about a patient (CY 2021 PFS 
proposed rule, 85 FR 50300). By finalizing this measure for MIPS 
eligible clinicians, we sought to ensure that health care providers 
participating in the Promoting Interoperability performance category 
would be rewarded for connecting to exchange arrangements that can 
enable this type of robust information sharing.
(ii) Background on TEFCA
    Section 4003(b) of the 21st Century Cures Act (Pub. L. 114-255), 
enacted in 2016, amended section 3001(c) of the Public Health Service 
Act (42 U.S.C. 300jj-11(c)), and required HHS to take steps to advance 
interoperability for the purpose of ensuring full network-to-network 
exchange of health information. Specifically, Congress directed the 
National Coordinator to ``develop or support a trusted exchange 
framework, including a common agreement among health information 
networks nationally.'' Since the enactment of the 21st Century Cures 
Act, HHS has pursued development of a Trusted Exchange Framework and 
Common Agreement, or TEFCA. ONC's goals for TEFCA are \485\:
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    \485\ See https://www.healthit.gov/buzz-blog/interoperability/321tefca-is-go-for-launch.
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    <bullet> Goal 1: Establish a universal policy and technical floor 
for nationwide interoperability.
    <bullet> Goal 2: Simplify connectivity for organizations to 
securely exchange information to improve patient care, enhance the 
welfare of populations, and generate health care value.
    <bullet> Goal 3: Enable individuals to gather their health care 
information.
    Since we adopted the HIE Bi-Directional Exchange measure, important 
additional developments have occurred with respect to TEFCA.\486\ On 
January 18, 2022. ONC announced a significant TEFCA milestone by 
releasing the Trusted Exchange Framework \487\ and Common Agreement 
Version 1.\488\ The Trusted Exchange Framework is a set of non-binding 
principles for health information exchange, and the Common Agreement 
for Nationwide Health Information Interoperability Version 1 (also 
referred to as Common Agreement) is a contract that advances those 
principles. The Common Agreement and the incorporated by reference 
Qualified Health Information Network (QHIN) Technical Framework Version 
1 (QTF)\489\ establish the technical infrastructure model and governing 
approach for different health information networks and their users to 
securely share clinical information with each other--all under commonly 
agreed-to terms. The Common Agreement is a legal contract that 
QHINs\490\ can sign with the ONC Recognized Coordinating Entity 
(RCE),\491\ a private-sector entity that implements the Common 
Agreement and ensures QHINs comply with its terms.
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    \486\ For more information on current developments related to 
TEFCA, we refer readers to www.HealthIT.gov/TEFCA.
    \487\ Trusted Exchange Framework (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf.
    \488\ Common Agreement for Nationwide Health Information 
Interoperability Version 1 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \489\ Qualified Health Information Network (QHIN) Technical 
Framework (QTF) Version 1.0 (Jan. 2022), https://rce.sequoiaproject.org/wp-content/uploads/2022/01/QTF_0122.pdf.
    \490\ The Common Agreement defines a QHIN as ``to the extent 
permitted by applicable SOP(s), a Health Information Network that is 
a U.S. Entity that has been Designated by the RCE and is a party to 
the Common Agreement countersigned by the RCE.'' See Common 
Agreement for Nationwide Health Information Interoperability Version 
1, at 10 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-.
    \491\ In August 2019, ONC awarded a cooperative agreement to The 
Sequoia Project to serve as the initial RCE. The RCE will 
operationalize and enforce the Common Agreement, oversee QHIN-
facilitated network operations, and ensure compliance by 
participating QHINs. The RCE will also engage interested parties to 
create a roadmap for expanding interoperability over time.
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    The technical and policy architecture of how exchange occurs under 
TEFCA follows a network-of-networks structure, which allows for 
connections at different levels and is inclusive of many different 
types of entities at different levels, such as health information 
networks, care practices, hospitals, public health agencies, and 
Individual Access Services (IAS) \492\ Providers.\493\ QHINs connect 
directly to each other to facilitate nationwide interoperability, and 
each QHIN can connect Participants, which can connect 
Subparticipants.\494\ Compared to most nationwide exchange today, the 
Common Agreement also includes an expanded set of Exchange Purposes 
\495\ beyond Treatment to include Individual Access Services, Payment, 
Health Care Operations, Public Health, and Government Benefits 
Determination--all built upon common technical and policy requirements 
and to meet key needs of the U.S. health care system. This flexible 
structure allows interested parties to participate in the way that 
makes the most sense for them, while also supporting simplified, 
seamless exchange.
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    \492\ The Common Agreement defines Individual Access Services 
(IAS) as ``with respect to the Exchange Purposes definition, the 
services provided utilizing the Connectivity Services, to the extent 
consistent with Applicable Law, to an Individual with whom the QHIN, 
Participant, or Subparticipant has a Direct Relationship to satisfy 
that Individual's ability to access, inspect, or obtain a copy of 
that Individual's Required Information that is then maintained by or 
for any QHIN, Participant, or Subparticipant.'' See Common Agreement 
for Nationwide Health Information Interoperability Version 1, at 7 
(Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \493\ The Common Agreement defines ``IAS Provider'' as: ``Each 
QHIN, Participant, and Subparticipant that offers Individual Access 
Services.'' See Common Agreement for Nationwide Health Information 
Interoperability Version 1, at 7 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \494\ For the Common Agreement definitions of QHIN, Participant, 
and Subparticipant, see Common Agreement for Nationwide Health 
Information Interoperability Version 1, at 8-12 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \495\ Exchange Purpose(s): means the reason, as authorized by 
[the] Common Agreement including the Exchange Purposes SOP, for a 
Request, Use, Disclosure, or Response transmitted via QHIN-to-QHIN 
exchange as one step in the transmission. Authorized Exchange 
Purposes are: Treatment, Payment, Health Care Operations, Public 
Health, Government Benefits Determination, Individual Access 
Services, and any other purpose authorized as an Exchange Purpose by 
the Exchange Purposes SOP, each to the extent permitted under 
Applicable Law, under all applicable provisions of [the] Common 
Agreement, and, if applicable, under the implementation SOP for the 
applicable Exchange Purpose. See Common Agreement for Nationwide 
Health Information Interoperability Version 1, at 6 (Jan. 2022), 
https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
---------------------------------------------------------------------------

    The QTF,\496\ which was developed and released by the RCE, 
describes the

[[Page 46294]]

functional and technical requirements that a Health Information Network 
(HIN)\497\ must fulfill to serve as a QHIN under the Common Agreement. 
The QTF specifies the technical underpinnings for QHIN-to-QHIN exchange 
and certain other responsibilities described in the Common Agreement. 
The technical and functional requirements described in the QTF enable 
information exchange modalities, including querying and message 
delivery across participating entities.
---------------------------------------------------------------------------

    \496\ Qualified Health Information Network (QHIN) Technical 
Framework (QTF) Version 1.0 (Jan. 2022), https://rce.sequoiaproject.org/wp-content/uploads/2022/01/QTF_0122.pdf.
    \497\ ``Health Information Network'' under TEFCA has the meaning 
assigned to the term ``Health Information Network or Health 
Information Exchange'' in the information blocking regulations at 45 
CFR 171.102.
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    In general, the information to be exchanged within the TEFCA 
ecosystem allows for the use of Health Level Seven (HL7[supreg]) 
Implementation Guide for Clinical Document Architecture (CDA[supreg]) 
Release 2: Consolidated CDA Templates for Clinical Notes (US Realm) 
Draft Standard for Trial Use Release 2.1 (C-CDA 2.1) document format, 
including data defined as part of U.S. Core Data for Interoperability 
(USCDI), with allowance for flexibility to further expand the content 
to support a multitude of use cases.\498\ The Common Agreement and the 
QTF do not require HL7[supreg] Fast Healthcare Interoperability 
Resource (FHIR[supreg]) based exchange. TEFCA allows for the optional 
exchange of FHIR content using more traditional, established standards 
to enable the transport of that content. However, TEFCA can nonetheless 
be a strong catalyst for network enablement of FHIR maturation. To that 
end, the RCE released a 3-year FHIR Roadmap for TEFCA Exchange, which 
lays out a deliberate strategy to add FHIR-based exchange under TEFCA 
in the near future.\499\
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    \498\ User's Guide to the Trusted Exchange Framework and Common 
Agreement--TEFCA (Jan 2022), https://rce.sequoiaproject.org/wp-content/uploads/2022/01/Common-Agreement-Users-Guide.pdf.
    \499\ FHIR[supreg] Roadmap for TEFCA Exchange Version 1 (Jan. 
2022), https://rce.sequoiaproject.org/wp-content/uploads/2022/01/FHIR-Roadmap-v1.0_updated.pdf.
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(iii) Proposed Enabling Exchange Under TEFCA Measure
    In 2022, prospective QHINs are anticipated to begin signing the 
Common Agreement and applying for designation. The RCE will then begin 
onboarding and designating QHINs to share information. In 2023, HHS 
expects interested parties across the care continuum to have increasing 
opportunities to enable exchange under TEFCA. Specifically, this would 
mean such interested parties would be: (1) signatories to either the 
Common Agreement or an agreement that meets the flow-down requirements 
of the Common Agreement (called a Framework Agreement \500\ under the 
Common Agreement); (2) in good standing (that is, not suspended) under 
that agreement; and (3) enabling secure, bi-directional exchange of 
information to occur, in production. TEFCA is expected to give 
individuals and entities easier, more efficient access to more health 
information. The Common Agreement requires strong privacy and security 
protections for all entities who elect to participate, including 
entities not covered by the Health Insurance Portability and 
Accountability Act (HIPAA).\501\
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    \500\ The Common Agreement defines ``Framework Agreement(s)'' 
as: ``any one or combination of the Common Agreement, a Participant-
QHIN Agreement, a Participant-Subparticipant Agreement, or a 
Downstream Subparticipant Agreement, as applicable.'' See Common 
Agreement for Nationwide Health Information Interoperability Version 
1, at 6 (Jan. 2022) https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
    \501\ Common Agreement for Nationwide Health Information 
Interoperability Version 1, at 8-12 (Jan. 2022), https://www.healthit.gov/sites/default/files/page/2022-.
---------------------------------------------------------------------------

    By connecting to a network that connects to a QHIN or directly to a 
QHIN, a MIPS eligible clinician can share health information in the 
same manner as described in the attestation statements previously 
finalized for the HIE Bi-Directional Exchange measure (CY 2021 PFS 
final rule (85 FR 84888 through 84893). By connecting to an entity that 
connects to a QHIN, or connecting directly to a QHIN, that supports 
sharing information on patients as part of a Framework Agreement,\502\ 
a MIPS eligible clinician would be thereby enabling bi-directional 
exchange with other health care providers as described in Statement 1 
of the HIE Bi-Directional Exchange measure. Since participation in a 
Framework Agreement as a QHIN, Participant, or Sub-participant will be 
open to all qualifying entities and will not be restricted by use of a 
single vendor, a connection via a Framework Agreement would also 
satisfy the requirements of Statement 2 of the HIE Bi-Directional 
Exchange measure. Finally, as discussed above, the technical 
requirements for exchanging information by entities through the Common 
Agreement and Framework Agreements utilize standards included in 
certified technology referenced under the CEHRT definition (see 42 CFR 
414.1305), including the ability to exchange and receive data using the 
C-CDA standard (see certification criteria at 45 CFR 170.315(b)(1) and 
(b)(2)), thus health care providers participating in a Framework 
Agreement can use the functions of CEHRT to support bi-directional 
exchange with an HIE.
---------------------------------------------------------------------------

    \502\ The Common Agreement defines ``Framework Agreement(s)'' 
as: ``any one or combination of the Common Agreement, a Participant-
QHIN Agreement, a Participant-Subparticipant Agreement, or a 
Downstream Subparticipant Agreement, as applicable.'' See Common 
Agreement for Nationwide Health Information Interoperability Version 
1, at 6 (Jan. 2022) https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
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    To offer health care providers more opportunities to earn credit 
for the Health Information Exchange Objective, and given the alignment 
between enabling exchange under TEFCA and the existing HIE Bi-
Directional Exchange measure, we are proposing to add an additional 
measure through which a MIPS eligible clinician could earn credit for 
the Health Information Exchange Objective by connecting to an entity 
that connects to a QHIN or connecting directly to a QHIN. Specifically, 
we are proposing to add the following new measure to the Health 
Information Exchange Objective beginning with the performance period in 
CY 2023: Enabling Exchange Under TEFCA measure. We propose MIPS 
eligible clinicians would have three reporting options for the Health 
Information Exchange Objective: (1) report on both the Support 
Electronic Referral Loops by Sending Health Information measure (or the 
exclusion, if applicable) and the Support Electronic Referral Loops by 
Receiving and Reconciling Health Information measure (or the exclusion, 
if applicable); (2) report on the HIE Bi-Directional Exchange measure; 
or (3) report on the proposed Enabling Exchange Under TEFCA measure. We 
propose the Enabling Exchange Under TEFCA measure would be worth the 
total amount of points available for the Health Information Exchange 
Objective. Under the current scoring methodology finalized in the CY 
2021 PFS final rule, the Health Information Exchange Objective is worth 
a total of 40 points (85 FR 84894). We note in section IV.A.10.c.(4) of 
this proposed rule, we are proposing changes to the scoring methodology 
beginning with the performance period in CY 2023 such that the Health 
Information Exchange Objective would be worth no more than 30 points. 
Therefore, under our proposal, the proposed Enabling Exchange Under 
TEFCA measure would be worth 30 points. We are proposing

[[Page 46295]]

this change to the scoring methodology as a result of our proposal in 
section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule to make the 
Query of PDMP measure required and worth 10 points. However, should we 
not finalize the Query of PDMP measure proposal, we propose the 
Enabling Exchange Under TEFCA measure would be worth 40 points (the 
current total point value of the Health Information Exchange 
Objective). In no case could more than 40 points total be earned for 
the Health Information Exchange Objective.
    We believe the new measure for Enabling Exchange Under TEFCA that 
we are proposing would incentivize MIPS eligible clinicians to exchange 
information by connecting directly or indirectly to a QHIN and support 
health information exchange at a national level. We believe that 
fulfillment of this measure is an extremely high value action. The 
overall TEFCA goal of establishing a universal floor of 
interoperability across the country aligns with our commitment to 
promoting and prioritizing interoperability and exchange of healthcare 
data. Incentivizing health care providers to enable exchange under 
TEFCA is a critical component to advancing healthcare data exchange 
nationwide. We are proposing a MIPS eligible clinician would report the 
Enabling Exchange Under TEFCA measure by attestation, and the measure 
would require a ``yes/no'' response. A ``yes'' response would enable a 
MIPS eligible clinician to earn the proposed 30 points allotted to the 
Health Information Exchange Objective. We propose that a MIPS eligible 
clinician would attest to the following:
    <bullet> Participating as a signatory to a Framework Agreement (as 
that term is defined by the Common Agreement for Nationwide Health 
Information Interoperability as published in the Federal Register and 
on ONC's website) in good standing (that is, not suspended) and 
enabling secure, bi-directional exchange of information to occur, in 
production, for every patient encounter, transition or referral, and 
record stored or maintained in the EHR during the performance period, 
in accordance with applicable law and policy.
    <bullet> Using the functions of CEHRT to support bi-directional 
exchange of patient information, in production, under this Framework 
Agreement.
    Similar to the HIE Bi-Directional Exchange measure, to successfully 
attest to this measure, we propose that a MIPS eligible clinician must 
use the capabilities of CEHRT to support bi-directional exchange under 
a Framework Agreement, which includes capabilities that support 
exchanging the clinical data within the Common Clinical Data Set (CCDS) 
or the United States Core Data for Interoperability (USCDI). This is 
consistent with the other measures under the Health Information 
Exchange Objective, which point to the use of CEHRT to support the 
exchange of the clinical data within the CCDS or the USCDI.
    We believe there are numerous certified health IT capabilities that 
can support bi-directional exchange under a Framework Agreement. For 
instance, participants may exchange information under a Framework 
Agreement by using technology certified to the criterion at 45 CFR 
170.315(b)(1), ``Care coordination--Transitions of care,'' to transmit 
C-CDAs across a network. Where supported, participants could also 
utilize API technology certified to either the criterion at 45 CFR 
170.315(g)(8), ``Design and performance--Application access--data 
category request,'' or (g)(10), ``Design and performance--Standardized 
API for patient and population services,'' as finalized in the ONC 21st 
Century Cures Act final rule (85 FR 25742), to enable exchange of data 
in the CCDS or USCDI from a participant's EHR. Additional certified 
health IT modules may also support exchange of information under a 
Framework Agreement for transitions of care, including modules 
certified to certification criteria at 45 CFR 170.315(g)(7), ``Design 
and performance--Application access--patient selection,'' and (g)(9), 
``Design and performance--Application access--all data request,'' which 
support information exchange via API; the certification criterion at 45 
CFR 170.315(e)(1), ``Patient engagement--View, download, and transmit 
to 3rd party,'' which supports patient access to their information; and 
the certification criterion at 45 CFR 170.315(g)(6), ``Design and 
performance--Consolidated CDA creation performance,'' which supports 
creation of a summary of care record. We recognize that entities that 
will connect directly or indirectly to a QHIN are currently interacting 
with health care providers using certified health IT in a variety of 
ways, and, as with the Bi-Directional HIE Exchange measure, believe 
that we should allow for substantial flexibility in how health care 
providers use certified health IT to exchange data under a Framework 
Agreement.
    The Enabling Exchange Under TEFCA measure could offer health care 
providers an alternative to earn credit for the Health Information 
Exchange Objective. The Enabling Exchange Under TEFCA measure would not 
require a MIPS eligible clinician to assess whether they participate in 
a health information exchange that meets the attributes of attestation 
Statement 2 under the HIE Bi-Directional Exchange measure regarding 
exchange across a broad network of unaffiliated exchange partners 
including those using disparate EHRs. These attributes are key to the 
goals of TEFCA, which aims to offer health care providers a uniform set 
of expectations around information sharing regardless of which network 
for information exchange they participate in.
    We are inviting public comment on these proposals. As noted in 
section IV.A.5. of this proposed rule, we are also requesting comment 
on other ways that TEFCA can advance CMS policy and program objectives, 
including how TEFCA can support exchange of information required under 
other measures in the Promoting Interoperability performance category. 
For instance, how can TEFCA support exchange of information specified 
under the Public Health and Clinical Data Exchange and the Patient 
Access to their Health Information objectives?
(f) Modifications to the Public Health and Clinical Data Exchange 
Objective
(i) Background
    The Promoting Interoperability performance category for MIPS 
eligible clinicians has been an important mechanism for encouraging 
healthcare data exchange for public health purposes through the Public 
Health and Clinical Data Exchange Objective. Effective responses to 
public health events, such as the COVID-19 PHE, require fast, accurate 
exchange of data between health care providers and Federal, State, and 
local public health agencies (PHAs). Health care providers collect 
these data for patient care, and PHAs need them to protect the public, 
whether to track an outbreak, initiate contact tracing, find gaps in 
vaccine coverage, or pinpoint the source of a foodborne outbreak.
    There are five measures under the Public Health and Clinical Data 
Exchange Objective: Immunization Registry Reporting; Syndromic 
Surveillance Reporting; Electronic Case Reporting; Public Health 
Registry Reporting; and Clinical Data Registry Reporting. For 
background on this objective and its associated measures, we refer 
readers to the CY 2019 PFS final rule (83 FR 59795, 59815 through 
59817). In the CY 2022 PFS final rule (86 FR 65469 through 65475), we

[[Page 46296]]

finalized the requirement for MIPS eligible clinicians to report two of 
the five measures associated with the Public Health and Clinical Data 
Exchange Objective, beginning with the performance period in CY 2022: 
Immunization Registry Reporting; and Electronic Case Reporting. These 
two measures will put PHAs on better footing for future health threats 
and a long-term COVID-19 pandemic recovery by strengthening two 
important public health functions: (1) case surveillance; and (2) 
vaccine uptake. Requiring these measures will enable nationwide 
automated case reporting for fast public health response; and local and 
national visibility on immunization uptake so PHAs can tailor vaccine 
distribution strategies. (See https://www.cdc.gov/coronavirus/2019-ncov/hcp/electronic-case-reporting.html https://www.healthit.gov/topic/safety/safer-guides.)
(ii) Proposed Revisions to Active Engagement
(A) Background
    The Promoting Interoperability performance category has been an 
important mechanism for encouraging data exchange between health care 
providers and public health agencies through the Public Health and 
Clinical Data Exchange Objective. We believe requiring MIPS eligible 
clinicians to report on the Immunization Registry Reporting measure and 
Electronic Case Reporting measure will motivate EHR vendors to 
implement the necessary capabilities in their products and encourage 
MIPS eligible clinicians to engage in the reporting activities 
described in the measures.
    Despite these gains, ensuring the nation's thousands of clinicians 
implement and initiate data production for these vital public health 
capabilities remains an ongoing and important effort. The Promoting 
Interoperability performance category provides an opportunity to 
continue strengthening the incentives for MIPS eligible clinicians to 
engage in these essential reporting activities. Without adequate 
incentives, it will be difficult to attain the comprehensive data 
exchange needed to ensure fast, complete, actionable data in response 
to future public health threats.
    In the EHR Incentive Program Stage 3 final rule (80 FR 62862 
through 62864), beginning with the EHR reporting period in 2016, we 
established a definition for active engagement under the Public Health 
and Clinical Data Registry Reporting Objective (subsequently renamed 
for MIPS the Public Health and Clinical Data Exchange Objective, see 83 
FR 59815 through 59817). Active engagement is defined as when an 
eligible professional (now a MIPS eligible clinician) is in the process 
of moving towards sending ``production data'' to a public health agency 
or clinical data registry, or is sending production data to a public 
health agency or clinical data registry. We noted that the term 
``production data'' refers to data generated through clinical processes 
involving patient care and it is used to distinguish between this data 
and ``test data'' which may be submitted for the purposes of enrolling 
in and testing electronic data transfers. We established the following 
three options for eligible professionals to demonstrate active 
engagement:
    <bullet> Option 1--Completed registration to submit data: The 
eligible professional registered to submit data with the PHA or, where 
applicable, the clinical data registry (CDR) to which the information 
is being submitted; registration was completed within 60 days after the 
start of the EHR reporting period; and the eligible professional is 
awaiting an invitation from the PHA or CDR to begin testing and 
validation. Eligible professionals that have registered in previous 
years do not need to submit an additional registration to meet this 
requirement for each EHR reporting period.
    <bullet> Option 2--Testing and validation: The eligible 
professional is in the process of testing and validation of the 
electronic submission of data. The eligible professional must respond 
to requests from the PHA or, where applicable, the CDR within 30 days; 
failure to respond twice within an EHR reporting period would result in 
the eligible professional not meeting the measure.
    <bullet> Option 3--Production: The eligible professional has 
completed testing and validation of the electronic submission and is 
electronically submitting production data to the PHA or CDR.
    For more information about the current options for active 
engagement, we refer readers to the EHR Incentive Program Stage 3 final 
rule (80 FR 62862 through 62864).
(B) Proposed Revision to Options for Active Engagement
    The three active engagement options provided flexibility for 
eligible professionals and MIPS eligible clinicians to meet the 
measures under the Public Health and Clinical Data Registry Reporting 
Objective/Public Health and Clinical Data Exchange Objective in a 
variety of ways, but they did not provide an incentive to move through 
the options and get to option 3, production, where there is the ongoing 
electronic submission of data. Option 1, completed registration to 
submit data, was an important option in 2016 as many PHAs and CDRs were 
starting to come online, and thus the provision of this option 
recognized that many eligible professionals were just beginning to 
engage in electronic data exchange with PHAs and CDRs. Now many years 
have passed, and we believe that MIPS eligible clinicians have had 
ample time to complete option 1.
    Thus, we propose to consolidate current options 1 and 2 into one 
option beginning with the performance period in CY 2023, as follows:
    <bullet> Proposed Option 1. Pre-production and Validation (a 
combination of current option 1, completed registration to submit data, 
and current option 2, testing and validation). The MIPS eligible 
clinician must first register to submit data with the PHA or, where 
applicable, the clinical data registry (CDR) to which the information 
is being submitted. Registration must be completed within 60 days after 
the start of the EHR reporting period, while awaiting an invitation 
from the PHA or CDR to begin testing and validation. MIPS eligible 
clinicians that have registered in previous years do not need to submit 
an additional registration for subsequent performance periods. Upon 
completion of the initial registration, the MIPS eligible clinician 
must begin the process of testing and validation of the electronic 
submission of data. The MIPS eligible clinician must respond to 
requests from the PHA or, where applicable, the CDR within 30 days; 
failure to respond twice within a performance period would result in 
the MIPS eligible clinician not meeting the measure.
    Eligible clinicians could select this option if they have 
previously completed the initial registration (existing Option 1). They 
could also select this option if they are currently in the process of 
testing and validation (existing Option 2).
    <bullet> Proposed Option 2. Validated Data Production (current 
option 3, production). The MIPS eligible clinician has completed 
testing and validation of the electronic submission and is 
electronically submitting production data to the PHA or CDR.

[[Page 46297]]

    Under this proposal, a MIPS eligible clinician must demonstrate 
their level of active engagement at either proposed Option 1 (pre-
production and validation) or proposed Option 2 (validated data 
production) to fulfill each measure. We are inviting public comment on 
these proposed changes to the options for active engagement.
(C) Proposed Reporting Requirement for Level of Engagement
    MIPS eligible clinicians currently are not required to report their 
level of active engagement for any of the measures associated with the 
Public Health and Clinical Data Exchange Objective. We believe that 
this information would be helpful as it would enable HHS to identify 
registries and PHAs which may be having difficulty onboarding MIPS 
eligible clinicians and moving them to the Validated Data Production 
phase. During the recent COVID-19 PHE, we recognized the importance of 
public health reporting (as discussed further in section 
IV.A.10.c.(4)(f)(i) of this proposed rule), and we believe that knowing 
the level of active engagement that a MIPS eligible clinician selects 
would provide information on the types of registries and geographic 
areas with health care providers in the Pre-production and Validation 
stage. Our goal is for all health care providers nationwide to be at 
the Validated Data Production stage so that data will be actively 
flowing and public health threats can be monitored. Therefore, for the 
Public Health and Clinical Data Exchange Objective, in addition to 
submitting responses for the required measures and any optional 
measures a MIPS eligible clinician chooses to report, we propose to 
require MIPS eligible clinicians to submit their level of active 
engagement, either Pre-production and Validation or Validated Data 
Production (as proposed in section IV.A.10.c.(4)(B)), for each measure 
they report beginning with the performance period in CY 2023. If our 
proposal to reduce the three current options of active engagement to 
two options is not finalized, we propose to require MIPS eligible 
clinicians to submit one of the three current options of active 
engagement for each measure they report.
    We are inviting public comment on this proposed change to require 
submission of the level of active engagement.
(D) Proposed Changes to the Duration of Active Engagement Options
    MIPS eligible clinicians currently are not required to advance from 
one option of active engagement to the next within a certain period of 
time. Beginning with the performance period in CY 2023, we are 
proposing that MIPS eligible clinicians may spend only one performance 
period at the Pre-production and Validation level of active engagement 
per measure, and that they must progress to the Validated Data 
Production level in the next performance period for which they report a 
particular measure. For example, under this proposal, if a MIPS 
eligible clinician submits the Immunization Registry Reporting measure 
for the performance period in CY 2023 at the level of active engagement 
for proposed option 1 (Pre-production and Validation), the clinician 
must submit the Immunization Registry Reporting measure at the level of 
active engagement for proposed option 2 (Validated Data Production 
phase) for the next performance period in CY 2024, or they would fail 
to satisfy the Public Health and Clinical Data Exchange Objective. To 
use an optional measure as an example to illustrate this proposal, if a 
MIPS eligible clinician chooses to submit the Syndromic Surveillance 
Reporting measure for the performance period in CY 2023 at the level of 
active engagement for proposed option 1 (Pre-production and Validation) 
and then chooses to submit the Syndromic Surveillance Reporting measure 
for a later performance period, the clinician would have to submit the 
measure at the level of active engagement for proposed option 2 
(Validated Data Production phase) for the next performance period for 
which they choose to submit the measure. The options for active 
engagement assume the same PHA or CDR is used by the MIPS eligible 
clinician. In the event a MIPS eligible clinician chooses to switch 
between one or more CDRs or PHAs, we are proposing they would be 
permitted to spend one additional performance period at the Pre-
production and Validation phase to assist with onboarding to the new 
CDR or PHA. As electronic transmission of high-quality data is achieved 
at the Validated Data Production phase, we want all MIPS eligible 
clinicians to reach this level.
    We are inviting public comments on this proposed change to the 
duration of the active engagement options.
(E) Public Health Reporting and Information Blocking
    The ONC 21st Century Cures Act final rule (85 FR 25642) implemented 
policies related to information blocking as authorized under section 
4004 of the 21st Century Cures Act. The 21st Century Cures Act final 
rule established a regulatory definition of information blocking, under 
which information blocking is, in general, a practice by a health IT 
developer of certified health IT, health information network, health 
information exchange, or health care provider (actors \503\) that, 
except as required by law or covered by an exception in 45 CFR part 
171, subparts B or C, is likely to interfere with (as defined in 45 CFR 
171.102) access, exchange, or use of EHI.<SUP>504 505</SUP> For a 
health care provider (as defined in 45 CFR 171.102), information 
blocking (see 45 CFR 171.103) means a practice (except as required by 
law or covered by an exception defined in 45 CFR part 171) that is 
likely to interfere with access, exchange, or use of EHI that the 
health care provider knows is unreasonable and is likely to interfere 
with access, exchange, or use of electronic health 
information.<SUP>506 507</SUP>
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    \503\ Actor is defined in 45 CFR 171.102 as ``health care 
provider, health IT developer of certified health IT, health 
information network or health information exchange.''
    \504\ For purposes of the definition of information blocking, 
for the period before October 6, 2022, electronic health information 
is defined in 45 CFR 171.103(b). As of that date, electronic health 
information will be defined as it is in 45 CFR 171.102.
    \505\ In order for a practice to be considered information 
blocking, additional requirements at 45 CFR 171.103(a)(2) or (a)(3) 
apply, depending on the type of actor engaging in the practice.
    \506\ For other types of actors (health IT developers of 
certified health IT and health information networks or health 
information exchanges, as defined in 45 CFR 171.102), the definition 
of ``information blocking'' (see 45 CFR 171.103) specifies that the 
actor ``knows, or should know, that such practice is likely to 
interfere with access, exchange, or use of electronic health 
information.''
    \507\ The exceptions to the definition of information blocking 
(practices that are required by law or covered by an exception in 45 
CFR part 171, subparts B or C) described in the previous sentence 
apply to this definition as well.
    \508\ See https://www.healthit.gov/curesrule/faq/would-not-complying-another-law-implicate-information-blocking-regulations.
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    ONC recently released an information blocking frequently asked 
question (FAQ) (IB.FAQ43.1.2022FEB) that highlights important points 
about public health reporting and information blocking.\508\ 
Specifically, if an actor is required to comply with another law that 
relates to the access, exchange, or use of EHI, failure to comply with 
that law may implicate the information blocking regulations. As an 
example, where a law requires actors to submit EHI to public health 
authorities, an actor's failure to submit EHI to public health 
authorities could be considered an interference under the information 
blocking regulations. For example, many States legally require 
reporting of certain diseases and conditions to detect

[[Page 46298]]

outbreaks and reduce the spread of disease. Should an actor that is 
required to comply with such a law fail to report,the failure could be 
an interference with access, exchange, or use of EHI under the 
information blocking regulations. Practices would be evaluated to 
determine whether the unique facts and circumstances constitute 
information blocking, consistent with additional ONC frequently asked 
questions.\509\
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    \509\ See https://www.healthit.gov/curesrule/faq/how-would-any-claim-or-report-information-blocking-be-evaluated.
---------------------------------------------------------------------------

(g) Proposed Changes to the Scoring Methodology for the Performance 
Period in CY 2023
    For ease of reference, Table 84 lists the objectives and measures 
for the Promoting Interoperability performance category for the CY 2023 
performance period/CY 2025 MIPS payment year as revised to reflect the 
proposals made in this proposed rule.
BILLING CODE 4120-01-P

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    In this proposed rule, we are making various proposals that would 
affect the scoring of the objectives and measures for the performance 
period in CY 2023. For reference, Table 85 reflects the scoring 
methodology for the Promoting Interoperability performance category for 
the performance period in CY 2022.

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    In proposing to make the Query of PDMP measure required, we would 
retain the 10 points associated with it, which are allocated as bonus 
points for the performance period in CY 2022. To accommodate this 
change if our proposal is finalized, we are proposing to reduce the 
points associated with the Health Information Exchange Objective 
measures from the current 40 points to 30 points beginning with the CY 
2023 performance period.
    The Public Health and Clinical Data Exchange Objective, with its 
two required measures, is currently worth only 10 points. Despite 
requiring certain measures to make the objective more effective in 
promoting public health data electronic exchange, the total number of 
points did not change between CY 2021 and CY 2022. We believe that 
increasing the point value of the Public Health and Clinical Data 
Exchange Objective would create a more meaningful incentive for MIPS 
eligible clinicians to engage in the electronic reporting of public 
health information and recognize the importance of public health 
systems affirmed by the COVID-19 pandemic. Increasing the point value 
would make the Public Health and Clinical Data Exchange Objective a 
more central piece of the Promoting Interoperability performance 
category and better incentivize MIPS eligible clinicians to implement 
these essential public health data exchange capabilities. Without 
adequate incentives, there remains a risk that MIPS eligible clinicians 
will simply not prioritize implementing these capabilities, which are 
essential to ongoing efforts to address COVID-19 and will be 
indispensable for responding to future public health threats and 
emergencies. Increasing the point value would more appropriately 
incentivize MIPS eligible clinicians to engage in the electronic 
reporting of public health information and would align the value of the 
objective with the objective's importance and the effort necessary to 
meet the required measures.
    Thus, we are proposing to increase the points allocated to the 
Public Health and Clinical Data Exchange Objective from 10 to 25 points 
to better align with the true value of this objective beginning with 
the CY 2023 performance period. We believe assigning 25 points to the 
objective reflects the importance of comprehensive, nationwide health 
care data exchange between MIPS eligible clinicians and public health 
agencies. Nationwide health care data exchange would provide immense 
value to the public by improving the speed and effectiveness of public 
health responses, as well as to MIPS eligible clinicians, since better 
public health response reduces pressure on clinicians, which can be 
overwhelmed in a public health crisis. To balance the increase in the 
points associated with the Public Health and Clinical Data Exchange 
Objective, we are proposing to reduce the points associated with the 
Provide Patients Electronic Access to Their Health Information measure 
from the current 40 points to 25 points beginning with the CY 2023 
performance period. We are proposing to revise the regulatory text for 
scoring the Promoting Interoperability performance category at Sec.  
414.1380(b)(4)(ii)(B) and (C) to reflect these proposals for scoring 
the objectives and measures. We are inviting public comment on these 
proposed changes to our scoring methodology.
    Table 86 reflects the scoring methodology for the Promoting 
Interoperability performance category for the performance period in CY 
2023 if the proposals discussed are finalized.

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    The maximum points available in Table 86 do not include the points 
that would be redistributed in the event an exclusion is claimed. For 
ease of reference, Table 87 shows how points would be redistributed 
among the objectives and measures for the performance period in CY 2023 
in the event a MIPS eligible clinician claims an exclusion, if the 
proposals discussed in this section are finalized.

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[GRAPHIC] [TIFF OMITTED] TP29JY22.135

    For ease of reference, Table 88 lists the objectives and measures 
for the Promoting Interoperability performance category for the 
performance period in CY 2023 and the 2015 Edition certification 
criteria.

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BILLING CODE 4120-01-C
(h) Additional Considerations
(i) Nurse Practitioners, Physician Assistants, Clinical Nurse 
Specialists, and Certified Registered Nurse Anesthetists
    We established a policy at Sec.  414.1380(c)(2)(i)(A)(4)(ii) for 
the performance periods in CY 2017 through 2022 (CY 2019 through CY 
2024 MIPS payment years) under section 1848(q)(5)(F) of the Act to 
assign a weight of zero to the Promoting Interoperability performance 
category in the MIPS final score if there are not sufficient measures 
applicable and available to NPs, PAs, CRNAs, and CNSs. We will assign a 
weight of zero only in the event that an NP, PA, CRNA, or CNS does not 
submit any data for any of the measures specified for the Promoting 
Interoperability performance category, but if they choose to report, 
they will be scored on the Promoting Interoperability performance 
category like all other MIPS eligible clinicians and the performance 
category will be given the weighting prescribed by section 
1848(q)(5)(E) of the Act.
    As in past years, we intend to use data from prior performance 
periods to further evaluate the participation of NPs, PAs, CRNAs, and 
CNSs in the Promoting Interoperability performance category and 
consider for subsequent years whether the measures specified for this 
category are applicable and available to these MIPS eligible 
clinicians. We analyzed the data submitted for the 2017 performance 
period for the Promoting Interoperability performance category and 
discovered that the vast majority of MIPS eligible clinicians submitted 
data as part of a group. Although we are pleased that MIPS eligible 
clinicians utilized the option to submit data as a group, it does limit 
our ability to analyze data at the individual NPI level. For the 2017 
performance period, approximately 4 percent of MIPS eligible clinicians 
who are NPs, PAs, CRNAs, or CNSs submitted data individually for MIPS, 
and more than two-thirds of them did not submit data for the Promoting 
Interoperability performance category. For the 2018 performance period, 
of the MIPS eligible clinicians who are NPs, PAs, CRNAs, or CNSs and 
submitted data individually for MIPS, we initially found approximately 
34 percent submitted data individually for the Promoting 
Interoperability performance category. However, after further review 
and the refinement of our analytics, we found that this percentage was 
24 percent, not 34 percent. For the 2019 performance period, of the 
MIPS eligible clinicians who are NPs, PAs, CRNAs, or CNSs and submitted 
data individually for MIPS, approximately 30 percent submitted data 
individually for the Promoting Interoperability performance category, a 
modest increase from 2018. For the 2020 performance period, of the MIPS 
eligible clinicians who are NPs, PAs, CRNAs, or CNSs and submitted data 
individually for MIPS, approximately 27.5 percent submitted data 
individually for the Promoting Interoperability performance category, a 
modest decrease from 2019. For the 2021 performance period, of the MIPS 
eligible clinicians who are NPs, PAs, CRNAs, or CNSs and submitted data 
individually for MIPS, approximately 21.3 percent submitted data 
individually for the Promoting Interoperability performance category, a 
decrease from 2020.
    Due to the continued relatively low numbers of NPs, PAs, CRNAs, or 
CNSs that submitted data individually for the Promoting 
Interoperability performance category for prior performance periods, we 
did consider proposing to extend the reweighting policy at Sec.  
414.1380(c)(2)(i)(A)(4)(ii) for another year (for the CY 2023 
performance period/2025 MIPS payment year). However, we believe that 
incentivizing more of these types of MIPS eligible clinicians to adopt 
and use CEHRT and submit data for the Promoting Interoperability 
performance category is important for increased interoperability and 
data exchange nationwide. We adopted the reweighting policy beginning 
with the first year of MIPS (the CY 2017 performance period/2019 MIPS 
payment year), and we believe that there has been sufficient time for 
NPs, PAs, CRNAs, and CNSs to adopt and implement CEHRT. At this point 
in the program's maturity, we are concerned that the reweighting policy 
itself might be serving as a disincentive to these types of MIPS 
eligible clinicians adopting and using CEHRT, which would be an 
unintended consequence. We believe it is possible that these clinician 
types are now able to submit data individually on the measures for the 
Promoting Interoperability performance category, but they are

[[Page 46310]]

choosing not to because they would prefer for the performance category 
to be reweighted and not to contribute to their final score. Further, 
we believe that there are sufficient measures applicable and available 
in the Promoting Interoperability performance category for NPs, PAs, 
CRNAs, and CNSs. The measures that may not apply to these clinician 
types, such as the e-Prescribing measure, have exclusions that can be 
claimed if applicable. We considered the impact that not extending the 
policy may have on MIPS eligible clinicians in small practices, but we 
believe that the policy we established in the CY 2022 PFS final rule at 
Sec.  414.1380(c)(2)(i)(A)(4)(ii)) to automatically assign a weight of 
zero to the Promoting Interoperability performance category for MIPS 
eligible clinicians in a small practice will result in very few NPs, 
PAs, CRNAs, and CNSs being affected. Further, we remind readers that a 
MIPS eligible clinician who meets the criteria for a significant 
hardship may submit an application to reweight the Promoting 
Interoperability performance category based on a significant hardship, 
such as lack of control over the availability CEHRT and insufficient 
internet access (81 FR 77240 through 77243, 82 FR 53680 through 53686, 
82 FR 53783 through 53785, and 85 FR 84984).
    For these reasons, we are not proposing to continue the reweighting 
policy at Sec.  414.1380(c)(2)(i)(A)(4)(ii) to assign a weight of zero 
to the Promoting Interoperability performance category in the MIPS 
final score for NPs, PAs, CRNAs, or CNSs for the CY 2023 performance 
period/2025 MIPS payment year. We are, however, requesting public 
comment on whether we should continue this policy for the CY 2023 
performance period/CY 2025 MIPS payment year, and we may decide to take 
a different approach in the final rule depending on the comments we 
receive. We are particularly interested in comments on potential 
barriers to CEHRT adoption and implementation that may impact one or 
more of these clinician types, as well as comments on the applicability 
of the Promoting Interoperability performance category measures to NPs, 
PAs, CRNAs, or CNSs.
(ii) Physical Therapists, Occupational Therapists, Qualified Speech-
Language Pathologists, Qualified Audiologists, Clinical Psychologists, 
and Registered Dieticians or Nutrition Professionals
    In the CY 2019 PFS final rule (83 FR 59819 through 59820), we 
established that we will apply the same reweighting policy for the 
Promoting Interoperability performance category that we adopted 
previously for NPs, PAs, CNSs, and CRNAs to other types of MIPS 
eligible clinicians who are non-physician practitioners (physical 
therapists, occupational therapists, qualified speech-language 
pathologist, qualified audiologists, clinical psychologists, and 
registered dieticians or nutrition professionals) for the CY 2019 
performance period. The reweighting policy for physical therapists, 
occupational therapists, qualified speech-language pathologist, 
qualified audiologists, clinical psychologists, and registered 
dieticians or nutrition professionals is codified at Sec.  
414.1380(c)(2)(i)(A)(4)(i).We stated that because many of these 
clinician types were or are not eligible to participate in the Medicare 
or Medicaid Promoting Interoperability Program, we have little evidence 
as to whether there are sufficient measures applicable and available to 
them under the Promoting Interoperability performance category. We 
extended this policy for the performance periods in CY 2020 (84 FR 
63003 through 63004), CY 2021 (85 FR 84895), and CY 2022 (86 FR 65488 
through 65489). We analyzed the data from the CY 2019 performance 
period/CY 2021 MIPS payment year, and approximately 18.4 percent of 
occupational therapists, 2 percent of physical therapists, and 1 
percent of clinical psychologists who submitted data individually for 
MIPS, submitted data individually for the Promoting Interoperability 
performance category. For qualified speech-language pathologists, 
qualified audiologists, and registered dieticians/nutrition 
professionals, approximately 18.8 percent of those who submitted data 
individually for MIPS also submitted data individually for the 
Promoting Interoperability performance category. We analyzed the data 
from the CY 2020 performance period/CY 2022 MIPS payment year, and 
approximately 3.3 percent of occupational therapists, 1.4 percent of 
physical therapists, and 0.6 percent of clinical psychologists who 
submitted data individually for MIPS, submitted data individually for 
the Promoting Interoperability performance category. For qualified 
speech-language pathologists, qualified audiologists, and registered 
dieticians/nutrition professionals, 0 percent (rounded from 16 total 
clinicians) of those who submitted data individually for MIPS also 
submitted data individually for the Promoting Interoperability 
performance category. We analyzed the data from the CY 2021 performance 
period/CY 2023 MIPS payment year, and 0 percent of occupational 
therapists, 0.3 percent of physical therapists, 0.5 percent of clinical 
psychologists who submitted data individually for MIPS, submitted data 
individually for the Promoting Interoperability performance category. 
For qualified speech-language pathologists, qualified audiologists, and 
registered dieticians/nutrition professionals, 6.7 (6.66) percent of 
those who submitted data individually for MIPS also submitted data 
individually for the Promoting Interoperability performance category.
    Based on low participation, it is possible that these clinician 
types may be finding that there are not sufficient measures that are 
applicable to them. As with NPs, PAs, CRNAs, and CNSs, however, it is 
also possible that the reweighting policy itself might be serving as a 
disincentive to these types of MIPS eligible clinicians adopting and 
using CEHRT, and that they are choosing not to submit data individually 
on the measures because they would prefer for the performance category 
to be reweighted and not to contribute to their final score. Because 
these clinician types were added to the definition of a MIPS eligible 
clinician under Sec.  414.1305 more recently than NPs, PAs, CRNAs, and 
CNSs, we believe it would be appropriate to continue the existing 
reweighting policy for them for one more year. Therefore, we are 
proposing to continue the existing policy of reweighting the Promoting 
Interoperability performance category for physical therapists, 
occupational therapists, qualified speech-language pathologist, 
qualified audiologists, clinical psychologists, and registered 
dieticians or nutrition professionals only for the CY 2023 performance 
period/2025 MIPS payment year and to revise Sec.  
414.1380(c)(2)(i)(A)(4)(i) to reflect the proposal. We want to continue 
to encourage these types of MIPS eligible clinicians to adopt and use 
CEHRT, which would contribute to increased interoperability and data 
exchange nationwide; therefore, we do not anticipate proposing in 
future rulemaking to extend the policy for additional years.
    We invite comments on this proposal.
(iii) Clinical Social Workers
    In the CY 2022 PFS final rule (86 FR 65387 through 65389), we added 
clinical social workers to the definition of a MIPS eligible clinician 
under Sec.  414.1305, beginning with the CY 2022 performance period/CY 
2024 MIPS payment year. This clinician type was not eligible to 
participate in the Medicare Promoting Interoperability Program to earn 
incentive payments for meaningful use of CEHRT or receive

[[Page 46311]]

reduced Medicare payments for failing to meaningfully use CEHRT. 
Clinical social workers also were not eligible for Medicaid EHR 
incentive payments. We stated that clinical social workers may lack 
experience with the adoption or use of CEHRT, and that we believed 
there may not be sufficient Promoting Interoperability performance 
category measures that are applicable and available to them (86 FR 
65489). For the CY 2022 performance period/CY 2024 MIPS payment year, 
we established that we will apply to clinical social workers the same 
reweighting policy for the Promoting Interoperability performance 
category that we adopted previously for NPs, PAs, CNSs, CRNAs, and 
other types of MIPS eligible clinicians who are non-physician 
practitioners (86 FR 65489). The reweighting policy for clinical social 
workers is codified at Sec.  414.1380(c)(2)(i)(A)(4)(iii).
    CY 2022 is the first year that clinical social workers are 
considered MIPS eligible clinicians, and thus we do not yet have any 
performance period data that we could use to evaluate whether the 
Promoting Interoperability performance category measures are applicable 
and available to this type of MIPS eligible clinician. We are proposing 
to continue the existing policy of reweighting the Promoting 
Interoperability performance category for clinical social workers for 
the CY 2023 performance period/CY 2025 MIPS payment year and to revise 
Sec.  414.1380(c)(2)(i)(A)(4)(iii) to reflect the proposal. We will 
evaluate whether the policy should be continued for future years when 
we have performance period data available.
(i) Patient Access to Health Information Measure--Request for 
Information (RFI)
    Patient use of portals to access their health information has been 
tied to benefits such as improvements in access, quality of care, and 
health outcomes, and reductions in healthcare expenditures.\510\ In 
particular, access to health information has been shown to enable the 
discovery of medical errors, to improve medication adherence, and to 
promote communication between the patient and health care 
provider.\511\ Health care provider encouragement (and other 
facilitating conditions), perceived usefulness, ease of use, control of 
health information, and enhanced communication are demonstrated as 
facilitators, while concerns of privacy, security, and lack of 
awareness have been tied to barriers of use.<SUP>512 513</SUP>
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    \510\ Ronda MC, Dijkhorst-Oei LT, Rutten GE. Reasons and 
barriers for using a patient portal: survey among patients with 
diabetes mellitus. J Med Internet Res. 2014 Nov 25;16(11):e263. doi: 
10.2196/jmir.3457. PMID: 25424228; PMCID: PMC4260081.
    \511\ Wildenbos GA, Peute L, Jaspers M. Facilitators and 
Barriers of Electronic Health Record Patient Portal Adoption by 
Older Adults: A Literature Study. Stud Health Technol Inform. 
2017;235:308-312. PMID: 28423804.
    \512\ Powell KR. Patient-Perceived Facilitators of and Barriers 
to Electronic Portal Use: A Systematic Review. Comput Inform Nurs. 
2017 Nov;35(11):565-573. doi: 10.1097/CIN.0000000000000377. PMID: 
28723832.
    \513\ Alaa A. Abd-alrazaq, Bridgette M. Bewick, Tracey 
Farragher, Peter Gardner, Factors that affect the use of electronic 
personal health records among patients: A systematic review, 
International Journal of Medical Informatics, Volume 126, 2019, 
Pages 164-175, ISSN 1386-5056, https://doi.org/10.1016/j.ijmedinf.2019.03.014.
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    The Health Information National Trends Survey (HINTS), a large, 
nationally representative survey operated by the National Cancer 
Institute (with support from ONC), is conducted routinely and contains 
key utilization data on consumer access and use of their online medical 
record through patient portals. The HINTS results showed the rates of 
individuals being offered and subsequently using their health 
information through a patient portal, as well as use of mobile health 
applications (apps) and the role health care providers play in 
encouraging use.\514\ Results showed that health care providers and 
staff have a substantial role in influencing patient use of the portal.
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    \514\ Johnson C, Richwine C, Patel V. Office of the National 
Coordinator for Health Information Technology (ONC) Data Brief, No. 
57 (September 2021). Individuals' Access and Use of Patient Portals 
and Smartphone Health Apps, 2020.
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    In the past for the Promoting Interoperability performance 
category, we attempted to promote patient access to their health 
information through measuring the number of patients who actively 
engaged with the electronic health record through the View, Download, 
Transmit (VDT) measure in the CY 2017 Quality Payment Program final 
rule (81 FR 77228 through 77237). In the CY 2019 PFS final rule (83 FR 
59812 through 59814), we renamed the Patient Electronic Access 
Objective to the Provider to Patient Exchange Objective and updated the 
measures within the Provider to Patient Exchange Objective. 
Specifically, we removed the standalone VDT measure from the Promoting 
Interoperability performance category in response to feedback from 
interested parties, including physician specialty societies ongoing 
concern with measures that require patient action for successful 
submission (83 FR 59814). We have also noted that data analysis of VDT 
measure supports concerns from interested parties that barriers exist 
which impact a clinician's ability to meet them. Interested parties 
have indicated that success of the measure is reliant upon the patient, 
who may face barriers to access which are outside a clinician's 
control. Additionally, in the CY 2019 PFS final rule (83 FR 59812 
through 59813), we changed the name of the Provide Patient Access 
measure to Provide Patients Electronic Access to Their Health 
Information and finalized changes to the measure description. These 
measure changes included a requirement for MIPS eligible clinicians to 
provide timely access for viewing, downloading or transmitting their 
health information for at least one unique patient discharged using any 
application of the patient's choice (83 FR 59812 through 59813). This 
change emphasized timely electronic access of patient health 
information rather than requiring health care providers to be 
accountable for patient actions.
    Through the current Provide Patients Electronic Access to Their 
Health Information measure in the Provider to Patient Exchange 
Objective, we are ensuring that patients have access to their health 
information through any application of their choice that is configured 
to meet the technical specifications of the Application Programing 
Interface (API) in the CEHRT of the MIPS eligible clinician. Promoting 
the use of API-enabled applications that provide timely access to 
updated information whenever the patient needs that information is an 
integral step in enhancing patient access and use of their health 
information. These API-enabled applications should be configured using 
standardized technology and contain the information the patient needs 
to make informed decisions about their care in a way the patient 
understands, and that recognizes the community's level of access to 
devices and internet connectivity. While we removed the VDT measure 
holding MIPS eligible clinicians responsible for patient action (83 FR 
59814), we still require that the technical capabilities be in place 
within a MIPS eligible clinician's CEHRT through the Provide Patients 
Electronic Access to Their Health Information measure should patients 
choose to access and use their health information (83 FR 59812 through 
59813).
    We continue to believe in the importance of taking a patient-
centered approach to health information access and moving to a system 
in which patients have immediate access to their electronic health 
information and can be assured that their health information will 
follow them as they move throughout the health care system. Recognizing 
the concerns and barriers

[[Page 46312]]

with the previous VDT measure discussed previously, but acknowledging 
the advancements made within the health IT industry over the past few 
years, this request for information is seeking a broad array of public 
comments regarding how to further promote equitable patient access and 
use of their health information without adding unnecessary burden on 
the MIPS eligible clinician or group. Specifically, we are seeking 
public comment on the following questions:
    <bullet> Moving beyond providing the information and technical 
capabilities to access their data, are there additional approaches to 
promote patient access and use of their health information? Are there 
examples of successful approaches or initiatives that have enhanced 
patient access and use of their health information?
    ++ Would allowing patients to add information to their records be 
useful in promoting patient access and utilization? Are there other 
incentives that would promote patient access?
    ++ Are there potential unintended consequences in allowing patients 
to add information to their records? What could be done to mitigate any 
potential unintended consequences?
    ++ Are there certain tools found to be useful in promoting patient 
access and use of their health information?
    <bullet> Recent studies have raised concerns about the presence of 
racial bias and stigmatizing language within EHRs that could lead to 
unintended consequences if patients were to obtain disparaging notes 
regarding their medical care.<SUP>515 516</SUP>
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    \515\ Sun M, Oliwa T, Peek ME, Tung EL. Negative Patient 
Descriptors: Documenting Racial Bias in the Electronic Health 
Record. Health Affairs 41, No. 2 (2022): 203-211. doi:10.1377/
hlthaff.2021.01423.
    \516\ Himmelstein G, Bates D, Zhou L. Examination of 
Stigmatizing Language in the Electronic Health Record. JAMA Netw 
Open. 2022;5(1):e2144967. doi:10.1001/jamanetworkopen.2021.44967.
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    ++ What policy, implementation strategies, or other considerations 
are necessary to address existing racial bias or other biases and 
prevent use of stigmatizing language?
    <bullet> Additional analysis of HINTS data provides insights into 
common barriers to patient portal access and use as well as 
characteristics that can help predict which individuals are more likely 
to experience certain barriers (for example, preference for in-person 
communication with their health care provider is one of the most 
prevalent barriers experienced more often by older adults and 
women).\517\
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    \517\ Turner K, Clary A, Hong Y, Alishahi Tabriz A, Shea CM. 
Patient Portal Barriers and Group Differences: Cross-Sectional 
National Survey Study. J Med Internet Res 2020;22(9):e18870.
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    ++ What are the most common barriers to patient access and use of 
their health information that have been observed? Are there differences 
by populations or individual characteristics? For example, are there 
barriers caused by lack of accessibility to patients due to disability 
or limited English proficiency?
    <bullet> Patients' health information may be found in multiple 
patient portals. How could CMS or HHS facilitate individuals' ability 
to access all their health information in one place?
    ++ If patient portals connected to a network participating in the 
recently launched TEFCA,<SUP>518 519</SUP> would this enable more 
seamless access to individual health information across various patient 
portals?
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    \518\ The Trusted Exchange Framework (TEF): Principles for 
Trusted Exchange. ONC January 2022: https://www.healthit.gov/sites/default/files/page/2022-01/Trusted_Exchange_Framework_0122.pdf.
    \519\ Common Agreement for Nationwide Health Information 
Interoperability V1. ONC. January 2022: https://www.healthit.gov/sites/default/files/page/2022-01/Common_Agreement_for_Nationwide_Health_Information_Interoperability_Version_1.pdf.
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    <bullet> With the advancement of HIT, EHRs and other health-related 
communication technologies, there are concerns that implementation of 
these technologies can lead to unintended consequences that exacerbate 
existing health disparities within populations who could receive 
greater benefits but are less likely to adopt 
them.<SUP>520 521 522 523</SUP> What policy, governance and 
implementation strategies or other considerations are necessary to 
ensure equal access to consumer-facing health technologies including 
patient portals and mobile health applications, as well as equitable 
implementation and appropriate design and encouragement of use across 
all populations?
---------------------------------------------------------------------------

    \520\ Craig S, McPeak KE, Madu C, Dalembert G. Health 
information technology and equity: Applying history's lessons to 
tomorrow's innovations. Current Problems in Pediatric and Adolescent 
Health Care. Volume 52, Issue 1, 2022.
    \521\ Antonio MG, Petrovskaya O, Lau F. Is research on patient 
portals attuned to health equity? A scoping review. JAMIA, 26(8-9), 
2019, 871-883.
    \522\ Sarkar U, Karter AJ, Liu JY, et al. The literacy divide: 
health literacy and the use of an internet-based patient portal in 
an integrated health system--results from the diabetes study of 
Northern California (DISTANCE). J Health Commun 2010; 15 (Suppl 2): 
183-96.
    \523\ Ackerman SL, Sarkar U, Tieu L, et al. Meaningful use in 
the safety net: a rapid ethnography of patient portal implementation 
at five community health centers in California. J Am Med Inform 
Assoc 2017; 24 (5): 903-12.
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    <bullet> What challenges do MIPS eligible clinicians face when 
addressing patient questions and requests resulting from patient access 
of patient portals or access of data through use of a mobile app? What 
can be done to mitigate potential burden?
    <bullet> For patients who access their health information, how 
could CMS, HHS, and health care providers help patients manage their 
health through the use of their personal health information?
    <bullet> Do you believe the API and app ecosystem are at the point 
where it would be beneficial to revisit adding a measure of patient 
access to their health information which assesses clinicians on the 
degree to which their patients actively access their health 
information? What should be considered when designing a measure of 
patient access of their health information through portals or apps?
    We welcome input on how we can encourage and enable patient access 
to and use of their health information to manage and improve their care 
across the care continuum.
(5) APM Entity Level Participation for MIPS Eligible Clinicians 
Participating in MIPS APMs
(a) Overview
    In the CY 2021 PFS final rule (85 FR 84896), we finalized our 
policy to terminate the APM scoring standard effective January 1, 2021, 
and to retain certain APM Entity group reporting policies that were 
established and finalized for reporting and scoring under MIPS 
beginning with the CY 2021 MIPS performance period. Therefore, we 
redesignated, in part, the regulation that describes APM Entity group 
determinations, from Sec.  414.1370(e) to Sec.  414.1317, and titled 
that section ``APM Entity Groups.''
(b) APM Entity Level Reporting of Promoting Interoperability 
Performance Category
    In the CY 2021 PFS final rule (85 FR 84896), we finalized a policy 
to allow APM Entities to report to traditional MIPS using any available 
MIPS reporting pathway, including the APM Performance Pathway (APP), 
traditional MIPS and, in the future, MIPS Value Pathways (MVPs).
    We finalized that APM Entities that do not report through the APP 
will continue to have the cost performance category reweighted to zero 
percent of their MIPS final score, but will be required to report and 
be scored on the three remaining MIPS performance categories, including 
quality, IA, and promoting interoperability. We explained in that rule 
that the PI performance category would continue to be scored for multi-
TIN APM Entities using the promoting interoperability roll-up 
calculation described at Sec.  414.1317(b)(1) (85 FR 84897).

[[Page 46313]]

    It has come to our attention through feedback from interested 
parties that many of the workstream modifications, as well as data 
aggregation and integration tools that are likely to be used by multi-
TIN APM Entities, such as use of the FHIR API or hiring vendors to 
complete the more complex reporting activities required for reporting 
APM Entity level eCQMs could also be used to collect data and submit 
for the promoting interoperability performance category at the APM 
Entity level.
    It is also our understanding that it is possible that an APM Entity 
may represent only a single practice site or specialty within a larger 
multi-specialty TIN. We believe that in these circumstances the APM 
Entity may have both the ability and desire to report on the promoting 
interoperability performance category at the APM Entity level, thereby 
excluding data generated by the rest of the larger TIN, in cases where 
the APM Entity itself performed above average relative to the rest of 
that TIN.
    Therefore, we are proposing to introduce a voluntary reporting 
option for APM Entities to report the promoting interoperability 
performance category at the APM Entity level beginning with the 2023 
performance period. Multi-TIN APM Entities that do not choose this 
proposed new reporting option would continue to be scored using the 
roll -up calculation described at Sec.  414.1317(b)(1). We seek comment 
on this proposal.
e. MIPS Final Score Methodology
(1) Performance Category Scores
(a) Background
    Section 1848(q)(1)(A)(i) and (ii) of the Act provides, in relevant 
part, that the Secretary shall develop a methodology for assessing the 
total performance of each MIPS eligible clinician according to certain 
specified performance standards for a performance period and use such 
methodology to provide for a composite performance score for each such 
clinician for each performance period.
    For the CY 2023 performance period/2025 MIPS payment year, we 
intend to continue to build on the scoring methodology we finalized for 
prior years. We believe that this scoring methodology allows for 
accountability and alignment across the performance categories and 
minimizes burden on MIPS eligible clinicians. We are proposing to 
update our scoring policies consistent with this framework. 
Specifically, we are proposing to--
    <bullet> Amend the benchmarking policy to score administrative 
claims measures in the quality performance category using a benchmark 
calculated from performance period data.
    <bullet> Clarify the topped-out measure policy and update the 
topped-out measure life cycle for scoring topped-out measures in the 
quality performance category.
    <bullet> Establish a maximum cost improvement score of 1 percentage 
point out of 100 percentage points available for the cost performance 
category beginning with the CY 2022 performance period/2024 MIPS 
payment year.
    We refer readers to section IV.A.10.c.(4)(l) of this proposed rule 
for our proposed changes to the scoring methodology for the Promoting 
Interoperability performance category. We are not proposing changes to 
scoring policies for the improvement activities performance category.
    We refer readers to Sec.  414.1380 for our current policies on 
scoring.
(b) Scoring the Quality Performance Category for the Following 
Collection Types: Medicare Part B Claims Measures, eCQMs, MIPS CQMs, 
QCDR Measures, the CAHPS for MIPS Survey Measure and Administrative 
Claims Measures
    We refer readers to Sec.  414.1380(b)(1) for our current policies 
regarding quality measure benchmarks, calculating total measure 
achievement and measure bonus points, calculating the quality 
performance category percent score, including achievement and 
improvement points, and the small practice bonus (81 FR 77276 through 
77308, 82 FR 53716 through 53748, 83 FR 59841 through 59855, 84 FR 
63011 through 63018, 85 FR 84898 through 84913). In the CY 2022 PFS 
final rule we finalized policies to simplify scoring in MIPS as we 
transition to MVPs and to incentivize the selection of new, potentially 
high-value measures (86 FR 65496 through 65507).
(i) Scoring Administrative Claims Measures in the Quality Performance 
Category Using Performance Period Benchmarks
    We refer readers to the CY 2017, CY 2018, CY 2019, CY 2020, and CY 
2021 Quality Payment Program final rules and PFS final rules (81 FR 
77277 through 77282, 82 FR 53699 through 53718, 83 FR 59841 through 
59842, 84 FR 63014 through 63016, and 85 FR 84901 through 84904, 
respectively) for our previously established benchmarking policies.
    In the CY 2017 Quality Payment Program final rule (81 FR 77276 
through 77282), we finalized a rule providing that we will use MIPS 
eligible clinicians' performance in the baseline period to set 
benchmarks for the quality performance category, with the exception of 
new quality measures, quality measures that lack historical data, or 
where we do not have comparable data from the baseline period. In these 
cases, we will calculate benchmarks using data submitted during the 
applicable performance period. We defined the baseline period to be the 
12-month CY that is 2 years prior to the performance period for the 
MIPS payment year. For example, for the CY 2023 performance period/2025 
MIPS payment year, the baseline period two performance periods prior 
would be the CY 2021 performance period (81 FR 77276 and 77277). 
Additionally, in the CY 2019 PFS final rule (83 FR 59842), we amended 
Sec.  414.1380(b)(1)(ii) to align our benchmark policy with 
concurrently made changes to our date submission terminology. These 
changes removed references to each individual benchmark and instead 
stated that benchmarks will be based on measure collection type, from 
all available sources, including MIPS eligible clinicians and APMs, to 
the extent feasible, during the applicable baseline or performance 
period.
    Additionally, we refer readers to the CY 2017 Quality Payment 
Program final rule and the CY 2021 PFS final rule (81 FR 77130 through 
77136 and 85 FR 84871 through 84873 respectively) and Sec.  
414.1325(a)(2)(i) for our previously established policies regarding 
administrative claims measures in the quality performance category.
    The policy at Sec.  414.1325 provides that there is no data 
submission requirement for cost measures or administrative claims 
measures in the quality performance category as these measures are 
calculated on behalf of participants by CMS using administrative claims 
data. In the CY 2017 Quality Payment Program final rule, we finalized a 
policy that clinicians would be scored on applicable administrative 
claims-based global or population health (henceforth referred to only 
as population health measures) in addition to the six required 
submitted measures. Additionally, we established exclusions to the case 
minimum policy of 20 cases. It was found that the all-cause hospital 
readmission (ACR) measure was not reliable for cases under 200 and for 
groups of fewer than ten clinicians. As a result, we established 
exceptions to the case minimum policy for this measures and others as 
specified in the MIPS final list of quality measures through rule 
making (Sec.  414.1380(b)(1)(iii)). In the CY 2021

[[Page 46314]]

PFS final rule (85 FR 84989 through 84901), we finalized a policy 
starting in the CY 2021 performance period/2023 MIPS payment year that 
would allow for performance periods longer than the standard 12-month 
performance period for administrative claims measures in the cost and 
quality performance categories as specified through rulemaking.
    Beginning with the CY 2023 performance period/2025 MIPS payment 
year, we are proposing that we will score administrative claims 
measures using benchmarks calculated using performance period 
benchmarks. We believe that using a performance period benchmark to 
score these measures would allow for scores that are more reflective of 
current performance, while adding no additional burden to clinicians. 
For the reasons described below, we believe it is more appropriate in 
certain circumstances to evaluate clinicians against current 
performance benchmarks. As previously noted, they do not require the 
submission of data by or on behalf of clinicians and may have a 
measure-specific performance period to ensure appropriate sample sizes. 
Additionally, in instances where these measures do not meet the case 
minimum or benchmark requirements, they are excluded from a MIPS-
eligible clinician's quality performance category score.
    The use of performance period benchmarks for such measures would 
help us to improve quality measurement. For example, the Risk-
standardized Complication Rate (RSCR) Following Elective Primary Total 
Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) has a 3-
year performance period (consecutive 36-month timeframe) \524\ that 
would start on October 1 of the calendar year 3 years prior to the 
applicable performance year and conclude on September 30 of the 
calendar year of the applicable performance year, proceeding with a 3-
month numerator assessment period (capturing complication outcomes) 
followed by a 2-month claims run-out period. For the CY 2023 
performance period/2025 MIPS payment year, the 3-year (36 consecutive 
months) performance period for this measure would span from October 1, 
2020 to September 30, 2023 with a 90-day numerator assessment period 
followed by a 60-day claims run-out period. This means that according 
to standard scoring policy, the corresponding baseline would include 
data from October 1, 2018 to September 30 2021. We believe that 
comparison to data that precedes that standard 2-year baseline period 
may limit the usefulness of this measure. By comparing performance to 
data that was collected 5 years prior, this measure does not account 
for changes to the healthcare landscape and improvements in care that 
might have been made in the timeframe.
---------------------------------------------------------------------------

    \524\ Section 414.1320(e)(1) provides in relevant part that, 
beginning with the 2023 MIPS payment year, the performance period 
for the quality and cost performance categories is the full calendar 
year that occurs 2 years prior to the applicable MIPS payment year, 
except as otherwise specified for administrative claims-based 
measures.
---------------------------------------------------------------------------

    We do not believe using performance period benchmarks would 
increase burden to clinicians. We believe that clinicians prefer to 
have historical benchmarks to aid in measure selection and have 
performance targets. Additionally, population health administrative 
claims measures in MIPS are not subject to case minimum policies 
reducing the risk in being scored on these measures.
    Accordingly, we are proposing to add a paragraph at Sec.  
414.1380(b)(1)(ii)(D) to state that, beginning with the CY 2023 
performance period/2025 MIPS payment year, CMS will calculate a 
benchmark for an administrative claims quality measure using the 
performance on the measure during the current performance period. We 
note that we do not intend this proposal to modify our existing 
policies regarding case minimums and measures for which no benchmark 
may be calculated. Specifically, measures would remain subject to case 
minimum requirements described in paragraph (b)(1)(iii) and benchmark 
requirements in paragraph (b)(1)(ii)(A) of this section. Measures that 
cannot have a benchmark calculated or meet case minimum requirements 
would still be deducted from the eligible clinician's total measure 
achievement points consistent with (b)(1)(i)(A)(2)(ii).
    We are seeking public comment on our proposals to score 
administrative claims measures in the quality performance category 
using performance period benchmarks.
(ii) Assigning Measure Achievement Points for Topped Out Measures
    Section 1848(q)(3)(B) of the Act requires that, in establishing 
performance standards with respect to measures and activities, the 
Secretary consider, among other things, the opportunity for continued 
improvement. As part of our implementation of section 1848(q)(3)(B) of 
the Act, we established our topped out measure policy, which is 
intended to encourage clinicians to focus on areas where clinical 
improvement is necessary possible by capping the points received for 
reporting on MIPS measures where meaningful distinctions in clinical 
performance are no longer measurable. We refer readers to Sec.  
414.1380(b)(1)(iv)(B) for our policies regarding the scoring of topped 
out measures. Under Sec.  414.1380(b)(1)(iv), we identify topped out 
measures in the benchmarks published for each performance year. Under 
Sec.  414.1380(b)(1)(iv)(B), beginning with the CY 2019 performance 
period/2021 MIPS payment year, measure benchmarks (except for measures 
in the CMS Web Interface) that are identified as topped out for 2 or 
more consecutive years will receive a maximum of 7 measure achievement 
points beginning in the second year the measure is identified as topped 
out (82 FR 53726 and 53727).
    We finalized in the CY 2017 Quality Payment Program final rule (81 
FR 77286) that we would define topped out process measures as those 
with a median performance rate of 95 percent or higher (Sec.  
414.1305). We defined topped out non-process measures using a 
definition similar to the definition used in the Hospital Value-Based 
Purchasing (VBP) Program: a measure where the truncated coefficient of 
variation is less than 0.10 and the 75th and 90th percentiles are 
within 2 standard errors (81 FR 77286). When a measure is topped out, a 
large majority of clinicians submitting the measure perform at or very 
near the top of the distribution; therefore, there is little or no room 
for the majority of MIPS eligible clinicians who submit the measure to 
improve. We understand that each measure we have identified as topped 
out may offer room for improvement for some MIPS eligible clinicians; 
however, we believe asking clinicians to submit measures that we have 
identified as topped out and measures for which the vast majority of 
MIPS eligible clinicians already excel is an unnecessary burden that 
does not add value or improve beneficiary outcomes.
    In the CY 2018 Quality Payment Program final rule, we finalized 
that, beginning in the CY 2019 performance period/2021 MIPS payment 
year, each measure (excluding measures in the CMS Web Interface) that 
is identified as topped out for two or more consecutive years can 
receive no more than 7 points in the second year that it is identified 
as topped out and beyond (82 FR 53726 through 53727). A measure is 
identified as topped out for a given performance period by assessing 
its historical benchmark. Two consecutive historical

[[Page 46315]]

benchmarks must be labeled as topped out for the 7-point cap to be 
applied for a given performance period. For example, for the CY 2023 
performance period/2025 MIPS payment year, a measure is considered 
topped out if the historical benchmark calculated from data submitted 
in the CY 2021 performance period has a median performance of 95 
percent or higher in the case of process measures or the truncated 
coefficient of variation is less than 0.10 and the 75th and 90th 
percentiles are within two standard errors in the case of non-process 
measures. If this same measure is identified as topped out again for 
the CY 2024 performance period/2026 MIPS payment year from data from 
the historical baseline period from CY 2022, this measure would be 
labeled as topped out and have the 7-point cap applied until the 
historical baseline period shows that the measure is no longer topped 
out or the measure is removed from the program. We believe this 
methodology incentivizes MIPS eligible clinicians to begin submitting 
non-topped out measures without performing below the median score. The 
methodology also does not impact scoring for those MIPS eligible 
clinicians that do not perform near the top of the measure, and 
therefore, have significant room to improve on the measure.
    In the CY 2021 PFS final rule (85 FR 84989 through 84901), we 
finalized a policy at Sec.  414.1380(b)(1)(vii)(A) that consolidated 
previously established scoring flexibilities regarding the truncation 
of a quality measure's performance period to 9-months of data from the 
CY 2018 Quality Payment Program final rule (82 FR 52714 through 53716) 
and the measure suppression policy established in the CY 2019 PFS final 
rule (FR 59845 through 59847). The updated scoring flexibilities policy 
stated that, beginning with the CY 2021 performance period/2023 MIPS 
payment year, CMS would truncate the performance period or suppress a 
quality measure if CMS determined that revised clinical guidelines, 
measure specifications, or codes impacted a clinician's ability to 
submit information on the measure or may lead to potentially misleading 
results (85 FR 84899 through 84901). We stated that, based on the 
timing of the changes to clinical guidelines, measure specifications or 
codes, we will assess the measure on 9 months of data, and if 9 
consecutive months of data are not available, we will suppress the 
measure by reducing the total available measure achievement points from 
the quality performance category by 10 points for each measure 
submitted that is impacted (85 FR 84899). In the CY 2022 PFS final rule 
(86 FR 65491 and 65492), the scope of the truncation and suppression 
policy was expanded to include errors that are outside the control of 
the clinician, such as an incorrect coding status.
    We now clarify the interaction of our topped-out measure policy and 
our measure truncation and measure suppression policies. First, we must 
note that not all instances in which a measure lacks a benchmark affect 
the scoring of the measure equally. For example, when a measure is 
suppressed in the baseline period for the incorrect inclusion of an 
inactive status code in the measure specifications, the measure could 
resume to be scored comparably once the measure specifications are 
accurate in both the baseline and applicable performance period. 
Conversely, a measure that was suppressed or had its performance period 
truncated because it underwent a substantive change could not be 
comparably scored. In a case like the former, it is not until the 
suppressed or otherwise affected data is in the baseline period that 
the topped-out measure lifecycle is affected. A measure that lacks a 
benchmark for a performance period due to the suppression of date in 
the measure's baseline period will not have the 7-point cap applied for 
that performance period. This is because the measure lacks the two 
topped out historical performance periods necessary for the application 
of the cap. This does not preclude, however, CMS determining that the 
measure is topped out for the performance period. In the case of a 
measure that lacks a baseline period, CMS may base the benchmark on 
performance during the applicable performance period (See Sec.  
414.1380(b)(1)(ii)). Determining the measure was topped out during the 
performance period would thus require only that MIPS eligible clinician 
data for the performance period met the topped-out measure standard. In 
such a case, the 7-point cap could next be applied as soon as the 
following year.
    Where a measure was suppressed or had its performance period 
truncated because of a substantive change or a change in clinical 
guidelines, the topped-out measure resets entirely the year following 
the change as there is no longer a historical benchmark with which to 
compare the measure for the purpose of determining whether it is topped 
out.
(c) Cost Performance Category Score
(i) Improvement Scoring Methodology
    In the CY 2018 Quality Payment Program final rule, we established 
policies related to measuring improvement in the cost performance 
category at the measure level, an improvement scoring methodology for 
the cost performance category, and a formula for calculating the cost 
performance category percent score to include achievement and 
improvement (82 FR 53748 through 53752). These policies were to apply 
beginning with the CY 2018 performance period/2020 MIPS payment year. 
We codified these policies under Sec.  414.1380(b)(2)(iii) and (iv) (82 
FR 53748 through 53752, 53957). Subsequent to the publication of that 
final rule, the Bipartisan Budget Act of 2018 (BBA 18) (Pub. L. 115-
123, enacted February 9, 2018) was enacted. Section 51003(a)(1)(B) of 
the BBA 18 modified section 1848(q)(5)(D) of the Act such that the cost 
performance category score shall not take in to account the improvement 
of the MIPS eligible clinician for each of the second, third, fourth, 
and fifth years for which the MIPS applies to payments. In the CY 2019 
PFS proposed rule, we stated that we do not believe this statutory 
change requires us to remove our existing methodology for scoring 
improvement in the cost performance category (see 82 FR 53749 through 
53752), but it does prohibit us from including an improvement component 
in the cost performance category percent score for each of the CY 2020 
through 2023 MIPS payment years (83 FR 35956). Therefore, we proposed 
to revise Sec.  414.1380(b)(2)(iv)(E) to provide that the maximum cost 
improvement score for the CY 2020, 2021, 2022, and 2023 MIPS payment 
years is zero percentage points (83 FR 35956). We stated that under our 
existing policy (82 FR 53751 through 53752), the maximum cost 
improvement score for the CY 2020 MIPS payment year is 1 percentage 
point, but due to the statutory changes and under our proposal, the 
maximum cost improvement score for the CY 2020 MIPS payment year would 
be zero percentage points (83 FR 35956). We also proposed at Sec.  
414.1380(a)(1)(ii) to modify the performance standards to reflect that 
the cost performance category percent score will not take in to account 
improvement until the CY 2024 MIPS payment year (83 FR 35956). In the 
CY 2019 PFS final rule, we finalized these proposals as proposed (83 FR 
59856).
    In prior rulemaking, we inadvertently failed to address what the 
maximum cost improvement score would be under

[[Page 46316]]

Sec.  414.1380(b)(2)(iv)(E) beginning with the CY 2022 performance 
period/2024 MIPS payment year. As we stated previously in the CY 2019 
PFS proposed and final rules (83 FR 35956 and 83 FR 59856, 
respectively), we do not believe the changes made to section 
1848(q)(5)(D) of the Act by section 51003(a)(1)(B) of the BBA 18 
required us to remove our existing methodology for scoring improvement 
in the cost performance category. Thus, in the CY 2019 PFS final rule, 
we maintained the methodology we had previously established under Sec.  
414.1380(b)(2)(iii) and (iv), while modifying Sec.  
414.1380(b)(2)(iv)(E) to reflect the statutory change made by section 
51003(a)(1)(B) of the BBA 18. Section 1848(q)(5)(D) of the Act requires 
us to take in to account the improvement of the MIPS eligible clinician 
when scoring the cost performance category for the sixth year of MIPS 
(the CY 2022 performance period/2024 MIPS payment year) and for 
subsequent years. We are proposing to establish a maximum cost 
improvement score of 1 percentage point for the cost performance 
category beginning with the CY 2022 performance period/2024 MIPS 
payment year. A maximum cost improvement score of 1 percentage point 
was the policy we established previously, before the amendments made by 
section 51003(a)(1)(B) of the BBA 18 with respect to the second, third, 
fourth, and fifth years of MIPS. We believe this policy is still 
appropriate at this time because although there are many opportunities 
for clinicians to actively work on improving their performance on cost 
measures, such as through more active care management or reductions in 
certain services, we recognize that many clinicians are still learning 
about cost measurement under MIPS. We aim to continue to educate 
clinicians about cost measurement and develop opportunities for robust 
feedback and measures that better recognize the role of clinicians. 
Clinicians are navigating and overcoming the obstacles of the COVID-19 
public health emergency while having to familiarize themselves with new 
policies we have adopted for MIPS, such as the establishment of MVPs as 
a voluntary means for participation starting with the CY 2023 
performance period that could become a mandatory means of 
participation, the opportunity for subgroup participation and 
reporting, the sunset of the CMS Web Interface as a collection/
submission type and transition to other collection and submission types 
for CMS Web Interface users starting with the CY 2023 performance 
period, and the implementation of new cost measures. As the CY 2022 
performance period/2024 MIPS payment year is the first program year we 
will be measuring improvement for the cost performance category, we 
believe it would be appropriate to begin gradually with a maximum cost 
improvement score of 1 percentage point--a policy clinicians already 
would be familiar with from prior rulemaking. In a future year, we may 
consider and assess the possibility of increasing the maximum cost 
improvement score.
    To the extent that this proposed change constitutes a change to the 
MIPS scoring or payment methodology for the CY 2024 MIPS payment 
adjustment after the start of the CY 2022 performance period, we 
believe that, consistent with section 1871(e)(1)(A)(i) of the Act, it 
is necessary to comply with the requirement of section 1848(q)(5)(D) of 
the Act that we take in to account the improvement of the MIPS eligible 
clinician when scoring the cost performance category for the sixth year 
of MIPS (the CY 2022 performance period/2024 MIPS payment year). We 
also believe that, consistent with section 1871(e)(1)(A)(ii) of the 
Act, it would be contrary to the public interest not to fill the gap in 
our existing methodology for scoring improvement in the cost 
performance category for the CY 2022 performance period/2024 MIPS 
payment year. Currently, our improvement scoring methodology for the 
cost performance category under Sec.  414.1380(b)(2)(iv)(E) does not 
include a maximum cost improvement score for the CY 2022 performance 
period/2024 MIPS payment year. Our proposal would correct this 
deficiency by establishing a maximum cost improvement score of 1 
percentage point beginning with the CY 2022 performance period/2024 
MIPS payment year. In addition, it would be contrary to the public 
interest not to comply the statutory requirement of section 
1848(q)(5)(D) of the Act to take in to account improvement when scoring 
the cost performance category for the sixth year of MIPS (the CY 2022 
performance period/2024 MIPS payment year).
    We are proposing corresponding changes to Sec.  
414.1380(b)(2)(iv)(E) to reflect the proposal. We solicit public 
comment on the proposal.
(2) Calculating the Final Score
    For a description of the statutory basis and our policies for 
calculating the final score for each MIPS eligible clinician, we refer 
readers to Sec.  414.1380(c) and the discussion in the CY 2017 and CY 
2018 Quality Payment Program final rules, and the CY 2019, CY 2020, CY 
2021, and CY 2022 PFS final rules (81 FR 77319 through 77329, 82 FR 
53769 through 53785, 83 FR 59868 through 59878, 84 FR 63020 through 
63031, 85 FR 84908 through 84917, 86 FR 65509 through 65527, 
respectively) on final score calculations, performance category 
weights, reweighting the performance categories, and the complex 
patient bonus.
    As described in more detail in the following sections, we:
    <bullet> Propose that a facility-based MIPS eligible clinician 
would be eligible to receive the complex patient bonus.
    <bullet> Request information on which additional risk indicators 
and data sources we should consider for use within the complex patient 
bonus formula to better assess the social and medical complexity for 
the patients of MIPS eligible clinicians.
    <bullet> Propose that virtual groups would be eligible for 
facility-based measurement.
    <bullet> Propose changes to the definition of a facility-based MIPS 
eligible clinician.
(a) Complex Patient Bonus
(i) Background
    Section 1848(q)(1)(G) of the Act requires us to consider risk 
factors in our MIPS scoring methodology. Specifically, it provides that 
the Secretary, on an ongoing basis, shall, as the Secretary determines 
appropriate and based on an individual's health status and other risk 
factors, assess appropriate adjustments to quality measures, cost 
measures, and other measures used under MIPS; and assess and implement 
appropriate adjustments to payment adjustments, final scores, scores 
for performance categories, or scores for measures or activities under 
MIPS. In doing so, the Secretary is required to take into account the 
relevant studies conducted under section 2(d) of the Improving Medicare 
Post-Acute Care Transformation Act of 2014 (IMPACT Act) (Pub. L. 113-
185, October 6, 2014) and, as appropriate, other information, including 
information collected before completion of such studies and 
recommendations. In the CY 2018 Quality Payment Program final rule, 
under the authority in section 1848(q)(1)(G) of the Act, we established 
at Sec.  414.1380(c)(3) a complex patient bonus of up to 5 points to be 
added to the final score for the 2020 MIPS payment year (82 FR 53771 
through 53776). In subsequent rulemaking, we continued the complex 
patient bonus at Sec.  414.1380(c)(3) for the 2021, 2022, and 2023 MIPS 
payment

[[Page 46317]]

years (83 FR 59870, 84 FR 63023, and 85 FR 84910, respectively). 
Additionally, we finalized for the 2022 and 2023 MIPS payment years at 
Sec.  414.1380(c)(3)(iv) that the complex patient bonus will be 
calculated under the existing formulas in paragraphs (c)(3)(i) and 
(ii), and the resulting numerical value will then be multiplied by 2, 
but cannot exceed 10.0 (85 FR 84911 through 84913 and 86 FR 65510 and 
65511, respectively). Finally, beginning with the CY 2022 performance 
period/2024 MIPS payment year, we revised the complex patient bonus by: 
(1) limiting the bonus to clinicians who have a median or higher value 
for at least one of the two risk indicators (Hierarchical Condition 
Category (HCC) and dual proportion); (2) standardizing the distribution 
of the two risk indicators so that the policy can target clinicians who 
have a higher share of socially and/or medically complex patients; and 
(3) providing one overall complex patient bonus cap at 10 bonus points 
(86 FR 65511 through 65519). We refer readers to the final rules cited 
above for additional details on the background, statutory authority, 
policy rationale, and calculation of the complex patient bonus.
(ii) Eligibility for the Complex Patient Bonus
    In the CY 2018 Quality Payment Program final rule, we finalized at 
Sec.  414.1380(c)(3) a complex patient bonus for MIPS eligible 
clinicians, groups, APM Entities, and virtual groups that submit data 
for at least one MIPS performance category during the applicable 
performance period, which will be added to the final score (82 FR 53771 
through 53776). In the CY 2018 Quality Payment Program proposed rule, 
we proposed that a MIPS eligible clinician, group, virtual group or APM 
Entity must submit data on at least one measure or activity in a 
performance category during the performance period to receive the 
complex patient bonus (82 FR 30138). We stated that under this 
proposal, MIPS eligible clinicians would not need to meet submission 
requirements for the quality performance category to receive the bonus 
(they could instead submit improvement activities or Promoting 
Interoperability performance category measures only or submit fewer 
than the required number of measures for the quality performance 
category). In the CY 2018 Quality Payment Program final rule, we also 
established facility-based measurement for certain MIPS eligible 
clinicians under the authority in section 1848(q)(2)(C)(ii) of the Act, 
which provides that the Secretary may use measures used for a payment 
system other than for physicians, such as measures for inpatient 
hospitals, for purposes of the quality and cost performance categories 
(82 FR 53752 through 53767). We did not address whether facility-based 
MIPS eligible clinicians would be eligible to receive the complex 
patient bonus. Under the scoring methodology for facility-based 
measurement under Sec.  414.1380(e), there are no data submission 
requirements for individual clinicians to be scored under facility-
based measurement (Sec.  414.1380(e)(4)). Although individual facility-
based MIPS eligible clinicians are not required to submit data for at 
least one MIPS performance category, and it is possible they may choose 
not to submit data voluntarily, we believe they should be eligible to 
receive the complex patient bonus. As with other MIPS eligible 
clinicians who submit data for the quality performance category, we are 
able to score this performance category for facility-based MIPS 
eligible clinicians based on quality measure data available to us 
pursuant to the methodology described under Sec.  414.1380(e). Thus, we 
are proposing that beginning with the 2023 performance period/2025 MIPS 
payment year, a facility-based MIPS eligible clinician would be 
eligible to receive the complex patient bonus, even if they do not 
submit data for at least one MIPS performance category. We are 
proposing corresponding revisions to Sec.  414.1380(c)(3). We seek 
comments on this proposal.
(iii) Request for Information on Risk Indicators for the Complex 
Patient Bonus Formula
(A) Background on Risk Indicators Within the Complex Patient Bonus 
Formula
    In the CY 2022 PFS final rule, we finalized to continue using the 
existing risk indicators for the complex patient bonus formula (86 FR 
65511 through 65517). We received comments regarding our policy to 
continue to use the existing risk indicators. A few commenters 
requested that CMS look at additional risk indicators to account for 
additional complexities within the complex patient bonus formula. 
Specifically, a few commenters suggested CMS consider clinical data to 
capture comorbidities and alternatives to dual eligibility to capture 
social risk. Other commenters suggested CMS consider using other data 
such as Z-codes and indices (for example, Social Vulnerability Index, 
Community Needs Index, etc.). In response to these comments, we stated 
that we would take the comments into consideration as we continue 
updating the complex patient bonus in future years (86 FR 65517). We 
also stated that, although the HHS Assistant Secretary for Planning and 
Evaluation (ASPE) report found dual eligibility to be a reliable 
indicator of social risk, we understand there may be some 
limitations.\525\ However, at that time, we were unaware of data 
sources and/or methodologies to account for other social indicators 
such as income and education which are readily available for all 
Medicare beneficiaries and would be more complete indices of a 
patient's complexity. We stated that we continue to believe that 
average HCC risk scores are a valid proxy for medical complexity which 
are also used by other CMS programs. Therefore, we stated that we will 
continue to pair the HCC risk score with the proportion of dually 
eligible patients to create a more complete complex patient indicator 
than can be captured using HCC risk scores alone. We stated that we 
will evaluate additional, more comprehensive options, such as Z-codes 
and indices, based on any updated data or additional information, 
including to better account for social risk factors while minimizing 
unintended consequences.
---------------------------------------------------------------------------

    \525\ ASPE. Second Report to Congress on Social Risk and 
Medicare's Value-Based Purchasing Programs. June 29, 2020. https://aspe.hhs.gov/pdf-report/second-impact-report-to-congress.
---------------------------------------------------------------------------

    When we considered the approaches for a complex patient bonus in 
the CY 2018 Quality Payment Program proposed rule (82 FR 30135 through 
30139), we reviewed evidence to identify how indicators of patient 
complexity have an impact on performance under MIPS as well as 
availability of data to implement the bonus, described in more detail 
in the regulatory impact analysis of the CY 2018 Quality Payment 
Program proposed rule (82 FR 30235 through 30238). At that time, we 
identified two potential indicators for complexity: medical complexity 
as measured through HCC risk scores and social risk as measured through 
the proportion of patients with dual eligible status. We identified 
these indicators because they are common indicators of patient 
complexity in the Medicare program and the data is readily available. 
Please refer to the CY 2018 Quality Payment Program proposed rule for a 
detailed discussion of our analysis of both indicators that informed 
our proposal (82 FR 30135 through 30138). Specifically, we proposed (82 
FR 30138) and finalized (82 FR 53776) at Sec.  414.1380(c)(3)(i) to 
calculate an

[[Page 46318]]

average HCC risk score, using the model adopted under section 1853 of 
the Act for Medicare Advantage risk adjustment purposes, for each MIPS 
eligible clinician or group, and to use that average HCC risk score as 
the complex patient bonus.
    Additionally, in the CY 2019 PFS final rule (83 FR 59870), we 
finalized to calculate the average HCC risk score for a MIPS eligible 
clinician or group by averaging HCC risk scores for beneficiaries cared 
for by the MIPS eligible clinician or clinicians in the group during 
the second 12-month segment of the eligibility period, which begins on 
October 1 of the calendar year preceding the applicable performance 
period and ends on September 30 of the calendar year in which the 
applicable performance period occurs. Beginning with the 2021 MIPS 
payment year, the second 12-month segment of the MIPS determination 
period (beginning on October 1 of the calendar year preceding the 
applicable performance period and ending on September 30 of the 
calendar year in which the applicable performance period occurs) is 
used when calculating average HCC risk scores and proportion of full 
benefit or partial benefit dual eligible beneficiaries for MIPS 
eligible clinicians.
(B) Request for Information on Risk Indicators Within Complex Patient 
Bonus Formula to Continue to Align With CMS Approach to 
Operationalizing Health Equity
    CMS defines ``health equity'' as the attainment of the highest 
level of health for all people, where everyone has a fair and just 
opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, social 
economic status, geography, preferred language, or other factors that 
affect access to care and health outcomes. We are working to advance 
health equity by designing, implementing, and operationalizing policies 
and programs that support health for all the people served by our 
programs, eliminating avoidable differences in health outcomes 
experienced by people who are disadvantaged or underserved, and 
providing the care and support that our enrollees need to thrive. We 
focus our health equity actions in five high-impact areas based on 
input from interested parties and communities, which incorporate both 
community- and system-level approaches to achieving health equity.\526\
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    \526\ https://www.cms.gov/About-CMS/Agency-Information/OMH/equity-initiatives/framework-for-health-equity.
---------------------------------------------------------------------------

    <bullet> Expand the Collection, Reporting, and Analysis of 
Standardized Data;
    <bullet> Assess Causes of Disparities Within CMS Programs and 
Address Inequities in Policies and Operations to Close Gaps;
    <bullet> Build Capacity of Health Care Organizations and the 
Workforce to Reduce Health and Health Care Disparities;
    <bullet> Advance Language Access, Health Literacy, and the 
Provision of Culturally Tailored Services; and
    <bullet> Increase All Forms of Accessibility to Health Care 
Services and Coverage.
    We believe the complex patient bonus aligns with all five focus 
areas, addressing the need for standardized data collection, supporting 
CMS in addressing inequities to close gaps, and helping build capacity 
among health care professionals to provide tailored, culturally and 
linguistically appropriate, accessible care that meets their patients' 
needs and addresses social risk factors that individuals experience 
which can affect health care quality, access, and outcomes. To ensure 
our focus remains on the communities, individuals, and health care 
professionals we serve, we continue to explore ways and efforts to 
improve our current policies to advance health equity in ways that are 
responsive to the needs of our interested parties.
    In section III.G.4.b.(7)(d) of this rule, we are proposing a 
positive adjustment to the quality performance score for an Accountable 
Care Organizations (ACO) that achieves a specified level of quality 
performance and serves beneficiaries in areas with a high Area 
Deprivation Index (ADI) or serves a large proportion of dual eligible 
beneficiaries. At this time, we are evaluating and inquiring whether 
the ADI measure is a good indicator of beneficiaries with high needs 
for use within the MIPS program as it is intended to capture local 
socioeconomic factors correlated with medical disparities and 
underservice. ADI is now reported publicly through the Neighborhood 
Atlas from the University of Wisconsin. It is a relative measure that 
is reported at the individual level, typically reported by percentile 
(1-100) or decile (1-10), with a higher percentile indicating greater 
disadvantage.
    While we are not currently proposing to use the ADI measure within 
the complex patient bonus, we ask for public comments on the potential 
future incorporation of the measure. We are particularly interested in 
information from, or related to perspectives of, individuals living in 
or serving underserved communities, including health care professionals 
disproportionately serving underserved communities and medically and 
socially complex patients:
    <bullet> What additional risk indicators should CMS consider 
incorporating within the complex patient bonus formula?
    ++ How should CMS incorporate those additional risk indicators into 
the complex patient bonus formula?
    ++ What additional data sources should CMS consider that would 
allow for CMS to calculate the complex patient bonus in both a feasible 
and timely manner?
    ++ What additional measures or indicators are already developed 
which may capture the social determinants of health?
    <bullet> In considering a potential future definition of ``safety 
net providers'' in the context of the complex patient bonus, CMS is 
interested in input and information related to the definition of 
``Essential Community Providers'' (ECPs) as defined in 45 CFR 156.235. 
Under that regulation, ECPs are defined as providers that serve 
predominantly low-income, medically underserved individuals. They 
include covered entities defined in section 340B(a)(4) of the Public 
Health Service (PHS) Act and entities described in section 
1927(c)(1)(D)(i)(IV) of the Act. Additional providers may submit an 
online petition to be considered and approved by CMS for inclusion on 
the ECP list through the ECP petition review process. We are interested 
in information from commenters regarding:
    ++ Whether the definition of ``essential community providers'' 
adequately functions as a potential definition for safety net providers 
and could include all MIPS eligible clinicians who may receive the 
complex patient bonus? What (if any) concerns would health care 
providers or health care professionals have regarding the use of this 
definition?
    ++ What recommendations for alternate definitions should CMS 
consider as a definition of ``safety net provider'' that would be 
inclusive of all MIPS eligible clinicians who may receive the complex 
patient bonus?
    ++ When considering the ``safety net provider'' definition, how 
would commenters suggest CMS consider differences related to location 
or facilities that might qualify as ``safety net providers'' versus 
individual health care professionals who might also qualify as ``safety 
net providers''? What would commenters identify as key determinations 
when considering a location, site-based, or facility-based definition 
or an individual health care

[[Page 46319]]

professional based definition of ``safety net provider'' in the context 
of MIPS eligible clinicians who may receive the complex patient bonus?
(b) Facility-Based Measurement
(i) Background
    Section 1848(q)(2)(C)(ii) of the Act provides that the Secretary 
may use measures used for a payment system other than for physicians, 
such as measures for inpatient hospitals, for purposes of the quality 
and cost performance categories. In the CY 2018 Quality Payment Program 
final rule (82 FR 53752 through 53767), we established facility-based 
measurement under the authority in section 1848(q)(2)(C)(ii) of the Act 
for certain MIPS eligible clinicians. We established facility-based 
measurement to better align incentives between facilities and the MIPS 
eligible clinicians who provide services there (82 FR 53753). Scoring 
under facility-based measurement was available for clinicians beginning 
with the CY 2019 performance period/2021 MIPS payment year. In the CY 
2022 PFS final rule, we finalized at Sec.  414.1380(e)(6)(vi)(B) that 
for clinicians and groups eligible for facility-based measurement, 
beginning with the CY 2022 performance period/2024 MIPS payment year, 
the MIPS quality and cost performance category scores for such 
clinicians and groups will be based on the facility-based measurement 
scoring methodology unless a clinician or group receives a higher MIPS 
final score through another MIPS submission (86 FR 65526 and 65527). 
For more background on facility-based measurement, we refer readers to 
the CY 2018 Quality Payment Program final rule (82 FR 53752 through 
53767), the CY 2019 PFS final rule (83 FR 59856 and 59867), the CY 2020 
PFS final rule (84 FR 63018 through 63020), and the CY 2022 PFS final 
rule (86 FR 65526 and 65527).
(A) Eligibility for Facility-Based Measurement
    In the CY 2018 Quality Payment Program final rule (82 FR 53756 and 
53757), we finalized individual eligibility criteria for facility-based 
measurement at Sec.  414.1380(e)(2)(i). We established that a MIPS 
eligible clinician who furnishes 75 percent or more of his or her 
covered professional services in sites of service identified by the 
place of service (POS) codes used in the Health Insurance Portability 
and Accountability Act of 1996 (HIPAA) standard transaction as an 
inpatient hospital or emergency room based on claims for a period prior 
to the performance period as specified by CMS is eligible as an 
individual for facility-based measurement. We specified that we would 
use the definition of professional services provided in section 
1848(k)(3)(A) of the Act in applying this standard (82 FR 53756). In 
the CY 2019 PFS final rule, we added the on-campus outpatient hospital 
(POS code 22) to the list of sites of service we consider when 
determining eligibility for facility-based measurement (83 FR 59857 
through 59860). Additionally, we required that clinicians bill at least 
one covered professional service in a site of service identified by the 
POS codes for inpatient hospital or the emergency room in order to be 
eligible for facility-based measurement. We codified these standards in 
Sec.  414.1380(e)(2)(i)(A) and (B). We also finalized that we must be 
able to attribute a clinician to a particular facility that has a 
value-based purchasing score under the methodology specified in Sec.  
414.1380(e)(5) in order for the clinician to be eligible for facility-
based measurement (Sec.  414.1380(e)(2)(i)(C)).
    Separately, in the CY 2018 Quality Payment Program final rule (82 
FR 53759), we defined a facility-based group as a group in which 75 
percent or more of its eligible clinician NPIs billing under the 
group's TIN meet the requirements described above.
    As we clarified and expanded our definition of a facility-based 
MIPS eligible clinician, we intended to allow MIPS eligible clinicians 
participating in virtual groups to be eligible for facility-based 
measurement using the same standards applicable to individual MIPS 
eligible clinicians and groups. We intended this because, just like 
individual clinicians and groups, some virtual groups may predominantly 
practice within a hospital setting and their MIPS eligible clinicians 
may otherwise be eligible for facility-based measurement based on the 
eligibility standards established at Sec.  414.1380(e)(2)(i)(A) through 
(C) were they to participate in MIPS individually or as a group. 
However, we did not specify at Sec.  414.1380(e)(2) that virtual groups 
may be eligible for facility-based measurement. Therefore, we are 
proposing to revise Sec.  414.1380(e)(2) to permit facility-based 
measurement of a virtual group so long as it meets the specified 
eligibility standards beginning with the 2023 performance period/2025 
MIPS payment year. Additionally, we are also proposing to revise Sec.  
414.1380(e)(2) to specify, consistent with our prior discussion of the 
matter, that a MIPS eligible clinician is eligible for facility-based 
measurement only if CMS determines it eligible to be facility-based (82 
FR 53757). We seek comments on this proposal.
(B) Definition of Facility-Based MIPS Eligible Clinician
    In the CY 2018 Quality Payment Program final rule, we finalized the 
definition of a facility-based MIPS eligible clinician at Sec.  
414.1305 (82 FR 53578). In the CY 2019 PFS final rule, we finalized 
additions to the determination of eligibility for facility-based 
measurement as reflected in the regulation text at Sec.  
414.1380(e)(2)(i)(A), (B), and (C) (83 FR 59856 through 59860); 
however, we inadvertently did not update the definition of a facility-
based MIPS eligible clinician at Sec.  414.1305 to reflect these 
additions. Therefore, we are proposing to revise the facility-based 
MIPS eligible clinician definition at Sec.  414.1305 to align with the 
current policies at Sec.  414.1380(e)(2)(i)(A), (B), and (C), which are 
described in detail in section IV.A.10.d.(2)(b)(i)(A) of this proposed 
rule. We are also proposing to revise the terminology within Sec.  
414.1380(e) to align with the terminology used in the definition of a 
facility-based MIPS eligible clinician at Sec.  414.1305. We are 
seeking comments on these proposals.
e. MIPS Payment Adjustments
(1) Background
    For our previously established policies regarding the final score 
used to determine MIPS payment adjustments, we refer readers to the CY 
2022 PFS final rule (86 FR 65527 through 65537), CY 2021 PFS final rule 
(85 FR 84917 through 84926), CY 2020 PFS final rule (84 FR 63031 
through 63045), CY 2019 PFS final rule (83 FR 59878 through 59894), CY 
2018 Quality Payment Program final rule (82 FR 53785 through 53799), 
and CY 2017 Quality Payment Program final rule (81 FR 77329 through 
77343). In this CY 2023 PFS proposed rule, we are proposing to 
establish the performance threshold for the CY 2025 MIPS payment year 
using 2019 MIPS payment year data. In addition, we are including 
information about our timing for providing MIPS performance feedback to 
clinicians for the performance period in 2021.
(2) Establishing the Performance Threshold
    Under section 1848(q)(6)(D)(i) of the Act, for each year of MIPS, 
the Secretary shall compute a performance threshold with respect to 
which the final scores of MIPS eligible clinicians are compared for 
purposes of determining the MIPS payment adjustment factors under 
section 1848(q)(6)(A) of the Act for a

[[Page 46320]]

year. The performance threshold for a year must be either the mean or 
median (as selected by the Secretary, and which may be reassessed every 
3 years) of the final scores for all MIPS eligible clinicians for a 
prior period specified by the Secretary.
    Section 1848(q)(6)(D)(iii) of the Act included a special rule for 
the initial 2 years of MIPS, which required the Secretary, prior to the 
performance period for such years, to establish a performance threshold 
for purposes of determining the MIPS payment adjustment factors under 
section 1848(q)(6)(A) of the Act and an additional performance 
threshold for purposes of determining the additional MIPS payment 
adjustment factors under section 1848(q)(6)(C) of the Act, each of 
which shall be based on a period prior to the performance period and 
take into account data available for performance on measures and 
activities that may be used under the performance categories and other 
factors determined appropriate by the Secretary. Section 51003(a)(1)(D) 
of the Bipartisan Budget Act of 2018 (Pub. L. 115-123, February 9, 
2018) amended section 1848(q)(6)(D)(iii) of the Act to extend the 
special rule to apply for the initial 5 years of MIPS instead of only 
the initial 2 years of MIPS.
    In addition, section 51003(a)(1)(D) of the Bipartisan Budget Act of 
2018 added a new clause (iv) to section 1848(q)(6)(D) of the Act, which 
includes an additional special rule for the third, fourth, and fifth 
years of MIPS (the 2021 through 2023 MIPS payment years). This 
additional special rule provides, for purposes of determining the MIPS 
payment adjustment factors under section 1848(q)(6)(A) of the Act, in 
addition to the requirements specified in section 1848(q)(6)(D)(iii) of 
the Act, the Secretary shall increase the performance threshold for 
each of the third, fourth, and fifth years to ensure a gradual and 
incremental transition to the performance threshold described in 
section 1848(q)(6)(D)(i) of the Act (as estimated by the Secretary) 
with respect to the sixth year (the 2024 MIPS payment year) to which 
the MIPS applies.
    We applied these special rules for the first 5 years of MIPS to 
provide for a gradual and incremental transition to the performance we 
estimated for the sixth year of MIPS (the CY 2024 MIPS payment year). 
In the CY 2022 PFS final rule, we set the performance threshold at 75 
points for the CY 2024 MIPS payment year (86 FR 65532). For further 
information on the performance threshold policies, we refer readers to 
the CY 2017 Quality Payment Program final rule (81 FR 77333 through 
77338), CY 2018 Quality Payment Program final rule (82 FR 53787 through 
53794), CY 2019 PFS final rule (83 FR 59880 through 59883), CY 2020 PFS 
final rule (84 FR 63031 through 63037), CY 2021 PFS final rule (85 FR 
84919 through 84923), and CY 2022 PFS final rule (86 FR 65527 through 
65532). We codified the performance thresholds for each of the first 6 
years of MIPS at Sec.  414.1405(b)(4) through (9), as shown in Table 
89.
[GRAPHIC] [TIFF OMITTED] TP29JY22.138

    Beginning with the CY 2024 MIPS payment year, section 
1848(q)(6)(D)(i) of the Act requires the performance threshold to be 
the mean or median (as selected by the Secretary) of the final scores 
for all MIPS eligible clinicians with respect to a prior period 
specified by the Secretary. That section also provides that the 
Secretary may reassess the selection of the mean or median every 3 
years. In the CY 2022 PFS final rule (86 FR 65527 through 65532), we 
selected the mean as the methodology for determining the performance 
threshold for each of the 2024, 2025, and 2026 MIPS payment years. We 
intend to reassess and establish the methodology (mean or median) that 
we will use to determine the performance threshold for each of the next 
3 years (2027 MIPS payment year, 2028 MIPS payment year, and 2029 MIPS 
payment year) in future rulemaking.
    While we identified the mean as our methodology for determining the 
performance threshold for MIPS payment years CY 2024 through 2026, we 
have not specified which prior period's mean final score we would use 
for the 2025 MIPS payment year's performance threshold. From our review 
of the data available to us, we have identified the mean final scores 
for each of the 2019 through 2022 MIPS payment years, as shown in Table 
90. These four values represent the mean final scores for all MIPS 
eligible clinicians from prior periods that are available for 
consideration for the CY 2025 MIPS payment year performance threshold. 
The final scores for the CY 2021 MIPS performance period/2023 MIPS 
payment year were not finalized in time for this proposed rule; thus, 
the mean final score for the CY 2023 MIPS payment year is not listed as 
a potential performance threshold value for the CY 2025 MIPS payment 
year.

[[Page 46321]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.139

    As shown in Table 90, the mean final scores available for 
consideration for the CY 2025 MIPS payment year performance threshold 
cover a range of values from 74.65 points to 89.47 points (rounded to 
75 points and 89 points, respectively). We are proposing to use the CY 
2019 MIPS payment year as the prior period for the purpose of 
determining the performance threshold for the CY 2025 MIPS payment year 
for several reasons. We expect the mean final score for the CY 2023 
performance period/2025 MIPS payment year to be lower than the mean 
final scores from the CY 2018 through 2020 performance periods/2020 
through 2022 MIPS payment years. In the CY 2022 PFS final rule (86 FR 
65491 through 65507), we removed transition policies such as quality 
bonus points that had been established for scoring the quality 
performance category for the CY 2018 through 2020 performance periods/
2020 through 2022 MIPS payment years. Additionally, for the CY 2019 
through 2021 performance periods/2021 through 2023 MIPS payment years, 
we applied certain extreme and uncontrollable circumstances policies 
described under Sec.  414.1380(c)(2)(i) to MIPS eligible clinicians 
nationwide due to the COVID-19 PHE, which resulted in the reweighting 
of some performance categories if data were not submitted for a MIPS 
eligible clinician. In setting the performance threshold for the CY 
2025 MIPS payment year, we believe we should take into account the 
elimination of those transition policies, as well as the possibility 
that the performance categories will not be reweighted for as many MIPS 
eligible clinicians for the CY 2023 performance period/2025 MIPS 
payment year. Furthermore, continuing to use the mean final score from 
the CY 2019 MIPS payment year to determine the performance threshold 
for the CY 2025 MIPS payment year would maintain stability in the 
program. We believe continuing to use the mean final score from the CY 
2019 MIPS payment year would provide predictability to MIPS eligible 
clinicians during a program year in which they might be affected by 
those prior policy changes as well as potentially scored on performance 
categories that were previously reweighted due to the COVID-19 PHE.
    We estimate in the Regulatory Impact Analysis (RIA) in section 
VII.E.16.d.(4) of this proposed rule that approximately a third of MIPS 
eligible clinicians would receive a negative payment adjustment for the 
CY 2023 performance period/2025 MIPS payment year if the policies 
proposed in this proposed rule are finalized and the performance 
threshold is equal to 75 points. However, we have estimated that final 
scores for many clinicians for the CY 2023 performance period/2025 MIPS 
payment year would be close to the proposed performance threshold of 75 
points; therefore, the actual observed percentage of clinicians 
receiving negative payment adjustments may slightly differ from the RIA 
estimates. We refer readers to the alternatives considered in the RIA 
in section VII.F.7 of this proposed rule where we present the impact of 
using data from alternative years to determine the performance 
threshold for the 2025 MIPS payment year. We intend to revisit in 
future rulemaking whether we should use a different prior period to 
establish the performance threshold for future MIPS payment years.
    Under this proposal, and pursuant to the methodology we established 
previously at Sec.  414.1405(g), the performance threshold for the CY 
2025 MIPS payment year would be the mean of the final scores for all 
MIPS eligible clinicians for the CY 2019 MIPS payment year, which is 75 
points (rounded from 74.65 points). We propose corresponding changes to 
Sec.  414.1405(b)(9) to reflect this proposal. We request comments on 
this proposal, as well as whether we should use data from alternative 
years to set the performance threshold for the CY 2025 MIPS payment 
year, which we considered and discussed in the RIA in section VII.F.7 
of this proposed rule.
(3) Example of Adjustment Factors
    Figure 4 provides an illustrative example of how various final 
scores would be converted to a MIPS payment adjustment factor using the 
statutory formula and based on our proposed policies for the CY 2025 
MIPS payment year. In Figure 4, the performance threshold is set at 75 
points. The applicable percentage is 9 percent for the CY 2025 MIPS 
payment year. The MIPS payment adjustment factor is determined on a 
linear sliding scale from zero to 100, with zero being the lowest 
possible score which receives the negative applicable percentage 
(negative 9 percent for the CY 2025 MIPS payment year) and resulting in 
the lowest payment adjustment, and 100 being the highest possible score 
which receives the highest positive applicable percentage and resulting 
in the highest payment adjustment. However, there are two modifications 
to this linear sliding scale. First, there is an exception for a final 
score between zero and one-fourth of the performance threshold (zero 
and 18.75 points based on the performance threshold of 75 points for 
the CY 2025 MIPS payment year). All MIPS eligible clinicians with a 
final score in this range will receive the lowest negative applicable 
percentage (negative 9 percent for the CY 2025 MIPS payment year). 
Second, the linear sliding scale line for the positive MIPS payment 
adjustment factor is adjusted by the scaling factor, which cannot be 
higher than 3.0.
    If the scaling factor is greater than zero and less than or equal 
to 1.0, then the MIPS payment adjustment factor for a final score of 
100 will be less than or equal to 9 percent. If the scaling factor is 
above 1.0 but is less than or equal to 3.0, then the MIPS payment 
adjustment factor for a final score of 100 will be greater than 9 
percent.
    Only those MIPS eligible clinicians with a final score equal to 75 
points (which is the proposed performance threshold for the CY 2025 
MIPS payment year) would receive a neutral MIPS payment adjustment. 
Beginning with the CY 2025 MIPS payment year, the additional MIPS 
payment adjustment for exceptional performance described in section 
1848(q)(6)(C) of the Act will no longer be available. For this reason, 
Figure 4 no longer illustrates an additional adjustment factor for MIPS 
eligible clinicians with final scores at or above the additional 
performance threshold described in section 1848(q)(6)(D)(ii) of the 
Act.

[[Page 46322]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.140

    Table 91 illustrates the changes in payment adjustment based on the 
final policies from the CY 2022 PFS final rule (86 FR 65527 through 
65536) for the 2024 MIPS payment year and the proposed policies for the 
2025 MIPS payment year, as well as the applicable percent required by 
section 1848(q)(6)(B) of the Act.

[[Page 46323]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.141

f. Review and Correction of MIPS Final Score
(1) Feedback and Information To Improve Performance
    Under section 1848(q)(12)(A)(i) of the Act, we are at a minimum 
required to provide MIPS eligible clinicians with timely (such as 
quarterly) confidential feedback on their performance under the quality 
and cost performance categories beginning July 1, 2017, and we have 
discretion to provide such feedback regarding the improvement 
activities and Promoting Interoperability performance categories. In 
the CY 2018 Quality Payment Program final rule (82 FR 53799 through 
53801), we finalized that on an annual basis, beginning July 1, 2018, 
performance feedback will be provided to MIPS eligible clinicians and 
groups for the quality and cost performance categories, and if 
technically feasible, for the improvement activities and advancing care 
information (now called the Promoting Interoperability) performance 
categories.
    As we explained previously, we aim to provide performance feedback 
on or around July 1 of each year, but due to the PHE and COVID-19, it 
is possible that we might provide performance feedback at a later date 
(85 FR 50321). We made performance feedback available for the CY 2019 
performance period on August 5, 2020, and for the CY 2020 performance 
period on August 2 and September 27, 2021. Although we aim to provide 
performance feedback for the CY 2021 performance period on or around 
July 1, 2022, it is possible that the release date could be later 
depending on the circumstances. We direct readers to qpp.cms.gov for 
more information.
g. Third Party Intermediaries General Requirements
(1) General Requirements
(a) Background
    Flexible reporting options will provide eligible clinicians with 
options

[[Page 46324]]

to accommodate different practices and make measurement meaningful. We 
believe that allowing eligible clinicians to participate in MIPS 
through the use of third party intermediaries that will collect or 
submit data on their behalf, will help us accomplish our goal of 
implementing a flexible program (82 FR 53806).
    We refer readers to Sec. Sec.  414.1305 and 414.1400, the CY 2017 
Quality Payment Program final rule (81 FR 77362 through 77390), the CY 
2018 Quality Payment Program final rule (82 FR 53806 through 53819), 
the CY 2019 PFS final rule (83 FR 59894 through 59910), the CY 2020 PFS 
final rule (84 FR 63049 through 63080), the May 8th COVID-19 IFC (85 FR 
27594 through 27595), the CY 2021 PFS final rule (85 FR 84926 through 
84947), and the CY 2022 PFS final rule (86 FR 65538 through 65550) for 
our previously established policies regarding third party 
intermediaries.
    In this proposed rule, we are proposing to update the definition of 
a third party intermediary at Sec.  1400.1305 and to make other minor 
conforming technical edits to the regulation text governing third party 
intermediaries set forth in Sec.  414.1400. We are also proposing to 
revise Qualified Clinical Data Registry (QCDR) measure self-nomination 
and measure approval requirements, including proposing to delay the 
QCDR measure testing requirement for traditional MIPS by an additional 
year, until the CY 2024 performance period/2026 MIPS payment year. We 
are also proposing to revise remedial action and termination of third 
party intermediaries' policies. Finally, we have also included two 
requests for information on third party intermediary support of MIPS 
value pathways (MVPs) and national Continuing Medical Education (CME) 
organizations becoming a new type of third party intermediary.
(b) Definition of a Third Party Intermediary
    In the CY 2022 PFS final rule (86 FR 65542 through 65545), we 
finalized at Sec.  414.1400(a)(1) that MIPS data may be submitted on 
behalf of a MIPS eligible clinician, group, virtual group, subgroup, or 
Alternative Payment Model (APM) Entity by any of the following third 
party intermediaries: QCDR; qualified registry; health IT vendor; or 
CMS approved survey vendor. In that rule, we added APM Entities to 
Sec.  414.1400(a)(1), expanding the general participation requirements 
of third party intermediaries reporting MIPS on behalf of APM Entities 
(86 FR 65542). We also revised Sec.  414.1400(a)(1) to allow for QCDRs, 
qualified registries, health IT vendors, and CAHPS for MIPS survey 
vendors to support subgroup reporting, a recently adopted option for 
MIPS eligible clinicians reporting MIPS Value Pathways (86 FR 65544 
through 65545). One of our strategic goals in developing MIPS included 
developing a program that is meaningful, understandable, and flexible 
for participating MIPS eligible clinicians. One way we believe this 
could be accomplished is through flexible reporting options, including 
allowing MIPS eligible clinicians the flexibility of using third party 
intermediaries to collect or submit data on their behalf. In the CY 
2019 PFS final rule (83 FR 59894) we finalized at Sec.  414.1305 to 
define a third party intermediary as an entity that has been approved 
under Sec.  414.1400 to submit data on behalf of a MIPS eligible 
clinician, group, or virtual group for one or more of the quality, 
improvement activities, and Promoting Interoperability performance 
categories.
    We now propose to update the definition of a third party 
intermediary at Sec.  414.1305 to include subgroups and APM Entities 
and to make minor edits for technical clarity. We propose the revised 
definition would state that a third party intermediary means an entity 
that CMS has approved under Sec.  414.1400 to submit data on behalf of 
a MIPS eligible clinician, group, virtual group, subgroup, or APM 
Entity for one or more of the quality, improvement activities, and 
Promoting Interoperability performance categories. We request comments 
on this proposal.
(2) Requirements Specific to QCDRs
(a) Background
    As described at Sec.  414.1305, a QCDR is an entity that 
demonstrates clinical expertise in medicine and quality measurement 
development experience and collects medical or clinical data on behalf 
of a MIPS eligible clinician for the purpose of patient and disease 
tracking to foster improvement in the quality of care provided to 
patients. Section 1848(q)(5)(B)(ii) of the Act provides, that the 
Secretary shall encourage MIPS eligible professionals to report on 
applicable measures through the use of certified EHR technology and 
qualified clinical data registries.
    We believe QCDRs and QCDR measures further health equity through 
the expansion of data collection, reporting, and analysis. QCDR 
measures data can be used not only to identify gaps in the standard of 
care, but also to determine solutions to disparate impacts on different 
populations. We anticipate growth in the number of QCDR measures that 
address health equity in upcoming performance years. We refer readers 
to Sec.  414.1400(b)(4), the CY 2017 Quality Payment Program final rule 
(81 FR 77374 through 77375), the CY 2018 Quality Payment Program final 
rule (82 FR 53813 through 53814), the CY 2019 PFS final rule (83 FR 
59900 through 59906), the CY 2020 PFS final rule (84 FR 63058 through 
63074), the May 8th COVID-19 IFC (85 FR 27594 through 27595), the CY 
2021 PFS final rule (85 FR 84937 through 84944) and the CY 2022 PFS 
final rule (86 FR 65540 through 65550) for previously finalized 
standards and criteria for QCDRs and QCDR measure requirements.
(b) QCDR Measure Self-Nomination Requirements
    As part of QCDR measure self-nomination, Sec.  414.1400(b)(4)(i) 
and (b)(4)(i)(B) require the nominating QCDR to publicly post the QCDR 
measure specifications (including the CMS-assigned QCDR measure ID) and 
provide CMS with a link to where this information is posted no later 
than 15 calendar days following CMS approval. We typically notify a 
QCDR of its measure's approval prior to our posting of the approved 
measure specifications. While we require QCDRs to post their approved 
measure specifications, as their websites are an important source for 
clinicians, we want to limit the chance of discrepancies between CMS's 
posting and QCDRs' postings.
    To avoid confusion, we are proposing to revise Sec.  
414.1400(b)(4)(i)(B) to clarify requirements for publicly posting the 
approved measure specifications. Specifically, we propose to revise the 
language such that entities must publicly post measure specifications 
no later than 15 calendar days following CMS's posting of approved QCDR 
measure specifications on a CMS website and that QCDRs need to confirm 
that the measure specifications they post align with the measure 
specifications posted by CMS. We propose to revise Sec.  
414.1400(b)(4)(i)(B) to state that, for a QCDR measure, the entity must 
submit for CMS approval measure specifications including the Name/title 
of measure, National Quality Forum (NQF) number (if NQF-endorsed), 
descriptions of the denominator, numerator, and when applicable, 
denominator exceptions, denominator exclusions, risk adjustment 
variables, and risk adjustment algorithms. In addition, no later than 
15 calendar days following CMS posting of all approved specifications 
for a QCDR measure, the entity must publicly post the CMS-approved 
measure specifications for the

[[Page 46325]]

QCDR measure (including the CMS-assigned QCDR measure ID) and provide 
CMS with a link to where this information is posted. We request 
comments on this proposal. The burden estimates for the self-nomination 
process are currently associated with OMB Control No. 0938-1314 (CMS-
10621). We refer readers to section V.B.9.c. of this rule for the 
associated burden estimates relevant to this proposal.
(c) QCDR Measure Approval Criteria
    We refer readers to Sec.  414.1400(b)(4)(iii), the CY 2017 Quality 
Payment Program final rule (81 FR 77374 through 77375), the CY 2018 
Quality Payment Program final rule (82 FR 53813 through 53814), the CY 
2019 PFS final rule (83 FR 59900 through 59906), the CY 2020 PFS final 
rule (84 FR 63058 through 63074), the May 8th COVID-19 IFC (85 FR 27594 
through 27595), the CY 2021 PFS final rule (85 FR 84937 through 84942), 
and the CY 2022 PFS final rule (86 FR 65540 through 65542) for 
previously finalized standards and criteria for QCDRs, specifically 
QCDR measure requirements.
    We refer readers to the CY 2020 PFS final rule where we finalized 
requirements for QCDR measure testing (84 FR 63065 through 63067). 
Based on our goal that all measures available in MIPS are reliable and 
valid, we finalized in the CY 2020 PFS final rule a requirement for all 
QCDR measures to be fully developed and tested with complete testing 
results at the clinician level beginning with the CY 2021 performance 
period/2023 MIPS payment year (84 FR 63065 through 63067).\527\ In 
consideration of the burden of collecting data as part of QCDR measure 
testing on clinicians and hospitals on the front lines of the COVID-19 
pandemic, in the May 8th COVID-19 IFC and CY 2021 PFS final rule, we 
delayed the requirement for fully developed and tested QCDR measures by 
a year, to begin with the CY 2022 performance year (85 FR 27594 and 85 
FR 84938 through 84939). Separately, to incorporate feedback from 
interested parties into the CY 2021 PFS final rule, we finalized an 
incremental approach to the QCDR measure testing requirements beginning 
with the CY 2022 performance year. Specifically, we finalized a policy 
that a QCDR measure must be face valid prior to being self-nominated 
for the CY 2022 performance year (85 FR 84939). For new QCDR measures 
to be approved, we must verify they are face valid for the initial 
performance year and fully tested for any subsequent performance year 
(85 FR 84939). Thus, a QCDR measure that we approve for the CY 2022 
performance year; does not have to be fully tested until the CY 2023 
performance year (85 FR 84939).
---------------------------------------------------------------------------

    \527\ We refer readers to the Blueprint for the CMS Measures 
Management System for additional details and guidance on QCDR 
measure testing. Available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/MMS/MMS-Blueprint.
---------------------------------------------------------------------------

    We recognize concerns expressed by interested parties regarding the 
burden of full measure testing and the continuing impact of the COVID-
19 PHE (86 FR 65540 and 65541). Data collection efforts pose a 
challenge given the myriad disruptions to the health care system caused 
by the PHE, including clinicians' need to prioritize care for COVID-19 
patients (and deprioritize data collection), and lost data due to the 
delay and cancelation of elective procedures. In particular, the COVID-
19 extreme and uncontrollable circumstances exception decreased the 
number of groups reporting to MIPS through QCDRs. Without data from 
clinicians, QCDRs cannot complete their measure assessments, and 
delaying for one year will reduce the burden placed on QCDRs and 
clinicians. Despite these challenges, we believe QCDRs will soon be 
able to work with clinicians on full measure testing. Fully developed 
and tested measures improve measure reliability and validity thereby 
increasing clinician usability. Full measure testing also prevents 
instances where QCDRs may discover that a measure is not feasible part 
way through data collection (84 FR 63066). Therefore, we propose to 
revise our QCDR measure approval requirements again by delaying the 
requirement for a QCDR measure to be fully developed and tested with 
complete testing results at the clinician level until the CY 2024 
performance year. Under this proposal, a QCDR measure approved for the 
CY 2023 performance year or earlier would not need to be fully 
developed and tested until the CY 2024 performance year. A new QCDR 
measure proposed for the CY 2024 performance year would be required to 
meet face validity. We would require full testing at the clinician 
level before the QCDR measure can continue in the program beyond the 
first year. We propose to amend Sec.  414.1400(b)(4)(iii)(A)(3) to 
state that beginning with the CY 2022 performance period/2024 MIPS 
payment year, CMS may approve a QCDR measure only if the QCDR measure 
meets face validity. Beginning with the CY 2024 performance period/2026 
MIPS payment year, a QCDR measure approved for a previous performance 
year must be fully developed and tested, with complete testing results 
at the clinician level, prior to self-nomination. We request comments 
on this proposal.
(3) Remedial Action and Termination of Third Party Intermediaries
    We refer readers to Sec.  414.1400(e), the CY 2017 Quality Payment 
Program final rule (81 FR 77386 through 77389), the CY 2019 PFS final 
rule (83 FR 59908 through 59910), the CY 2020 PFS final rule (84 FR 
63077 through 63080), the CY 2021 PFS final rule (85 FR 84947), and the 
CY 2022 PFS final rule (86 FR 65542 and 65550) for previously finalized 
policies for remedial action and termination of third party 
intermediaries.
    We are proposing a few changes to the regulations relating to 
remedial actions and terminations set forth in Sec.  414.1400(e). These 
include one revised and one new requirement for Corrective Action Plans 
(CAPs), and proposed termination of certain approved QCDRs and 
Qualified Registries that continue to fail to submit performance data.
    Section 414.1400(e)(1) provides that, after providing written 
notice, CMS may take remedial action if CMS determines that a third 
party intermediary has ceased to meet one or more of the applicable 
criteria for approval, has submitted a false certification under 
paragraph (a)(3) of this section, or has submitted data that are 
inaccurate, unusable, or otherwise compromised. As described in Sec.  
414.1400(e)(1)(i) and (ii), the remedial actions CMS may take against a 
third party intermediary include requiring the third party intermediary 
to submit to CMS by a date specified by the agency a corrective action 
plan (CAP) and publicly disclosing an entity's data error rate on the 
CMS website until the data error rate falls below 3 percent.
    As described in Sec.  414.1400(e)(2), CMS may immediately or with 
advance notice terminate the ability of a third party intermediary to 
submit MIPS data on behalf of a MIPS eligible clinician, group, or 
virtual group for one or more of the following reasons: CMS has grounds 
to impose remedial action; CMS has not received a CAP within the 
specified time-period or the CAP is not accepted by CMS; or the third 
party intermediary fails to correct the deficiencies or data errors by 
the date specified by CMS.
    We are taking this opportunity to propose a technical correction in 
Sec.  414.1400(e)(3), to include the missing introductory text of, ``A 
data submission that,'' which we inadvertently failed to

[[Page 46326]]

include when finalizing our proposal to revise and redesignate existing 
language from former Sec.  414.1400(f)(3)(ii) to paragraph (e)(3) in 
the CY 2022 PFS final rule (86 FR 65550). With this proposed technical 
correction, the provision at Sec.  414.1400(e)(3) would read, ``A data 
submission that contains data inaccuracies affecting the third party 
intermediary's total clinicians may lead to remedial action/termination 
of the third party intermediary for future program year(s) based on CMS 
discretion.''
(a) Revised Corrective Action Plan (CAP) Requirements
    As described in Sec.  414.1400(e)(1)(i), the remedial actions CMS 
may take against a third party intermediary include requiring the third 
party intermediary to submit to CMS by a date specified by the agency a 
corrective action plan (CAP). As finalized in the CY 2021 PFS final 
rule and specified at Sec. Sec.  414.1400(e)(1)(i)(A) through (D), 
unless different or additional information is specified by CMS, the CAP 
must address the following issues: (A) the issues that contributed to 
the non-compliance; (B) the impact to individual clinicians, groups, or 
virtual groups, regardless of whether they are participating in the 
program because they are MIPS eligible, voluntary participating, or 
opting in to participating in the MIPS program; (C) the corrective 
actions to be implemented by the third party intermediary to ensure 
that the non-compliance has been resolved and will not recur in the 
future; and (D) a detailed timeline for achieving compliance with the 
applicable requirements.
    In this proposed rule, we are proposing to revise the scope of 
affected parties impacted by the second CAP requirement at Sec.  
414.1400(e)(1)(i)(B). As finalized in the CY 2021 PFS final rule at 
Sec.  414.1400(e)(1)(i)(B), we explained that, depending on the 
circumstances, non-compliance by a third party intermediary may affect 
an uncertain number of clinicians and groups and has the potential to 
implicate substantial program dollars. We noted our belief that the 
information regarding the scope of harms was necessary for the agency 
to assess the full program impact of the non-compliance, as well as our 
belief that it was important for the CAP to include this impact 
information regardless of the clinician's participation status, because 
non-compliance may have programmatic implications even if it does not 
affect payment, such as for data posted on the Physician Compare 
website (85 FR 84947).
    We have become aware that in some cases, QCDRs granted licenses to 
the measures of another QCDR upon which a CAP has been imposed may be 
directly impacted by the issues that led to the CAP. We are proposing 
to broaden the scope of affected parties under the CAP requirement at 
Sec.  414.1400(e)(1)(i)(B) to also identify impacts to any QCDRs that 
were granted licenses to the measures of the affected QCDR, rather than 
limit the identification of impacts to clinicians only. We are also 
proposing a technical correction in Sec.  414.1400(e)(1)(i)(B) to 
correct the word ``voluntary'' to ``voluntarily.'' Accordingly, we 
propose to revise the CAP requirement at Sec.  414.1400(e)(1)(i)(B) to 
require the third party intermediary to address in its CAP the impact 
to individual clinicians, groups, virtual groups, subgroups, or APM 
Entities, regardless of whether they are participating in the program 
because they are MIPS eligible, voluntarily participating, or opting in 
to participating in the MIPS program, and any QCDRs that were granted 
licenses to the measures of a QCDR upon which a CAP has been imposed.
    We also propose to add a new CAP requirement to require the third 
party intermediary to notify the parties identified in proposed Sec.  
414.1400(e)(1)(i)(B) of the impact to these parties by submitting a 
communication plan. The intent of this proposal is to enable affected 
parties to better understand and prepare for any operational and other 
challenges as needed. We believe having third party intermediaries 
submit a communication plan as part of their CAP would ensure third 
party intermediaries directly communicate the situation and its impact 
to these parties in a timely and consistent manner. Accordingly, we 
propose to add Sec.  414.1400(e)(1)(i)(E) to require the third party 
intermediary to develop a communication plan for communicating the 
impact to the parties identified in proposed Sec.  
414.1400(e)(1)(i)(B). Specifically, as proposed above, this would 
include individual clinicians, groups, virtual groups, subgroups, or 
APM Entities, regardless of whether they are participating in the 
program because they are MIPS eligible, voluntarily participating, or 
opting in to participating in the MIPS program, and any QCDRs that were 
granted licenses to the measures of a QCDR upon which a CAP has been 
imposed. We refer readers to section V.B.9.c. of this rule for the 
associated burden estimates relevant to these proposals. We request 
comments on these proposals.
(b) Termination of Approved QCDRs and Qualified Registries That Have 
Not Submitted Performance Data
    In the CY 2022 PFS final rule, we noted that we had identified a 
number of QCDRs and qualified registries that had continued to self-
nominate to become a third party intermediary for the MIPS program but 
had not submitted clinician, group, or virtual group data to CMS (86 FR 
65545). We further noted as the MIPS program continues to mature, we 
wished to reduce the number of vendors that self-nominate to become a 
qualified vendor but do not actively participate in the MIPS program 
(Id.). We also noted that our goal was to decrease the operational 
burden on CMS and those vendors that do not submit MIPS data to CMS (86 
FR 65546). Accordingly, we finalized requirements for approved QCDRs 
and qualified registries that have not submitted performance data to 
submit a participation plan as part of their self-nomination process 
(Id.). We finalized an incremental approach to addressing this issue. 
First, we established a participation plan requirement, which requires 
a QCDR or qualified registry that was approved but did not submit data 
for any of the CY 2019 through 2023 MIPS payment years to submit a 
participation plan in order to be approved for the CY 2023 performance 
period/2025 MIPS payment year (Sec.  414.1400(b)(3)(vii)). Second, a 
QCDR or qualified registry that was approved but did not submit any 
MIPS data for either of the 2 years preceding the applicable self-
nomination period must submit a participation plan in order for it to 
be approved for the CY 2024 performance period/2026 MIPS payment year 
or for a future performance period/payment year (Sec.  
414.1400(b)(3)(viii)).
    Even with the participation requirements in place, we remain 
concerned about the administrative burden created by QCDRs and 
qualified registries that submit the required participation plans 
during the self-nomination process and continue as an approved QCDR or 
qualified registry, yet continue not to submit MIPS data to CMS. 
Maintaining these vendors that do not actively participate does not 
provide a benefit to the MIPS program, rather it creates confusion for 
interested parties by including these vendors in our qualified postings 
(86 FR 65545).
    Our goal is also to decrease the operational burden on CMS and 
interested parties. CMS would decrease its operational burden by 
eliminating

[[Page 46327]]

the need to screen these entities. Removing QCDRs and qualified 
registries who do not actively participate from our qualified postings 
would also decrease the administrative burden for clinicians trying to 
identify an active participating QCDR or qualified registry.
    Accordingly, beginning with the CY 2024 performance period, we 
propose to terminate those QCDRs and qualified registries that are 
required to submit participation plans during the applicable self-
nomination period under Sec.  414.1400(b)(3)(viii) because they did not 
submit any MIPS data for either of the 2 years preceding the applicable 
self-nomination period, and continue to not submit MIPS data to CMS for 
the applicable performance period. For example, if a QCDR or qualified 
registry is required to submit a participation plan during the self-
nomination process for the CY 2024 performance period under Sec.  
414.1400(b)(3)(viii) because they did not submit any MIPS data for the 
CY 2022 and 2023 performance periods, and CMS approves their 
participation plan, but the QCDR or qualified registry continues to not 
submit MIPS data for the CY 2024 performance period (CY 2024 
performance data is submitted by March 2025), then under our proposed 
policy, that QCDR or qualified registry would be terminated.
    Specifically, we propose to add a new ground for termination at 
Sec.  414.1400(e)(5) stating that, beginning with the CY 2024 
performance period/2026 MIPS payment year, a QCDR or qualified registry 
that submits a participation plan as required under Sec.  
414.1400(b)(3)(viii), but does not submit MIPS data for the applicable 
performance period for which they self-nominated under Sec.  
414.1400(b)(3)(viii), will be terminated. We refer readers to section 
V.B.9.c. of this rule for the associated burden estimates relevant to 
this proposal. We request comments on this proposal.
    Finally, in conjunction with our proposal in section 
IV.A.10.g.(1)(b) above to amend the definition of ``third party 
intermediary'' to refer to subgroups and APM Entities, we are proposing 
a conforming change to Sec.  414.1400(e)(2), which currently states 
that CMS may immediately or with advance notice terminate ``the ability 
of a third party intermediary to submit MIPS data on behalf of MIPS 
eligible clinician, group or virtual group'' under certain 
circumstances. Rather than amend this provision to add references to 
subgroups and APM Entities, we propose to revise Sec.  414.1400(e)(2) 
by removing the previously quoted phrase. If this proposal is 
finalized, the revised regulation would simply provide that CMS may 
immediately or with advance notice ``terminate a third party 
intermediary'' under the specified circumstances. We request comments 
on this proposal.
(4) Auditing of Entities Submitting MIPS Data
(a) Background
    In the CY 2017 Quality Payment Program final rule (81 FR 77389 
through 77390), we finalized that third party intermediaries submitting 
MIPS data must comply with auditing procedures as a condition of 
qualification and approval to participate in MIPS, including the 
requirement to make available to CMS the contact information of each 
MIPS eligible clinician or group on behalf of whom it submits data 
(Sec.  414.1400(f)(1)).
(b) Proposed Revisions to the Requirement to Make Contact Information 
Available
    In conjunction with our proposal in section IV.A.10.g.(1)(b) above 
updating the definition of a third party intermediary, we are similarly 
proposing to revise the requirements codified at Sec.  414.1400(f)(1) 
to account for third party intermediaries reporting on behalf of 
subgroups and APM Entities. Additionally, we are also proposing to 
update the requirement to apply to third party intermediaries 
submitting data on behalf of virtual groups. We therefore propose to 
update Sec.  414.1400(f)(1) to require that the entity must make 
available to CMS the contact information of each MIPS eligible 
clinician, group, virtual group, subgroup, or APM Entity on behalf of 
whom it submits data. The contact information must include, at a 
minimum, the MIPS eligible clinician, group, virtual group, subgroup, 
or APM Entity phone number, address, and, if available, email. We 
invite public comment on this proposal.
(5) Requests for Information
(a) Request for Information on Third Party Intermediary Support of MVPs
    In the 2022 PFS rule (86 FR 65394 through 65395) we discussed our 
proposals related to furthering our transition to MVPs. We believe it 
is important to allow third party intermediaries to support MVPs. 
Furthermore, we noted that we expect QCDRs, qualified registries, and 
Health IT vendors who support MVPs to support all measures and 
activities across the quality, Promoting Interoperability, and 
improvement activities performance categories that are included in the 
MVP (86 FR 65543). Thus, we believe it is important for third party 
intermediaries to have the capabilities to support MVPs (86 FR 65415 
and 65542 through 65544).
    Although our MVP proposals have generally been supported, some 
third party intermediaries have had questions and expressed concerns 
with the requirement for third party intermediaries to support all 
measures within an MVP due to operational limitations (86 FR 65543). 
While we recognize these limitations, we believe allowing third party 
intermediaries to only support specific measures in an MVP creates 
undue burden on the MVP Participant and limits the clinicians' choice 
of measures available.
    Given public comments on the challenges of the current requirement 
to support all quality measures within an MVP (86 FR 65543), we are 
requesting input on the following:
    <bullet> Should third party intermediaries have the flexibility to 
choose which measures they will support within an MVP?
    <bullet> What are the barriers/burdens that third party 
intermediaries face to supporting all measures within an MVP?
    <bullet> What type of technical educational resources would be 
helpful for QCDRs, qualified registries, and Health IT vendors to 
support all measures within an MVP?
    We request comments on these questions.
(b) Request for Information on National Continuing Medical Education 
(CME) Accreditation Organizations Submitting Improvement Activities
    We have signaled an interest in aligning MIPS with efforts 
clinicians undertake to maintain their state licensure and, as 
appropriate, board certification status, which often requires 
completion of Continuing Medical Education (CME) requirements and/or 
Maintenance of Certification (MOC) requirements. We are considering 
whether national continuing medical education (CME) accreditation 
organizations that provide certification of CME could serve as a new 
type of third party intermediary to submit data for clinicians seeking 
improvement activities performance category credit for IA_PSPA_28, 
``Completion of an Accredited Safety or Quality Improvement Program,'' 
and IA_PSPA_2, ``Participation in MOC Part IV,'' which are both medium-
weighted improvement activities, so that clinicians would not need to 
attest to completion of the improvement

[[Page 46328]]

activities through the QPP web portal. We are considering how to 
include information from national CME accreditation organizations in 
MIPS.
    Currently, the only entities that are permitted to submit 
attestations on behalf of clinicians are third party intermediaries 
which includes QCDRs, qualified registries, health IT vendors, and CMS-
approved survey vendors. We are considering approaches to including CME 
accreditation organizations as third party intermediaries, however our 
current third party intermediary policies do not allow third party 
intermediaries to submit data solely for the improvement activities 
performance category. We have established that QCDRs and quality 
registries must support the reporting of three performance categories: 
quality; Promoting Interoperability; and improvement activities (Sec.  
414.1400(b)(1)(i). We have finalized requirements that Health IT 
vendors supporting MVPs must be able to submit data for the quality, 
Promoting Interoperability, and improvement activities performance 
categories (Sec.  414.1400(c)(1)(i)). In the quality performance 
category, QCDRs, quality registries and Health IT vendors are not 
required to support the Consumer Assessment of Healthcare Provider and 
Systems (CAHPS) for MIPS surveys and qualified registries and Health IT 
vendors are not required to support QCDR measures (85 FR 84926). CMS-
approved survey vendors are allowed to report the CAHPS for MIPS survey 
only for the quality performance category (Sec.  414.1400(d)).
    We are considering establishing a different type of third party 
intermediary, that allows national CME accreditation organizations to 
submit improvement activities based on completion of CME or MOC for the 
improvement activities performance category. We are seeking comment on 
whether a new type of third party intermediary would be valuable to 
clinicians. We believe that if we add a new type of third party 
intermediary, we should consider only national CME accreditation 
organizations to reduce potential clinician confusion and program 
complexity. We realize there are numerous issues on which we need 
feedback to determine the usefulness of CME accreditation organizations 
reporting for clinicians and to fully implement policies. We are 
interested in the value to clinicians, including burden reduction, to 
allow CME accreditation organizations to submit one or two improvement 
activities. We are interested in the types of organizations that should 
be considered if we establish a different type of third party 
intermediary and seek feedback on criteria for selection. We also are 
interested in benefits and barriers to the CME accreditation 
organizations if we established a different type of third party 
intermediary. It is important to note that all requirements that apply 
to third party intermediaries would need to be applied to CME 
Accreditation Organizations. We would need to establish criteria for 
the types of CME accreditation organizations that would be included, a 
review process to evaluate vendor application forms, requirements for 
yearly vendor training and additional training as required, submission 
of a Quality Assurance Plan (QAP) regarding the data submitted, and 
policies about the public posting of information submitted.
    We are seeking feedback on the value to clinicians of adding CME 
accreditation organizations as third party intermediaries including 
burden reduction, criteria for selecting CME accreditation 
organizations including the types of entities that should be considered 
and implementation policies.
    (i) Request for Information on Value of Adding CME Accreditation 
Organizations as Third Party Intermediaries
    We are requesting feedback on the value to clinicians of the 
program including CME accreditation organizations as a new type of 
third party intermediary that submits data on improvement activities 
that align with efforts clinicians undertake to complete CME, rather 
than attest to completing the activity at the time of submission.
    <bullet> What is the value to clinicians for adding a new third 
party intermediary as an alternative method of data submission for the 
two improvement activities noted above, rather than attesting to 
completion of the improvement activities?
    <bullet> What considerations are there for including a new type of 
third party intermediary that supports only select improvement 
activities in the improvement activities performance category? 
Currently, completion of the improvement activities related to CME and 
MOC do not satisfy the requirements of the improvement activities 
performance category; additional improvement activities must be 
submitted to meet the requirements. Improvement activities related to 
CME and MOC are not included in all MVPs. We are concerned that 
including an additional reporting method might be confusing for 
clinicians, who would need to attest to additional improvement 
activities to meet requirements of the improvement activities 
performance category. If a new type of third party intermediary was 
created that allowed a CME accreditation organization to submit data 
for select improvement activities, would there be any additional burden 
or operational costs to clinicians using multiple vendors to submit 
data to meet the requirements of the improvement activities performance 
category?
    <bullet> If a new type of third party intermediary was created for 
reporting only the improvement activities performance category, are CME 
accreditation organizations interested in developing capacity over time 
to submit additional improvement activities in the Improvement 
Activities Inventory, especially activities that address CMS priority 
issues, such as closing the health equity gap, inclusion of the patient 
voice in quality improvement, shared decision-making, and care 
coordination?
    <bullet> As the program transitions to MVPs, we are interested in 
reducing complexity and burden for clinicians. Would CME accreditation 
organizations need to be able to support MVPs (submission of measures 
and activities for quality, Promoting Interoperability and improvement 
activities performance categories) to reduce burden?
    <bullet> Are there other approaches to aligning MIPS and MVP 
requirements with completion of CME requirements and/or MOC 
requirements that we should consider?
(ii) Request for Information on Criteria for Selecting the CME 
Accreditation Organizations
    We request feedback on the types of organizations that should be 
considered for this potential new type of third party intermediary.
    <bullet> If we add a new type of third party intermediary, we 
believe we should develop criteria that permit only national CME 
accreditation organizations to become a new third party intermediary, 
to reduce confusion and complexity for clinicians. Are there special 
considerations or factors we should consider in the criteria related to 
regional CME accreditation organizations?
    <bullet> If we develop a new type of third party intermediary that 
allows only reporting for specific improvement activities for the 
improvement activities performance category, what type of selection 
criteria should be established? What type of entity would be eligible 
to be this new third party intermediary type? For example, would only 
national certifying accrediting organizations for CME with the ability 
to report for all

[[Page 46329]]

MIPS clinicians meet the requirement when we initially implement the 
policy because the relevant improvement activity is specific to 
physicians: IA_PSPA_28, ``Completion of an Accredited Safety or Quality 
Improvement Program'' and IA_PSPA_2, ``Participation in MOC Part IV''? 
Should we consider only organizations that can support submission of 
all improvement activities in the improvement activities performance 
category to reduce clinician confusion and burden?
    <bullet> Should we allow only CME accreditation organizations that 
can submit all measures and activities required in MVPs, to parallel 
the requirements for QCDRs, qualified registries and Health IT vendors? 
Are there technical resources that would be helpful to CME 
accreditation organizations to describe how measures and activities are 
submitted to CMS to assist a transition to supporting three performance 
categories? If CME accreditation organizations could support measures 
and activities in MVPs, would we need to develop any separate third 
party intermediary policies for the selection and approval of national 
CME accreditation organizations?
    <bullet> Should we consider inclusion of organizations that are 
accredited to provide continuing clinicians education (for example, 
CME, certified nurse educator (CNE), etc.)?
    <bullet> Should we consider organizations that accredit facilities 
and clinical practices as part of this new third party intermediaries 
type?
(iii) Request for Information on Third Party Intermediary 
Implementation Policies
    We request feedback on how third party intermediary policies should 
be maintained or modified if we add a new type of third party 
intermediary.
    <bullet> If we develop a new type of third party intermediary, we 
believe we should align with existing third party intermediary 
requirements and policies to the extent possible. Are there concerns 
with current policies used for CMS-approved vendors that includes 
completion of a vendor application form; completion of yearly vendor 
training and additional training as required; submission of a QAP; and 
the requirement that CMS be able to publicly post submitted data? Are 
there recommendations about this approval process?
    <bullet> Third party intermediaries currently submit data via a 
file upload or application programming interface or API submission. 
Should we maintain submission requirements? Are there advantages or 
concerns with allowing the direct, log in and upload, and attestation 
submission types? Would any other submission types or methodologies be 
needed to submit improvement activity data for this new third party 
intermediary type?
    We request feedback on these topics.
h. Public Reporting on the Compare Tools Hosted by HHS
    Section 10331(a)(1) of the Affordable Care Act authorized the 
development of a Physician Compare internet website with information on 
physicians and other eligible professionals enrolled in Medicare who 
participate in the Physician Quality Reporting Initiative (PQRI). 
Section 1848(q)(9) of the Act, as added by section 101(b) of MACRA, 
aligned Physician Compare with the newly-established Merit-Based 
Incentive Program by requiring the public reporting of MIPS performance 
information for MIPS eligible professionals through Physician Compare.
    For previous discussions on public reporting, we refer readers to 
the CY 2016 PFS final rule (80 FR 71116 through 71123), the CY 2017 
Quality Payment Program final rule (81 FR 77390 through 77399), the CY 
2018 Quality Payment Program final rule (82 FR 53819 through 53832), 
the CY 2019 PFS final rule (83 FR 59910 through 59915), the CY 2020 PFS 
final rule (84 FR 63080 through 63083), the CY 2022 PFS final rule (86 
FR 65550 through 65554) and the Care Compare: Doctors and Clinicians 
Initiative Page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Compare-DAC. We also note that as 
finalized at Sec.  414.1305 ``Physician Compare'' is defined as the 
Physician Compare internet website of CMS (or a successor website). As 
discussed in prior rulemaking, we note the current website is the 
Compare Tools hosted by the U.S. Department of Health and Human 
Services (HHS), referred to as ``compare tool'' throughout this 
proposed rule (86 FR 39466).
(1) Telehealth Indicator
    Prior to the start of the COVID-19 public health emergency (PHE) in 
March 2020, Medicare paid for telehealth under limited circumstances, 
with telemedicine services restricted to rural or health professional 
shortage areas, established patients, or certain types of health care 
providers. In response to the ongoing PHE, we expanded Medicare payment 
for telemedicine services to increase access to care. In the CY 2021 
PFS final rule, we finalized a number of more permanent Category 1 CPT 
codes and authorized a number of time-limited Category 3 codes due to 
the PHE (85 FR 84502 through 84540). Additionally, in the CY 2022 PFS 
final rule, we expanded upon definitions of different telehealth 
services to increase coverage, and extended the time period for certain 
Category 3 codes (86 FR 65047 through 65065).
    According to the September 2021 Medicare Telemedicine 
Snapshot,\528\ telehealth services have increased more than 30-fold 
since the start of the PHE and have been utilized by more than half of 
the Medicare population. With the increase in patients seeking 
telehealth due to the ongoing PHE and CMS finalizing and expanding 
coverage of certain Category 1 and Category 3 telehealth services 
codes, adding an indicator to clinician and group profile pages would 
clarify for website users which clinicians offer telehealth services.
---------------------------------------------------------------------------

    \528\ CMS, Medicare Telemedicine Snapshot: March 2020-Feb. 2021 
(2021), https://www.cms.gov/files/document/medicare-telemedicine-snapshot.pdf. See also Medicare Telemedicine Snapshot Data File, 
https://www.cms.gov/files/zip/medicare-telemedicine-snapshot-data-file.zip.
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    The Compare tool includes information on how beneficiaries may 
access care. We believe knowing whether a clinician offers services via 
telehealth would be useful to patients and caregivers generally, beyond 
the PHE, particularly for those who have access to care barriers such 
as living in rural areas or have transportation constraints. The 
ability to search for clinicians and groups who offer telehealth would 
also eliminate the burden of patients and caregivers having to call 
offices to obtain this information.
    Our research suggests that the addition of a telehealth indicator 
would meet a gap in the current information we provide on access to 
care and that such an indicator would be well understood by users. 
Keyword searches from the legacy Physician Compare website showed that, 
historically, website users search for telehealth information. 
Additionally, user testing we conducted with Medicare beneficiaries and 
caregivers showed that users accurately understood the meaning of a 
telehealth indicator and some even expressed an interest in knowing 
which services, specifically, might be offered via telehealth. Most 
users found the telehealth indicator to be important and useful when 
selecting a clinician. Users also mentioned convenience or personal 
preference as

[[Page 46330]]

reasons a telehealth indicator would be important to include on the 
website.
    We also believe that publicly reporting a telehealth indicator on 
clinician and group profile pages would further CMS's health equity 
goals. According to the aforementioned Medicare Telemedicine Snapshot, 
more than half of the Medicare population in almost every racial/ethnic 
group regardless of sex or Medicare and Medicaid status are utilizing 
telehealth services. Given the exponential increase in Medicare 
telehealth usage by Medicare users over the past 2 years, particularly 
by those in areas with limited healthcare access, and those who cannot 
physically access a clinician's office, publicly reporting information 
on which clinicians furnish services via telehealth would aid in more 
widely applicable health care provider selection across the Medicare 
and dually eligible Medicare and Medicaid populations, since some 
beneficiaries have preferences for, or limitations preventing them 
from- seeing a clinician in-person. For these reasons, we propose 
adding a telehealth indicator to clinician and group profile pages, as 
technically feasible. Along with the indicator, we would include a 
statement on the profile page caveating, in a user-friendly way based 
on consumer testing, that the clinician or group only provides some, 
not all, services via telehealth.
    To develop the indicator that would display on the Compare tool 
clinician and group profile pages, we propose to identify clinicians 
who perform telehealth services using Place of Service Code 02 
(indicating telehealth) on paid physician & ancillary service (that is, 
carrier) claims, or modifier 95 appended on paid claims. To keep the 
indicator current and address concerns that some telehealth codes are 
time-limited, we would use a 6-month lookback period and refresh the 
telehealth indicator on clinician profile pages bi-monthly, which is 
the same cadence in which we update other clinician directory 
information. Frequently updating the telehealth indicator information 
would ensure that when a time-limited Category 3 codes expires, a 
clinician who only bills telehealth services under that code would no 
longer have a telehealth indicator on their profile page.
    We seek comment on all aspects of our proposals to add a telehealth 
indicator to clinician and group profile pages, as technically 
feasible; our proposed approach to identifying clinicians and groups 
furnishing telehealth services; and our proposed 6-month lookback 
period and bi-monthly data refresh frequency, which account for 
potential changes to telehealth coverage.
(2) Publicly Reporting Utilization Data on Profile Pages
    Section 104(a) of MACRA provides that, beginning with 2015, the 
Secretary shall make publicly available on an annual basis, in an 
easily understandable format, information with respect to physicians 
and, as appropriate, other eligible professionals, on items and 
services furnished to Medicare beneficiaries. The information made 
available must be similar to the physician and other supplier 
utilization data we have historically made available and shall include 
information on the number of services furnished by the physician or 
other eligible professional under Medicare, which may include 
information on the most frequent services furnished or groupings of 
services. Section 104(e) of MACRA requires that we integrate this data 
into the Compare tool.
    To satisfy section 104(e), we implemented a policy of including 
utilization data in a downloadable format from late 2017 using the most 
currently available data and that the specific codes to be included 
were determined using data analysis and reported at the eligible 
clinician level (80 FR 71130). We also finalized a policy of continuing 
to include utilization data in the downloadable database (81 FR 77398). 
This information continues to be available today in the Medicare 
Provider Data Catalog (PDC) available at https://data.cms.gov/provider-data/topics/doctors-clinicians. Separately, we have reported on the 
Compare tool clinician training information as well as a clinician's 
primary and secondary specialties.\529\
---------------------------------------------------------------------------

    \529\ CMS, Physician Compare Report to Congress 36 (2014), 
available at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/physician-compare-initiative/Downloads/Physician-Compare-Report-to-Congress.pdf.
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    We believe it would be useful to patients and their caregivers, 
when making healthcare decisions, if a subset of procedures performed 
were publicly reported on clinician profile pages in an understandable 
and meaningful way. To date, we have gathered utilization data for 
procedures from physician/supplier Medicare Part B non-institutional 
claims on certain services and procedures and published it in the 
public use file (PUF) file entitled ``Physician and Other Supplier 
Data.'' These data are useful to the healthcare industry, healthcare 
researchers, and other interested parties who have the expertise to 
accurately interpret these data and use them in meaningful analyses. 
However, this information is presented in a technical manner that is 
not easily accessible or usable by patients, who do not frequently 
visit data.cms.gov or understand medical procedure coding. 
Additionally, the amount of information available in the PUF may 
overwhelm patients and caregivers.
    We envision that reporting utilization data on patient-facing 
clinician profile pages would provide two main areas of benefit. The 
first would be to allow for more granular clinician searches. Patients 
would not only be able to find specific types of clinicians but also 
those clinicians who have performed specific types of procedures. The 
second would be to provide categories of utilization data in a plain 
language display that is more usable to patients and their caregivers 
than what is available in the PDC.
    For example, someone with severe arthritis of the knee may want to 
search for an orthopedic surgeon who specifically performs knee 
replacements. Currently, the clinician search returns only results for 
``orthopedic surgeons'' generally. That is, the patient does not see 
which clinicians have performed knee replacements in the past, and the 
patient likely would need to spend time calling clinicians to ascertain 
such information. We believe that indicating which clinicians have 
performed certain procedures would relieve some of this patient burden 
as it would yield more specific and useful search results.
    In order to publicly report procedural utilization data in a 
meaningful way to patients and caregivers, rather than showing 
thousands of rows of individual Healthcare Common Procedure Coding 
System (HCPCS) data, as we do for the research community in the PDC, we 
propose to collapse HCPCS codes using the Restructured Berenson-Eggers 
Type of Service (BETOS) Codes Classification System into procedural 
categories. BETOS is a taxonomy that allows for the grouping of health 
care services codes for Medicare Part B into clinically meaningful 
categories and subcategories. Additional BETOS information is available 
at https://data.cms.gov/provider-summary-by-type-of-service/provider-service-classifications/restructured-betos-classification-system. For 
example, applying categories would enable us to list that a clinician 
performs knee arthroplasties, which we could further simplify to knee 
replacements for understandability instead listing each of nine unique 
procedure codes indicating

[[Page 46331]]

the specifics of exactly which bones and implants were utilized. We 
would exclude non-specific procedure codes, such as evaluation and 
management (E&M) codes for office visits which do not provide context 
about the care provided, and low complexity procedures such as basic 
wound care or administering a vaccine because these codes encompass 
many types of care and are not specific enough about the services 
covered. For procedures in which no Restructured BETOS categories are 
available, we would utilize procedure code sources used in MIPS, such 
as the procedure categories already defined for MIPS cost or quality 
measures.
    Prior to publishing this data, we would conduct user testing with 
patients and caregivers to determine which procedures are of most 
importance, as well as how to best display and plain language 
utilization data on profile pages. User testing would also inform the 
appropriate context necessary to display utilization data in a 
meaningful way that ensures it is interpreted accurately.
    We note that the utilization data shown on profile pages would only 
reflect Medicare claims data. Though this would provide information to 
patients and caregivers about which procedures are covered by Medicare, 
the utilization data would not include procedures performed for 
patients who have other types of insurance. For this reason, we would 
include a disclaimer on profile pages that the utilization data only 
represents the care that has been provided to Medicare beneficiaries 
and does not include those of patients with other forms of insurance.
    In summary, we believe that publicly reporting summary utilization 
data on profile pages in a way that is easily accessible and 
understandable by patients and caregivers will assist in more informed 
healthcare decision-making and further the implementation of the MACRA 
requirement to publicly report utilization data beyond what we publish 
today in the PDC. It would allow patients and their caregivers to more 
easily find and compare clinicians who perform specific procedures 
without having to contact each individual clinician directly.
    Therefore, we propose publicly reporting Medicare procedural 
utilization data on the Compare tool clinician and group profile pages 
in a way that is understandable to patients and caregivers, based on 
user testing, and helps them make healthcare decisions. We would begin 
publicly reporting procedural utilization data no earlier than CY 2023. 
We will use a 12-month lookback period and bi-monthly data refresh 
frequency, as technically feasible. We seek comment on all aspects of 
this proposal, including the proposed approaches to identifying the 
most relevant and understandable procedural categories.
(3) Incorporating Health Equity Into Public Reporting Request for 
Information
    In an effort to gather information from interested parties to help 
guide efforts to advance health equity, we seek comment on ways to 
incorporate health equity into public reporting on doctor and clinician 
profile pages with the goal of ensuring that all patients and 
caregivers can easily access meaningful information to assist with 
their healthcare decisions. As defined by CMS, for the purpose of this 
request for information, health equity means ``the attainment of the 
highest level of health of all people, where everyone has a fair and 
just opportunity to attain their optimal health regardless of race, 
ethnicity, disability, sexual orientation, gender identity, 
socioeconomic status, geography, preferred language, or other factors 
that affect access to care and health outcomes.'' \530\ In accordance 
with this definition and other CMS efforts to improve health equity, we 
believe that empowering all patients with information that enables them 
to select high quality, high value clinicians will be one facet that 
helps improve outcomes and close disparity gaps across social risk 
factors, race, and ethnicity.
---------------------------------------------------------------------------

    \530\ https://www.cms.gov/pillar/health-equity.
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    We note that, consistent with Sec.  414.1395(b) and subject to the 
limitations of Sec.  414.1395 (c), all new MIPS quality or cost 
measures, improvement activities, and Promoting Interoperability 
measures and attestations, including those that aim to improve health 
equity will be available for public reporting on the Compare tool. 
CMS's public reporting of such information would provide patients and 
caregivers with information regarding health equity efforts and culture 
within a particular practice. For example, should the proposed 
improvement activity ``Create and Implement a Plan to Improve Care for 
Lesbian, Gay, Bisexual, Transgender, and Queer Patients'' be added to 
the improvement activity inventory, visitors to the Compare tool could 
see, when selecting a clinician, which clinicians chose to complete 
this improvement activity. This may be especially meaningful for 
patients concerned about care for LGBTQ+ individuals when selecting a 
clinician.
    We have also considered including additional information to the 
Compare tool clinician and group profile pages, such as whether the 
clinician or group has language services available, speaks other 
languages besides English, and whether they accept insurance outside of 
traditional Medicare Fee-for-Service, such as Medicaid, Medigap, 
Medicare Advantage, and other commercial insurance. During prior user 
testing sessions, participants have indicated an interest in seeing 
more demographic information on profile pages including available 
language services, other languages spoken, and additional insurances 
accepted. Beneficiary inquiries from the 1-800-MEDICARE have also shown 
that patients are interested in information about available language 
services provided by a clinician's office.
    However, we lack data sources from which to obtain language 
services, languages spoken, and other payer information. That said, we 
request information on what additional information, such as the 
information described previously in this section of the proposed rule, 
should be publicly reported on the Compare tool, as well as what 
readily available, centralized data sources could be used for gathering 
them. Additionally, we request information on other ways to incorporate 
health equity into public reporting. Specifically, we request 
information on the following questions:
    <bullet> Should we publicly report available language (including 
sign language) services on a clinician's Compare tool profile pages? If 
so, what data sources are available? This could also include if a 
clinician offers translator services including human interpreters, 
digital interpreter, and languages the clinician or staff speak.
    <bullet> Should we publicly report information through the Compare 
tool on whether clinicians and groups accept other insurance outside of 
traditional Medicare Fee-for-Service, such as Medigap, and Medicare 
Advantage; Medicaid; and commercial insurance for non-Medicare eligible 
patients, including through the healthcare exchanges. If so, what data 
sources are available for this information?
    <bullet> What additional information would be useful to add to 
Compare tool profile pages to help patients and caregivers make 
healthcare decisions?
11. Overview of the APM Incentive
a. Overview
    Under the Quality Payment Program, an eligible clinician who is a 
Qualifying

[[Page 46332]]

APM Participant (QP) for a performance year earns an APM Incentive 
Payment, which is made in the corresponding payment year for payment 
years 2019 through 2024. As provided in our regulation at Sec.  
414.1450(d), this payment is made based on the clinician's QP status in 
the QP Performance Period that is 2 years prior (for example, the 2022 
APM Incentive Payment will correspond to the 2020 performance year), 
and at Sec.  414.1450(b)(1) the APM Incentive Payment is equal to 5 
percent of the eligible clinician's estimated aggregate payments for 
covered professional services in the base period (the year between the 
QP performance and payment years).
b. APM Incentive Payment Recipient
    In the CY 2017 Quality Payment Program final rule (81 FR 77008, 
77487), we initially finalized a policy that the APM Incentive Payment 
is made to the TIN associated with the APM Entity through which an 
eligible clinician becomes a QP during the QP Performance Period. In 
the CY 2021 PFS final rule (85 FR 84472, 84949 through 84950), we 
revised our approach to identifying the TIN or TINs to which we make 
the APM Incentive Payment at Sec.  414.1450(c) to use a stepwise 
hierarchy to identify an appropriate payee TIN or TINs.
c. Public Notice
    As specified in Sec.  414.1450(c)(8), we notify QPs for whom we are 
unable to identify an appropriate TIN to which to make the APM 
Incentive Payment through a notice published annually in the Federal 
Register. In that notice, we include information on how the QP can 
update their information to enable CMS to make the APM Incentive 
Payment. Under our current policy, the deadline for providing CMS with 
updated information is the later of November 1 of each payment year or 
60 days from the date on which we make the initial round of APM 
Incentive Payments for such year.
    Section 414.1450(d) specifies that we make APM Incentive Payments 
as soon as practicable following calculation and validation of the APM 
Incentive Payment amount, but in no event later than 1 year after the 
incentive payment base period, defined in Sec.  414.1305 as the 
calendar year prior to the year in which CMS disburses the APM 
Incentive Payment. Based on our experience and lessons learned in 
disbursing APM Incentive Payments, we have determined that the November 
1 cutoff date for QPs to provide us with updated information does not 
leave sufficient time for us to process the information provided and 
make payments within the timeframe established in Sec.  414.1450(d). In 
addition, we made operational adjustments beginning in the 2021 payment 
year that allowed us to make the initial round of APM Incentive 
Payments earlier in the calendar year than was possible in the first 2 
payment years. Because we are now able to notify QPs for whom we have 
not identified a TIN to which to make the APM Incentive Payment through 
the Federal Register notice earlier in the payment year, and because we 
have found that we need additional time to process the updated 
information we receive in response to the notice, we now are proposing 
to change the specified cutoff date from November 1 to September 1 of 
the payment year, or 60 days from the date on which we make the initial 
round of payments, whichever is later. As is the case under the current 
policy, after the specified cutoff date, we will no longer accept 
updated information from QPs or their representatives, and any claims 
to an APM Incentive Payment for such QPs for the payment year will be 
forfeited.
    We believe this change to the cutoff date for response to the 
public notice would allow us to disburse APM Incentive Payments more 
efficiently and effectively, reducing the time within which we make the 
remaining APM Incentive Payments for the payment year. This change 
would also improve our ability to make all APM Incentive Payments 
within the timeframe established under Sec.  414.1450(d), and 
therefore, affected QPs would not have to wait as long to receive their 
payments.
    We seek comment on this proposal to amend Sec.  414.1450(c)(8) to 
change the cutoff date for response to the public notice from November 
1 to September 1 of each payment year, or 60 days from the date on 
which we make the initial round of APM Incentive Payments, whichever is 
later.
d. Request for Information on Quality Payment Program Incentives 
Beginning in Performance Year 2023
    Section 1833(z)(1) of the Act provides for APM Incentive Payments 
in each year for eligible clinicians who are QPs with respect to a year 
from 2019 through 2024. Specifically, for each of the specified payment 
years, in addition to the amount of payment that would otherwise be 
made for covered professional services furnished by an eligible 
clinician who is a QP for such year, there is an additional lump sum 
APM Incentive Payment equal to 5 percent of the eligible clinician's 
estimated aggregate payment amounts for such covered professional 
services for the preceding year. Covered professional services is 
defined at Sec.  414.1305, with reference to the statutory definition 
at section 1848(k)(3) of the Act, as services for which payment is made 
under, or based on, the PFS and which are furnished by an eligible 
clinician (physician; practitioner as defined in section 1842(b)(18)(C) 
of the Act; PT, OT, or speech-language pathologist; or qualified 
audiologist as defined under section 1861(ll)(4)(B) of the Act.
    In the CY 2017 Quality Payment Program final rule (81 FR 77445), we 
established a policy that, beginning with the 2017 QP Performance 
Period, the QP Performance Period would be the calendar year that is 2 
calendar years before the payment year for the APM Incentive Payment. 
Thus, we established that the first QP Performance Period would begin 
on January 1, 2017, the first ``base year'' (established at 81 FR 77481 
and 77482) for which we would use claims for professional services to 
calculate the 5 percent APM Incentive Payment amount would be in 2018, 
and the first payment year for the APM Incentive Payment would be in 
2019 as required by the statute. The QP Performance Period, base year, 
and payment year continue in this fashion through payment year 2024, 
which is the final year for which the statute authorizes an APM 
Incentive Payment.
    After performance year 2022, which correlates with payment year 
2024, there is no further statutory authority for a 5 percent APM 
Incentive Payment for eligible clinicians who become QPs for a year. In 
performance year 2023, which correlates with payment year 2025, the 
statute does not provide for any type of incentive for eligible 
clinicians who become QPs. Beginning with performance year 2024, which 
correlates with payment year 2026, section 1848(d)(1) of the Act 
provides for the application of two different PFS conversion factors 
depending on whether the services are furnished by an eligible 
clinician who is a QP for the year. The PFS conversion factor is the 
fixed-dollar constant, updated each year in accordance with statute, 
that is used to convert the RVUs (relative value units) for a service, 
after application of geographic practice cost indices to adjust for 
cost variations, into PFS payment amounts. Section 1848(d)(20) of the 
Act specifies that, beginning in CY 2026 (which is the payment year 
that correlates with the 2024 QP Performance Period under the Quality 
Payment Program), the update to the

[[Page 46333]]

``qualifying APM conversion factor'' (hereafter, ``QP conversion 
factor'') that applies for eligible clinicians who are QPs with respect 
to the payment year is 0.75 percent, and the update to the ``non-
qualifying APM conversion factor'' (hereafter, ``general conversion 
factor'') that applies for eligible clinicians who are not QPs with 
respect to the year (as well as other types of suppliers that are not 
eligible clinicians under the Quality Payment Program) is 0.25 percent. 
With the differentially higher 0.75 percent update to the QP conversion 
factor compounding each year beginning with CY 2026, compared to the 
0.25 percent update to the general conversion factor in each year, the 
two PFS conversion factors will continue to diverge with each year, as 
illustrated in the chart below
    Beginning in payment year 2025, the statutory incentive structure 
under the Quality Payment Program for eligible clinicians who 
participate in Advanced APMs stands in contrast to the incentives for 
MIPS eligible clinicians. Specifically, as described in section 
VI.E.16.d.(4) of this proposed rule, we anticipate that the maximum 
potential positive payment adjustment that could be applied under MIPS 
for payment years beginning in 2025 will be at or above 6.9 percent, 
and the corresponding maximum negative payment adjustment will be 9 
percent. While only some MIPS eligible clinicians could earn the 
maximum positive payment adjustment, there is nonetheless a significant 
range of potential positive payment adjustments under MIPS that would 
exceed the differentially higher QP conversion factor beginning in 
payment year 2026 and for many years to come. As illustrated in Figure 
5, the QP conversion factor, with the compounded differentially higher 
0.75 percent update in each year, is not expected to equate to the 
anticipated maximum available positive payment adjustment under MIPS 
until after CY 2038.
[GRAPHIC] [TIFF OMITTED] TP29JY22.142

    We note again that the statute does not provide for any financial 
incentives for eligible clinicians who achieve QP status in QP 
Performance Period 2023/payment year 2025. Because section 
1848(q)(1)(C)(ii)(I) of the Act explicitly excludes eligible clinicians 
who are QPs for a year from being considered as MIPS eligible 
clinicians, eligible clinicians who are QPs for a year are not subject 
to MIPS for that year, and thus, cannot receive MIPS payment 
adjustments. As such, eligible clinicians who are determined to be QPs 
in performance year 2023 will be paid under the PFS in payment year 
2025 at the same rate as any other eligible clinicians who are not 
subject to MIPS and suppliers that are not subject to the Quality 
Payment Program at all.
    We recognize that the lack of any available financial incentive 
under the Quality Payment Program for QPs for the 2025 payment year 
could affect the willingness of some eligible clinicians to participate 
in Advanced APMs in performance year 2023. Moreover, we recognize that 
the substantial difference between the QP conversion factor that will 
apply for QPs beginning in CY 2026 and maximum positive payment 
adjustment available under MIPS might affect the willingness of 
eligible clinicians to participate in Advanced APMs for several years 
to come. We recognize that there are other factors that affect an 
eligible clinician's decision whether to participate in an Advanced 
APM, including the avoidance of MIPS reporting requirements and the 
availability of shared savings and other incentives within the various 
Advanced APMs.
    However, we are concerned that the statutory incentive structure 
under the Quality Payment Program beginning in the 2023 performance 
year and corresponding 2025 payment year could potentially lead to a 
drop in Advanced APM participation, and a corresponding increase in 
MIPS participation as eligible clinicians may believe their payments 
would be higher if they receive the MIPS payment adjustment.

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While it has been CMS's goal to increase MIPS participation, we 
continue to believe MIPS should be a first step on a glide path towards 
Advanced APM participation. Furthermore, we are concerned that a 
significant reduction in Advanced APM participation stemming from 
changes in financial incentives under the Quality Payment Program could 
potentially bias the CMS Innovation Center's model tests of voluntary 
Advanced APMs by leading clinicians who have performed well in Advanced 
APMs on both cost and quality metrics, to leave participation in the 
Advanced APM in which they currently participate, or decide not to 
apply for and participate in Advanced APMs, thereby interfering with 
the evaluation of current model tests and interfering with potential 
participation in future models.
    We also are concerned that a shift of eligible clinicians into MIPS 
and out of Advanced APMs would be likely to affect the availability and 
distribution of funds in the budget-neutral MIPS payment pool. The 
average MIPS final score for MIPS eligible clinicians who were 
participants in MIPS APMs in 2020 was 96.24 points while the average 
MIPS final score for all other MIPS eligible clinicians was 84.42 
points. Given these statistics, we can reasonably anticipate that 
eligible clinicians who would shift away from participation in Advanced 
APMs and into MIPS would increase the relative number of high-
performing MIPS eligible clinicians likely to earn a positive MIPS 
payment adjustment. As a result of more MIPS eligible clinicians 
earning a positive MIPS payment adjustment, we would expect to see a 
corresponding reduction in the average and maximum positive MIPS 
payment adjustment due to the statutory requirement under section 
1848(q)(6)(F)(ii) of the Act to maintain budget neutrality in MIPS.
    We have considered a range of potential administrative actions 
within our authority that might address these concerns. For example, we 
explored options for modifying the Advanced APM criteria or the 
requirements for current and future Advanced APMs to permit some degree 
of flexibility for eligible clinicians to choose whether to be 
considered under either the MIPS or the Advanced APM track of the 
Quality Payment Program. We have found it difficult to conceive of 
potential administrative options that would increase flexibility for 
eligible clinicians without drastically modifying characteristics of 
Advanced APMs, including CEHRT use, quality-based payment, and 
financial risk. After further consideration, we have concluded that it 
would be more prudent to forego administrative action for the 2023 
performance period and 2025 payment year, and instead to seek robust 
public input that we will consider in identifying potential options for 
the 2024 performance period and 2026 payment year of the Quality 
Payment Program (and potentially beyond). Specifically, we seek public 
comment on whether administrative action is needed beginning in the 
2024 performance period and 2026 payment year, and if so, what would be 
the best approach to address the multi-faceted issues that arise with 
the end of statutory authority for an APM Incentive Payment for QPs and 
the transition to the differential QP and general conversion factors 
beginning in payment year 2026, which correlates to the 2024 
performance year.
    Taking into account that the current statute: (1) requires us to 
make QP determinations for eligible clinicians participating in 
Advanced APMs; (2) defines Advanced APMs as those APMs that require 
CEHRT use, sets payment based on MIPS-comparable quality measures, and 
assumption of more than nominal financial risk, as described at Sec.  
414.1415; and (3) specifically excludes QPs from being MIPS eligible 
clinicians, we are seeking input on what, if any, administrative 
actions eligible clinicians and APM Entities would potentially find 
helpful to better balance the payment incentives within the Quality 
Payment Program going forward, while continuing to encourage eligible 
clinicians and APM Entities to participate in APMs that align with the 
broader goals of CMS.
    We are particularly interested in receiving public comments in 
response to the questions stated below, which will help us to gauge 
options going forward. We are also considering holding a public 
listening session in the near future to gather additional feedback on 
these questions and ideas, though we encourage the public to submit 
written comments on this Request for Information.
    <bullet> What are your primary considerations going forward as you 
choose whether to participate in an Advanced APM or be subject to MIPS 
reporting requirements and payment adjustments? What factors are the 
most important as you make this decision?
    <bullet> If you are participating in an Advanced APM now and have 
been or could be a QP for a year, will the end of the 5 percent lump-
sum APM Incentive Payments beginning in the 2025 payment year 
(associated with the 2023 QP Performance Period) cause you to consider 
dropping your participation in the Advanced APM, which would mean 
forgoing QP determinations, thereby ensuring you are subject to MIPS 
reporting requirements and payment adjustments?
    <bullet> Going forward, attaining QP status for a year through 
sufficient participation in one or more Advanced APMs will enable an 
eligible clinician to, for a year: (1) continue receiving any financial 
incentive payments available under the Advanced APM(s) in which they 
participate, subject to the terms and conditions applicable to the 
specific Advanced APM(s); (2) be paid under the PFS in the payment year 
using the a higher QP conversion factor (0.75 percent rather than 0.25 
percent) beginning in payment year 2026; and (3) not be subject to MIPS 
reporting requirements or payment adjustments. Do these three 
conditions provide sufficient incentives for you to participate in an 
Advanced APM, or would you instead decide to be subject to MIPS 
reporting requirements and payment adjustments?
    <bullet> Are there other advantages of MIPS participation that 
might lead a clinician to prefer MIPS over participation in an Advanced 
APM, such as: (1) quality measurement that may be specific to a 
particular practice area or specialty area; or (2) the desire for more 
precise accountability through public reporting of quality measure 
performance in the future?
e. Advanced APMs
(1) Advanced APM Criteria
(a) General Overview
    In the CY 2017 Quality Payment Program final rule (81 FR 77408), we 
finalized the criteria that define an Advanced APM based on the 
requirements set forth in sections 1833(z)(3)(C) and (D) of the Act. An 
Advanced APM is an APM that:
    <bullet> Requires its participants to use certified EHR technology 
(CEHRT) (81 FR 77409 through 77414);
    <bullet> Provides for payment for covered professional services 
based on quality measures comparable to measures under the quality 
performance category under MIPS (81 FR 77414 through 77418); and
    <bullet> Either requires its participating APM Entities to bear 
financial risk for monetary losses that are in excess of a nominal 
amount, or is a Medical Home Model expanded under section 1115A(c) of 
the Act (81 FR 77418 through 77431). We refer to this criterion as the 
financial risk criterion.
    In this section of the proposed rule, we address policies regarding 
several aspects of the Advanced APM criteria. We provide a 
clarification around

[[Page 46335]]

payment based on quality measures and a proposal to modify the period 
of applicability for the generally applicable nominal amount standard.
(b) Payment Based on Quality Measures
    In the CY 2017 Quality Payment Program final rule, we finalized the 
requirement for Advanced APMs that payment be based on quality measures 
at Sec.  414.1415(b). In the CY 2019 PFS final rule (83 FR 59915 
through 59938), we revised Sec.  414.1415(b)(2) to clarify, effective 
January 1, 2020, that at least one of the quality measures upon which 
an Advanced APM bases payment must either be finalized on the MIPS 
final list of measures, as described in Sec.  414.1330; endorsed by a 
consensus-based entity; or determined by CMS to be evidenced-based, 
reliable, and valid. We also revised the requirement at Sec.  
414.1415(b)(3) that the quality measures upon which an Advanced APM 
bases payment must include at least one outcome measure (unless there 
are no available or applicable outcome measures included in the MIPS 
final quality measures list for the Advanced APM's first QP Performance 
Period) to provide, effective January 1, 2020, that at least one such 
outcome measure must either be finalized on the MIPS final list of 
measures as described in Sec.  414.1330; endorsed by a consensus-based 
entity; or determined by CMS to be evidence-based, reliable, and valid.
    It has come to our attention that it may not be clear whether the 
two criteria at Sec.  414.1415(b) require different quality measures. 
That is, interested parties have questioned whether two separate 
measures are required with one to meet each criterion, or whether it is 
sufficient that a single quality measure meets both of the criteria. 
Therefore, in this proposed rule, we propose to revise the regulation 
at Sec.  414.1415(b)(3) and adding a new paragraph (b)(4) to clarify 
that the requirement for Advanced APMs that payment must be based on 
quality measures as specified at Sec.  414.1415(b)(1) can be met 
through the use of a single quality measure that meets the criteria 
under both Sec.  414.1415(b)(2) and (b)(3). Likewise, consistent with 
our practice of aligning Advanced APM and Other Payer Advanced APM 
policies to the extent feasible and appropriate, we are also proposing 
to revise Sec.  414.1420(c)(3)(ii) and add a new paragraph (c)(4) to 
clarify that the requirement for Other Payer Advanced APMs that payment 
must be based on quality measures as specified at Sec.  414.1420(c)(1) 
can be met through the use of a single quality measure that meets the 
criteria at Sec.  414.1420(c)(2) and (c)(3). We seek public comment on 
these proposals.
(c) Generally Applicable Nominal Amount Standard
    In the CY 2017 Quality Payment Program final rule, we finalized the 
amount of the generally applicable revenue-based nominal amount 
standard at 8 percent for the first two QP Performance Periods only, 
and we sought comment on what the revenue-based nominal amount standard 
should be for the third and subsequent QP Performance Periods. 
Specifically, we sought comment on setting the revenue-based standard: 
(1) for 2019 and later at up to 15 percent of revenue; or (2) at 10 
percent so long as risk is equal to at least 1.5 percent of expected 
expenditures for which an APM Entity is responsible under an APM (81 FR 
77427).
    In the CY 2018 Quality Payment Program final rule, we finalized at 
Sec.  414.1415(c)(3)(i)(A) our proposal to maintain the generally 
applicable revenue-based nominal amount standard at 8 percent for the 
2019 and 2020 QP Performance Periods. We also specified that the 
standard is based on the average estimated total Medicare Parts A and B 
revenue of all providers and suppliers in participating APM Entities. 
We stated that we would address the nominal amount standard for QP 
Performance Periods after 2020 in future rulemaking (82 FR 53838).
    In the CY 2019 PFS final rule (83 FR 59922 through 59923), we 
revised Sec.  414.1415(c)(3)(i)(A) to maintain the generally applicable 
revenue-based nominal amount standard at 8 percent of the average 
estimated total Medicare Parts A and B revenue of all providers and 
suppliers in participating APM Entities for QP Performance Periods 2021 
through 2024.
    At the same time, we established the generally applicable revenue-
based nominal amount standard for Other Payer Advanced APMs at Sec.  
414.1420(d)(3)(i) to reflect the same 8 percent standard for QP 
Performance Periods for years 2021 through 2024, but based on the total 
combined revenues from the payer to providers and other entities under 
the payment arrangement.
    We are proposing to amend Sec.  414.1415(c)(3)(i)(A) to permanently 
establish the generally applicable revenue-based nominal amount 
standard at 8 percent of the average estimated total Medicare Parts A 
and B revenue of all providers and suppliers in participating APM 
Entities for the QP Performance Period. We are proposing this change 
because the nominal amount standard of 8 percent has worked well and we 
are making the change permanent at this time to provide continuity in 
policy into the future.
    We are also proposing to amend Sec.  414.1420(d)(3)(i) to 
permanently establish the generally applicable revenue-based nominal 
amount standard at 8 percent of the total combined revenues from the 
payer to providers and other entities under the payment arrangement, 
consistent with our longstanding practice of aligning Advanced APM 
policies with Other Payer Advanced APM policies to the extent feasible 
and appropriate. We propose to amend these regulations to remove the 
specified end date of the 2024 QP Performance Period, such that the 8 
percent standard would apply for all future performance years beginning 
with the 2023 QP Performance Period. This proposal would not change the 
current generally applicable revenue-based nominal amount standard. 
While we will continue to evaluate the generally applicable revenue-
based nominal amount standard going forward and may determine at some 
point that it would be appropriate to propose to change the generally 
applicable revenue-based nominal amount standard, we believe that the 
current standard of 8 percent continues to be appropriate at this time 
for both the Advanced APM and Other Payer Advanced APM financial risk 
criteria.
    We seek public comment on the proposals to amend Sec.  
414.1415(c)(3)(i)(A) and 414.1420(d)(3)(i) to make permanent the 8 
percent level of the generally applicable revenue-based nominal amount 
standard such that it would apply to all future QP Performance Periods 
beginning January 1, 2023.
(d) Medical Home Model 50 Eligible Clinician Limit
    In the 2017 Quality Payment Program final rule (81 FR 77428), we 
finalized a policy for the Medical Home Model nominal financial risk 
criterion to set a limit of 50 on the number of eligible clinicians in 
an organization that participates in an Advanced APM through a Medical 
Home Model.
    At that time, we described the way in which we would identify APM 
Entities that meet this standard as looking for ``APM Entities that 
participate in Medical Home Models and that have 50 or fewer eligible 
clinicians in the organization through which the entity is owned and 
operated.'' We defined organizational size as measured based on the 
size of the ``parent organization'' rather than the size of the APM 
Entity itself. We recognized that there would

[[Page 46336]]

be ``additional but [. . .] achievable'' burden to correctly identify 
parent organizations and their size (81 FR 77428).
    In the 2017 Quality Payment Program final rule, we responded to the 
many comments we had received in opposition to the proposal (81 FR 
77429), where commenters expressed opinions that identifying eligible 
entities in this way was arbitrary, or that it would unfairly 
discriminate between similarly situated organizations. We finalized the 
proposal despite these concerns because we believed we could identify 
organizations that were or were not reasonably capable of taking on the 
generally applicable level of financial risk by identifying the 
ultimate size of the parent organization, and in so doing, identify 
organizations that should be excluded from the Medical Home Model 
financial risk standard.
    After several years of implementation and upon closer analysis of 
our results under the Medical Home Model standard, we have gained 
experience about the composition of parent organizations and that there 
is a wide variation in how practices are organized and are proposing a 
change in our policy. These changes are based on a re-evaluation of two 
assumptions we used in finalizing the 50 eligible clinician limit, 
codified at Sec.  414.1415(c)(7), have not borne out in practice.
    Our belief that we could easily gather accurate data about the size 
and composition of ``parent organizations'' through disclosures from 
the APM Entities affiliated with them was misplaced. To accurately 
understand the numerous and varied ways in which a parent organization 
(itself a complex concept) may enter into contractual relationships 
with other subsidiary entities that have Taxpayer Identification 
Numbers (TINs), which otherwise might have no apparent relationship 
with one another, would require insight and access to private contracts 
do not have. The administration of QPP is not the same as the 
administration of an individual APM and we are not party to the 
contracts between those private entities. Based on the information 
about these relationships, we are unable to confidently say that, under 
the parent organization approach we had finalized, all similarly 
situated organizations are being treated in the same manner. On the 
other hand, we believe we have a good understanding of APM Entities and 
how they will manage financial risk from our time implementing the QPP 
and various APMs.
    Based on this insight and experience implementing the 50 eligible 
clinician limit for the Medical Home Model financial risk standard, we 
are proposing to amend our methodology for identifying which eligible 
clinicians are to be included under the 50 eligible clinician limit.
    Specifically, we propose to amend Sec.  414.1415(c)(7) to apply the 
50 eligible clinician limit directly to the APM Entity participating in 
the Medical Home Model, and to no longer look to the parent 
organization for the APM Entity. We would identify the eligible 
clinicians in the APM Entity by using the TIN/NPIs on the participation 
list of the APM Entity on each of the three QP determination dates 
(March 31, June 30, and August 31). This proposal, if finalized, would 
become effective beginning in Performance Year 2023. We believe this 
change will address the challenges we have faced in implementing this 
policy, as discussed above.
    We are also proposing to amend Sec.  414.1420(d)(8) to apply the 50 
eligible clinician limit directly to the APM Entity participating in 
Aligned Other Payer Medical Home Model and Medicaid Medical Home Model, 
and to no longer look to the parent organization for the APM Entity, 
consistent with our longstanding practice of aligning Advanced APM 
policies with Other Payer Advanced APM policies to the extent feasible 
and appropriate.
    In order to continue to achieve our aim of reducing the possibility 
for an APM Entity to potentially manipulate their numbers of eligible 
clinicians to inappropriately take advantage of participation in an 
Advanced APM that is a Medical Home Model, we propose that the Medical 
Home Model financial risk and nominal amount standards under Sec.  
414.1415(c)(2) and (c)(4) would apply only if the APM Entity remains 
below the 50 eligible clinician limit on all three QP determination 
dates during the QP Performance Period. If the number of eligible 
clinicians in the APM Entity is above 50 on any of the three QP 
determination dates, the Medical Home Model financial risk and nominal 
amount standards will not apply for that APM Entity for the QP 
Performance Period. Should an APM Entity exceed the 50 eligible 
clinician limit on any of the three snapshot dates, no eligible 
clinicians would achieve or retain QP status through that APM Entity 
for the QP Performance Period and corresponding payment year, 
regardless of the outcome of QP determinations made at another QP 
determination date. We propose to amend the regulation text to says 
that an APM Entity's Participation List will be used to determine if 
the 50 eligible clinician limit requirement has been met three times a 
year, for each of the three QP determination dates (March 31, June 30, 
and August 31).
    In addition, we propose to amend Sec.  414.1440(e)(2) to require 
APM Entities or eligible clinician requesting a QP determination under 
the All-Payer Combination Option through participation in an Aligned 
Other Payer Medical Home Model or Medicaid Medical Home Model to supply 
information and certify that the 50 eligible clinician limit is being 
met for any Aligned Other Payer Medical Home Model or Medicaid Medical 
Home Model in which they participate and for the applicable time period 
in which the APM Entity or eligible clinician QP determination is made 
under the All-Payer Combination Option, as specified in the proposed 
revised Sec.  414.1420(d)(8). Note, a practice exceeding the 50 
eligible clinician limit under the Medicare Option would not preclude 
an eligible clinician or APM Entity from seeking a QP determination 
based on an Aligned Other Payer Medical Home Model or Medicaid Medical 
Home Model.
    We believe this modification to the methodology used to apply the 
50 eligible clinician limit would better identify the eligible 
clinicians and APM Entities that should be included in QP 
determinations for participation in Advanced APMs under the Medical 
Home Model financial risk standard, and therefore continue to encourage 
movement into value based payment arrangements. This methodology would 
not attempt the complex task of gathering information on parent 
organizations, and we believe it would treat similarly situated 
entities similarly.
    We seek public comment on these proposals.
(2) Qualifying APM Participant Determination
(a) General Overview
    In the CY 2017 Quality Payment Program final rule (81 FR 77439 
through 77448), we finalized our policy at Sec.  414.1425(b) for 
Qualifying APM Participant (QP) determinations. For the purposes of 
making QP determinations, an eligible clinician must be present on the 
Participation List of an APM Entity in an Advanced APM on one of the 
``snapshot dates'' (March 31, June 30, or August 31) for the QP 
Performance Period. An eligible clinician included on a Participation 
List on any one of such dates is included in the APM Entity group even 
if that eligible

[[Page 46337]]

clinician is not included on that Participation List at one of the 
prior- or later-listed dates. We perform QP determinations for the 
eligible clinicians in an APM entity group three times during the QP 
Performance Period using claims data for services furnished from 
January 1 through each of the respective QP snapshot dates of that 
year. An eligible clinician can be determined to be a QP only if they 
appear on the Participation List on a snapshot date that we use to 
identify the APM Entity group and to calculate Threshold Scores and 
make QP determinations at the APM Entity level based on participation 
in the Advanced APM. For eligible clinicians who appear on a 
Participation List with more than one APM Entity, but do not to achieve 
QP status based on any APM Entity group-level determinations, we make 
most QP determinations at the individual level as described in Sec.  
414.1425(c)(4). Likewise, for eligible clinicians who appear on an 
Affiliated Practitioner list for an Advanced APM we make QP 
determinations at the individual level three times during the QP 
Performance Period using claims data for services furnished from 
January 1 through each of the respective QP determination snapshot 
dates as described in Sec.  414.1425(b)(2).
(b) Request for Information: Potential Transition to Individual QP 
Determinations Only
    In the CY 2017 Quality Payment Program final rule (81 FR 77439 
through 77440), we discussed our reasons for establishing a policy to 
calculate Threshold Scores and make most QP determinations at the APM 
Entity group level, rather than at the individual eligible clinician 
level. At that time, we believed that this policy promoted 
administrative simplicity and collaboration among group members instead 
of imposing barriers or burden. We recognized that while many 
beneficiaries are attributed to an APM Entity based on the services 
rendered by one eligible clinician, many of the eligible clinicians 
participating in the APM Entity play a role in the actual diagnosis, 
treatment, and management of the many beneficiaries in the APM Entity's 
patient population. Each of these individual eligible clinicians can 
potentially be viewed as being instrumental to providing quality care 
to the beneficiary in alignment with the objectives of the APM, 
regardless of whether the specific services they furnish are used for 
purposes of APM-specific attribution methods. We noted that an APM 
Entity faces the risks and rewards of participation in an Advanced APM 
as a single unit and generally is responsible for performance metrics 
that are aggregated to the level of that APM Entity. The policy is 
based on the premise that entire organizations commit to participating 
in an Advanced APM and focusing on the attendant cost and quality goals 
as a whole.
    Under the current policy at Sec.  414.1425(b), for most eligible 
clinicians participating in Advanced APMs, QP determinations are made 
at the APM Entity level. As described in Sec.  414.1435, the Threshold 
Score for an APM Entity or eligible clinician is calculated in one of 
two ways, either the payment amount method or patient count method. The 
threshold score using the payment count method is calculated by 
dividing: (1) the aggregate of payments for Medicare Part B covered 
professional services furnished by the APM Entity group to attributed 
beneficiaries during the QP Performance Period; by (2) aggregate of 
payments for Medicare Part B covered professional services furnished by 
the APM Entity group to all attribution-eligible beneficiaries during 
the QP Performance Period. The Threshold Score using the patient count 
method is calculated by dividing: (1) the number of attributed 
beneficiaries to whom the APM Entity group furnishes Medicare Part B 
covered professional services; by (2) the number of attribution-
eligible beneficiaries to whom the APM Entity group or eligible 
clinician furnish Medicare Part B covered professional services. 
Attributed beneficiaries are generally determined from each Advanced 
APM Entity's attributed beneficiary lists generated by each Advanced 
APM's specific attribution methodology.
    The current policy for QP determinations under the All-Payer 
Combination Option at Sec.  414.1440(d) establishes a process that is 
similar to the QP determination participating in Advanced APMs, but 
accounts for participation in Other Payer Advanced APMs. Under the All-
Payer Combination Option, an eligible clinician may request the QP 
determination be made at the individual or APM Entity level, and an APM 
Entity may request that the QP determination made at the individual, 
TIN or APM Entity level. Further, Sec.  414.1440(d) specifies that CMS 
uses data at the same level for the Medicare and other payer portions 
of Threshold Score calculations under the All-Payer Combination Option. 
When QP determinations are made at the eligible clinician or, at the 
TIN level when all clinicians who have reassigned billing rights to the 
TIN are included in a single APM Entity; and if the Medicare Threshold 
Score for the APM Entity group is higher than when calculated for the 
eligible clinician or TIN, CMS makes QP determinations using a weighted 
Medicare Threshold Score that is factored into an All-Payer Combination 
Option Threshold Score.
    We are requesting public comment on the idea of transitioning away 
from an APM Entity level QP determination and instead calculating 
Threshold Scores and making QP determinations at the individual 
eligible clinician level for all eligible clinicians in Advanced APMs 
and Other Payer Advanced APMs. We believe making QP determinations at 
the individual eligible clinician level may have several benefits over 
the current policy. First, as explained later in this section of the 
proposed rule, we believe that making all QP determinations at the 
individual eligible clinician level would substantially reduce the 
practice of APM Entities removing specialists from their participation 
lists. Second, the change to make all QP determinations at the 
individual eligible clinician level would increase the number of 
eligible clinicians who are determined to be QPs for whom their 
individual participation would qualify them, but whose APM Entities did 
not qualify because other eligible clinicians in the APM Entity reduced 
its Threshold Score. Third, if we were to begin making all QP 
determinations at the individual eligible clinician level, that 
approach would eliminate the number of eligible clinicians who become 
QPs for a year, but whose individual participation in their Advanced 
APM(s) is well below the Threshold Score. Under our current policy to 
make most QP determinations at the APM Entity level, many eligible 
clinicians who would not meet the Threshold Score individually but 
whose APM Entities met the Threshold Score are able to gain QP status. 
For at least some of those eligible clinicians, a significant portion 
of the covered professional services they furnish may occur outside of 
the Advanced APM. When such eligible clinicians receive QP status, they 
may receive a financial windfall because their APM Incentive Payments 
are calculated based on all of the covered professional services they 
furnish during the base year, not just the services they furnish as 
part of the APM Entity in the Advanced APM.
    We note that this potential for receiving a financial windfall is 
possible through the 2022 QP Performance Period (which correlates to 
payment year 2024), but this will change beginning in the 2023 QP 
Performance Period (which correlates to payment year 2025) because the 
current statute does not provide for any APM Incentive

[[Page 46338]]

Payment for that year. As such, there will be no further potential 
windfall in the form of the APM Incentive Payment.
    However, there could be a similar windfall beginning in CY 2026 
(which corresponds to the 2024 QP Performance Period) because eligible 
clinicians who achieve QP status beginning in that year will be paid 
under the PFS using the differentially higher QP conversion factor for 
the year, which will apply to all the covered professional services the 
eligible clinician furnishes in the year. In addition, beginning in 
payment year 2025 there are competing incentives under the QPP between 
the MIPS and APM track which are discussed in detail in section 
IV.(A).(11)(d) of this proposed rule.
    Because the APM Entity Threshold Scores (using the payment amount 
and patient count methods) that are used to make APM Entity-level QP 
determinations are based on an aggregate calculation across all 
eligible clinicians participating in the APM Entity group, eligible 
clinicians in the APM Entity group who furnish proportionally fewer 
services that lead to attribution of patients or payment amounts to the 
APM Entity are likely to lower the APM Entity's Threshold Score. For 
example, primary care physicians may furnish proportionally more 
evaluation and management (office visit) services which are frequently 
the basis for attribution of patients and payment amounts to the 
numerator of the APM Entity's Threshold Score; whereas specialist 
physicians may furnish proportionally more diagnostic tests and 
surgical procedures which are not usually part of the attribution basis 
to the APM Entity.
    We have received reports from Advanced APM participants that some 
APM Entities have taken steps to reduce the number of such eligible 
clinicians on their Participation Lists. Specifically, to achieve 
higher QP Threshold Scores, some APM Entities have taken steps to 
exclude from their APM Entity groups (and consequently from their 
Participation Lists) eligible clinicians who furnish proportionally 
fewer services that lead to the attribution of patients or payment 
amounts for purposes of calculating threshold scores for APM Entity-
level QP determinations. There are important reasons that it is not 
beneficial for an APM Entity to exclude specialists and other eligible 
clinicians who furnish relatively fewer services that lead to 
attribution. In both the Medicare Shared Savings Program and in models 
tested by the Innovation Center that the meet the criteria to be 
Advanced APMs, CMS seeks to promote patient-centered care that is 
integrated across the continuum of care. The inclusion of specialists 
in APM Entities is essential for achieving this goal. For example, a 
comprehensive network that includes a range of specialists is central 
to the success of an ACO in the Medicare Shared Savings Program for its 
intended purpose in patient-centered care that coordinates items and 
services for Medicare FFS beneficiaries, a key aim of value-based care 
and practice transformation.\531\ The methodology used in beneficiary 
assignment for the Shared Savings Program is deliberately constructed 
such that assignment is largely based on primary care, rather than 
specialty care, which results in specialists contributing 
proportionately less in terms of payment amounts and patient counts to 
the ACO's QP numerator.
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    Similarly, it was not our intent to create a policy wherein 
eligible clinicians who are seeing most or all of their Medicare 
patients through an Advanced APM may remain unable to achieve QP status 
because the APM Entity with which they participate in the Advanced APM 
includes eligible clinicians who furnish very few services through the 
Advanced APM. It has always been one of the goals of the APM track of 
the Quality Payment Program for the availability of QP status to 
incentivize eligible clinicians to join Advanced APMs. But under our 
current policy to make most QP determinations at the APM Entity level, 
there is the potential that eligible clinicians who are fully engaged 
in an Advanced APM may still be unable to earn QP status.
    We carefully considered our policy to make most QP determinations 
at the APM Entity level, and believed it was the best approach at the 
time. However, we did not intend for the policy to create potentially 
conflicting incentives for APM Entities between the goal for their 
eligible clinicians to achieve QP status under the Quality Payment 
Program, and their full participation in an Advanced APM with a group 
of eligible clinicians that can deliver a full spectrum of care.
    Finally, we are concerned that, under our current policy to make 
most QP determinations at the APM Entity level, some eligible 
clinicians who furnish relatively fewer of their services through an 
APM Entity may receive a disproportionate financial benefit because 
they achieve QP status as a result of the care furnished by other 
eligible clinicians in the APM Entity, while their APM Incentive 
Payment is calculated based on all of the covered professional services 
they furnish during the base year--both as part of the APM Entity and 
elsewhere. Our policy to make most QP determinations at the APM Entity 
level allows these windfall financial rewards because we calculate the 
Threshold Scores using the aggregate of payment amounts or patient 
counts for attributed patients based on Medicare Part B covered 
professional services furnished by all the eligible clinicians in the 
APM Entity, whether they furnished a few or many of such services. Once 
an eligible clinician receives QP status for a year, the APM Incentive 
Payment is calculated based on paid claims for that individual QP's 
covered professional services across all their TINs in the base year. 
This can allow an eligible clinician with minimal Advanced APM 
participation to receive a large APM Incentive Payment, which we do not 
believe aligns with the intent of the Quality Payment Program. Though, 
as we note above, QPs for payment year 2025 (QP Performance Period 
2023) will not, by statute, receive a financial incentive for achieving 
such status, beginning in payment 2026 (QP Performance Period 2024) 
financial incentives once again will apply in the form of the enhanced 
QP conversion factor, which in turn compounds each year after that and 
therefore increases over time.
    We are requesting input from interested parties on the possibility 
of discontinuing our policy to calculate Threshold Scores and make most 
QP determinations at the APM Entity level, and instead to make all QP 
determinations at the individual eligible clinician level. We believe 
this would avoid the potential incentive for APM Entities to limit or 
exclude specialists and other eligible clinicians who furnish services 
that are an important part of the health care spectrum, but less likely 
to be attributed to the APM Entity for purposes of calculating 
Threshold Scores for QP determinations. While the exclusion from an APM 
Entity of such specialists and other eligible clinicians can serve to 
improve the Threshold Scores for an APM Entity, it would not 
necessarily serve the central goals of many of our Advanced APMs, such 
as the statutory charge to Medicare Shared Savings Program ACOs to 
encourage groups of doctors, hospitals, and other health care providers 
to work together to manage and coordinate care for Medicare fee-for-
service beneficiaries through an ACO.
    In light of this potential conflict between Advanced APM goals and 
the existing QP Threshold Score calculation methodology, we are 
considering

[[Page 46339]]

whether it would be better to make all QP determinations at the 
individual eligible clinician level using the unique National Provider 
Identifier (NPI) associated with an eligible clinician participating in 
an Advanced APM. Under that approach, we would calculate a Threshold 
Score for each eligible clinician, identified by their NPI, based on 
all the covered professional services furnished by that individual 
eligible clinician, including services billed across all of the TINs to 
which the individual has reassigned their Medicare billing rights. This 
Threshold Score calculated at the individual eligible clinician level 
would provide a more specific measurement of each such eligible 
clinician's level of participation in one or more Advanced APMs. This 
methodology to calculate Threshold Scores and make QP determinations at 
the individual eligible clinician level would ensure that only those 
eligible clinicians (NPIs) who individually meet or exceed the 
applicable Threshold Score would receive QP status. At the same time, 
it would allow APM Entities to make decisions about which eligible 
clinicians to include on their Participation Lists based on the scope 
of eligible clinicians needed to furnish services to their patient 
populations under the Advanced APM, and to include those eligible 
clinicians who furnish proportionally fewer services that lead to 
patient attribution to the APM Entity under the current QP 
determination policy, without potentially affecting the QP status of 
other eligible clinicians in the APM Entity group. Because APM Entities 
no longer would have a need to consider how each eligible clinician may 
affect their aggregate Threshold Score for the APM Entity group, they 
would be able to include any eligible clinician who they believe can 
help them meet the patient-centered care goals of the Advanced APM(s) 
they are participating in. Therefore, we are considering whether a 
change to make QP determinations at the individual eligible clinician 
level would have a positive health equity impact by ensuring that 
incentives under the Quality Payment Program would hold ACOs 
``accountable for the quality, cost, and experience of care of an 
assigned Medicare fee-for-service (FFS) beneficiary population.'' \532\
---------------------------------------------------------------------------

    \532\ Ibid.
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    Additionally, an analysis conducted by CMS found that many eligible 
clinicians do in fact frequently provide covered professional services 
to beneficiaries attributed to other APM Entities. These types of 
services and relationships are not necessarily accounted for or 
rewarded under the current methodology that makes QP determinations 
predominantly at the APM Entity level because they are outside the APM 
Entity participating in the Advanced APM, but would be if QP 
determinations were made at the individual eligible clinician level 
because all of the relevant covered professional services furnished by 
that eligible clinician would be counted in the QP determination. While 
our initial decision to calculate Threshold Scores and make most QP 
determinations at the APM Entity level was appropriate and, at the 
time, preferable to achieve the policy goals as stated in the CY 2017 
proposed rule and reiterated above, for the reasons we identify here, 
we also believe that a change to calculate Threshold Scores and make QP 
determinations at the individual eligible clinician level may be 
preferable.
    In this Request for Information, we are requesting public feedback 
on whether an individual level QP determination approach is an avenue 
we should continue exploring in future years to better identify and 
reward individual eligible clinicians with substantial engagement in 
Advanced APMs.
(c) QP Thresholds and Partial QP Thresholds
    Section 1833(z)(2) of the Act specifies the thresholds for the 
level of participation in Advanced APMs required for an eligible 
clinician to become a QP for a year. The Medicare Option, based on Part 
B payments for covered professional services or counts of patients 
furnished covered professional services under Part B, has been 
applicable since payment year 2019. The All-Payer Combination Option, 
which uses the Medicare Option, as well as an eligible clinician's 
participation in Other Payer Advanced APMs, is applicable beginning in 
the payment year 2021. In the CY 2017 Quality Payment Program final 
rule (81 FR 77433 through 77439), we finalized our policy for QP and 
Partial QP Thresholds for the Medicare Option as codified at Sec.  
414.1430(a) and for the All-Payer Combination Option at Sec.  
414.1430(b).
    In the CY 2022 PFS final rule (86 FR 65557 through 65558), we 
finalized policies to implement section 114(a) of Subtitle B of Title I 
of Division CC of the CAA (referred to herein as section 114(a) of 
Division CC of the CAA), which amended section 1833(z)(2)(B) of the Act 
with regard to payment years 2023 and 2024 (which correspond 
respectively to performance years 2021 and 2022), by freezing for such 
years the applicable payment amount and patient count thresholds for an 
eligible clinician to achieve QP status. However, we neglected to fully 
amend our regulations at Sec.  414.1430(a) and (b) to reflect these 
changes, and therefore, we are proposing conforming changes to Sec.  
414.1430(a) and (b) in this proposed rule.
    Specifically, section 114(a) of Division CC of the CAA amended 
section 1833(z)(2)(B) of the Act to continue the QP payment amount 
thresholds that apply in payment years 2021 and 2022 for payment years 
2023 and 2024. Additionally, section 114(a) of Division CC of the CAA 
amended section 1833(z)(2)(D) of the Act to require that, for payment 
years 2023 and 2024, the Secretary must use the same percentage 
criteria for the QP patient count threshold that are applied in payment 
year 2022. As such, the Medicare Option QP thresholds for payment years 
2023 and 2024 (performance years 2021 and 2022) will remain at 50 
percent for the payment amount method and 35 percent for the patient 
count method. Section 114(b) of Division CC of the CAA amended section 
1848(q)(1)(C)(iii) of the Act to extend through payment year 2024 the 
Partial QP thresholds that are established for payment years 2021 and 
2022. Therefore, the Partial QP thresholds for payment years 2023 and 
2024 (performance years 2021 and 2022) will remain at 40 percent for 
the payment amount method and 25 percent for the patient count method. 
For performance years beginning with 2023 (corresponding to payment 
years beginning with 2025) the statute prescribes the QP thresholds for 
the payment amount method, and the QP thresholds we established for the 
patient count method at Sec.  414.1430 will take effect. Specifically, 
for performance years beginning with 2023, the Medicare Option QP 
Thresholds will be 75 percent for the payment amount method and 50 
percent for the patient count method. The Partial QP Thresholds under 
the Medicare Option will be 50 percent for the payment amount method 
and 35 percent for the patient count method.
    Under the All-Payer Combination Option, the QP thresholds for 
performance years 2021 and 2022 (corresponding to payment years 2023 
and 2024) will be 50 percent for the payment amount method and 35 
percent for the patient count method. The Partial QP thresholds for 
performance years 2021 and 2022 (corresponding to payment years 2023 
and 2024) will be 40 percent for the payment amount

[[Page 46340]]

method and 25 percent for the patient count method. The Partial QP 
thresholds for performance year 2023 and later (corresponding to 
payment years 2025 and later) will be 50 percent for the payment amount 
method and 35 percent for the patient count method. In order to become 
a QP through the All-Payer Combination Option, eligible clinicians must 
first meet certain threshold percentages under the Medicare Option. For 
performance years 2021 and later (corresponding to payment year 2023 
and later), the minimum Medicare Option threshold an eligible clinician 
must meet for the All-Payer Combination Option is 25 percent for the 
payment amount method or 20 percent under the patient count method.
[GRAPHIC] [TIFF OMITTED] TP29JY22.641

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), we are required to publish a 60-day notice in the Federal 
Register and solicit public comment before a ``collection of 
information'' requirement is submitted to the Office of Management and 
Budget (OMB) for review and approval. For the purposes of the PRA and 
this section of the preamble, collection of information is defined 
under 5 CFR 1320.3(c) of OMB's implementing regulations.
    To fairly evaluate whether an information collection should be 
approved by OMB, PRA section 3506(c)(2)(A) requires that we solicit 
comment on the following issues:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
    <bullet> The accuracy of our burden estimates.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> Our effort to minimize the information collection burden 
on the affected public, including the use of automated collection 
techniques.
    We solicited public comment on each of the required issues under 
section 3506(c)(2)(A) of the PRA for the following information 
collection requirements.

A. Wage Estimates

    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics' May 2021 National Occupational Employment and Wage 
Estimates for all salary estimates (http://www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 93 presents the mean hourly wage, 
the cost of fringe benefits and overhead (calculated at 100 percent of 
salary), and the adjusted hourly wage.
BILLING CODE 4120-01-P

[[Page 46341]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.143

[GRAPHIC] [TIFF OMITTED] TP29JY22.144


[[Page 46342]]


    As indicated, we adjusted BLS' hourly wage estimates by a factor of 
100 percent to obtain the adjusted hourly wage estimate. This is 
necessarily a rough adjustment, both because fringe benefits and 
overhead costs vary significantly from employer to employer, and 
because methods of estimating these costs vary widely from study to 
study. Nonetheless, we believe that doubling the hourly wage to 
estimate total cost is a reasonably accurate estimation method.

B. Information Collection Requirements (ICRs)

1. ICRs Requiring Manufacturers of Certain Single-Dose Container or 
Single-Use Package Drugs To Provide Refunds With Respect to Discarded 
Amounts (Sec.  414.940)
    As discussed in section III.A.7. of this proposed rule, as a part 
of implementing section 1847A(h) of the Act, as added by section 90004 
of the Infrastructure Act, we recognize the need for establishing a 
dispute resolution process because of the nature of determining the 
estimated total allowed charges for a given calendar quarter and the 
methods by which the estimated refund amount is determined. We are 
proposing that each manufacturer have an opportunity to dispute the 
report, described in section III.A.4. of this proposed rule, by 
submitting an error report.
    We are proposing that to assert that there have been one or more 
errors in the report, a manufacturer must submit a dispute with each 
asserted error. The dispute must include the following information: (1) 
Manufacturer name and address; (2) The name, telephone number, and 
email address of one or more employees or representatives of the 
manufacturer with whom the Secretary may discuss the claimed errors; 
(3) For a mathematical calculation error, the specific calculation 
element(s) that the manufacturer disputes and its proposed corrected 
calculation; and (4) For any other asserted error, an explanation of 
the nature of the error, how the error affects the refund calculation, 
an explanation of how the manufacturer established that an error 
occurred, the proposed correction to the error, and an explanation of 
why the Secretary should use the proposed corrected data instead.
    As discussed in section VII.E.1. of this proposed rule, our 
estimates show a projected 26 billing and payment codes meeting the 
proposed definition of refundable single-dose container or single-use 
package drug would have 10 percent or more discarded units, which is 
the applicable percentage specified in section 1847A(h)(3) of the Act. 
Therefore, we anticipate a similar number of drugs would owe a refund 
pursuant section 90004 of the Infrastructure Act. Since each of these 
billing and payment codes is a single source drug code, each would 
represent 1 manufacturer and we would expect disputes from fewer than 
10 manufacturers per year.
    Consistent with the estimated annual burden per respondent/
recordkeeper for similar error reports utilized to implement the 
Branded Prescription Drug Fee (76 FR 51310), we estimate the annual 
burden per respondent/recordkeeper to be 40 hours. If we anticipate no 
more than 10 disputes per year, the total annual reporting and/or 
recordkeeping burden would be 400 hours (10 error reports per year x 40 
hours per respondent). Based on the most recent Bureau of Labor and 
Statistics Occupational and Employment Data (May 2021) for Category 43-
6014 (Secretaries and Administrative Assistants), the mean hourly wage 
for an administrative assistant is $19.75.\533\ We have added 100% of 
the mean hourly wage to account for fringe and overhead benefits, which 
calculates to $39.50 ($19.75 + $19.75). Therefore, we estimate an 
annual cost of this burden to be $15,800 ($39.50/hour x 400 hours). 
These information collection requirements discussed in this section 
will be submitted to OMB for approval as part of a new information 
collection request.
---------------------------------------------------------------------------

    \533\ https://www.bls.gov/oes/current/oes436014.htm.
---------------------------------------------------------------------------

2. ICRs Regarding the Clinical Laboratory Fee Schedule: Data Reporting 
by Laboratories
    As described in section III.B of this proposed rule, under the 
Clinical Laboratory Fee Schedule, ``reporting entities'' must report to 
CMS during a ``data reporting period'' ``applicable information'' 
collected during a ``data collection period'' for their component 
``applicable laboratories.'' As stated in section 1834A(h)(2) of the 
Act, Chapter 35 of title 44, United States Code, shall not apply to 
information collected under section 1834A of the Act. Consequently, the 
information collection requirements contained in this proposed rule 
need not be reviewed by the Office of Management and Budget.
3. ICRs Regarding the Medicare Shared Savings Program
    Section 1899(e) of the Act provides that chapter 35 of title 44 
U.S.C., which includes such provisions as the PRA, shall not apply to 
the Shared Savings Program. Accordingly, we are not setting out burden 
under the authority of the PRA. Please refer to section VII.F.8. of 
this proposed rule for a discussion of the impacts associated with the 
proposed changes to the Shared Savings Program as described in section 
III.G. of this proposed rule.
4. ICRs for Medical Necessity and Documentation Requirements for 
Nonemergency, Scheduled, Repetitive Ambulance Services
    In section III.I. of this proposed rule, we propose to clarify 
Sec.  410.40(e)(2)(ii) by reorganizing existing language and stating 
that the PCS and additional documentation from the beneficiary's 
medical record may be used to support a claim that transportation by 
ground ambulance is required. We are also clarifying that the PCS and 
additional documentation must provide detailed explanations, that are 
consistent with the beneficiary's current medical condition, that 
explains the beneficiary's need for transport by an ambulance. Finally, 
we are clarifying that coverage includes observation or other services 
rendered by qualified ambulance personnel. We do not expect that our 
proposal will yield a change in the information collection burdens 
currently approved under OMB control number 0938-1380 and 0938-0969 as 
this policy does not require providers and suppliers to submit 
additional information. We are simply clarifying existing policy 
requirements.
5. ICRs for Medicare Provider and Supplier Enrollment Changes
    We propose the following three revisions to Sec.  424.518:
    <bullet> Add changes of ownership and the reporting of a new owner 
as provider enrollment transactions falling within the scope of Sec.  
424.518. (As explained in section III.J. of this proposed rule, these 
parties would have to submit fingerprints and be subject to a 
fingerprint-based criminal background check (FBCBC) if the provider or 
supplier is in the ``high'' level of categorical screening.)
    <bullet> State that any screening level adjustment to ``high'' also 
applies to all other enrolled and prospective providers and suppliers 
that have the same legal business name and tax identification number as 
the provider or supplier that originally triggered the screening level 
increase.
    <bullet> Moving SNFs from the ``limited'' level of categorical 
screening to the ``high'' screening level.

[[Page 46343]]

    These proposed changes would result in an increase in the annual 
number of providers and suppliers that must submit the fingerprints for 
a national background check (via FBI Applicant Fingerprint Card FD-258) 
of all individuals who maintain a 5 percent or greater direct or 
indirect ownership interest in the provider or supplier. The burden is 
currently approved by OMB under control number 1110-0046. An analysis 
of the impact of this requirement can be found in the RIA section of 
this rule.
    None of our other proposed Medicare provider enrollment provisions 
implicate information collection requirements.
6. ICRs for State Options for Implementing Medicaid Provider Enrollment 
Affiliation Provision
    We do not anticipate any information collection burden associated 
with our proposed revision to Sec.  455.107(b), for the latter merely 
involves giving the states somewhat greater flexibility in executing 
the provisions of Sec.  455.107.
7. ICRs Requirement for Electronic Prescribing for Controlled 
Substances for a Covered Part D Drug Under a Prescription Drug Plan or 
an MA-PD Plan (Section 2003 of the SUPPORT Act)
    In section III.M. of this proposed rule, we are proposing to extend 
the existing compliance action of sending letters to non-compliant 
prescribers from the CY 2023 EPCS program implementation year (January 
1, 2023 through December 31, 2023) to the CY 2024 year (January 1, 2024 
through December 31, 2024). Additionally, effective January 1, 2023, we 
are proposing to change the year from which PDE data is used from the 
preceding year to the current evaluated year when CMS determines 
whether a prescriber qualified for an exception based on the number of 
Part D controlled substance prescriptions (Sec.  423.160(a)(5)(ii)). We 
are also proposing to determine whether a prescriber qualifies for the 
emergency or disaster exception (Sec.  423.160(a)(5)(iii)) based on the 
prescriber's valid address in PECOS (Medicare Provider Enrollment, 
Chain, and Ownership System), instead of the NCPDP Pharmacy Database 
address, and for prescribers who are not enrolled or do not have a 
valid PECOS address, we are proposing to use the address in the 
National Plan and Provider Enumeration System (NPPES) data. We do not 
expect that our proposal will yield a change in the information 
collection burdens currently being submitted for review under OMB 
control number 0938-1396 (CMS-10755) as these proposals do not require 
providers and suppliers to submit additional information. We refer 
readers to the 2022 PFS final rule (86 FR 65562 through 65564) for a 
detailed discussion of the EPCS collection of information burden that 
is being submitted under OMB control number 0938-1396.
8. ICRs Regarding the Medicare Ground Ambulance Data Collection System 
(Sec.  414.626)
    Section 1834(l)(17) of the Act requires that the Secretary develop 
a ground ambulance data collection system that collects cost, revenue, 
utilization, and other information determined appropriate by the 
Secretary with respect to providers of services and suppliers of ground 
ambulance services (ground ambulance organizations). Section 
1834(l)(17)(I) of the Act states that the PRA does not apply to the 
collection of information required under section 1834(l)(17) of the 
Act. Accordingly, this collection of information section does not set 
out any burden for the proposed provisions. Please see section VII. of 
this preamble for a discussion of the estimated impacts.
9. The Quality Payment Program (QPP) (42 CFR Part 414 and Section IV. 
of This Proposed Rule)
    The following QPP-specific ICRs reflect this proposed rule's policy 
changes as well as adjustments to the policies that have been finalized 
in the CY 2017 and CY 2018 Quality Payment Program final rules (81 FR 
77008 and 82 FR 53568), CY 2019, CY 2020, CY 2021, and CY 2022 PFS 
final rules (83 FR 59452, 84 FR 62568,85 FR 84472, and 86 FR 64996 
respectively).
a. Background
(1) ICRs Associated With MIPS and Advanced APMs
    There is a series of ICRs associated with the Quality Payment 
Program, including for MIPS and Advanced APMs. The following sections 
describe the proposed changes in the estimated burden for the 
information collections relevant to the revisions in the policies 
associated with the CY 2023 PFS proposed rule and the proposed 
revisions to our currently approved information requests for MIPS and 
Advanced APM ICRs. The proposed estimated burden will be submitted to 
OMB under control number OMB 0938-1314 (CMS-10621). The collection of 
information associated with the CAHPS for MIPS survey under OMB control 
number 0938-1222 (CMS-10450) is currently pending OMB review and 
approval. We note that CMS has already received approval for collection 
of information associated with the virtual group election process under 
OMB control number 0938-1343 (CMS-10652).
(2) Summary of Quality Payment Program Changes: MIPS
    We have included the change in estimated burden for the CY 2023 
performance period/2025 MIPS payment year due to the proposed policies 
and information collections in this proposed rule. The proposed 
policies in this rule impact the burden estimates for the CY 2023 MIPS 
performance period/2025 MIPS payment year.
    The following six MIPS ICRs show changes in burden due to the 
proposed policies in this rule: (1) Quality performance category data 
submission by Medicare Part B claims collection type; (2) Quality 
performance category data submission by QCDR and MIPS CQM collection 
type; (3) Quality performance category data submission by eCQM 
collection type; (4) MVP quality performance category submission; (5) 
MVP registration, and (6) Promoting Interoperability performance 
category data submission. In aggregate, we estimate the proposed 
policies would result in a net decrease in burden of 11,039 hours and 
$1,213,933 for the CY 2023 performance period/2025 MIPS payment year. 
The remaining changes to our currently approved burden estimates are 
adjustments due to the revised burden assumptions based on the updated 
data available at the time of publication of this proposed rule.
    We have added one new ICR for third party intermediaries to 
distinctly capture the burden for collection of information related to: 
(1) QCDR and qualified registry targeted audits as established under 
the conditions for approval at Sec.  414.1400(b)(3)(vi) through (viii); 
and (2) all the requirements for remedial action and termination at 
Sec.  414.1400(e). For simplicity, we capture the estimated burden for 
third party intermediaries to submit additional requirements for 
compliance with both the conditions of approval and remedial action and 
termination criteria under one ICR. We note that the proposed addition 
of this ICR is not due to proposed policy changes in this rule, but 
rather it is a change in our approach to representing the estimated 
burden for third party intermediaries in the CY 2022 PFS final rule. 
(86 FR 65569 through 65576)].
    We are not making any changes or adjustments to the following ICRs:

[[Page 46344]]

Registration for virtual groups; CAHPS survey vendor applications; 
group registration for CAHPS for MIPS survey; CAHPS for MIPS survey 
beneficiary participation; subgroups registration; call for quality 
measures; call for Promoting Interoperability measures; call for 
quality measures; nomination of improvement activities and opt-out of 
performance data display on Compare Tools for voluntary participants. 
See section V.B.9. of this proposed rule for a summary of the ICRs, the 
overall burden estimates, and a summary of the assumption and data 
changes affecting each ICR.
    The accuracy of our estimates of the total burden for data 
submission under the quality, Promoting Interoperability, and 
improvement activities performance categories may be impacted by two 
primary factors. First, we are unable to predict with absolute 
certainty who will be a QP for the CY 2023 performance period/2025 MIPS 
payment year. New eligible clinician participants in Advanced APMs who 
become QPs will be excluded from MIPS reporting requirements and 
payment adjustments, and as such, are unlikely to report under MIPS; 
while some current Advanced APM participants may end participation such 
that the APM Entity's eligible clinicians may not be QPs for a year 
based on Sec.  414.1425(c)(5), and thus be required to report under 
MIPS. Second, it is difficult to predict what Partial QPs, who can 
elect whether to report to MIPS, will do in the CY 2023 performance 
period/2025 MIPS payment year compared to the CY 2019 performance 
period/2021 MIPS payment year, and therefore, the actual number of 
Advanced APM participants and how they elect to submit data may be 
different than our estimates. However, we believe our estimates are the 
most appropriate given the available data. Additionally, we will 
continue to update our estimates annually as data becomes available.
(3) Summary of Quality Payment Program Changes: Advanced APMs
    For these ICRs (identified above under, ``ICRs Associated with MIPS 
and Advanced APMs''), the changes to currently approved burden 
estimates are adjustments based on updated projections for the CY 2023 
performance period/2025 MIPS payment year. We did not implement any 
changes to the Other Payer Advanced APM identification: Payer Initiated 
and Eligible Clinician Initiated Processes; and submission of Data for 
QP determinations under the All-Payer Combination Option.
(4) Framework for Understanding the Burden of MIPS Data Submission
    Because of the wide range of information collection requirements 
under MIPS, Table 95 presents a framework for understanding how the 
organizations permitted or required to submit data on behalf of 
clinicians vary across the types of data, and whether the clinician is 
a MIPS eligible clinician or other eligible clinician voluntarily 
submitting data, MIPS APM participant, or an Advanced APM participant. 
As shown in the first row of Table 95, MIPS eligible clinicians and 
other clinicians voluntarily submitting data will submit data either as 
individuals, groups, or virtual groups for the quality, Promoting 
Interoperability, and improvement activities performance categories. 
Note that virtual groups are subject to the same data submission 
requirements as groups, and therefore, we will refer only to groups for 
the remainder of this section unless otherwise noted. Beginning with 
the CY 2023 performance period/2025 MIPS payment year, clinicians could 
also participate as subgroups for reporting measures and activities in 
a MIPS Value Pathway (MVP). We note that the subgroup reporting option 
is not available for clinicians participating in traditional MIPS.
    Because MIPS eligible clinicians are not required to submit any 
additional information for assessment under the cost performance 
category, the administrative claims data used for the cost performance 
category is not represented in Table 95.
    For MIPS eligible clinicians participating in MIPS APMs, the 
organizations submitting data on behalf of MIPS eligible clinicians 
will vary between performance categories and, in some instances, 
between MIPS APMs. We previously finalized in the CY 2021 PFS final 
rule that the APP is available for both ACO participants and non-ACO 
participants to submit quality data (85 FR 84859 through 84866). Due to 
data limitations and our inability to determine who will use the APM 
Performance Pathway versus the traditional MIPS submission mechanism 
for the CY 2023 performance period/2025 MIPS payment year, we assume 
ACO APM Entities will submit data through the APM Performance Pathway, 
using the CMS Web Interface option, and non-ACO APM Entities will 
participate through traditional MIPS, thereby submitting as an 
individual or group rather than as an entity. We also want to note that 
as finalized in the CY 2022 PFS final rule (86 FR 65259 through 65263), 
the CMS Web Interface collection type is available through the CY 2024 
performance period/2026 MIPS payment year only for clinicians 
participating in the Shared Savings Program. Per section 1899 of the 
Act (42 U.S.C. 1395jjj), submissions received from eligible clinicians 
in ACOs are not included in burden estimates for this proposed rule 
because quality data submissions to fulfill requirements of the Shared 
Savings Program are not subject to the PRA.
    For the Promoting Interoperability performance category, group TINs 
may submit data on behalf of eligible clinicians in MIPS APMs, or 
eligible clinicians in MIPS APMs may submit data individually. As 
described in section IV.A.10.c.(5)(b) of this proposed rule, we are 
proposing to introduce a voluntary reporting option for APM Entities to 
report the Promoting Interoperability performance category at the APM 
Entity level beginning with the CY 2023 performance period/2025 MIPS 
payment year. For the improvement activities performance category, we 
will assume no reporting burden for MIPS APM participants. In the CY 
2017 QPP final rule, we described that for MIPS APMs, we compare the 
requirements of the specific MIPS APM with the list of activities in 
the improvement activities Inventory and score those activities in the 
same manner that they are otherwise scored for MIPS eligible clinicians 
(81 FR 77185). Although the policy allows for the submission of 
additional improvement activities if a MIPS APM receives less than the 
maximum improvement activities performance category score, to date all 
MIPS APM have qualified for the maximum improvement activities score. 
Therefore, we assume that no additional submission will be needed.
    Eligible clinicians who attain Partial QP status may incur 
additional burden if they elect to participate in MIPS, which is 
discussed in more detail in the CY 2018 PFS final rule (82 FR 53841 
through 53844).
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    The policies finalized in the CY 2017 and CY 2018 Quality Payment 
Program final rules (81 FR 77008 and 82 FR 53568), the CY 2019, CY 
2020, CY 2021, and CY 2022 PFS final rules (83 FR 59452, 84 FR 62568, 
85 FR 84472 and 86 FR 64996), and continued in this proposed rule 
create some additional data collection requirements not listed in Table 
95. These additional data collections, some of which are currently 
approved by OMB under the control numbers 0938-1314 (Quality Payment 
Program, CMS-10621) and 0938-1222 (CAHPS for MIPS, CMS-10450), are as 
follows:
    Additional ICRs related to MIPS third-party intermediaries (see 
section V.B.9.c. of this proposed rule):
    <bullet> Self-nomination of new and returning QCDRs (81 FR 77507 
through 77508, 82 FR 53906 through 53908, and 83 FR 59998 through 
60000) (OMB 0938-1314).
    <bullet> Self-nomination of new and returning registries (81 FR 
77507 through 77508, 82 FR 53906 through 53908, and 83 FR 59997 through 
59998) (OMB 0938-1314)
    <bullet> Third party intermediary plan audits (New)
    <bullet> Approval process for new and returning CAHPS for MIPS 
survey vendors (82 FR 53908) (OMB 0938-1222).
    <bullet> Open Authorization Credentialing and Token Request Process 
(OMB 0938-1314) (85 FR 84969 through 84970).
    Additional ICRs related to the data submission and the quality 
performance category (see section V.B.9.e. of this proposed rule):
    <bullet> CAHPS for MIPS survey completion by beneficiaries (81 FR 
77509, 82 FR 53916 through 53917, and 83 FR 60008 through 60009) (OMB 
0938-1222).
    <bullet> Quality Payment Program Identity Management Application 
Process (82 FR 53914 and 83 FR 60003 through 60004) (OMB 0938-1314).
    Additional ICRs related to the Promoting Interoperability 
performance category (see section V.B.9.g. of this proposed rule):
    <bullet> Reweighting Applications for Promoting Interoperability 
and other performance categories (82 FR 53918 and 83 FR 60011 through 
60012) (OMB 0938-1314).
    Additional ICRs related to call for new MIPS measures and 
activities (see sections V.B.9.f., V.B.9.h., and V.B.9.j. of this 
proposed rule):
    <bullet> Nomination of improvement activities (82 FR 53922 and 83 
FR 60017 through 60018) (OMB 0938-1314).
    <bullet> Call for new Promoting Interoperability measures (83 FR 
60014 through 60015) (OMB 0938-1314).
    <bullet> Call for MIPS quality measures (83 FR 60010 through 60011) 
(OMB 0938-1314).
    <bullet> Nomination of MVPs (85 FR 84990 through 84991) (OMB 0938-
1314).
    Additional ICRs related to MIPS (see section V.B.9.o. of this 
proposed rule):
    <bullet> Opt out of performance data display on Compare Tools for 
voluntary reporters under MIPS (82 FR 53924 through 53925 and 83 FR 
60022) (OMB 0938-1314).
    Additional ICRs related to APMs (see sections V.B.9.m. and V.B.9.n. 
of this proposed rule):
    <bullet> Partial QP Election (81 FR 77512 through 77513, 82 FR 
53922 through 53923, and 83 FR 60018 through 60019) (OMB 0938-1314).
    <bullet> Other Payer Advanced APM determinations: Payer Initiated 
Process (82 FR 53923 through 53924 and 83 FR 60019 through 60020) (OMB 
0938-1314).
    <bullet> Other Payer Advanced APM determinations: Eligible 
Clinician Initiated Process (82 FR 53924 and 83 FR 60020) (OMB 0938-
1314).
    <bullet> Submission of Data for All-Payer QP Determinations (83 FR 
60021) (OMB 0938-1314).
b. ICRs Regarding the Virtual Group Election (Sec.  414.1315)
    This rule is not proposing any new or revised collection of 
information requirements or burden related to the virtual group 
election. The virtual group election requirements and burden are 
currently approved by OMB under control number 0938-1343 (CMS-10652). 
Consequently, we are not proposing any changes to the virtual group 
election process under that control number.
c. ICRs Regarding Third Party Intermediaries (Sec.  414.1400)
    In this rule, we propose changes in our existing approach to 
capture the estimated burden for third party intermediaries. In the CY 
2022 PFS final rule, for the burden related to the third party 
intermediaries, we combined the burden associated with the submission 
of targeted audits, corrective action plans, participation plans and 
transition plans under the ICRs for QCDR and qualified registry self-
nomination process (86 FR 65569 through 65573 and 86 FR 65573 through 
65576). We propose to separate the burden for submission of the 
targeted audits and other plans listed above under the ICR for third 
party intermediary plan audits (see section V.B.9.c.(4) of this 
proposed rule). We believe that the proposed change would more 
accurately capture the associated burden for the QCDR and qualified 
registry self-nomination process because not every QCDR or qualified 
registry that submits a self-nomination application would also submit a 
targeted audit, corrective action plan (CAP), participation plan, or a 
transition plan. This change is not due to any proposed policies 
related to third party intermediaries in this rule, rather it is a 
change in representing the estimated burden from adopted policies. The 
proposed requirements and burden associated with this rule's self-
nomination process related to qualified registries and QCDRs will be 
submitted to OMB for approval under control number 0938-1314 (CMS-
10621).
    In section IV.A.10.g.(1)(b) of this rule, we propose updates to the 
definition of a third party intermediary at Sec.  414.1305, and to make 
other minor conforming technical edits to the regulation text governing 
third party intermediaries set forth in Sec.  414.1400. We also propose 
to revise QCDR measure self-nomination and measure approval 
requirements to delay the QCDR measure testing requirement for 
traditional MIPS by an additional year, until the CY 2024 performance 
period/2026 MIPS payment year.
(1) Background
    Under MIPS, the quality, Promoting Interoperability, and 
improvement activities performance category data may be submitted via 
relevant third party intermediaries, such as qualified registries, 
QCDRs, and health IT vendors. Data on the CAHPS for MIPS survey, which 
counts as either one quality performance category measure, or towards 
an improvement activity, can be submitted via CMS-approved survey 
vendors. Entities seeking approval to submit data on behalf of 
clinicians as a qualified registry, QCDR, or survey vendor must 
complete a self-nomination process annually.\534\ The processes for 
self-nomination of entities seeking approval as qualified registries 
and QCDRs are similar with the exception that QCDRs have the option to 
nominate QCDR measures for approval for the reporting of quality 
performance category data. Therefore, differences between QCDRs and 
qualified registry self-nomination are associated with the preparation 
of QCDR measures for approval.
---------------------------------------------------------------------------

    \534\ As stated in the CY 2019 PFS final rule (83 FR 59998), 
health IT vendors are not included in the burden estimates for MIPS.
---------------------------------------------------------------------------

(2) QCDR Self-Nomination Applications
    As described below, in this rule we propose to adjust the number of 
self-nomination applications used to

[[Page 46347]]

calculate our burden estimates based on current data (from 84 to 90). 
We are not proposing adjustments to the number of QCDR measures 
submitted for consideration by each QCDR at the time of self-nomination 
and the average time required to submit information for each QCDR 
measure. We refer readers to the CY 2017 and CY 2018 Quality Payment 
Program final rules (81 FR 77507 through 77508, 82 FR 53906 through 
53908), the CY 2019, CY 2020, CY 2021 and CY 2022 PFS final rules (83 
FR 59998 through 60000, 84 FR 63116 through 63121, 85 FR 84964 through 
84969 and 86 FR 65569 through 65573) for our previously finalized 
requirements and estimated burden for self-nomination of QCDRs and 
nomination of QCDR measures.
(a) Self-Nomination Process and Other Requirements
    In section IV.A.10.g.(1)(b) of this rule, we propose to update the 
definition of a third party intermediary at Sec.  414.1305 to include 
subgroups and APM Entities and to make minor edits for technical 
clarity. We propose the revised definition would provide that a third 
party intermediary means an entity that has been approved under Sec.  
414.1400 to submit data on behalf of a MIPS eligible clinician, group, 
virtual group, subgroup, or APM Entity for one or more of the quality, 
improvement activities and Promoting Interoperability performance 
categories. This proposal is intended to update the regulation text to 
align with the existing policy and does not require additional 
information from QCDRs during the self-nomination process. Therefore, 
we are not proposing to revise our burden estimates related to this 
proposal.
(b) QCDR Measure Requirements
    We previously finalized QCDR measure self-nomination requirements 
at Sec.  414.1400(b)(4)(i), including the requirement at Sec.  
414.1400(b)(4)(i)(B) that entities must publicly post the measure 
specifications for QCDR measures no later than 15 calendar days 
following CMS approval of any QCDR measure specifications.
    In section IV.A.10.g.(2)(b) of this rule, we propose to revise 
Sec.  414.1400(b)(4)(i)(B) to clarify requirements for publicly posting 
the QCDR measure specifications. We are not adjusting our burden 
estimates as a result of this proposal because this would not 
substantively change the estimated time required for a QCDR to submit 
information for a QCDR measure at the time of self-nomination.
    Additionally, in section IV.A.10.g.(2)(c) of this rule, we propose 
to amend Sec.  414.1400(b)(4)(iii)(A)(3) to delay the requirement for 
QCDR measure full testing until the CY 2024 performance period/2026 
MIPS payment year. We are not adjusting our burden estimates as result 
of this proposal because we assume that this does not meaningfully 
change the existing requirements, or the time required for a QCDR to 
submit information for a QCDR measure at the time of self-nomination.
    For this rule, we propose to adjust the number of estimated QCDRs 
that would submit applications for self-nomination from 84 to 90 based 
on the number of applications that we expect to receive during the CY 
2022 self-nomination period for the CY 2023 performance period/2025 
MIPS payment year. This is an increase of 6 from the currently approved 
number of 84 respondents in the CY 2022 PFS final rule (86 FR 65571). 
We are not proposing any changes to the currently approved time of 0.5 
hours required for the QCDR simplified self-nomination process and 2.5 
hours for the full self-nomination process in the CY 2022 PFS final 
rule (86 FR 65571). Additionally, this rule is not proposing any new 
requirements for QCDRs that nominate QCDR measures as part of the self-
nomination process. Therefore, we are not proposing changes to revise 
our currently approved estimated time for the QCDRs that submit 
measures as part of their self-nomination process (9.5 hours for the 
simplified self-nomination process and 11.5 hours for the full self-
nomination process respectively) (86 FR 65571).
    Based on the assumptions discussed in this section, we provide an 
estimate of the total annual burden associated with a QCDR self-
nominating to be considered ``qualified'' to submit quality measures 
results and numerator and denominator data on behalf of MIPS eligible 
clinicians.
    As shown in Table 96, we assume that the staff involved in the QCDR 
self-nomination process will continue to be computer systems analysts 
or their equivalent, who have an average labor rate of $98.28/hr. Using 
the change in the number of respondents, in aggregate, the proposed 
estimated annual burden for the simplified and full-self nomination 
process will range from 855 hours (90 QCDRs x 9.5 hr) to 1,035 hours 
(90 QCDRs x 11.5 hr) at a cost ranging from $84,029 (855 hr x $98.28/
hr) and $101,720 (1,035 hr x $98.28/hr), respectively.
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    As shown in Table 97, for the CY 2023 performance period/2025 MIPS 
payment year, the proposed change in the representation of burden for 
this ICR described above in this section and the estimated increase in 
6 respondents

[[Page 46348]]

from the currently approved 84 respondents to 90 results in a change of 
-63 hours at a cost of -$6,192 for the simplified self-nomination 
process (or minimum burden) and -141 hours at a cost of -$13,857 for 
the full self-nomination process (or maximum burden). We note that the 
decrease in burden is due to separating the estimated burden for 
targeted audits, CAPs, and participation plans and including that 
burden under a new ICR for third party intermediary plan audits (see 
Table 101).
    We note that for the purposes of calculating proposed estimated 
change in burden in Tables 132, 133, and 135 of this rule, we use only 
the maximum burden estimate.
[GRAPHIC] [TIFF OMITTED] TP29JY22.147

(3) Qualified Registry Self-Nomination Process and Other Requirements
    We refer readers to Sec.  414.1400 which states that qualified 
registries interested in submitting MIPS data to us on behalf of MIPS 
eligible clinicians, groups, or virtual groups need to complete a self-
nomination process to be considered for approval to do so.
    In section IV.A.10.g.(1)(b) of this rule, we propose to update the 
definition of a third party intermediary at Sec.  414.1305 to include 
subgroups and APM Entities and to make minor edits for technical 
clarity. This proposal would update the regulation text to align with 
existing policy and does not require additional information from 
qualified registries during the self-nomination process. Therefore, we 
are not proposing to revise our burden estimates related to this 
proposal.
    For this rule, we propose to adjust the number of estimated 
qualified registries that would submit applications for self-nomination 
from 147 to 160 based on the number of applications that we expect to 
receive during the CY 2022 self-nomination period for the CY 2023 
performance period/2025 MIPS payment year. This is an increase of 13 
applications from the currently approved estimate of 147 in the CY 2022 
PFS final rule (86 FR 65574). Therefore, we are proposing to revise our 
estimates for this information collection related to the qualified 
registry self-nomination process. We are not proposing changes to 
revise our currently approved estimated time of 0.5 hours for the 
simplified qualified registry self-nomination process and 2 hours for 
the full qualified registry self-nomination process (86 FR 65574 
through 65575).
    As shown in Table 98, we assume that the staff involved in the 
qualified registry self-nomination process will continue to be computer 
systems analysts or their equivalent, who have an average labor rate of 
$98.28/hr. Using the proposed change in estimated number of 
respondents, combined with the estimated time required for a self-
nomination process ranging from a minimum of 0.5 hours to a maximum of 
2 hours, we estimate that the annual burden would range from 80 hours 
(160 qualified registries x 0.5 hr) to 320 hours (160 qualified 
registries x 2 hr) at a cost ranging from $7,862 (80 hr x $98.28/hr) 
and $31,450 (320 hr x $98.28/hr), respectively.
    Both the proposed minimum and maximum burden shown in 99 reflect 
the adjustments to the number of respondents due to availability of 
more recent data. Based on the assumptions discussed in this section, 
we provide an estimate of the total annual burden associated with a 
qualified registry self-nominating to be considered ``qualified'' to 
submit quality measures results and numerator and denominator data on 
MIPS eligible clinicians.

[[Page 46349]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.148

    As shown in Table 99, for the CY 2023 performance period/2025 MIPS 
payment year, the proposed change in the representation of burden for 
this ICR described above in this section and the estimated increase in 
13 respondents from the currently approved 147 respondents to 160 
results in a change of -311 hours at a cost of -$30,565 for the 
simplified self-nomination process (or minimum burden) and -521 hours 
at a cost of -$51,203 for the full self-nomination process (or maximum 
burden). We note that the decrease in burden is due to separating the 
estimated burden for targeted audits and participation plans and 
including that burden under a new ICR for third party intermediary plan 
audits (see Table 101).
    We note that for the purposes of calculating proposed estimated 
change in burden in Tables 132, 133, and 135 of this rule, we use only 
the maximum burden estimate.
[GRAPHIC] [TIFF OMITTED] TP29JY22.149

(4) ICR for Third Party Intermediary Plan Audits
    As discussed above in this section, we are proposing to add a new 
ICR to distinctly capture the burden for collection of information 
related to QCDR and qualified registry targeted audits at Sec.  
414.1400(b)(3)(vi) through (viii) and the requirements for remedial 
action and termination of third party intermediaries at Sec.  
414.1400(e) during the third party intermediary self-nomination 
process. We note that we capture the estimated burden for third party 
intermediaries to submit additional requirements for compliance with 
both the conditions of approval and remedial action and termination 
criteria under one ICR. The proposed requirements and burden associated 
with developing the plans and audits by QCDRs and qualified registries 
will be submitted to OMB for approval under control number 0938-1314 
(CMS-10621).
    In the CY 2022 PFS final rule, we combined the burden associated 
with the submission of the targeted audits, corrective action plans, 
participation plans and transition plans with the ICR for QCDR self-
nomination process and other requirements (86 FR 65569 through 65573) 
and the ICR for qualified registry self-nomination process and other 
requirements (86 FR 65573 through 65576). For the purposes of this ICR, 
we refer to these audits and plans collectively as ``plan audits.'' For 
this proposed rule, we determined that it is necessary to separately 
estimate the burden for QCDR and qualified registry targetedaudits from 
self-nomination application burden because it would more accurately 
represent the burden.
    In section IV.A.10.g.(3) of this rule, we propose a few changes to 
the regulations remedial actions and terminations set forth in Sec.  
414.1400(e). These include one revised and one new requirement for 
Corrective Action Plans (CAPs), and proposed termination of certain 
approved QCDRs and qualified registries that continue to fail to submit 
performance data. The burden associated with these proposals is 
discussed below.
(a) Targeted Audits
    In the CY 2022 PFS final rule (86 FR 65547 through 65548), we 
finalized that beginning with the CY 2021 performance period/2023 MIPS 
payment year, the QCDR or qualified

[[Page 46350]]

registry must conduct targeted audits in accordance with requirements 
at Sec.  414.1400(b)(3)(vi). Consistent with our assumptions in the CY 
2022 PFS final rule for the QCDRs (86 FR 65574) and qualified 
registries (86 FR 65571) that would submit targeted audits, we estimate 
that the time required for a QCDR or qualified registry to submit a 
targeted audit ranges between 5 and 10 hours for the simplified and 
full self-nomination process, respectively. We assume that the staff 
involved in submitting the targeted audits will continue to be computer 
systems analysts or their equivalent, who have an average labor rate of 
$98.28/hr.
    Using the proposed adjustments to the number of QCDRs and qualified 
registries expected to submit self-nomination applications in sections 
V.B.9.c.(2) and V.B.9.c.(3) of this rule, we estimate that 70 third 
party intermediaries (20 QCDRs and 50 qualified registries) would 
submit targeted audits for the CY 2023 performance period/2025 MIPS 
payment year (See Table 100). Using the unchanged currently approved 
time per respondent (86 FR 65572), we estimate the total impact 
associated with QCDRs and qualified registries completing targeted 
audits will range from 350 hours (70 respondents x 5 hours/audit) at a 
cost of $34,398 (70 respondents x $491.40/audit) to 700 hours (70 
respondents x 10 hours/audit) at a cost of $68,796 (70 respondents x 
$982.80/audit) for the simplified and full self-nomination process, 
respectively (see Table 101 for the cost per audit).
(b) Participation Plans
    In the CY 2022 PFS final rule (86 FR 65546), we finalized 
requirements for approved QCDRs and qualified registries that have not 
submitted performance data to submit a participation plan as part of 
their self-nomination process. We refer readers to Sec.  414.1400(e) 
for previously finalized policies for remedial action and termination 
of third-party intermediaries.
    In section IV.A.10.g.(3)(b) of this proposed rule, we propose a new 
termination policy for approved QCDRs and qualified registries which 
are required to submit participation plans during the applicable self-
nomination period under Sec.  414.1400(b)(3)(viii). We propose to 
terminate those QCDRs and qualified registries that are required to 
submit participation plans during the applicable self-nomination period 
under Sec.  414.1400(b)(3)(viii) because they did not submit any MIPS 
data for either of the 2 years preceding the applicable self-nomination 
period, and continue to not submit MIPS data to CMS for the applicable 
performance period. Specifically, we propose to add a new ground for 
termination at Sec.  414.1400(e)(5) stating that, beginning with the CY 
2024 performance period/2026 MIPS payment year, a QCDR or qualified 
registry that submits a participation plan as required under paragraph 
(b)(3)(viii) of this section, but does not submit MIPS data for the 
applicable performance period for which they self-nominated under 
paragraph (b)(3)(viii) of this section, will be terminated. If this 
policy is finalized, CMS would terminate the qualified registry or QCDR 
as applicable under Sec.  414.1400(e)(5) and we assume that it would 
not require additional requirements for interested parties to submit 
their information during the qualified registry and QCDR self-
nomination process. (86 FR 65574). We refer readers to section 
IV.A.10.g.(3)(b) of this rule for additional details related to these 
proposals.
    Consistent with our assumptions in the CY 2022 PFS final rule for 
the QCDRs (86 FR 65574) and qualified registries (86 FR 65571) that 
would submit participation plans, we estimate that it would take 3 
hours for a QCDR or qualified registry to submit a participation plan 
during the self-nomination process. We assume that the staff involved 
in submitting a participation plan will continue to be computer systems 
analysts or their equivalent, who have an average labor rate of $98.28/
hr.
    As shown in Table 100, we estimate that 29 third party 
intermediaries (10 QCDRs and 19 qualified registries) would submit 
participation plans for the CY 2023 performance period/2025 MIPS 
payment year. Therefore, we estimate the total impact associated with 
QCDRs and qualified registries to submit participation plans would be 
87 hours (29 respondents x 3 hours/plan) at a cost of $8,550 (29 
respondents x $294.84/plan). (See Table 101 for the cost per audit).
(c) Corrective Action Plans (CAPs)
    In section IV.A.10.g.(3)(a) of this rule, we propose to revise the 
CAP requirement at Sec.  414.1400(e)(1)(i)(B) to require the third 
party intermediary to address in its CAP the impact to individual 
clinicians, groups, or virtual groups, subgroups, or APM Entities, 
regardless of whether they are participating in the program because 
they are MIPS eligible, voluntarily participating, or opting in to 
participating in the MIPS, and any QCDRs that were granted licenses to 
the measures of a QCDR upon which a CAP has been imposed. We also 
propose to add a new CAP requirement to require the third-party 
intermediary to notify the parties identified in proposed Sec.  
414.1400(e)(1)(i)(B) of the impact to these parties by submitting a 
communication plan. Additionally, we propose to add Sec.  
414.1400(e)(1)(i)(E) to require the third party intermediary to develop 
a communication plan for communicating the impact to the parties 
identified in proposed Sec.  414.1400(e)(1)(i)(B). We assume that the 
intent of this proposal is to enable affected parties to better 
understand and prepare for any operational and other challenges as 
needed. We believe having third party intermediaries submit a 
communication plan as part of their CAP would ensure third party 
intermediaries directly communicate the situation and its impact to 
these parties in a timely and consistent manner. However, due to the 
relatively low number of CAPs (an average of 10 responses) that we 
expect to receive from QCDRs and qualified registries for the CY 2023 
performance period/2025 MIPS payment year, we are unable to estimate 
the burden associated with the development of a communication plan.
    Consistent with our assumptions in the CY 2022 PFS final rule for 
the QCDRs and qualified registries (86 FR 65575) that would submit 
CAPs, we estimate that 10 third party intermediaries would submit CAPs 
for the CY 2023 performance period/2025 MIPS payment year. 
Additionally, we estimate that it would take 3 hours for a QCDR or 
qualified registry to submit a participation plan. We assume that the 
staff involved in submitting the targeted audits will continue to be 
computer systems analysts or their equivalent, who have an average 
labor rate of $98.28/hr.
    Therefore, we estimate the total impact associated with QCDRs and 
qualified registries to CAPs would be 30 hours (10 respondents x 3 
hours/plan) at a cost of $2,948 (10 respondents x $294.84/plan). (See 
Table 101 for the cost per audit).
(d) Transition Plans
    In the CY 2020 PFS final rule (84 FR 63052 through 63053), we 
established a policy at Sec.  414.1400(a)(4)(vi) that a condition of 
approval for the third party intermediary is to agree that prior to 
discontinuing services to any MIPS eligible clinician, group or virtual 
group during a performance period, the third party intermediary must 
support the transition of such MIPS eligible clinician, group, or 
virtual group to an alternate third party intermediary, submitter type, 
or, for any measure on

[[Page 46351]]

which data has been collected, collection type according to a CMS 
approved transition plan. In the CY 2020 PFS final rule (84 FR 63115), 
we did not estimate the total burden associated with the development of 
CMS approved transition plans because of the uncertain, but low 
frequency (less than 10 per year historically) with which third party 
intermediaries have elected to discontinue services during a 
performance period. Based on updated data received for the transition 
plans submitted by the registries and QCDRs beginning with the CY 2020 
performance period/2022 MIPS payment year, we estimate to receive 15 
transition plans from QCDRs and qualified registries for the CY 2023 
performance period/2025 MIPS payment year. We estimate that it would 
take 1 hour for a computer system analyst or their equivalent at a 
labor rate of $98.28/hr to develop a transition plan on behalf of each 
QCDR or qualified registry during the self-nomination period. However, 
we are unable to estimate the burden for implementing the actions in 
the transition plan because the level of effort may vary for each QCDR 
or qualified registry. Therefore, we estimate the total impact 
associated with qualified registries completing transition plans is 15 
hours (15 transition plans x 1 hour/plan) at a cost of $1,474 (15 hr x 
$98.28/hr). We refer readers to section VI.E.16.e.(2)(c) of this 
proposed rule where we discuss our impact analysis for the transition 
plans submitted by QCDRs and qualified registries.
    In section IV.A.10.g.(3) of this rule, we propose to revise 
conforming changes to Sec.  414.1400(e)(2), which currently states that 
CMS may immediately or with advance notice terminate the ability of a 
third party intermediary to submit MIPS data on behalf of a MIPS 
eligible clinician, group, or virtual group under certain 
circumstances. Rather than amend this provision to add references to 
subgroups and APM Entities, we propose to revise Sec.  414.1400(e)(2) 
by removing the previously quoted phrase. If this proposal is 
finalized, the revised regulation would simply provide that CMS may 
immediately or with advance notice ``terminate a third party 
intermediary' under the specified circumstances. We assume that these 
proposals are intended to revise the regulation text in conjunction 
with the proposal in section IV.A.10.g.(1)(b) of this rule to amend the 
definition of a ``third party intermediary'' to refer to subgroups and 
APM Entities, and do not require additional information from qualified 
registries during the self-nomination process.
    In section IV.A.10.g.(4)(b) of this rule, we propose to update 
Sec.  414.1400(f)(1) to require that the entity must make available to 
CMS the contact information of each MIPS eligible clinician, group, 
virtual group, subgroup, or APM Entity on behalf of whom it submits 
data. The contact information must include, at a minimum, the MIPS 
eligible clinician, group, virtual group, subgroup, or APM Entity phone 
number, address, and, if available, email. We assume that the intent of 
this proposal is to update the regulation text to align with the 
proposed updates to the definition of a ``third party intermediary'' at 
Sec.  414.1305. We do not expect to receive additional information from 
qualified registries during the self-nomination process due to this 
proposal. Additionally, we refer readers to section VI.E.16.e.(2)(c) of 
this proposed rule where we discuss our impact analysis for these 
proposals.
    As shown in Table 100, we assume that 124 third party 
intermediaries would submit plan audits (targeted audits, participation 
plans, CAPs, and transition plans).
[GRAPHIC] [TIFF OMITTED] TP29JY22.150

    As shown in Table 101, we assume that the staff involved in the 
submission of the plan audits during the third party intermediary self-
nomination process will continue to be computer systems analysts or 
their equivalent, who have an average labor rate of $98.28/hr. For the 
CY 2023 performance period/2025 MIPS payment year, in aggregate, the 
proposed estimated annual burden for the simplified (or minimum) and 
full (or maximum) self-nomination process will range from 482 hours to 
832 hours at a cost ranging from $50,370 (482 hr x $98.28/hr) and 
$81,769 (832 hr x $98.28/hr), respectively.

[[Page 46352]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.151

    As shown in Table 102, for the CY 2023 performance period/2025 MIPS 
payment year, the addition of this ICR for third party intermediary 
plan audits results in a change of +482 hours at a cost of +$50,370 for 
the simplified self-nomination process (or minimum burden) and +832 
hours at a cost of +$81,768 for the full self-nomination process (or 
maximum burden).
    We note that for the purposes of calculating proposed estimated 
change in burden in Tables 132, 133, and 135 of this rule, we use only 
the maximum burden estimate.
[GRAPHIC] [TIFF OMITTED] TP29JY22.152

(5) Survey Vendor Requirements
    This rule is not proposing new or revised collection of information 
requirements related to the requirements for CAHPS Survey vendors. The 
requirements and burden for CAHPS survey vendors to submit data for 
eligible clinicians are currently approved by OMB under control number 
0938-1222 (CMS-10450). Consequently, we are not proposing any changes 
to the CAHPS for MIPS Survey vendor information collection request 
under that control number.
d. ICR Regarding Open Authorization (OAuth) Credentialing and Token 
Request Process
    The proposed requirements and burden associated with the OAuth 
Credentialing and token request process will be submitted to OMB for 
approval under control number 0938-1314 (CMS-10621). We refer readers 
to the CY 2021 and the CY 2022 PFS final rules (85 FR 84969 through 85 
FR 84970 and 86 FR 65576) for our previously finalized requirements and 
burden estimates for the information collection related to the OAuth 
credentialing and token request process.
    This rule is not proposing new or revised collection of information 
requirements related to the OAuth credentialing and token request 
process. Beginning with the CY 2023 MIPS performance period/2025 MIPS 
payment year, we made administrative

[[Page 46353]]

changes in the process for interested parties to submit their 
application for OAuth credentialing and token process. Based on the 
changes to the workflows, the CMS Office of Information Technology 
(OIT) has centralized Okta Administrator privileges. In previous years, 
the Quality Payment Program maintained the privileges for Administrator 
roles. As a result of this change, interested parties that would submit 
their information for OAuth Credentialing and Token request process are 
now required to meet with both Quality Payment Program and OIT for 
final approvals to have their applications integrated with the CMS Okta 
production environment. Therefore, we propose to revise our estimates 
that it would take 2 hours for a computer systems analyst (or their 
equivalent) to provide documentation and any follow-up communication 
via email. This is an increase of 1 hour from the currently approved 
estimated time of 1 hour for interested parties to provide their 
documentation and any follow-up communication via email.
    As shown in Table 103, we are not proposing any changes to our 
currently approved estimate of 15 respondents that would complete this 
process for the CY 2023 performance period/2025 MIPS payment year. In 
aggregate, accounting for the increase in time required for a computer 
systems analyst (or their equivalent) to complete the token request 
process, we estimate an annual burden of 30 hours (15 vendors x 2 hrs) 
at a cost of $2,948 (30 hrs x $98.28/hr).
[GRAPHIC] [TIFF OMITTED] TP29JY22.153

    As shown in Table 104, using our unchanged currently approved 
number of respondents (86 FR 65576), the proposed increase in the 
amount of time required for the OAuth credentialing and token request 
process results in an adjustment of +15 hours (+15 respondents x 1 hr/
respondent) at a cost of +$1,474 (+15 hr x $98.28/hr) from our 
currently approved burden of 15 hours (15 respondents x 1 hr/
respondent) at a cost of $1,474 (15 hrs x $98.28/hr) for the CY 2023 
performance period/2025 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP29JY22.154

e. ICRs Regarding Quality Data Submission (Sec. Sec.  414.1318, 
414.1325, 414.1335, and 414.1365)
(1) Background
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77502 through 77503 and 82 FR 53908 through 53912), 
the CY 2019, CY 2020, CY 2021, and CY 2022 PFS final rules (83 FR 60000 
through 60003, 84 FR 63121 through 63124, 85 FR 84970 through 84974, 86 
FR 65576 through 65588) for our previously finalized estimated burden 
associated with data submission for the quality performance category.
    Under our current policies, two groups of clinicians must submit 
quality data under MIPS: those who submit data as MIPS eligible 
clinicians, and those who submit data voluntarily but are not subject 
to MIPS payment adjustments. Clinicians are ineligible for MIPS payment 
adjustments if they are newly enrolled to Medicare; are QPs; are 
partial QPs who elect to not participate in MIPS; are not one of the 
clinician types included in the definition for MIPS eligible clinician; 
or do not exceed the low-volume threshold as an individual or as a 
group.
(2) Changes and Adjustments to Quality Performance Category Respondents
    To determine which QPs should be excluded from MIPS, we used the 
Advanced APM payment and patient percentages from the APM Participant 
List for the third snapshot date for the

[[Page 46354]]

2021 QP Performance period. From this data, we calculated the QP 
determinations as Pdescribed in the Qualifying APM Participant (QP) 
definition at Sec.  414.1305 for the CY 2023 performance period/2025 
MIPS payment year. Due to data limitations, we could not identify 
specific clinicians who have not yet enrolled in APMs, but who may 
become QPs in the future for the CY 2023 performance period/2025 MIPS 
payment year (and therefore will no longer need to submit data to 
MIPS); hence, our model may underestimate or overestimate the number of 
respondents.
    In the CY 2019 PFS final rule, we finalized limiting the Medicare 
Part B claims collection type to small practices beginning with the CY 
2019 performance period/2021 MIPS payment year and allowing clinicians 
in small practices to report Medicare Part B claims as a group or as 
individuals (83 FR 59752). We note that we continue to use CY 2019 
performance period/2021 MIPS payment year data to estimate the number 
of respondents in the CY 2023 PFS proposed rule.
    There may be an undercount in submissions due to the PHE for COVID-
19, because of the automatic extreme and uncontrollable circumstances 
policy, and application-based policy that allowed clinicians to elect 
not to submit during the submission period for the CY 2019 performance 
period/2021 MIPS payment year that we are using to inform our burden 
estimates. Despite this limitation, we believe the data from the CY 
2019 performance period/2021 MIPS payment year is still the best data 
source available as it most accurately reflects the impacts of policies 
finalized in previous rules and trends toward increased group 
reporting.
    We assume that 100 percent of ACO APM Entities will submit quality 
data to CMS as required under their models. While we do not believe 
there is additional reporting for ACO APM entities, consistent with 
assumptions used in the CY 2021 and CY 2022 PFS final rules (85 FR 
84972 and 86 FR 65567), we include all quality data voluntarily 
submitted by MIPS APM participants at the individual or TIN-level in 
our respondent estimates. As stated in section V.B.9.a.(4) of this 
proposed rule, we assume non-ACO APM Entities will participate through 
traditional MIPS and submit as an individual or group rather than as an 
entity. To estimate who will be a MIPS APM participant in the CY 2023 
performance period/2025 MIPS payment year, we used the Advanced APM 
payment and patient percentages from the APM Participant List for the 
final snapshot date for the 2021 QP performance period. We elected to 
use this data source because the overlap with the data submissions for 
the CY 2019 performance period/2021 MIPS payment year enabled the 
exclusion of Partial QPs that elected to not participate in MIPS and 
required fewer assumptions as to who is a QP or not. Based on this 
information, if we determine that a MIPS eligible clinician will not be 
scored as a MIPS APM, then their reporting assumption is based on their 
reporting as a group or individual for the CY 2019 performance period/
2021 MIPS payment year.
    Our burden estimates for the quality performance category do not 
include the burden for the quality data that APM Entities submit to 
fulfill the requirements of their APMs. The associated burden is 
excluded from this collection of information section but is discussed 
in the regulatory impact analysis section of this proposed rule because 
sections 1899(e) and 1115A(d)(3) of the Act (42 U.S.C. 1395jjj(e) and 
1315a(d)(3), respectively) state that the Shared Savings Program and 
the testing, evaluation, and expansion of Innovation Center models 
tested under section 1115A of the Act (or section 3021 of the 
Affordable Care Act) are not subject to the PRA.\535\
---------------------------------------------------------------------------

    \535\ Our estimates do reflect the burden on MIPS APM 
participants of submitting Promoting Interoperability performance 
category data, which is outside the requirements of their APMs.
---------------------------------------------------------------------------

    For the CY 2023 performance period/2025 MIPS payment year, 
respondents will have the option to submit quality performance category 
data via Medicare Part B claims, direct, and log in and upload 
submission types. We estimate the burden for collecting data via 
collection type: Medicare Part B claims, QCDR and MIPS CQMs, and eCQMs. 
Additionally, we capture the burden for clinicians who choose to submit 
via these collection types for the quality performance category of 
MVPs. We believe that, while estimating burden by submission type may 
be better aligned with the way clinicians participate with the Quality 
Payment Program, it is more important to reduce confusion and enable 
greater transparency by maintaining consistency with previous 
rulemaking.
    Because MIPS eligible clinicians may submit data for multiple 
collection types for a single performance category, the estimated 
numbers of individual clinicians and groups to collect via the various 
collection types are not mutually exclusive and reflect the occurrence 
of individual clinicians or groups that collected data via multiple 
collection types during the CY 2019 performance period/2021 MIPS 
payment year. We captured the burden of any eligible clinician that may 
have historically collected via multiple collection types, as we assume 
they will continue to collect via multiple collection types and that 
our MIPS scoring methodology will take the highest score where the same 
measure is submitted via multiple collection types.
    Table 105 uses methods similar to those described above to estimate 
the number of clinicians that will submit data as individual clinicians 
via each collection type in the CY 2023 performance period/2025 MIPS 
payment year. For the CY 2023 performance period/2025 MIPS payment 
year, we estimate that approximately 27,006 clinicians will submit data 
as individuals using the Medicare Part B claims collection type; 
approximately 37,306 clinicians will submit data as individuals using 
MIPS CQM and QCDR collection type; and approximately 38,464 clinicians 
will submit data as individuals using eCQMs collection type. Based on 
performance data from the CY 2019 performance period/2021 MIPS payment 
year, these are increases of 1,579, 850, and 2,063 respondents from the 
currently approved estimates of 25,427, 36,456, and 36,401 for the 
Medicare Part B claims, MIPS CQM and QCDR, and eCQM collection types, 
respectively.

[[Page 46355]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.155

    Consistent with the policy finalized in the CY 2018 Quality Payment 
Program final rule that for MIPS eligible clinicians who collect 
measures via Medicare Part B claims, MIPS CQM, eCQM, or QCDR collection 
types and submit more than the required number of measures (82 FR 53735 
through 54736), we will score the clinician on the required measures 
with the highest assigned measure achievement points and thus, the same 
clinician may be counted as a respondent for more than one collection 
type. Therefore, our columns in Table 105 are not mutually exclusive.
    Table 106 provides our estimated counts of groups or virtual groups 
that will submit quality data on behalf of clinicians for each 
collection type in the CY 2023 performance periods/2025 MIPS payment 
year. We assume that clinicians who submitted quality data as groups in 
the CY 2019 performance period/2021 MIPS payment year will continue to 
submit quality data either as groups, or virtual groups for the same 
collection types for the 2023 performance period/2025 MIPS payment 
years. We refer readers to the CY 2022 PFS final rule (86 FR 65577) on 
our assumptions related to the use of an alternate collection type for 
groups that submitted data via the CMS Web Interface collection type 
for the CY 2019 performance period/2021 MIPS payment year.
    As shown in Table 106, for the CY 2023 performance period/2025 MIPS 
payment year we estimate that 10,278 groups and virtual groups will 
submit data for the MIPS CQM and QCDR collection type and 7,296 groups 
and virtual groups will submit for eCQM collection types. These are 
decreases of 156 and 76 respondents from the currently approved 
estimates of 10,434, and 7,372 for the groups that would submit data 
using MIPS CQM and QCDR, and eCQM collection types, respectively.
    As the data does not exist for APM performance pathway or MIPS 
quality measures for non-ACO APM entities, we assume non-ACO APM 
Entities will participate through traditional MIPS and base our 
estimates on submissions received in the CY 2019 performance period/
2021 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP29JY22.156

    The burden associated with the submission of quality performance 
category data has some limitations. We believe it is difficult to 
quantify the burden accurately because clinicians and groups may have 
different processes for integrating quality data submission into their 
practices' workflows. Moreover, the time needed for a

[[Page 46356]]

clinician to review quality measures and other information, select 
measures applicable to their patients and the services they furnish, 
and incorporate the use of quality measures into the practice workflows 
is expected to vary along with the number of measures that are 
potentially applicable to a given clinician's practice and by the 
collection type. For example, clinicians submitting data via the 
Medicare Part B claims collection type need to integrate the capture of 
quality data codes for each encounter whereas clinicians submitting via 
the eCQM collection types may have quality measures automated as part 
of their EHR implementation.
    We believe the burden associated with submitting quality measures 
data will vary depending on the collection type selected by the 
clinician, group, or third-party. As such, we separately estimated the 
burden for clinicians, groups, and third parties to submit quality 
measures data by the collection type used. For the purposes of our 
burden estimates for the Medicare Part B claims, MIPS CQM and QCDR, and 
eCQM collection types, we also assume that, on average, each clinician 
or group will submit 6 quality measures. Additionally, as finalized in 
the CY 2022 PFS final rule (86 FR 65394 through 65397), group TINs 
could also choose to participate as subgroups for MVP reporting 
beginning with the CY 2023 performance period/2025 MIPS payment year. 
we refer readers to the CY 2022 PFS final rule for additional details 
on MVP quality reporting requirements (86 FR 65411 through 65412).
    In terms of the quality measures available for clinicians and 
groups to report for the CY 2023 performance period/2025 MIPS payment 
year, we are proposing a measure set of 194 quality measures. The new 
MIPS quality measures finalized for inclusion in MIPS for the CY 2023 
performance period/2025 MIPS payment year and future years are found in 
Table Group A of Appendix 1; MIPS quality measures with substantive 
changes can be found in Table Group D of Appendix 1; and MIPS quality 
measures finalized for removal can be found in Table Group C of 
Appendix 1. These measures are stratified by collection type in Table 
107, as well as proposed counts of new, removed, and substantively 
changed measures.
[GRAPHIC] [TIFF OMITTED] TP29JY22.157

    For the CY 2023 performance period/2025 MIPS payment year, we are 
proposing a net reduction of 6 quality measures across all collection 
types compared to the 200 measures finalized for the CY 2022 
performance period/2024 MIPS payment year (86 FR 65542). Specifically, 
as discussed in section IV.A.10.c.(1)(c) of this rule, we are proposing 
to add 9 new MIPS quality measures, remove 15 MIPS quality measures, 
partially remove 2 MIPS quality measures that are proposed for removal 
from traditional MIPS and proposed for retention for use in MVPs, and 
make substantive updates to 75 MIPS quality measures. We do not 
anticipate that our provision to remove these measures will increase or 
decrease the reporting burden on clinicians and groups as respondents 
generally are still required to submit quality data for 6 measures. We 
refer readers to section V.B.9.e.(7) of this proposed rule for the 
proposed change in associated burden related to the provisions 
introducing MVP and subgroup reporting beginning in the CY 2023 
performance period/2025 MIPS payment year.
(3) Quality Payment Program Identity Management Application Process
    This rule is not proposing any new or revised collection of 
information requirements or burden related to the identity management 
application process. We are proposing to adjust the number of 
respondents based on updated data. The proposed requirements and burden 
will be submitted to OMB under control number 0938-1314 (CMS-10621).
    Based on historical trends for the number of eligible clinicians, 
groups, or third parties that register for new accounts, we noticed 
that we inadvertently underestimated our assumptions in the CY 2022 PFS 
final rule (86 FR 65582). In order to accurately capture the 
incremental change in the number of respondents in previous years, we 
are using a rolling average of the number of respondents that would 
register for obtaining new accounts. Therefore, we are proposing to 
adjust our estimates from 3,741 to 6,500 for the number of respondents 
that would submit their information to obtain new user accounts in the 
HARP system for the CY 2023 performance period/2025 MIPS payment year. 
This would result in an increase of 2,759 respondents. We are not 
proposing to adjust the currently approved estimated time of 1 hour per 
respondent to obtain a new account. As shown in Table 108, it would 
take 1 hour at $98.28/hr for a computer systems analyst (or their 
equivalent) to obtain an account for the

[[Page 46357]]

HARP system. In aggregate we estimate an annual burden of 6,500 hours 
(6,500 registrations x 1 hr/registration) at a cost of $638,820 (6,500 
hrs x $98.28/hr).
[GRAPHIC] [TIFF OMITTED] TP29JY22.158

    As shown in Table 109, using the unchanged currently approved hours 
per respondent burden estimate, the proposed increase of 2,759 
respondents from 3,741 to 6,500 for the CY 2023 performance period/2025 
MIPS payment year would result in an estimated increase of 2,759 hours 
(+2.759 respondents x 1hr/respondent) at a cost of $271,155 (2,759 hrs 
x 98.28/hr).
[GRAPHIC] [TIFF OMITTED] TP29JY22.159

(4) Quality Data Submission by Clinicians: Medicare Part B Claims-Based 
Collection Type
    This rule is not proposing any new or revised collection of 
information requirements related to the submission of Medicare Part B 
claims data for the quality performance category. However, we are 
proposing to adjust our currently approved burden estimates based on 
our changes in assumptions for calculating the data. We refer readers 
to Table 118 of this section for the proposed change in associated 
burden related to the submission of Medicare Part B claims data for the 
MVP quality performance category in the CY 2023 performance period/2025 
MIPS payment year.
    The following proposed burden will be submitted to OMB for approval 
under control number 0938-1314 (CMS-10621).
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77501 through 77504 and 82 FR 53912), the CY 2019, 
CY 2020, CY 2021 and CY 2022 PFS final rules (83 FR 60004 through 
60005, 84 FR 63124 through 63126, 85 FR 84975 through 84976 and 86 FR 
65582 through 65584) for our previously finalized requirements and 
burden for quality data submission via the Medicare Part B claims 
collection type.
    As noted in Table 105, based on data from the CY 2019 performance 
period/2021 MIPS payment year, we estimate that 27,006 individual 
clinicians will collect and submit quality data via the Medicare Part B 
claims collection type. In this rule, we are proposing to adjust the 
number of Medicare Part B claims respondents from the currently 
approved estimate of 25,427 to 27,006 (an increase of 1,579).
    As shown in Table 105, consistent with our currently approved per 
response time figures, we estimate that the burden of quality data 
submission using Medicare Part B claims will range from 0.15 hours (9 
minutes) for a computer systems analyst at a cost of $14.74 (0.15 hr x 
$98.28/hr) to 7.2 hours for a computer systems analyst at a cost of 
$707.61 (7.2 hr x $98.28/hr). We assume that the burden will involve 
becoming familiar with MIPS quality measure specifications.
    Consistent with our currently approved per response time estimates, 
we believe that the start-up cost for a clinician's practice to review 
measure specifications is 7 hours, consisting of 3 hours at $115.22/hr 
for a medical and health services manager, 1 hour at $259.98/hr for a 
physician, 1 hour at $49.86/hr for an LPN, 1 hour at $98.28/hr for a 
computer systems analyst, and 1 hour at $41.10/hr for a billing and 
posting clerk. We are not proposing to revise our currently approved 
per response time estimates.
    As shown in Table 110, considering both data submission and start-
up requirements for our adjusted number of clinicians, the estimated 
time (per clinician) ranges from a minimum of 7.15 hours (0.15 hr + 7 
hr) to a

[[Page 46358]]

maximum of 14.2 hours (7.2 hr + 7 hr). In aggregate, the total annual 
time for the CY 2023 performance period/2025 MIPS payment year ranges 
from 193,093 hours (7.15 hr x 27,006 clinicians) to 383,485 hours (14.2 
hr x 27,006 clinicians). The estimated annual cost (per clinician) 
ranges from $809.62 [(0.15 hr x $98.28/hr) + (3 hr x $115.22/hr) + (1 
hr x $98.28/hr) + (1 hr x $49.86/hr) + (1 hr x $41.10/hr) + (1 hr x 
$259.98/hr)] to a maximum of $1,502.49 [(7.2 hr x $98.28/hr) + (3 hr x 
$115.22/hr) + (1 hr x $98.28/hr) + (1 hr x $49.86/hr) + (1 hr x $41.10/
hr) + (1 hr x $259.98/hr)]. The total annual cost for the CY 2023 
performance period/2025 MIPS payment year ranges from a minimum of 
$21,864,598 (27,006 clinicians x $810) to a maximum of $40,576,245 
(27,006 clinicians x $1,502.49).
[GRAPHIC] [TIFF OMITTED] TP29JY22.160

    As shown in Table 111, using our unchanged currently approved 
burden per response estimates, the increase in number of respondents 
from 25,427 to 27,006 results in a total maximum adjustment of 22,422 
hours (+1,579 respondents x 14.2 hr/respondent) at a cost of $2,372,432 
(+1,579 respondents x $1,502.49/respondent). For purposes of 
calculating total burden associated with this proposed rule as shown in 
Tables 132, 133, and 135, only the maximum burden is used.

[[Page 46359]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.161

(5) Quality Data Submission by Individuals and Groups Using MIPS CQM 
and QCDR Collection Types
    The following proposed requirements and burden will be submitted to 
OMB for approval under control number 0938-1314 (CMS-10621).
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77504 through 77505 and 82 FR 53912 through 53914), 
the CY 2019, CY 2020, CY 2021 and CY 2022 PFS final rules (83 FR 60005 
through 60006, 84 FR 63127 through 63128, 85 FR 84977 through 84979, 
and 86 FR 65584 through 65586) for our previously finalized 
requirements and burden for quality data submission via the MIPS CQM 
and QCDR collection types. We refer readers to Table 118 for the 
estimated change in associated burden for quality data submission using 
MIPS CQM and QCDR collection types related to MVP and subgroup 
reporting in the CY 2023 performance period/2025 MIPS payment year.
    As noted in Tables 105 and 106, based on data from the CY 2019 
performance period/2021 MIPS payment year, for the CY 2023 performance 
period/2025 MIPS payment year, we assume that 47,584 clinicians (37,306 
individuals and 10,278 groups and virtual groups) will submit quality 
data as individuals or groups using MIPS CQM or QCDR collection types. 
This is an increase of 850 individuals and a decrease of 156 groups 
from the estimates of 36,456 individuals and the 10,434 groups provided 
in the CY 2022 PFS final rule (86 FR 65585). Given that the number of 
measures required for clinicians and groups is the same, we expect the 
burden to be the same for each respondent collecting data via MIPS CQM 
or QCDR, whether the clinician is participating in MIPS as an 
individual or group.
    Under the MIPS CQM and QCDR collection types, the individual 
clinician or group may either submit the quality measures data directly 
to us, log in and upload a file, or utilize a third-party intermediary 
to submit the data to us on the clinician's or group's behalf. We 
estimate that the burden associated with the QCDR collection type is 
similar to the burden associated with the MIPS CQM collection type; 
therefore, we discuss the burden for both together below. For MIPS CQM 
and QCDR collection types, we estimate an additional time for 
respondents (individual clinicians and groups) to become familiar with 
MIPS quality measure specifications and, in some cases, specialty 
measure sets and QCDR measures. Therefore, we believe that the burden 
for an individual clinician or group to review measure specifications 
and submit quality data is total of 9 hours at a cost of $982.65 per 
response. This consists of 3 hours at $98.28/hr for a computer systems 
analyst (or their equivalent) to submit quality data along with 2 hours 
at $115.22/hr for a medical and health services manager, 1 hour at 
$98.28/hr for a computer systems analyst, 1 hour at $49.86/hr for a 
LPN, 1 hour at $41.10/hr for a billing clerk, and 1 hour at $259.98/hr 
for a physician to review measure specifications. Additionally, 
clinicians and groups who do not submit data directly will need to 
authorize or instruct the qualified registry or QCDR to submit quality 
measures' results and numerator and denominator data on quality 
measures to us on their behalf. We estimate that the time and effort 
associated with authorizing or instructing the quality registry or QCDR 
to submit this data will be approximately 5 minutes (0.083 hours) at 
$98.28/hr for a computer systems analyst at a cost of $8.15 (0.083 hr x 
$98.28/hr). Overall, we estimate 9.083 hrs/response (3 hrs + 2 hrs + 1 
hr + 1 hr + 1 hr + 1 hr + 0.083 hrs) at a cost of $982.65/response [(3 
hrs x $98.28/hr) + (2 hrs x $115.22/hr) + (1 hr x $259.98/hr) + (1 hr x 
$98.28/hr) + (1 hr x $49.86/hr) + (1 hr x $41.10/hr) + (0.083 hrs x 
$98.28/hr)].
    As shown in Table 112, For the CY 2023 performance period/2025 MIPS 
payment year, in aggregate, we estimate a burden of 432,205 hours 
[9.083 hrs/response x (37,306 clinicians submitting as individuals + 
10,278 groups submitting via QCDR or MIPS CQM on behalf of individual 
clinicians, a total of 47,584 responses)] at a cost of $46,758,418 
(47,584 responses x $982.65/response).

[[Page 46360]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.162

    As shown in Table 113, using the unchanged currently approved hours 
per respondent burden estimate, the increase of 694 respondents from 
46,890 to 47,584 for the CY 2023 performance period/2025 MIPS payment 
year results in an increase of 6,303 hours (+694 respondents x 9.083 
hr/respondent) and $681,959 (694 respondents x $982.65/respondent).
[GRAPHIC] [TIFF OMITTED] TP29JY22.163


[[Page 46361]]


(6) Quality Data Submission by Clinicians and Groups: eCQM Collection 
Type
    The following proposed requirements and burden will be submitted to 
OMB for approval under control number 0938-1314 (CMS-10621).
    We refer readers to the CY 2017 Quality Payment Program final rule 
(81 FR 77505 through 77506), CY 2018 Quality Payment Program final rule 
(82 FR 53914 through 53915), CY 2019 PFS final rule (83 FR 60006 
through 60007), CY 2020 PFS final rule (84 FR 63128 through 63130) and 
the CY 2021 PFS final rule (85 FR 84979 through 84980) for our 
previously finalized requirements and burden for quality data 
submission via the eCQM collection types. For the change in associated 
burden for quality data submission related to the provisions 
introducing MVP and subgroup reporting beginning in the CY 2023 
performance period/2025 MIPS payment year, we refer readers to Table 
118 of this section.
    Based on CY 2019 performance period/2021 MIPS payment year data, 
for the CY 2023 performance period/2025 MIPS payment year, we assume 
that 45,760 clinicians (38,464 individual clinicians and 7,296 groups 
and virtual groups) would submit quality data using the eCQM collection 
type. This is an increase of 2,063 individuals and a decrease of 76 
groups from the estimates of 36,401 individuals and 7,372 groups 
provided in the CY 2021 PFS final rule (85 FR 84979). We assume the 
burden to be the same for each respondent using the eCQM collection 
type, whether the clinician is participating in MIPS as an individual 
or group.
    Under the eCQM collection type, the individual clinician or group 
may either submit the quality measures data directly to us from their 
eCQM, log in and upload a file, or utilize a third-party intermediary 
to derive data from their CEHRT and submit it to us on the clinician's 
or group's behalf.
    To prepare for the eCQM collection type, the clinician or group 
must review the quality measures on which we will be accepting MIPS 
data extracted from eCQMs, select the appropriate quality measures, 
extract the necessary clinical data from their CEHRT, and submit the 
necessary data to a QCDR/qualified registry or use a health IT vendor 
to submit the data on behalf of the clinician or group. We assume the 
burden for collecting quality measures data via eCQM is similar for 
clinicians and groups who submit their data directly to us from their 
CEHRT and clinicians and groups who use a health IT vendor to submit 
the data on their behalf. This includes extracting the necessary 
clinical data from their CEHRT and submitting the necessary data to a 
QCDR/qualified registry.
    We estimate that it will take no more than 2 hours at $98.28/hr for 
a computer systems analyst to submit the actual data file. The burden 
will also involve becoming familiar with MIPS quality measure 
specifications. In this regard, we estimate it will take 6 hours for a 
clinician or group to review measure specifications. Of that time, we 
estimate 2 hours at $115.22/hr for a medical and health services 
manager, 1 hour at $259.98/hr for a physician, 1 hour at $98.28/hr for 
a computer systems analyst, 1 hour at $49.86/hr for an LPN, and 1 hour 
at $41.10/hr for a billing clerk. Overall, we estimate a cost of 
$876.22/response [(2 hr x $98.28/hr) + (2 hr x $115.22/hr) + (1 hr x 
$259.98/hr) + (1 hr x $98.28/hr) + (1 hr x $49.86/hr) + (1 hr x $41.10/
hr)].
    As shown in Table 114, For the CY 2023 performance period/2025 MIPS 
payment year, in aggregate, we estimate a burden of 366,080 hours [8 hr 
x 45,760 (38,464 clinicians + 7,296 groups and virtual groups)] at a 
cost of $40,095,827 (45,760 responses x $876.22/response).

[[Page 46362]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.164

    As shown in Table 115, using the unchanged currently approved hours 
per respondent burden estimate, the proposed increase of 1,987 
respondents from 43,773 to 45,760 for the CY 2023 performance period/
2025 MIPS payment year results in an increase of 15,896 hours (+1,987 
respondents x 8 hr/respondent) at a cost of $1,741,049 (+1,987 
respondents x $876.22/respondent).
[GRAPHIC] [TIFF OMITTED] TP29JY22.165

(7) ICRs Regarding Burden for MVP Reporting
    The proposed requirements and burden associated with the 
implementation of MVPs and subgroups will be submitted to OMB for 
approval under control number 0938-1314 (CMS-10621).
(a) Burden for MVP Reporting Requirements
    We refer readers to the CY 2022 PFS final rule (86 FR 65588 through 
65592) for our previously finalized burden and requirements for 
submission of data for the MVP quality performance category. In the CY 
2022 PFS final rule, we finalized an option for clinicians choosing to 
report MVPs to participate

[[Page 46363]]

through subgroups beginning with the CY 2023 performance period/2025 
MIPS payment year (86 FR 65392 through 65394). We refer readers to the 
CY 2022 PFS final rule for our previously finalized assumptions on the 
estimated number of clinicians participating as subgroups in the CY 
2023 performance period/2025 MIPS payment year (86 FR 65589).
    For the ICRs related to MVP participants, we continue to use the 
MIPS submission data from the CY 2019 performance period/2021 MIPS 
payment year. In Appendix 3: MVP Inventory of this rule, we propose to 
revise 6 of the 7 MVPs finalized in Appendix 3: MVP Inventory of the CY 
2022 PFS final rule (86 FR 65998 through 66031). Specifically, these 
revisions are based on the proposed removal of certain improvement 
activities in section IV.A.10.c.(3)(b)(ii) of this rule, the addition 
of other relevant existing quality measures for MVP participants to 
select from and the proposed addition of the ONC direct review 
attestation requirement in the Promoting Interoperability performance 
category to all previously finalized MVPs. Additionally, we propose 5 
new MVPs for the CY 2023 performance period/2025 MIPS payment year. If 
the proposed 5 new MVPs are finalized, MVP participants would have a 
total of 12 MVPs available for the CY 2023 performance period/2025 MIPS 
payment year. Due to the availability of new MVPs and addition of 
relevant quality measures to existing MVPs, we expect an increase in 
the number of MVP participants. Therefore, we estimate that 12 percent 
of the clinicians would participate in MVP reporting in the CY 2023 
performance period/2025 MIPS payment year. This is an increase of 2 
percentage points from the currently approved estimate of 10 percent in 
the CY 2022 PFS final rule (86 FR 65588 through 65589).
    We assume that the changes to the existing MVPs and the addition of 
new MVPs would not impact the currently approved number of subgroups. 
We expect that clinician participation in subgroups will be relatively 
low for the CY 2023 performance period/2025 MIPS payment year due the 
voluntary subgroup reporting option and the additional burden involved 
for groups to organize clinicians into subgroups. Therefore, we are not 
proposing any adjustments to our previously finalized assumption in the 
CY 2022 PFS final rule (86 FR 65589) of 20 subgroups that would 
participate in MVP reporting.
    In section IV.A.8.e.(4)(b) of this rule, we propose to modify Sec.  
414.1365(d)(3)(i)(A)(1) to read that subgroups are scored on each 
selected population health measure based on their affiliated group 
score, if available, and that if the subgroup's affiliated group score 
is not available, each such measure is excluded from the subgroup's 
total measure achievement points and total available measure 
achievement points. We also propose to add Sec.  
414.1365(d)(3)(i)(B)(1) so that subgroups are scored on each selected 
outcomes-based administrative claims measure based on their affiliated 
group score, if available, and that if the subgroup's affiliated group 
score is not available, each such measure will receive zero measure 
achievement points. We assume that these proposals are related to the 
subgroup scoring of administrative claim measures and do not impact 
clinician participation in subgroups. Furthermore, clinicians do not 
submit data for the administrative claims' measures and hence, there is 
no associated burden relevant to these measures for clinicians 
participating as subgroups. Therefore, we are not proposing any 
adjustments to our previously finalized assumptions for subgroup 
reporting burden of the MVP quality performance category in the CY 2022 
PFS final rule (86 FR 65592).
    Additionally, in section IV.A.8.e.(4)(c) of this rule, we propose 
at Sec.  414.1318(b)(1) that we will not assign a score for a subgroup 
that registers and does not submit data for the applicable performance 
period. We also propose to make conforming changes at Sec.  414.1318(b) 
to state that, except as provided under Sec.  414.1317(b) and paragraph 
(b)(1) of this section, each MIPS eligible clinician in the subgroup 
receives a final score based on the subgroup's combined performance 
assessment. We assume that subgroups that register for MVP reporting 
intend to submit data for the measures and activities in an MVP. These 
proposed policies are meant to clarify the scoring for subgroups in 
instances when a subgroup does not submit data as originally intended 
when registering as a subgroup. Therefore, we are not proposing any 
adjustments to our previously finalized assumptions for subgroup 
reporting burden of the MVP quality performance category in the CY 2022 
PFS final rule (86 FR 65592).
(i) Burden for MVP Registration: Individuals, Groups and APM Entities
    We refer readers to the CY 2022 PFS final rule (86 FR 65589 through 
65590) for our previously finalized burden relevant to MVP registration 
for clinicians participating as an individual and/or group for MVP 
reporting.
    As shown in Table 116, consistent with our previously finalized 
assumptions in the CY 2022 PFS final rule (86 FR 65590), we estimate 
that the registration process for clinicians choosing to submit MIPS 
data for the measures and the activities in an MVP would require 0.25 
hours of a computer systems analyst's time for the CY 2023 performance 
period/2025 MIPS payment year. We assume that the staff involved in the 
MVP registration process will mainly be computer systems analysts or 
their equivalent, who have an average labor cost of $98.28/hour.
    As discussed above, based on data from the CY 2019 performance 
period/2021 MIPS payment year, the proposed changes to existing MVPs 
and the addition of new MVPs, we estimate that approximately 12 percent 
of the clinicians that currently participate in MIPS would submit data 
for the measures and activities in an MVP. For the CY 2023 performance 
period/2025 MIPS payment year, we assume that we would receive a total 
of 16,432 submissions for the measures and activities included in MVPs. 
This total includes our estimate of 20 subgroup reporters that would 
also be reporting MVPs in addition to MVP reporters who currently 
participate in traditional MIPS. Therefore, we assume that the total 
number of individual clinicians, groups, subgroups and APM Entities to 
complete the MVP registration process is 16,432. As shown in Table 116, 
we estimate that it would take 4,108 hours (16,432 respondents x 0.25 
hr/respondent) at a cost of $403,734 (4,108 hrs x 98.28/hr) for 
individual clinicians, groups and APM Entities to register for MVPs in 
the CY 2023 performance period/2025 MIPS payment year.

[[Page 46364]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.166

    As shown in Table 117, for the CY 2023 performance period/2025 MIPS 
payment year, the proposed adjustment in the number of respondents 
expected to register for MVP reporting from 12,917 to 16,432 results in 
an increase of 3,515 respondents. In aggregate, when combined with the 
unchanged hourly burden per respondent, this would result in an 
increase of 879 hours (+3,515 respondents x 0.25 hr/respondent) at a 
cost of $86,388 (879 hrs x 98.28/hr).
[GRAPHIC] [TIFF OMITTED] TP29JY22.167

(ii) Burden for Subgroup Registration
    We previously established at Sec.  414.1365(b) a registration 
process for clinicians who choose to report MVPs through a subgroup. We 
refer readers to the CY 2022 PFS final rule for our previously 
finalized burden relevant to subgroup registration for clinicians 
participating in MVP reporting (86 FR 65590).
    In section IV.A.8.e.(2) of this rule, we propose to modify the 
definition of a single specialty group at Sec.  414.1305 to state that 
single specialty group means a group that consists of one specialty 
type as determined by CMS using Medicare Part B claims. We also propose 
to modify the definition of a multispecialty group at Sec.  414.1305 to 
state that multispecialty group means a group that consists of two or 
more specialty types as determined by CMS using Medicare Part B claims. 
We believe that these definitions would help groups understand their 
specialty determination. However, we are not proposing any adjustments 
to the subgroups burden associated with these proposals because we 
believe that these definitions would not impact the utilization of 
subgroups by groups and hence, would not change the way groups choose 
to organize clinicians in subgroups.
    In section IV.A.8.e.(3)(b) of this rule, we propose that as part of 
the subgroup registration process, in addition to the previously 
established registration requirements, group TINs must provide a 
description of each subgroup that is registered. Under this proposed 
policy, we would identify some key scenarios for subgroups to select 
from that we expect might reflect a typical subgroup, but also wish to 
offer an opportunity for group TINs to describe how they constructed 
their subgroups by providing a narrative in a text--only field, if the 
options we provide do not correctly describe the subgroup. We assume 
that the burden associated with choosing a key scenario would minimize 
the time required for subgroups to provide a narrative description. 
Additionally, we anticipate the narratives to be short descriptions of 
the nature of a group practice and appropriately reflect the subgroup 
composition. Therefore, we are not proposing any adjustments in the 
burden for subgroup registration because we assume that the narrative 
requirement would not add significant burden to the currently approved 
half an hour for subgroup registration in the CY 2022 PFS final rule 
(86 FR 65590). We refer readers to section IV.A.8.e.(3)(b) of this rule 
for examples of the subgroup narrative description.
    In section IV.A.8.f.(3)(d) of this rule, we are proposing to add at 
Sec.  414.1318(a)(4) that CMS will apply the low-volume threshold 
criteria for a subgroup as described under Sec.  414.1318(a)(1) using 
information from the initial 12-month segment of the applicable MIPS 
determination period. Additionally, we propose to make conforming 
changes at Sec.  414.1318(a)(1) to state that, except as provided under 
paragraph (a)(2) of this section and subject to (a)(4) of this section, 
for a MIPS payment year, determinations of meeting the low-volume 
threshold criteria and special status for a subgroup is determined at 
the group level in accordance with Sec. Sec.  414.1305 and

[[Page 46365]]

414.1310. We assume that these proposals would provide clarification 
for groups to identify their eligibility to form subgroups and also 
ensure that an individual eligible clinician or group will continue to 
be identified as such for the applicable MIPS payment year regardless 
of the results of the second segment of the MIPS determination period. 
This proposal does not change the application of low-volume threshold 
and special status as described under Sec.  414.1318(a)(1) for 
clinicians in subgroups. Therefore, we are not proposing any 
adjustments to the currently approved burden for subgroup registration.
    In section IV.A.8.e.(3)(c) of this rule, we propose at Sec.  
414.1318(a)(3) that an individual eligible clinician, as represented by 
a TIN-NPI combination may register for no more than one subgroup within 
a group's TIN. We assume that the proposal would limit the number of 
subgroups that a clinician could participate under a TIN and would not 
result in additional burden for clinicians to participate as subgroups. 
Therefore, we are not proposing any adjustments to the currently 
approved burden for subgroup registration.
    Therefore, we are not prosing any changes to our previously 
finalized assumptions for subgroup registration burden. The burden 
relevant to subgroup registration requirement is currently approved by 
OMB under control number 0938-1314 (CMS-10621). Consequently, we are 
not proposing any changes to the ICR for subgroup registration under 
that control number. Similar to our assumptions in the CY 2022 PFS 
final rule, we continue to capture the burden associated with subgroup 
quality reporting in the ICR for MVP quality performance category 
submission. The burden associated with subgroup submissions for 
Promoting Interoperability and improvement activities is included in 
the relevant ICRs in sections V.B.9.g.(3) and V.B.9.i. of this rule.
(iii) Burden for MVP Quality Performance Category Submission
    In the CY 2022 PFS final rule (86 FR 65411 through 65415), we 
previously finalized the reporting requirements for the MVP quality 
performance category at Sec.  414.1365(c)(1)(i). As discussed in 
section IV.A.8.b. of this rule, we are not proposing new requirements 
to submit data for the quality performance category of MVPs. Therefore, 
we are not proposing any changes to our currently approved hourly 
burden per respondent estimates for submitting the MVP quality 
performance category data.
    As described above in this section of the proposed rule, we 
estimate that 12 percent of the clinicians who participated in MIPS for 
the CY 2019 performance period/2021 MIPS payment year would submit data 
for the quality performance category of MVP in the CY 2023 performance 
period/2025 MIPS payment year. We also estimate that there would be 20 
subgroups reporters in the CY 2023 performance period/2025 MIPS payment 
year. As shown in Table 118, we estimate that 6,240 clinicians and 10 
subgroups would submit data using eCQMs collection type; 6,849 
clinicians and 10 subgroups would submit data using MIPS CQM and QCDR 
collection type; and 3,683 clinicians and 0 subgroups would submit data 
for the MVP quality performance category using the Medicare Part B 
claims collection type. For the CY 2023 performance period/2025 MIPS 
payment year, using our unchanged hourly burden per respondent 
estimates for the clinicians and subgroups submitting data for the MVP 
quality performance category, we estimate a burden of 33,125 hours [5.3 
hr x 6,250 (6,240 +10) respondents] at a cost of $3,627,750 (6,250 
respondents x 580.44/respondent) for the eCQM collection type, 38,799 
hours [5.97 hr x 6,499 (6,489 +10)] at a cost of $4,200,239 (6,499 
respondents x 646.29/respondent) for the MIPS CQM and QCDR collection 
type, and 34,768 hours (9.44 hr x 3,683 clinicians) at a cost of 
$3,678,102 (3,863 respondents x 998.67/respondent) for the Medicare 
Part B claims collection type.
BILLING CODE 4120-01-P

[[Page 46366]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.168

    Table 119 illustrates the proposed changes in estimated burden for 
clinicians who would submit the MVP quality performance category 
utilizing the eCQM, MIPS CQM and QCDR, and claims collection types in 
the CY 2023 performance period/2025 MIPS payment year. In aggregate, 
when combined with the unchanged hourly burden per respondent, the 
increase in 3,515 respondents that would submit data for the MVP 
quality performance category would result in an increase of 7,303 hours 
at a cost of $799,845 for the eCQM collection type, an increase of 
7,636 hours at a cost of $826,605 for the CQM and QCDR collection type, 
and an increase of 8,080 hours at a cost of $856,859 for the claims 
collection type.

[[Page 46367]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.169

BILLING CODE 4120-01-C
(8) Beneficiary Responses to CAHPS for MIPS Survey
    This rule is not proposing any new or revised collection of 
information requirements or burden related to the CAHPS for MIPS 
survey. The CAHPS for MIPS survey requirements and burden are currently 
approved by OMB under control number 0938-1222 (CMS-10450). 
Consequently, we are not proposing any changes to the CAHPS for MIPS 
Survey process under that control number.
(9) Group Registration for CAHPS for MIPS Survey
    This rule is not proposing any new or revised collection of 
information requirements or burden related to the group registration 
for the CAHPS for MIPS Survey. The CAHPS for MIPS survey requirements 
and burden are currently approved by OMB under control number 0938-1222 
(CMS-10450). Consequently, we are not proposing any changes to the 
CAHPS for MIPS Survey registration process under that control number.
f. ICRs Regarding the Call for MIPS Quality Measures
    This rule is not proposing any new or revised collection of 
information requirements or burden related to the call for MIPS quality 
measures. The requirements and the associated burden are currently 
approved under OMB control number 0938-1314 (CMS-10621). Consequently, 
we are not proposing any changes to the call for MIPS quality measures 
process under that control number.
g. ICRs Regarding Promoting Interoperability Data (Sec. Sec.  414.1375 
and 414.1380)
(1) Background
    For the CY 2023 performance period/2025 MIPS payment year, 
clinicians and groups can submit Promoting Interoperability data 
through direct, log in and upload, or log in and attest submission 
types. With the exception of submitters who elect to use the log in and 
attest submission type for the Promoting Interoperability performance 
category, which is not available for the quality performance category, 
we anticipate that individuals and groups will use the same data 
submission type for both of these performance categories and that the 
clinicians, practice managers, and computer systems analysts involved 
in supporting the quality data submission will also support the 
Promoting Interoperability data submission process. The following 
burden estimates show only incremental hours required above and beyond 
the time already accounted for in the quality data submission process. 
Although this analysis assesses burden by performance category and 
submission type, we emphasize that MIPS is a consolidated program and 
submission analysis, and decisions are expected to be made for the 
program as a whole.
(2) Reweighting Applications for Promoting Interoperability and Other 
Performance Categories
    The proposed requirements and burden associated with this rule's 
data submission will be submitted to OMB for approval under control 
number 0938-1314 (CMS-10621).
    We refer readers to the CY 2018 Quality Payment Program final rule 
(82 FR 53918 through 53919), and the CY 2019, CY 2020, CY 2021 and CY 
2022 PFS final rules (83 FR 60011 through 60012, 84 FR 63134 through 
63135, 85 FR 84984 through 84985, and 86 FR 65596 through 65598) for 
our previously finalized requirements and burden for reweighting 
applications for Promoting Interoperability and other performance 
categories.
    As established in the CY 2017 and CY 2018 Quality Payment Program 
final rules, MIPS eligible clinicians who meet the criteria for a 
significant hardship or other type of exception may submit an 
application requesting a zero percent weighting for the Promoting 
Interoperability, quality, cost, and/or improvement activities 
performance categories under specific circumstances (81 FR 77240 
through 77243, 82 FR 53680 through 53686, and 82 FR 53783 through 
53785). Respondents who apply for a reweighting of the quality, cost, 
and/or improvement activities performance categories have the option of 
applying for reweighting of the Promoting Interoperability performance 
category on the same online form. We assume that respondents applying 
for a reweighting of the Promoting Interoperability performance 
category due to extreme and uncontrollable circumstances will also 
request a reweighting of at least one of the other performance 
categories simultaneously and not submit multiple reweighting 
applications.
    In section IV.A.10.c.(4)(m)(i) of this rule, we are proposing not 
to continue the reweighting policy at Sec.  414.1380(c)(2)(i)(A)(4)(ii) 
to assign a weight of zero to the Promoting Interoperability 
performance category in the MIPS final score for NPs, PAs, CRNAs, and 
CNSs for the CY 2023 performance period/2025 MIPS payment year. If we 
adopt this proposal as final policy, some of these types of clinicians 
who are automatically assigned a weight of zero percent for the 
Promoting Interoperability performance category under our current 
policy may choose to submit an application for reweighting the 
Promoting Interoperability performance category to zero percent due to 
a significant hardship or as a result of a decertification of an EHR. 
Based on historically low participation trends for NPs, PAs, CRNAs, and 
CNSs that

[[Page 46368]]

submitted data individually for the Promoting Interoperability 
performance category for prior performance periods, we are unable to 
estimate how many of these clinicians would be applying for reweighting 
the Promoting Interoperability performance category to zero percent. 
Therefore, we are not proposing any adjustments to the number of 
respondents submitting reweighting applications.
    In section IV.A.10.c.(4)(m)(ii) of this rule, we are proposing to 
continue the existing policy of reweighting the Promoting 
Interoperability performance category for physical therapists, 
occupational therapists, qualified speech-language pathologist, 
qualified audiologists, clinical psychologists, and registered 
dieticians or nutrition professionals only for the CY 2023 performance 
period/2025 MIPS payment year and to revise Sec.  
414.1380(c)(2)(i)(A)(4)(i) to reflect the proposal. We are also 
proposing to continue the existing policy of reweighting the Promoting 
Interoperability performance category for clinical social workers for 
the CY 2023 performance period/2025 MIPS payment year and to revise 
Sec.  414.1380(c)(2)(i)(A)(4)(iii) to reflect the proposal. We are not 
proposing any adjustments to the number of respondents submitting 
reweighting applications due to these proposals because it does not 
change the existing reweighting policy for these clinician types 
participating in MIPS in the CY 2023 performance period/2025 MIPS 
payment year.
    Table 120 summarizes the burden for clinicians to apply for 
reweighting of the Promoting Interoperability performance category to 
zero percent due to a significant hardship or as a result of a 
decertification of an EHR. Based on the number of reweighting 
applications received by March 31, 2022 for the CY 2021 performance 
period/2023 MIPS payment year, we estimate that we would receive a 
total of 31,135 reweighting applications for the CY 2023 performance 
period/2025 MIPS payment year. Out of the 31,135, we estimate that 
13,480 respondents (eligible clinicians or groups) will submit a 
request to reweight the Promoting Interoperability performance category 
to zero percent due to extreme and uncontrollable circumstances, 
insufficient internet connectivity, lack of control over the 
availability of CEHRT, or as a result of a decertification of an EHR. 
We estimate that the remaining 17,655 respondents will submit a request 
to reweight one or more of the quality, cost, Promoting 
Interoperability, or improvement activities performance categories due 
to an extreme or uncontrollable circumstance. As discussed in section 
V.B.9.a.(4) of this rule, we assume ACO APM Entities will submit data 
through the APP and non-ACO APM Entities will participate through 
traditional MIPS, thereby submitting as an individual, group, or at the 
APM Entity level. Based on the actual number of APM Entities that 
submitted reweighting applications for the CY 2021 performance period/
2023 MIPS payment year, we estimate that 20 APM Entities will submit an 
extreme and uncontrollable circumstances exception application for the 
CY 2023 performance period/2024 MIPS payment year. This is a decrease 
of 10 from the currently approved estimate of 30 APM entities that 
would submit a reweighting application. Combined with our 
aforementioned estimate of 31,135 eligible clinicians and groups, the 
total estimated number of respondents expected to submit applications 
for reweighting of the Promoting Interoperability and other performance 
categories for the CY 2023 performance period/2025 MIPS payment year is 
31,155. This proposed adjustment results in a decrease of 11,672 
respondents compared to our currently approved estimate of 42,827 
respondents (86 FR 65597). This decrease is based on the actual number 
of reweighting applications submitted for the CY 2021 performance 
period/2023 MIPS payment year. Similar to the data used to estimate the 
number of respondents in the CY 2021 PFS final rule, our respondent 
estimate includes a significant number of applications submitted as a 
result of a data issue CMS was made aware of and is specific to a 
single third-party intermediary. While we do not anticipate similar 
data issues to occur in each performance period, we do believe future 
similar incidents may occur and are electing to use this data without 
adjustment to reflect this belief. We want to note that our respondent 
estimate also includes the reweighting applications submitted during 
the extended period ending March 31, 2022, due to the PHE for COVID-19.
    Consistent with our assumptions in the CY 2022 PFS final rule (86 
FR 65596 through 65598), we continue to estimate it will take 0.25 
hours for a computer system analyst to complete and submit the 
application. As shown in Table 120, we estimate an annual burden of 
7,789 hours (31,155 applications x 0.25 hr/application) and $765,503 
(7,789 hours x $98.28/hr).
[GRAPHIC] [TIFF OMITTED] TP29JY22.170

    The proposed adjustment in the estimated number of respondents, 
from 42,827 to 31,155 respondents, results in a decrease of 11,672 
respondents. In aggregate, using the unchanged currently approved 
hourly burden per

[[Page 46369]]

response estimate, as shown in Table 121, the decrease in 11,672 
respondents would result in a decrease of 2,918 hours (-11,672 
respondents x 0.25 hr/respondent) at a cost of $286,781 (-2,918 hrs x 
$98.28/hr) for the CY 2023 performance period/2025 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP29JY22.171

(3) Submitting Promoting Interoperability Data
    The proposed requirements and burden associated with this rule's 
data submission will be submitted to OMB for approval under control 
number 0938-1314 (CMS-10621).
    We refer readers to the CY 2017 and CY 2018 Quality Payment Program 
final rules (81 FR 77509 through 77511, 82 FR 53919 through 53920), and 
the CY 2019, CY 2020, CY 2021 and CY 2022 PFS final rules (83 FR 60013 
through 60014, 84 FR 63135 through 63137, 85 FR 84985 through 84987, 86 
FR 65598 through 65600) for our previously finalized requirements and 
burden for submission of data for the Promoting Interoperability 
performance category.
    In section IV.A.10.c.(4)(d)(i)(D)(ab) of this proposed rule, we are 
proposing to require MIPS eligible clinicians to report the Query of 
PDMP measure (which requires reporting a ``yes/no'' response) for the 
Promoting Interoperability performance category. If this proposal is 
finalized, we are proposing two exclusions beginning with the 
performance period in CY 2023: (1) Any MIPS eligible clinician who is 
unable to electronically prescribe Schedule II opioids and Schedule III 
and IV drugs in accordance with applicable law during the performance 
period, and. (2) Any MIPS eligible clinician who writes fewer than 100 
permissible prescriptions during the performance period. Due to lack of 
sufficient data regarding the number of clinicians who voluntarily 
submitted data for optional measures in the Promoting Interoperability 
performance category, we have consistently been unable to estimate the 
associated burden for the reporting of such measures. Therefore, we are 
not proposing to adjust our currently approved time required for 
clinicians to submit data for the Promoting Interoperability 
performance category because we are unable to account for any change in 
burden due to the proposed change to require the currently optional 
Query of PDMP measure.
    In section IV.A.10.c.(4)(e) of this rule, we are proposing to add 
an additional measure through which a MIPS eligible clinician could 
earn credit for the Health Information Exchange Objective by connecting 
to an entity that connects to a QHIN or connecting directly to a QHIN. 
Specifically, we are proposing to add the following new measure to the 
Health Information Exchange Objective beginning with the performance 
period in CY 2023: Enabling Exchange Under TEFCA measure. We propose 
MIPS eligible clinicians would have three reporting options for the 
Health Information Exchange Objective: (1) report on both the Support 
Electronic Referral Loops by Sending Health Information measure (or the 
exclusion, if applicable) and the Support Electronic Referral Loops by 
Receiving and Reconciling Health Information measure (or the exclusion, 
if applicable); (2) report on the HIE Bi-Directional Exchange measure; 
or (3) report on the proposed Enabling Exchange Under TEFCA measure. We 
believe that given the alignment between the Enabling Exchange under 
TEFCA measure and the existing HIE Bi-Directional exchange measure, 
adding this measure offers clinicians more opportunities to earn credit 
for the Health Information Exchange Objective. Because the proposed 
addition of Enabling Exchange Under TEFCA measure is optional for the 
Health Information Exchange Objective, we are unable to estimate the 
number of clinicians that would report this measure. Therefore, we are 
not proposing to adjust our currently approved time required for 
clinicians to submit data for the Promoting Interoperability 
performance category because we are unable to account for any change in 
burden due to the proposed change.
    In section IV.A.10.c.(4)(f)(ii) of this rule, we propose revisions 
to the three active engagement options. Specifically, we propose to 
consolidate current options 1 and 2 into one option beginning with the 
performance period in CY 2023. Additionally, for the Public Health and 
Clinical Data Exchange Objective, in addition to submitting responses 
for the required measures and any optional measures a MIPS eligible 
clinician chooses to report, we propose to require MIPS eligible 
clinicians to submit their level of active engagement, either Pre-
production and Validation or Validated Data Production (as proposed in 
section IV.A.10.c.(4)(f)(ii)(C) of this proposed rule), for each 
measure they report beginning with the performance period in CY 2023. 
If the proposed requirement for MIPS eligible clinicians to submit 
their level of active engagement with each measure is finalized, we 
estimate that it would add an additional one minute to the currently 
approved estimated time of 2.69 hours, resulting in a total estimated 
time of 2.71 hours, for clinicians to submit data for the Promoting 
Interoperability performance category.
    In section IV.A.10.c.(4)(f)(ii)(D) of this rule, we also propose 
that beginning with the performance period in CY 2023, that MIPS 
eligible clinicians may spend only one performance period at the Pre-
production and Validation level of active engagement per measure, and 
that they must progress to the Validated Data Production level in the 
next performance period for which they

[[Page 46370]]

report a particular measure. We refer readers to sections 
IV.A.10.c.4.(d) and IV.A.10.c.(4)(g) of this rule for additional 
information on proposed measure descriptions and changes to scoring 
methodologies in the Promoting Interoperability performance category.
    As shown in Table 122, based on data from the CY 2019 performance 
period/2021 MIPS payment year, we estimate that a total of 54,770 
respondents consisting of 43,117 individual MIPS eligible clinicians, 
11,633 groups and virtual groups and 20 subgroups would submit 
Promoting Interoperability data in the CY 2023 performance period/2025 
MIPS payment year. We assume that MIPS eligible clinicians previously 
scored under the APM scoring standard, as described in the CY 2020 PFS 
final rule, will continue to submit Promoting Interoperability data (84 
FR 63006) in a similar way through the APP. As a result, we do not 
anticipate any change in burden for APM Participants submitting data 
for the Promoting Interoperability performance category. In section 
IV.A.10.c.(5)(b) of this rule, we are proposing to introduce a 
voluntary reporting option for APM Entities to report the Promoting 
Interoperability performance category at the APM Entity level beginning 
with the CY 2023 performance period/2025 MIPS payment year. Because the 
proposed reporting of the Promoting Interoperability performance 
category is voluntary, we are unable to estimate the number of APM 
Entities that would submit data on behalf of their clinicians for this 
category. Therefore, we assume that each MIPS eligible clinician in an 
APM Entity reports data for the Promoting Interoperability performance 
category through either their group TIN or individual reporting. 
Sections 1899 and 1115A of the Act (42 U.S.C. 1395jjj and 42 U.S.C. 
1315a, respectively) state that the Shared Savings Program and the 
testing, evaluation, and expansion of Innovation Center models are not 
subject to the PRA. However, in the CY 2019 PFS final rule, we 
established that MIPS eligible clinicians who participate in the Shared 
Savings Program are no longer limited to reporting for the Promoting 
Interoperability performance category through their ACO participant TIN 
(83 FR 59822 through 59823). Burden estimates for this proposed rule 
assume group TIN-level reporting as we believe this is the most 
reasonable assumption for the Shared Savings Program, which requires 
that ACOs include full TINs as ACO participants.
[GRAPHIC] [TIFF OMITTED] TP29JY22.172

    As shown in Table 123, accounting for the change in hourly burden 
per respondent due to the proposed requirement for clinicians to submit 
their level of active engagement for the Public Health and Clinical 
Data Exchange Objective, the proposed increase in the number of 
respondents from 51,667 to 54,770 would result in a total burden of 
148,427 hours (54,770 respondents x 2.71 incremental hours for a 
computer analyst's time above and beyond the physician, medical and 
health services manager, and computer system's analyst time required to 
submit quality data) and $14,587,406 (148,427 hrs x $98.28/hr)).
[GRAPHIC] [TIFF OMITTED] TP29JY22.173

    As shown in Table 124, using our unchanged hourly burden per 
respondent estimate, the proposed increase in the number of respondents 
results in an increase of 9,443 hours (+3,103 respondents x 2.71 hrs + 
51,667

[[Page 46371]]

x 0.02 hrs) at a cost of $928,058 (+9,443 hours x $98.28/hour).
[GRAPHIC] [TIFF OMITTED] TP29JY22.174

h. ICRs Regarding the Nomination of Promoting Interoperability (PI) 
Measures
    This rule is not proposing any new or revised collection of 
information requirements or burden related to the nomination of 
Promoting Interoperability measures. The requirements and burden are 
currently approved by OMB under control number 0938-1314 (CMS-10621). 
Consequently, we are not proposing any changes to the process for 
nomination of Promoting Interoperability measures under that control 
number.
i. ICR Regarding Improvement Activities Submission (Sec. Sec.  
414.1305, 414.1355, 414.1360, and 414.1365)
    The proposed requirements and burden will be submitted to OMB for 
approval under control number 0938-1314 (CMS-10621).
    In section IV.A.10.c.(3)(b)(ii) of this rule, we are proposing 
changes to the improvement activities Inventory for the CY 2023 
performance period/2025 MIPS payment year and future years as follows: 
adding 4 new improvement activities; modifying 5 existing improvement 
activities; and removing 6 previously adopted improvement activities. 
We do not believe the changes to the improvement activities inventory 
will impact the estimated time required for interested parties to 
submit information, because MIPS eligible clinicians are still required 
to submit the same number of activities and the estimated time per 
response time for each activity is uniform. Therefore, we are not 
proposing to adjust our currently estimated time of 5 minutes or 0.083 
hours (per response) for improvement activities submission.
    We are proposing to adjust our currently approved burden estimates 
based on more recent data. As represented in Table 125, based on data 
from the CY 2019 performance period/2021 MIPS payment year, we estimate 
that a total of 96,980 respondents consisting of 78,239 individual 
clinicians, 17,721 groups and 20 subgroups will submit improvement 
activities during the CY 2023 performance period/2025 MIPS payment 
year. This proposed adjustment represents an increase of 15,398 
respondents (14,394 individuals, 4 groups and 0 subgroups) from the 
currently approved estimate of 81,582 respondents (63,845 individuals 
and 17,717 groups, and 20 subgroups) in the CY 2022 PFS final rule (86 
FR 65603).
    As discussed in sections V.B.9.e.(2) and V.B.9.g.(3) of this 
proposed rule regarding our estimate of clinicians and groups 
submitting data for the quality and Promoting Interoperability 
performance categories, we are proposing to update our estimates for 
the number of clinicians and groups that will submit improvement 
activities data based on projections of the number of eligible 
clinicians that were not QPs or participating in an ACO in the CY 2019 
performance period/2021 MIPS payment year but will be QPs in the CY 
2023 performance period/2025 MIPS payment year, and will therefore not 
be required to submit improvement activities data.

[[Page 46372]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.175

    Consistent with the CY 2022 PFS final rule, we continue to estimate 
that the time required per response per individual or group is 5 
minutes or 0.083 hours for a computer system analyst at a labor rate of 
$98.28/hr to submit by logging in and manually attesting that certain 
activities were performed in the form and manner specified by CMS with 
a set of authenticated credentials (86 FR 65603). As shown in Table 
126, we estimate an annual burden of 8,049 hours (96,980 responses x 
0.083 hr) at a cost of $791,056 (8,049 hrs x $98.28/hr)) for the CY 
2023 performance period/2025 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP29JY22.176

    As shown in Table 127, using our unchanged currently approved per 
respondent burden estimate, the proposed increase in the number of 
respondents results in an increase of 1,278 hours (+15,398 respondents 
x 0.083 hr/respondent) at a cost of $125,602 (1,278 hrs x $98.28/hr) 
for the CY 2023 performance period/2025 MIPS payment year.

[[Page 46373]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.177

j. ICRs Regarding the Nomination of Improvement Activities (Sec.  
414.1360)
    This rule is not proposing any new or revised collection of 
information requirements or burden related to the nomination of 
improvement activities. The requirements and burden are currently 
approved by OMB under control number 0938-1314 (CMS-10621). 
Consequently, we are not proposing any changes to the nomination of 
improvement activities under that control number.
k. Nomination of MVPs
    The proposed requirements and burden will be submitted to OMB for 
approval under control number 0938-1314 (CMS-10621). We refer readers 
to the CY 2021 PFS and CY 2022 PFS final rules (85 FR 84990 through 
84991 and 86 FR 65605) for our previously finalized requirements and 
burden for collection of information relevant to nomination of MVPs for 
inclusion in the Quality Payment Program.
    In section IV.A.8.a. of this rule, we propose updates to the 
previously finalized policies for the MVP development and maintenance 
process in the CY 2021 and 2022 PFS final rules (85 FR 84849 through 
84856 and 86 FR 65410). Specifically, we propose to modify the MVP 
development process such that we would evaluate a submitted candidate 
MVP through the MVP development process, and if we determine it is 
``ready'' for feedback, we would post a draft version of the submitted 
candidate MVP on the Quality Payment Program website (https://qpp.cms.gov/) and solicit feedback for a 30-day period. Interested 
parties and general public would have the opportunity to submit 
feedback on the candidate MVP for CMS's consideration through an email 
inbox. We would review the feedback received, and determine if any 
changes should be made to the candidate MVP prior to potentially 
including the MVP in a notice of proposed rulemaking. If we determined 
changes should be made to the candidate MVP, we would not notify the 
interested party who originally submitted the candidate MVP for CMS 
consideration in advance of the rulemaking process. We also propose to 
modify the MVP maintenance process such that interested parties and the 
general public would be able to submit their recommendations for 
potential revisions to established MVPs on a rolling basis throughout 
the year. We would then review the submitted recommendations and 
determine whether any are potentially feasible and appropriate. If we 
identify any submitted recommendations that are potentially feasible 
and appropriate, we would host a public facing webinar, open to 
interested parties and the general public through which they may offer 
their feedback on the potential revisions we have identified. We would 
publish details related to the timing and registration process for the 
webinar through our Quality Payment Program Listserv. If we decide to 
make any revisions to an established MVP based on the recommendations 
submitted, we would adopt such revisions through notice and comment 
rulemaking.
    We anticipate that these proposed changes do not require additional 
steps being added to the information collection relevant to the MVP 
nomination process described in the CY 2021 PFS final rule (85 FR 84990 
through 84991). Therefore, we are not making any changes to the 
currently approved estimated time of 12 hours (86 FR 65605) for 
interested parties to submit their MVP candidates utilizing a standard 
template. Additionally, we refer readers to section VI.E.16.e.(2)(a) of 
this proposed rule where we discuss our impact analysis for these 
proposals.
    In this rule, we are proposing to adjust the number of respondents 
submitting MVP nominations from 25 to 20 based on more recent data. 
This proposed adjustment would result in a decrease of 5 from our 
currently approved estimate of 25 in the CY 2022 PFS final rule (86 FR 
65605). As shown in Table 128, for the CY 2023 performance period/2025 
MIPS payment year, we estimate that we would receive 20 MVP nominations 
and the estimated time required per respondent would be 12 hours. This 
would result in an estimated annual burden of 240 hours (20 nominations 
x 12 hr/nomination) at a cost of $41,550 (20 x [(7.2 hr x $115.22/hr) + 
(4.8 hr x $259.97/hr)]).

[[Page 46374]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.178

    As shown in Table 129, using our unchanged currently approved 
burden per respondent estimate, the proposed decrease in the number of 
respondents submitting MVP nominations results in a total annual 
adjustment of -60 hours (-5 respondents x 12 hr/nomination) at a cost 
of -$10,387 (-5 x [(7.2 hr x $115.22/hr) + (4.8 hr x $259.97/hr)]) for 
the CY 2023 performance period/2025 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP29JY22.179

l. ICRs Regarding the Cost Performance Category (Sec.  414.1350)
    The cost performance category relies on administrative claims data. 
The Medicare Parts A and B claims submission process (OMB control 
number 0938-1197; CMS-1500 and CMS-1490S) is used to collect data on 
cost measures from MIPS eligible clinicians. MIPS eligible clinicians 
are not required to provide any documentation by CD or hardcopy. 
Moreover, the policies in this rule do not result in the need to add or 
revise or delete any claims data fields. Consequently, we are not 
proposing any changes to this information collection under that control 
number.
m. ICRs Regarding Partial QP Elections (Sec. Sec.  414.1310(b) and 
414.1430)
    This rule is not proposing any new or revised collection of 
information requirements related to the Partial QP Elections to 
participate in MIPS as a MIPS eligible clinician. However, we propose 
to adjust our currently approved burden estimates based on updated 
projections for the CY 2023 performance period/2025 MIPS payment year. 
The proposed adjusted burden will be submitted to OMB for approval 
under control number 0938-1314 (CMS-10621).
    As shown in Table 130, based on our predictive QP analysis for the 
2023 QP performance period/2025 MIPS payment year, which accounts for 
historical response rates in the CY 2021 performance period/2023 MIPS 
payment year, we are proposing to revise our estimate that a total of 
287 respondents (156 APM Entities and 131 individual eligible 
clinicians representing approximately 7,182 Partial QPs) would make the 
election to participate as a Partial QP in MIPS. This is an increase of 
37 from the 250 elections that are currently approved by OMB under the 
aforementioned control number. We continue to estimate it will take the 
APM Entity representative or eligible clinician 15 minutes (0.25 hrs) 
to make this election. In aggregate, we are proposing to revise our 
estimated annual burden to 72 hours (287 respondents x 0.25 hrs/
election) and $7,076 (72 hrs x $98.28/hr).

[[Page 46375]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.180

    As shown in Table 131, using our unchanged currently approved per 
respondent burden estimate (86 FR 65605), we propose that the increase 
in the number of Partial QP elections results in an adjustment of 9 
hours (+37 respondents x 0.25 hr/election) at a cost of +$884 (+9 hr x 
$98.28/hr) for the CY 2023 performance period/2025 MIPS payment year.
[GRAPHIC] [TIFF OMITTED] TP29JY22.181

n. ICRs Regarding Other Payer Advanced APM Determinations: Payer-
Initiated Process (Sec.  414.1445) and Eligible Clinician-Initiated 
Process (Sec.  414.1445)
    The following burden will be submitted to OMB for approval under 
control number 0938-1314 (CMS-10621).
(1) Payer-Initiated Process (Sec.  414.1445)
    This rule is not proposing any new or revised collection of 
information requirements related to the Payer-Initiated Process. The 
requirements and burden associated with this information collection are 
currently approved by OMB under control number 0938-1314 (CMS-10621). 
Consequently, we are not making any changes to the Payer- Initiated 
process under that control number.
(2) Eligible Clinician-Initiated Process (Sec.  414.1445)
    This rule is not proposing any new or revised collection of 
information requirements or burden related to the Eligible Clinician-
Initiated Process. The requirements and burden associated with this 
information collection are currently approved by OMB under control 
number 0938-1314 (CMS-10621). Consequently, we are not making any 
changes to the Eligible Clinician-Initiated Process under that control 
number.
(3) Submission of Data for QP Determinations Under the All-Payer 
Combination Option (Sec.  414.1440)
    This rule is not proposing any new or revised collection of 
information requirements related to the Submission of Data for QP 
Determinations under the All-Payer Combination Option. The requirements 
and burden for the All-Payer Combination option are currently approved 
by OMB under control number 0938-1314 (CMS-10621). Consequently, we are 
not making any changes under that control number.
o. ICRs Regarding Voluntary Participants Election To Opt-Out of 
Performance Data Display on Compare Tools (Sec.  414.1395)
    This rule is not proposing any new or revised collection of 
information requirements related to the election by voluntary 
participants to opt-out of public reporting on Compare Tools. The 
requirements and burden associated with this information collection are 
currently approved by OMB under control number 0938-1314 (CMS-10621). 
Consequently, we are not proposing any changes to the election of 
voluntary participants to opt-out of performance data display on 
Compare Tools under that control number.
p. Summary of Annual Quality Payment Program Burden Estimates
    Table 132 summarizes this proposed rule's total burden estimates 
for the Quality Payment Program for the CY 2023 performance period/2025 
MIPS payment year.
BILLING CODE 4120-04-P
    In the CY 2022 PFS final rule, the total estimated burden for the 
CY 2023 performance period/2025 MIPS payment year was 1,383,049 hours 
at a cost of $139,501,770 (86 FR 65613). Accounting for updated wage 
rates and the subset of all Quality Payment Program ICRs discussed in 
this rule compared to the CY 2022 PFS final rule, the total estimated 
annual burden of continuing the policies and information collections 
set forth in the CY 2022 PFS final rule into the CY 2023 performance 
period/2025 MIPS payment year is 1,386,649 hours at a cost of 
$147,977,762. These represent an increase of 3,600 hours and an 
increase of $8,475,992. To understand the burden implications of the 
policies in

[[Page 46376]]

this rule, we provide an estimate of the total burden associated with 
continuing the policies and information collections set forth in the CY 
2022 PFS final rule into the CY 2023 performance period/2025 MIPS 
payment year. This burden estimate of 1,476,903 hours at a cost of 
$157,603,546 reflects the availability of more accurate data to account 
for all potential respondents and submissions across all the 
performance categories and more accurately reflect the exclusion of QPs 
from all MIPS performance categories, an increase of 90,254 hours and 
$9,625,784. This burden estimate is higher than the burden approved for 
information collection related to the CY 2022 PFS final rule due to 
updated data and assumptions. Our total burden estimate for the CY 2023 
performance period/2025 MIPS payment year is 1,465,864 hours and 
$156,389,613 which represents an increase of 79,215 hours and 
$8,411,851 from the CY 2022 PFS final rule. The difference of -11,039 
hours (79,215 hours-90,254 hours) and -$1,213,933 ($8,411,851-
$9,625,784) between this estimate and the total burden shown in Table 
132 is the decrease in burden associated with impacts of the policies 
for the CY 2023 performance period/2025 MIPS payment year.
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[[Page 46377]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.183


[[Page 46378]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.184

    Table 134 provides the reasons for proposed changes in the 
estimated burden for information collections in the Quality Payment 
Program segment of this rule. We have divided the reasons for our 
proposed change in burden into those related to proposed policies and 
those related to proposed adjustments in burden continued from the CY 
2022 PFS final rule policies that reflect updated data and revised 
methods.

[[Page 46379]]

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[[Page 46380]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.186

C. Summary of Annual Burden Estimates for Changes
[GRAPHIC] [TIFF OMITTED] TP29JY22.187

D. Submission of Comments

    We have submitted a copy of this rule to OMB for review of the 
rule's information collection requirements and burden. The requirements 
are not effective until they have been approved by OMB.
    To obtain copies of the supporting statement and any related forms 
for the

[[Page 46381]]

collections previously discussed, please visit CMS's website at 
PaperworkReductionActof1995/PRAListing.html, or call the Reports 
Clearance Office at (410) 786-1326.
    If you wish to comment, please submit your comments electronically 
as specified in the DATES and ADDRESSES sections of this proposed rule 
and identify the rule (CMS-1770-P) and where applicable the ICR's CFR 
citation, CMS ID number, and OMB control number.

VI. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

VII. Regulatory Impact Analysis

A. Statement of Need

    In this proposed rule, we are proposing to make payment and policy 
changes under the Medicare PFS and required statutory changes under the 
Consolidated Appropriations Act, 2021 (CAA, 2021); sections 301, 302, 
303, 304, and 305 under the Consolidated Appropriations Act, 2022 (CAA, 
2022); and sections 2003 and 2005 of the SUPPORT for Patients and 
Communities Act of 2018, section 90004 of the Infrastructure Investment 
and Jobs Act, and section 4 of the Protecting Medicare and American 
Farmers from Sequester Cuts Act. . Our proposed policies in this rule 
specifically address: changes to the physician fee schedule (PFS); 
other changes to Medicare Part B payment policies to ensure that 
payment systems are updated to reflect changes in medical practice, the 
relative value of services, and changes in the statute; improvements to 
the Medicare Shared Savings Program (Shared Savings Program) 
requirements that promote health equity and strengthen financial 
incentives for participation; updates to the Quality Payment Program; 
updates to the Medicare coverage of opioid use disorder services 
furnished by opioid treatment programs; updates to certain Medicare 
provider enrollment policies; updates to electronic prescribing for 
controlled substances for a covered Part D drug under a prescription 
drug plan or an MA-PD plan (section 2003 of the SUPPORT Act); and 
updates to the Medicare Ground Ambulance Data Collection System. The 
proposed policies reflect CMS's stewardship of the Medicare program and 
overarching policy objectives for ensuring equitable beneficiary access 
to appropriate and quality medical care.
1. Statutory Provisions
a. Extension of Certain Medicare Telehealth Flexibilities, Under 
Section 1834(m) of the Act, as Amended by the Consolidated 
Appropriations Act, 2022
    Section II.D.1.e. of this proposed rule implements sections 301, 
302, 304, and 305, of the Consolidated Appropriations Act, 2022, which 
extended the geographic restrictions (section 301), extended the 
temporary expansion of practitioner types who are eligible to furnish 
Medicare telehealth (section 302), delayed the in-person requirements 
under Medicare for mental health services furnished through telehealth 
under the PFS (section 304), and extended audio-only flexibilities for 
certain telehealth services that would otherwise not be available via 
telehealth (section 305) after the expiration of the PHE to remain on 
the Medicare Telehealth Services List for a 151-day period beginning on 
the first day after the end of the public health emergency (PHE) for 
COVID-19. This proposal is necessary to fulfill the statutory 
requirement to implement this extension until the 152nd day after the 
end of the PHE for COVID-19.
b. Requiring Manufacturers of Certain Single-Dose Container or Single-
Use Package Drugs Payable Under Medicare Part B To Provide Refunds With 
Respect to Discarded Amounts
    Section III.A. of this proposed rule implements section 90004 of 
the Infrastructure Investment and Jobs Act (Pub. L. 117-9, November 15, 
2021) which requires drug manufacturers to provide a refund to CMS for 
certain discarded amounts from a refundable single-dose container or 
single-use package drug. These proposals are necessary to fulfill the 
statutory requirement to implement this policy effective January 1, 
2023 and reduce unnecessary Medicare spending for discarded drug.
c. Rural Health Clinics (RHCs) and Federally Qualified Health Centers 
(FQHCs)
    Section III.C.3. of this proposed rule implements sections 303 and 
304 of the Consolidated Appropriations Act, 2022. Section 303 of the 
CAA, 2022 amended section 1834(m)(8) of the Act to temporarily continue 
payment for telehealth services furnished by FQHCs and RHCs for the 
151-day period beginning on the first day after the end of the COVID-19 
PHE using the methodology established for telehealth services furnished 
by FQHCs and RHCs during the PHE, which, in accordance with section 
1834(m)(8)(B) of the Act, is based on payment rates that are similar to 
the national average payment rates for comparable telehealth services 
under the PFS.
    Section 304 of the CAA, 2022 delays the in-person requirements 
under Medicare for mental health services furnished through telehealth 
under the PFS and for mental health visits furnished by RHCs and FQHCs 
via telecommunications technology for a 151-day period beginning on the 
first day after the end of the public health emergency (PHE) for COVID-
19. These proposals are necessary to fulfill these statutory 
requirements.
    We also note in section III.C.3. of this proposed rule we discuss 
implementation of sections 301 and 305 of the CAA, 2022 that would 
apply to telehealth services (those that are not mental health visits) 
furnished by RHCs and FQHCs. That is, section 301 of the CAA, 2022 
extended the geographic restrictions and section 305 of the CAA, 2022 
extended audio-only flexibilities for certain telehealth services that 
would otherwise not be available via telehealth.
d. Clinical Laboratory Fee Schedule--Revisions Consistent With Recent 
Statutory Changes
    Section III.B.5. of this rule proposes to make conforming 
regulations text changes for CLFS data reporting requirements due to 
the enactment of Protecting Medicare and American Farmers from 
Sequester Cuts Act (S. 610).
    By statute, certain clinical laboratories are periodically required 
to submit private payor rates for certain kinds of lab tests. For 
Clinical Diagnostic Laboratory Tests (CDLTs) that are not Advanced 
Diagnostic Laboratory Tests (ADLTs), the Protecting Medicare and 
American Farmers from Sequester Cuts Act (S. 610) delayed the next data 
reporting period by one year. Instead of taking place from January 1, 
2022 through March 31, 2022, data reporting will now take place from 
January 1, 2023 through March 31, 2023, based on the original data 
collection period of January 1, 2019 through June 30, 2019. Data 
reporting for these tests then resumes on a 3-year cycle (2026, 2029, 
etc.). Additionally, the statutory phase-in reduction provisions 
indicate for CYs 2023 through 2025, payment may not be reduced by more 
than 15 percent as compared to the amount established for the preceding 
year.

[[Page 46382]]

e. Requirement for Electronic Prescribing for Controlled Substances for 
a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD Plan 
(Section 2003 of the SUPPORT Act)
    In this rule, we are proposing changes to the electronic 
prescribing for controlled substances (EPCS) requirement specified in 
section 2003 of the SUPPORT Act. Previously finalized policies did not 
include actions for non-compliance after the 2023 year. Additionally, 
previously finalized policies for statutory exclusions may not have 
properly identified prescribers that are small prescribers during the 
compliance period and may have misidentified prescribers in locations 
with a recognized emergency. The proposals define action for non-
compliance for electronic prescribing of controlled substances for the 
2024 year and refine policies to better identify prescribers who 
qualify for the small practice and recognized emergency exceptions to 
the EPCS requirement.
f. Medicare Ground Ambulance Data Collection System
    Section 1834(l)(17)(A) of the Act requires the Secretary to develop 
a data collection system (which may include use of a cost survey) to 
collect cost, revenue, utilization, and other information determined 
appropriate by the Secretary for providers and suppliers of ground 
ambulance services. In this proposed rule, we are proposing a series of 
changes to the Medicare Ground Ambulance Data Collection System 
including the proposal to update Sec.  414.626(d)(1) and (e)(2) to give 
us the necessary flexibility to specify how ground ambulance 
organizations should submit the hardship exemption requests and 
informal review requests, including to our web-based portal once that 
portal is operational, and proposed revisions to the Medicare Ground 
Ambulance Data Collection Instrument. The changes and clarifications 
aim to reduce burden on respondents, improve data quality, or both.
g. Quality Payment Program
    This proposed rule is also necessary to make changes to the Quality 
Payment Program to move the Quality Payment Program forward to focus 
more on measurement efforts, refine how clinicians would be able to 
participate in a more meaningful way through the Merit-based Incentive 
Payment System (MIPS) Value Pathways (MVPs), and encourage 
participation in Advanced Alternative Payment Models (APMs). Authorized 
by MACRA, the Quality Payment Program is an incentive program that 
includes two participation tracks, MIPS and Advanced APMs. MIPS 
eligible clinicians are subject to a MIPS payment adjustment based on 
their performance in four performance categories: cost, quality, 
improvement activities, and Promoting Interoperability. Currently, 
reporting for MIPS is not required to be coordinated across performance 
categories. These policies are intended to promote better quality 
reporting to improve patient health outcomes by coordinating reporting 
for MIPS across performance categories, and make changes to scoring 
that will provide a better picture of clinicians' performance.
2. Discretionary Provisions
a. RHCs and FQHCs
    In section III.C.2. of this proposed rule, we are proposing to 
include chronic pain management (CPM) services in the general care 
management HCPCS code G0511 when these services are provided by RHCs 
and FQHCs. Since HCPCS code GYYY1 would be valued using a crosswalk to 
the PCM CPT code 99424, which is currently one of the CPT codes that 
comprise HCPCS code G0511, we propose no change to the average used to 
calculate the G0511 payment rate.
    In addition, in section III.C.2. of this proposed rule we discuss 
the new coding and payment for general behavioral health integration 
(BHI) services (HCPCS code GBHI1). We explain that since clinical 
psychologists (CPs) and clinical social workers (CSWs) are considered 
practitioners that can provide services in RHCs/FQHCs, we acknowledge 
when CPs and CSWs provide the services described in HCPCS code GBHI1 in 
an RHC or FQHC, they can bill HCPCS code G0511.
    These proposals are necessary in that we evaluate coding proposals 
in this rule and their applicability to RHCs and FQHCs.
    Section III.C.4. of this proposed rule proposes to provide 
discussion and clarification regarding the use of short-period cost 
reports vs 12-consecutive month cost reports to establish the payment 
limit for specified provider-based RHCs. This proposal is necessary to 
accurately reflect the costs of providing RHC services and will 
establish a more accurate base from which the payment limits will be 
upgraded going forward.
b. Clinical Laboratory Fee Schedule (CLFS) Specimen Collection and 
Travel Allowance
    Section III.B.6. of this rule proposes to clarify and codify the 
CLFS specimen collection and travel allowance payment policies.
    In general, section 1833(h)(3) of the Act requires the Secretary to 
pay a nominal fee for specimen collection for laboratory testing and a 
fee to cover transportation and personnel expenses for trained 
personnel to collect specimens from homebound patients and inpatients 
(not in a hospital). CMS' long-standing instructions regarding the 
statutory requirements for CLFS specimen collection and travel 
allowance are described in Medicare Claims Processing manual guidance. 
OIG and other interested parties have expressed concerns regarding 
inconsistent MAC implementation of the payment policies as well as 
unclear or conflicting guidance to providers related to the CLFS travel 
allowance. In the CY 2022 PFS final rule we solicited comments 
regarding these two payment policies; commenters supported 
clarification to the existing policy and also made suggestions 
regarding possible refinements.
    Describing and codifying the payment policies related to CLFS 
specimen collection and travel allowance are necessary to clarify 
existing policy, address concerns expressed by interested parties, and 
reduce administrative burden.
c. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)
    In section III.F. of this proposed rule, we explain that because of 
the inconsistencies in the voluntarily reported ASP data for orally-
administered methadone, which reflects data from a small subset of 
methadone manufacturers, we do not believe this voluntarily reported 
ASP data for orally administered methadone currently provides a 
reliable source for pricing the methadone codes. We previously issued 
an interim final rule with comment period to establish a limited 
exception to the methodology for determining the payment amount for the 
drug component of an episode of care under the OTP benefit in order to 
freeze the payment amount for methadone furnished during an episode of 
care in CY 2022 at the payment amount that was determined for CY 2021. 
For CY 2023 and subsequent years, we are proposing to revise our 
methodology for pricing methadone under the OTP benefit, specifically, 
the drug component of the methadone weekly bundle and the add-on code 
for take-home supplies of methadone, so that it would not rely on 
voluntarily-submitted ASP data. We believe this proposal

[[Page 46383]]

would stabilize the payment amount for methadone dispensed by OTPs 
during an episode of care and therefore maintain access to treatment 
with methadone in the OTP setting for Medicare beneficiaries. 
Additionally, in section III.F. of this proposed rule, we are proposing 
to modify the payment rate for the non-drug component of the bundled 
payment for an episode of care to base the rate for individual therapy 
on a crosswalk code describing a longer duration of psychotherapy 
compared to the current crosswalk code. We believe this proposal is 
needed in order to more accurately reflect the resource costs involved 
with furnishing therapy in the OTP setting.
d. Medicare Part B Payment for Preventive Vaccine Administration 
Services
    Sections III.H.2. and 3. of this proposed rule discuss proposals 
that implement policies impacting the payment amount for administration 
of preventive vaccines paid under the Part B vaccine benefit. Section 
III.H.4. of this proposed rule proposes to clarify the timing of 
payment policies for COVID-19 vaccines and COVID-19 monoclonal antibody 
products. These proposals are necessary to provide stable payment for 
preventive vaccine administration to allow predictability for providers 
and suppliers to rely on for building and sustaining robust vaccination 
programs.
e. Medical Necessity and Documentation Requirements for Nonemergency, 
Scheduled, Repetitive Ambulance Services
    We propose to modify nonemergency, repetitive, scheduled ambulance 
policy at Sec.  410.40(e)(2)(ii) by clarifying that (1) the physician 
certification statement and additional documentation must provide 
detailed explanations, that are consistent with the beneficiary's 
current medical condition, that explains the beneficiary's need for 
transport by an ambulance; and (2) that coverage includes observation 
or other services rendered by qualified ambulance personnel. Existing 
regulations at Sec.  410.40(e)(2) are interpreted too narrowly by some 
interested parties, excluding beneficiaries in need of monitoring. This 
proposed language clarifies the intent of existing regulatory language 
by explicitly stating that beneficiaries who may not be in need of 
tangible services, but otherwise are in need of monitoring, qualify for 
this limited ambulance benefit. This is not a statutorily-mandated 
provision but addresses a longstanding ambiguity potentially affecting 
vulnerable populations.
f. Expansion of Coverage for Colorectal Cancer Screening and Reducing 
Barriers
    In CY 2019, the last year for which incidence data are available, 
colorectal cancer (CRC) accounted for the 4th highest rate of new 
cancer cases and 4th highest rate of cancer deaths in the United 
States.\536\ The Center for Disease Control and Prevention (CDC) 
advises, ``Colorectal cancer almost always develops from precancerous 
polyps (abnormal growths) in the colon or rectum. Screening tests can 
find precancerous polyps, so that they can be removed before they turn 
into cancer. Screening tests can also find colorectal cancer early, 
when treatment works best. Regular screening, beginning at age 45, is 
the key to preventing colorectal cancer and finding it early.'' \537\ 
This proposed rule would expand coverage for colorectal cancer 
screening tests by reducing the minimum age payment limitation for 
certain tests from 50 to 45 years of age. In addition, we propose to 
expand the regulatory definition of CRC screening tests to include a 
follow-on screening colonoscopy after a Medicare covered non-invasive 
stool-based CRC screening test returns a positive result. Our proposals 
would update Medicare coverage and payment policies to align with our 
new understanding of CRC screening, the latest recommendations from the 
U.S. Preventive Services Task Force and recommendations from 
professional societies and other appropriate organizations. We propose 
to expand coverage of colorectal cancer screening tests by exercising 
our authority under sections 1834(n) and 1861(pp)(1)(D) of the Act. We 
believe these proposals would expand access to quality care and improve 
health outcomes through prevention, early detection, more effective 
treatment and reduced mortality. Moreover, it would directly advance 
health equity by promoting access and removing barriers for much needed 
cancer prevention and early detection within rural communities and 
communities of color that are especially impacted by the incidence of 
CRC.
---------------------------------------------------------------------------

    \536\ https://gis.cdc.gov/Cancer/USCS/#/AtAGlance/.
    \537\ https://www.cdc.gov/cancer/colorectal/basic_info/screening/.
---------------------------------------------------------------------------

g. Removal of Selected National Coverage Determinations
    CMS periodically identifies and proposes to remove National 
Coverage Determinations (NCDs) that no longer contain clinically 
pertinent and current information, in other words those items and 
services that no longer reflect current medical practice, or that 
involve items and services that are used infrequently by beneficiaries. 
Since the CY 2021 PFS final rule (85 FR 84472), we have used notice and 
comment rulemaking to obtain public comment on removing outdated NCDs, 
replacing the prior subregulatory administrative process used on two 
occasions in 2013 and 2015. Eliminating an NCD that provides national 
coverage for items and services means that the item or service will no 
longer be automatically, nationally covered by Medicare (42 CFR 
405.1060). Instead, the initial coverage determinations for those items 
and services will be made by local Medicare Administrative Contractors 
(MACs). As described in section III.G. of this proposed rule, we are 
proposing to remove NCD 160.22 Ambulatory EEG Monitoring (06/12/1984), 
because the NCD contains outdated language that is inconsistent with, 
and contrary to current standards of care. We believe that allowing 
local contractor discretion to make coverage decision for this service 
better serves the needs of the Medicare program and its beneficiaries. 
We estimate there would be de minimis change to 2023 payments, compared 
to 2021 because this is a long-established service for which the MACs 
already have LCDs and guidance articles. Therefore, we believe removing 
the outdated NCD would allow MACs to update local coverage guidance for 
this established diagnostic test, but would not result in significant 
changes to utilization or payments.
h. Medicare Shared Savings Program
    As we seek to advance the overall value-based care strategy of 
growth, alignment, and equity, we are proposing modifications to the 
Medicare Shared Savings Program to increase program participation by 
supporting organizations new to value-based care and shared savings, 
especially for organizations serving underserved populations, and 
providing greater flexibility in the progression to performance-based 
risk, allowing these organizations more time to redesign their care 
processes to be successful under risk arrangements. As part of this 
effort, we are proposing advance investment payments to new, low-
revenue ACOs that are inexperienced with performance-based risk 
Medicare ACO initiatives. To address the social needs of people with 
Medicare, these payments would increase when more people who are dually 
eligible and/or who live in areas with high deprivation (measured by 
the area deprivation index (ADI)) are attributed to the ACO. We are 
also building on the existing Shared Savings Program benchmarking

[[Page 46384]]

methodology by proposing modifications to strengthen financial 
incentives for long term participation by reducing the impact of ACOs' 
performance on their benchmarks, to address the impact of ACO market 
penetration on regional expenditures used to adjust and update 
benchmarks, and to strengthen the business case for participation for 
ACOs serving high-risk and high dually eligible populations, which 
would help sustain participation and grow the program. Additionally, we 
are proposing modifications to the benchmarking methodology to mitigate 
bias in regional expenditure calculations that benefits ACOs electing 
prospective assignment. We are also proposing changes to the quality 
reporting and the quality performance requirements to support the 
transition of ACOs to all payer quality measure reporting. These 
proposals include implementing a health equity adjustment to an ACO's 
MIPS quality performance category score to recognize high performing 
ACOs serving a high proportion of underserved beneficiaries. Finally, 
we are proposing changes that are important for improved operations of 
the Shared Savings Program, including policies to reduce ACO 
administrative burden while maintaining program integrity.
i. Provider Enrollment and DMEPOS Conditions of Payment
    This proposed rule is also needed to make regulatory enhancements 
to our provider enrollment policies and to our DMEPOS conditions of 
payments. These provisions focus on, but are not limited to: (1) 
expanding the bases for denying or revoking a provider's or supplier's 
Medicare enrollment; (2) subjecting a greater number of providers and 
suppliers, such as skilled nursing facilities, to the highest level of 
screening, which includes fingerprinting all 5 percent or greater 
owners of these providers and suppliers; and (3) denying payment to 
DMEPOS suppliers that are not appropriately licensed. These changes are 
necessary to help ensure that payments are made only to qualified 
providers and suppliers and that owners of these entities are carefully 
screened. As explained in section III.J. of this proposed rule, we 
believe that fulfilling both of these objectives would assist in 
protecting the Trust Funds and Medicare beneficiaries.
j. Proposal To Revise HCPCS Level II Coding Procedures for Wound Care 
Management Products
    The HCPCS is a standardized coding system used to identify 
particular items and services on claims submitted to Medicare, 
Medicaid, and other health insurance programs in a consistent and 
orderly manner. The HCPCS is divided into two principal subsystems, 
referred to as HCPCS Level I and HCPCS Level II. The HCPCS Level I code 
set is comprised of Current Procedural Terminology (CPT[supreg]) codes, 
which are owned and maintained by the American Medical Association. The 
HCPCS Level II code set is used primarily to identify items, services, 
supplies, and equipment that are not identified by CPT[supreg] codes. 
CMS updates and maintains the HCPCS Level II code set on a periodic and 
routine basis.
    One of the categories of items and supplies that are typically 
described by HCPCS Level II codes are wound care management products, 
which are regulated by the Food and Drug Administration. In order to 
provide a more uniform and permanent approach to coding for wound care 
management products, we are making five proposals in this proposed 
rule: (1) that the assignment of A codes to all wound care management 
products (that are not regulated by FDA as drugs or biological products 
that would otherwise be eligible for separate payment under section 
1847A of the Act) would continue with respect to products for which a 
HCPCS Level II code is requested for the first time, as well as for 
wound care management products to which we previously assigned a Q 
code; (2) to discontinue all existing Q codes for wound care management 
products; (3) to, prior to the assignment of an A code, require 
products with an existing Q code that were described by the applicant 
as a 361 HCT/P to submit a HCPCS Level II re-application within 12 
months of the effective date of the final rule (that is, January 1, 
2024); (4) to require a recommendation letter from the FDA's TRG to be 
submitted as part of the HCPCS Level II application for all wound care 
management products described by the applicant as a 361 HCT/P, 
regardless if it is a first time application or re-application for a 
product with an existing Q code; and (5) to evaluate HCPCS Level II 
coding applications for all 361 HCT/P wound care management products 
through our biannual coding cycles for non-drugs and non-biological 
products, rather than on a quarterly basis, beginning January 1, 2024. 
These proposals align with our proposal in section II.J. of this 
proposed rule that all wound care management products (that are not 
regulated by FDA as drugs or biological products that would otherwise 
be eligible for separate payment under section 1847A of the Act) would 
be covered under section 1861(s)(2)(A) of the Act as incident to 
supplies that are commonly furnished in the physician office setting.
B. Overall Impact
    We examined the impact of this rule as required by Executive Order 
12866 on Regulatory Planning and Review (September 30, 1993), Executive 
Order 13563 on Improving Regulation and Regulatory Review (February 2, 
2013), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. 
L. 96-354), section 1102(b) of the Social Security Act, section 202 of 
the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-
4), Executive Order 13132 on Federalism (August 4, 1999), and the 
Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). An RIA 
must be prepared for major rules with economically significant effects 
($100 million or more in any 1 year). We estimated, as discussed in 
this section, that the PFS provisions included in this proposed rule 
will redistribute more than $100 million in 1 year. Therefore, we 
estimate that this rulemaking is ``economically significant'' as 
measured by the $100 million threshold, and hence also a major rule 
under the Congressional Review Act. Accordingly, we prepared an RIA 
that, to the best of our ability, presents the costs and benefits of 
the rulemaking. The RFA requires agencies to analyze options for 
regulatory relief of small entities. For purposes of the RFA, small 
entities include small businesses, nonprofit organizations, and small 
governmental jurisdictions. Most hospitals, practitioners and most 
other providers and suppliers are small entities, either by nonprofit 
status or by having annual revenues that qualify for small business 
status under the Small Business Administration standards. (For details, 
see the SBA's website at http://www.sba.gov/content/table-small-business-size-standards (refer to the 620000 series)). Individuals and 
States are not included in the definition of a small entity.
    The RFA requires that we analyze regulatory options for small 
businesses and other entities. We prepare a regulatory flexibility 
analysis unless we certify that a rule would not have a significant 
economic impact on a

[[Page 46385]]

substantial number of small entities. The analysis must include a 
justification concerning the reason action is being taken, the kinds 
and number of small entities the rule affects, and an explanation of 
any meaningful options that achieve the objectives with less 
significant adverse economic impact on the small entities.
    Approximately 95 percent of practitioners, other providers, and 
suppliers are considered to be small entities, based upon the SBA 
standards. There are over 1 million physicians, other practitioners, 
and medical suppliers that receive Medicare payment under the PFS. 
Because many of the affected entities are small entities, the analysis 
and discussion provided in this section, as well as elsewhere in this 
proposed rule is intended to comply with the RFA requirements regarding 
significant impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 603 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside of a Metropolitan Statistical Area for Medicare 
payment regulations and has fewer than 100 beds. Medicare does not pay 
rural hospitals for their services under the PFS; rather, the PFS pays 
for physicians' services, which can be furnished by physicians and NPPs 
in a variety of settings, including rural hospitals. We did not prepare 
an analysis for section 1102(b) of the Act because we determined, and 
the Secretary certified, that this proposed rule will not have a 
significant impact on the operations of a substantial number of small 
rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits on State, 
local, or tribal governments or on the private sector before issuing 
any rule whose mandates require spending in any 1 year of $100 million 
in 1995 dollars, updated annually for inflation. In 2022, that 
threshold is approximately $165 million. This proposed rule will impose 
no mandates on State, local, or tribal governments or on the private 
sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues 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 proposed rule does not impose any costs on 
State or local governments, the requirements of Executive Order 13132 
are not applicable.
    We prepared the following analysis, which together with the 
information provided in the rest of this preamble, meets all assessment 
requirements. The analysis explains the rationale for and purposes of 
this proposed rule; details the costs and benefits of the rule; 
analyzes alternatives; and presents the measures we will use to 
minimize the burden on small entities. As indicated elsewhere in this 
proposed rule, we discussed a variety of changes to our regulations, 
payments, or payment policies to ensure that our payment systems 
reflect changes in medical practice and the relative value of services, 
and to implement provisions of the statute. We provide information for 
each of the proposed policy changes in the relevant sections of this 
proposed rule. We are unaware of any relevant Federal rules that 
duplicate, overlap, or conflict with this proposed rule. The relevant 
sections of this proposed rule contain a description of significant 
alternatives if applicable.
C. Changes in Relative Value Unit (RVU) Impacts
1. Resource-Based Work, PE, and MP RVUs
    Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or 
decreases in RVUs may not cause the amount of Medicare Part B 
expenditures for the year to differ by more than $20 million from what 
expenditures would have been in the absence of these changes. If this 
threshold is exceeded, we make adjustments to preserve budget 
neutrality.
    Our estimates of changes in Medicare expenditures for PFS services 
compared payment rates for CY 2022 with payment rates for CY 2023 using 
CY 2021 Medicare utilization. The payment impacts described in this 
proposed rule reflect averages by specialty based on Medicare 
utilization. The payment impact for an individual practitioner could 
vary from the average and will depend on the mix of services they 
furnish. The average percentage change in total revenues will be less 
than the impact displayed here because practitioners and other entities 
generally furnish services to both Medicare and non-Medicare patients. 
In addition, practitioners and other entities may receive substantial 
Medicare revenues for services under other Medicare payment systems. 
For instance, independent laboratories receive approximately 83 percent 
of their Medicare revenues from clinical laboratory services that are 
paid under the Clinical Laboratory Fee Schedule (CLFS).
    The PFS update adjustment factor for CY 2023, as specified in 
section 1848(d)(19) of the Act, is 0.00 percent before applying other 
adjustments. In addition, the Protecting Medicare and American Farmers 
from Sequester Cuts Act provided a 3.00 percent increase in PFS payment 
amounts for services furnished on or after January 1, 2022, and before 
January 1, 2023 and required that the increase shall not be taken into 
account in determining PFS payment rates for subsequent years. The 
expiration of this 3.00 percent increase in payment amounts will result 
in the CY 2023 conversion factor being calculated as though the 3.00 
percent increase for the CY 2022 conversion factor had never been 
applied.
    To calculate the CY 2023 PFS conversion factor (CF), we took the CY 
2022 conversion factor without the 1-year 3.00 percent increase 
provided by the CAA and multiplied it by the BN adjustment required as 
described in the preceding paragraphs. We estimate the CY 2023 PFS CF 
to be 33.0775 which reflects the BN adjustment under section 
1848(c)(2)(B)(ii)(II) of the Act, the 0.00 percent update adjustment 
factor specified under section 1848(d)(19) of the Act, and the 
expiration of the 3.00 percent increase for services furnished in CY 
2022, as provided in the CAA. We estimate the CY 2022 anesthesia CF to 
be 20.7191 which reflects the same overall PFS adjustments with the 
addition of anesthesia-specific PE and MP adjustments.
BILLING CODE 4120-01-P

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    Table 138 shows the payment impact of the policies contained in 
this proposed rule on PFS services. To the extent that there are year-
to-year changes in the volume and mix of services provided by 
practitioners, the actual impact on total Medicare revenues will be 
different from those shown in Table 138 (CY 2022 PFS Estimated Impact 
on Total Allowed Charges by Specialty). The following is an explanation 
of the information represented in Table 138.
    <bullet> Column A (Specialty): Identifies the specialty for which 
data are shown.
    <bullet> Column B (Allowed Charges): The aggregate estimated PFS 
allowed charges for the specialty based on CY 2021 utilization and CY 
2022 rates. That is, allowed charges are the PFS amounts for covered 
services and include coinsurance and deductibles (which are the 
financial responsibility of the beneficiary). These amounts have been 
summed across all services furnished by physicians, practitioners, and 
suppliers within a specialty to arrive at the total allowed charges for 
the specialty.
    <bullet> Column C (Impact of Work RVU Changes): This column shows 
the estimated CY 2023 impact on total allowed charges of the changes in 
the work RVUs, including the impact of changes due to potentially 
misvalued codes.
    <bullet> Column D (Impact of PE RVU Changes): This column shows the 
estimated CY 2023 impact on total allowed charges of the changes in the 
PE RVUs.
    <bullet> Column E (Impact of MP RVU Changes): This column shows the 
estimated CY 2023 impact on total allowed charges of the changes in the 
MP RVUs.
    <bullet> Column F (Combined Impact): This column shows the 
estimated CY 2023 combined impact on total allowed charges of all the 
changes in the previous columns. Column F may not equal the sum of 
columns C, D, and E due to rounding.

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    We have received requests from interested parties for CMS to 
provide more granular information that separates the specialty-specific 
impacts by site of service. These interested parties have presented 
high-level information to CMS suggesting that Medicare payment policies 
are directly responsible for the consolidation of privately owned 
physician practices and free standing supplier facilities into larger 
health systems. Their concerns highlight a need to update the 
information under the PFS to account for current trends in the delivery 
of health care, especially concerning independent versus facility-based 
practices. In response to interested party feedback, we have recently 
improved our current suite of public use files (PUFs) by including a 
new file that shows estimated specialty payment impacts at a more 
granular level, specifically by showing ranges of impact for 
practitioners within a specialty. This file is available on the CMS 
website under downloads for the CY 2023 PFS proposed rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    For this rulemaking cycle, we are providing an additional impact 
table that includes a facility/non-facility breakout of payment 
changes. The following is an explanation of the information represented 
in Table 139.
    <bullet> Column A (Specialty): Identifies the specialty for which 
data are shown.
    <bullet> Column B (Setting): Identifies the facility or nonfacility 
setting for which data are shown.
    <bullet> Column C (Allowed Charges): The aggregate estimated PFS 
allowed charges for the specialty based on CY 2021 utilization and CY 
2022 rates. That is, allowed charges are the PFS amounts for covered 
services and include coinsurance and deductibles (which are the 
financial responsibility of the beneficiary). These amounts have been 
summed across all services furnished by physicians, practitioners, and 
suppliers within a specialty to arrive at the total allowed charges for 
the specialty.
    <bullet> Column D (Combined Impact): This column shows the 
estimated CY 2023 combined impact on total allowed charges.

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BILLING CODE 4120-01-C
2. CY 2023 PFS Impact Discussion
a. Changes in RVUs
    The most widespread specialty impacts of the RVU changes are 
generally related to the changes to RVUs for specific services 
resulting from the misvalued code initiative, including RVUs for new 
and revised codes. The estimated impacts for some specialties, 
including infectious disease, internal medicine, geriatrics, diagnostic 
testing facility, and physical medicine reflect increases relative to 
other physician specialties. These increases can largely be attributed 
to the revaluation of the other E/M services and/or the second year 
transition to updated clinical labor pricing. The services that make up 
these specialties rely primarily on E/M services or on clinical labor 
for their practice expense costs. These increases are also due to 
increases in value for particular services after considering the 
recommendations from the American Medical Association's (AMA) Relative 
Value Scale Update Committee (RUC) and CMS review, and increased 
payments resulting from updates to supply and equipment pricing.
    The estimated impacts for several specialties, including clinical 
social workers, clinical psychologists, radiology and interventional 
radiology, vascular surgery, and nuclear medicine, reflect decreases in 
payments relative to payment to other physician specialties which are 
largely the result of the redistributive effects of the revaluation of 
other E/M services and/or the second year transition to updated 
clinical labor pricing. The services that make up these specialties 
were also negatively affected by updated malpractice premium data for 
CY 2023, or rely primarily on supply/equipment items for their practice 
expense costs and therefore were affected negatively by the transition 
to updated clinical labor pricing under budget neutrality. These 
decreases are also due to the revaluation of individual procedures 
based on reviews, including consideration of

[[Page 46394]]

AMA RUC review and recommendations, as well as decreases resulting from 
the continued phase-in implementation of the previously finalized 
updates to supply and equipment pricing. The estimated impacts also 
reflect decreases due to continued implementation of previously 
finalized code-level reductions that are being phased in over several 
years. For independent laboratories, it is important to note that these 
entities receive approximately 83 percent of their Medicare revenues 
from services that are paid under the CLFS.
    We often receive comments regarding the changes in RVUs displayed 
on the specialty impact table (Table 138), including comments received 
in response to the valuations. We remind interested parties that 
although the estimated impacts are displayed at the specialty level, 
typically the changes are driven by the valuation of a relatively small 
number of new and/or potentially misvalued codes. The percentage 
changes in Table 138 are based upon aggregate estimated PFS allowed 
charges summed across all services furnished by physicians, 
practitioners, and suppliers within a specialty to arrive at the total 
allowed charges for the specialty, and compared to the same summed 
total from the previous calendar year. Therefore, they are averages, 
and may not necessarily be representative of what is happening to the 
particular services furnished by a single practitioner within any given 
specialty. To illustrate how impacts can vary within specialties, we 
created a public use file that models the expected percentage change in 
total RVUs per practitioner. Using CY 2021 utilization data, Total RVUs 
change between -1 percent and 1 percent for more than 45 percent of 
practitioners, representing more than 44 percent of the changes in 
Total RVUs for all practitioners, with variation by specialty. 
Specialties, such as chiropractic, hand surgery, ophthalmology, 
optometry, and orthopedic surgery, exhibit little variation in changes 
in total RVUs per practitioner. For these specialties, more than 90 
percent of these practitioners will experience a change in Total RVUs 
between -1 percent and 1 percent. The specific service mix within a 
specialty may vary by practitioner, so individual practitioners may 
experience different changes in total RVUs. For example, Table 138 (CY 
2022 PFS Estimated Impact on Total Allowed Charges by Specialty) 
indicates a 5 percent increase in RVUs for the infectious disease 
specialty as a whole, however, only 36 percent of infectious disease 
specialty practitioners--representing over 51 percent of Total RVUs for 
the specialty--would experience a 5 percent or more increase in Total 
RVUs. Meanwhile, nearly 12 percent of infectious disease specialty 
practitioners would experience 1 percent or more decreases in Total 
RVUs, and these practitioners account for about 6 percent of Total RVUs 
for this specialty. We also note the code level RVU changes are 
available in the Addendum B public use file that we make available with 
each rule.
    Many interested parties have requested that CMS maintain the 3.00 
percent increase in PFS payment amounts that was specified in the 
Protecting Medicare and American Farmers from Sequester Cuts Act for 
services furnished during CY 2022. We remind readers that this increase 
was provided through a time-limited amendment to the statute, which CMS 
does not have legal authority to alter. The expiration of this 3.00 
percent increase in payment amounts will result in the CY 2023 
conversion factor being calculated as though the 3.00 percent increase 
for the CY 2022 conversion factor had never been applied. Several 
interested parties have requested clarification regarding whether the 
specialty impacts displayed in Table 138 reflected the expiration of 
the 3.00 percent CAA provision for CY 2023. We can clarify for the 
commenters that the specialty impacts displayed in Table 138 reflect 
changes that take place within the pool of total RVUs. The specialty 
impacts table therefore includes any changes in spending which result 
from finalized policies within BN (such as the revaluation of other E/M 
codes in CY 2023 or the clinical labor pricing update in CY 2022) but 
does not include any changes in spending which result from finalized 
policies that are not subject to BN adjustment, and therefore, have a 
neutral impact across all specialties. The expiration of the 3.00 
percent CAA provision for CY 2023 is a statutory change that takes 
place outside of BN, and therefore, is not captured in the specialty 
impacts displayed in Table 138.
b. Impact
    Column F of Table 138 displays the estimated CY 2023 impact on 
total allowed charges, by specialty, of all the RVU changes. A table 
showing the estimated impact of all of the changes on total payments 
for selected high volume procedures is available under ``downloads'' on 
the CY 2023 PFS proposed rule website at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/. We selected these 
procedures for sake of illustration from among the procedures most 
commonly furnished by a broad spectrum of specialties. The change in 
both facility rates and the nonfacility rates are shown. For an 
explanation of facility and
nonfacility PE, we refer readers to Addendum A on the CMS website at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.
D. Changes Related to Telehealth Services
    In last year's final rule, we discussed various flexibilities that 
would expire at the end of the PHE. Further, we clarified certain 
policies that were initially implemented as temporary policies, and 
subsequently made permanent by provisions of the CAA, 2021 that amended 
section 1834(m) of the Act (refer to 86 FR 65055-65063). Also, we note 
that the CAA, 2022 includes provisions that further amend section 
1834(m) of the Act. For a detailed discussion of our implementation of 
the CAA, 2022 provisions refer to section II.B of this proposed rule.
    Following the expiration of the PHE for COVID-19, Medicare 
telehealth will see changes occur in a number of areas. CMS implemented 
many temporary policy changes during the PHE to facilitate continued 
safe access to care during the pandemic, and that those changes will 
end with the expiration of the PHE ends or, in the case of some 
policies, after 151 days following the end of the PHE as specified in 
the relevant sections of the CAA, 2022.
    Following the expiration of the flexibilities put in place during 
the PHE for COVID-19, the statutory and regulatory restrictions on 
payment for Medicare telehealth services under section 1834(m) of the 
Act and our regulations at Sec. Sec.  410.78 and 414.65 will apply once 
again.

[[Page 46395]]

For most Medicare telehealth services, payment will be made only when 
furnished by certain types of physicians and practitioners to patients 
located in specified types of medical settings (originating sites) 
located in mostly rural areas, and only when the service is furnished 
using audio and video equipment permitting two-way, real-time 
interactive communication between the patient and furnishing 
practitioner. There are limited exceptions to these restrictions that 
allow Medicare telehealth services to be furnished without geographic 
limitations, to patients in their homes, and in some cases using audio-
only technology, when the services are for the diagnosis, evaluation, 
or treatment of a mental health disorder (including a substance use 
disorder (SUD), including opioid misuse). There are also limited 
statutory exceptions for home dialysis monthly ESRD-related visits and 
for services for purposes of diagnosis, evaluation or treatment of 
symptoms of an acute stroke, to allow Medicare telehealth services to 
be furnished without geographic limitations, and to patients in their 
homes or certain other locations.
    As such, after the expiration of the flexibilities put in place 
during the PHE, we expect a significant reduction in the volume of 
Medicare telehealth services overall, and a corresponding reduction in 
aggregate spending for Medicare telehealth services. We further expect 
that many of the services that have been furnished via telehealth 
during the PHE will return to in-person settings. However, because the 
provisions of the CAA, 2021 and CAA, 2022 required permanent changes to 
remove previous restrictions on the use of telehealth for the 
diagnosis, evaluation or treatment of a mental health disorder 
(including a substance use disorder (SUD), including opioid use 
disorder), we anticipate that volume and spending for Medicare 
telehealth mental health services will increase from pre-pandemic 
levels coming years.
    In this proposed rule, we propose to continue including on the 
Medicare Telehealth Services List, either permanently or temporarily 
through the end of CY 2023, many of the services added to the list 
during the PHE. However, after the expiration of the flexibilities put 
in place during the PHE, payment for Medicare telehealth services will 
be subject to the statutory and regulatory limitations described 
previously in this section of the RIA. Compared to overall utilization 
of these services during the PHE, we do not expect new significant 
overall growth in Medicare telehealth services by aggregate volume. 
Further, we estimate that the proposed addition of telehealth services 
added to the Medicare Telehealth Services List will have a negligible 
impact on PFS expenditures.
    We are also proposing to implement provisions of the CAA, 2022 that 
extend the application of certain Medicare telehealth flexibilities for 
an additional 151 days after the end of the PHE for COVID-19, including 
allowing Medicare telehealth services to be furnished to patients 
located anywhere within the U.S.; allowing the extended scope of 
eligible telehealth practitioners to include occupational therapists, 
physical therapists, speech-language pathologists, and audiologists; 
extending payment for telehealth services furnished by FQHCs and RHCs; 
and delaying the requirement that there be an in-person visit with the 
physician or practitioner within 6 months before an initial mental 
health telehealth service. We anticipate that these proposals will 
result in continued utilization of Medicare telehealth services during 
the remainder of the PHE and the immediate subsequent 151 days at 
levels comparable to observed utilization of these services thus far 
during the PHE for COVID-19.
    Regarding our proposal to retain on the Medicare Telehealth 
Services List until the end of CY 2023 the services that we added to 
the list on a temporary Category 3 basis, we believe our proposals 
would provide clarity to interested parties, but will have a negligible 
impact on PFS expenditures. For example, outside the circumstances and 
flexibilities available during the PHE, services that are permanently 
included on the Medicare Telehealth Services List are furnished via 
telehealth, on average, less than 0.1 percent of the time they are 
reported.\538\ The statutory and regulatory requirements for payment of 
Medicare telehealth services that apply outside the circumstances of 
the PHE have limited increases in utilization.
E. Other Provisions of the Regulation
1. Requiring Manufacturers of Certain Single-Dose Container or Single-
Use Package Drugs Payable Under Medicare Part B To Provide Refunds With 
Respect to Discarded Amounts
    Section 90004 of the Infrastructure Investment and Jobs Act (Pub. 
L. 117-9, November 15, 2021) amended section 1847A of the Act to 
require manufacturers to provide a refund to CMS for certain discarded 
amounts from a refundable single-dose container or single-use package 
drug. The refund amount is the payment limit for the drug, multiplied 
by the amount of discarded drug that exceeds an applicable percentage, 
which is required to be at least 10 percent, of total charges (subject 
to certain exclusions) for the drug in a given calendar quarter. In 
section III.A of this proposed rule, we are proposing implementation of 
this provision including: how discarded amounts of drugs are 
determined; a definition of which drugs are subject to refunds (and 
exclusions); when and how often CMS will notify manufacturers of 
refunds; when and how often payment of refunds from manufacturers to 
CMS is required; refund calculation methodology; a dispute resolution 
process; and enforcement provisions.
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    \538\ https://www.cms.gov/medicare-telemedicine-snapshot.
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    To estimate anticipated quarterly refund amounts due from 
manufacturers, we analyzed JW modifier data from 2020 as if the data 
represented dates of service on or after the effective date of section 
90004 of the Infrastructure Act (that is, January 1, 2023).\539\ 
Overall in the 2020 calendar year, Medicare paid nearly $720 million 
for discarded amounts of drugs from a single-dose container or single-
use package paid under Part B. In that year, there were 39 billing and 
payment codes with 10 percent or more discarded units based on JW 
modifier data. Of these, 8 would not meet the proposed definition of 
refundable single-dose container or single-use package drug in section 
1847A(h)(8) of the Act because they are multiple source drug codes; 5 
would be excluded from the proposed definition of refundable single-
dose container or single-use package drug (as specified in section 
1847A(h)(8)(B) of the Act) because they are identified as 
radiopharmaceuticals or imaging agents in FDA-approved labeling. After 
these exclusions, there were 26 billing and payment codes that would 
meet the proposed definition of refundable single-dose container or 
single-use package drug and have 10 percent or more discarded units.
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    \539\ https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare-part-b-discarded-drug-units.
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    We estimated refund amounts as described in section 1847A(h)(3) of 
the Act were calculated based on this data by subtracting the percent 
units discarded by 10 percent (the applicable percentage). Then, we 
multiplied that percentage by the CY 2020 total allow amount to 
estimate the annual refund for a given billing and payment code. The 
quarterly refund was estimated by dividing the annual estimate by 4. 
Based

[[Page 46396]]

on this data, there would be approximately $141 million dollars in 
refunds due from manufacturers for the calendar year of 2020 ($35.4 
million dollars each calendar quarter). See Table 140.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP29JY22.197

BILLING CODE 4120-01-C
    There are several limitations to this analysis that could 
substantially affect the total quarterly refund. Since new drugs are 
continually being approved, this estimate does not consider newer drugs 
that would meet the definition of refundable single-dose container or 
single-use package drug on or after the effective date of January 1, 
2023. Since section 1847A(h)(8)(B)(iii) of the Act excludes drugs 
approved by FDA on or after November 15, 2021 and for which payment has 
been made under Part B for fewer than 18 months from this definition, 
we would expect impact on refund amounts after the 18-month exclusion 
has ended if the drug otherwise meets the definition. Other substantial 
changes to this estimate may occur if a billing and payment code no 
longer meets this definition. For example, if a generic version of one 
of these drugs is marketed, the billing and payment code would become a 
multiple source drug code and would no longer meet the definition of 
refundable single-dose container or single-use package drug. 
Subsequently, the manufacturers would not be responsible for refunds 
under this provision. There may be changes in the percent discarded 
units for a given refundable single-dose container or single-use 
package drug if the manufacturer introduces additional vial sizes or 
modifies the vial size to reduce the amount discarded. Lastly, since 
data from the CMS website only includes billing and payment codes on

[[Page 46397]]

the ASP drug pricing file \540\ and implementation of section 90004 of 
the Infrastructure Act would not be restricted to billing and payment 
codes included on the file, there may be other applicable data that was 
not assessed as part of this estimate.
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    \540\ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice.
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a. Impacts Related to the Proposed Dispute Resolution Process
    As described in section V.B.1. of this proposed rule, the 
information collection requirements, we estimate the annual burden per 
respondent/recordkeeper to be 40 hours. If we anticipate no more than 
10 disputes per year, the total annual reporting and/or recordkeeping 
burden would be 400 hours (10 error reports per year x 40 hours per 
respondent). We estimate an annual cost of this burden to be $15,800 
($39.50/hour x 400 hours).
2. Rural Health Clinics (RHCs) and Federally Qualified Health Centers 
(FQHCs)
    In section III.C.2. of this proposed rule, we are proposing to 
include chronic pain management services in the general care management 
HCPCS code G0511 when these services are provided by RHCs and FQHCs. 
Since HCPCS code GYYY1 would be valued using a crosswalk to the PCM CPT 
code 99424, which is currently one of the CPT codes that comprise HCPCS 
code G0511, we propose no change to the average used to calculate the 
G0511 payment rate.
    In addition, in section III.C.2. of this proposed rule we discuss 
the new coding and payment for general behavioral health integration 
services (HCPCS code GBHI1). We explain that since clinical 
psychologists (CPs) and clinical social workers (CSWs) are considered 
practitioners that can provide services in RHCs/FQHCs, we acknowledge 
when CPs and CSWs provide the services described in HCPCS code GBHI1 in 
an RHC or FQHC, they can bill HCPCS code G0511.
    In terms of estimated impacts to the Medicare program, expanding 
use of General Care Management HCPCS code G0511 to include chronic pain 
management services (GYYY1) and behavioral health integration services 
(GBHI1) for RHCs and FQHCs would have a negligible impact on Medicare 
spending because these services are already included.
    In section III.C.4. of this proposed rule, we provide a discussion 
and clarification regarding the use of short-period cost reports vs 12-
consecutive month cost reports to establish the payment limit for 
specified provider-based RHCs in accordance with section 1833(f)(3)(A) 
of the Act. We believe this clarification would have negligible impact 
on Medicare spending.
3. Clinical Laboratory Fee Schedule
    In section III.B. of this proposed rule, we discuss statutory 
revisions to the data reporting period and phase-in of payment 
reductions under the CLFS. In accordance with section 4(b) of the 
Protecting Medicare and American Farmers from Sequester Cuts Act 
(PMAFSCA) (Pub. L. 117-71, enacted December 10, 2021), we are proposing 
to make certain conforming changes to the data reporting and payment 
requirements in our regulations at 42 CFR part 414, subpart G. 
Specifically, for CDLTs that are not ADLTs, we are proposing to update 
certain definitions and revise Sec.  414.504(a)(1) to indicate that 
initially, data reporting begins January 1, 2017 and is required every 
3 years beginning January 2023. The PMAFSCA delays the next data 
reporting period under the CLFS for CDLTs that are not ADLTs by 1 year, 
that is, it requires the next data reporting period for these tests to 
take place during the period of January 1, 2023 through March 31, 2023. 
Subsequently, the next private payor rate-based CLFS update for these 
tests would be effective January 1, 2024 instead of January 1, 2023. In 
addition, we are proposing to make conforming changes to our 
requirements for the phase-in of payment reductions to reflect the 
PMAFSCA amendments. Specifically, we are proposing to revise Sec.  
414.507(d) to indicate that for CY 2022, payment may not be reduced by 
more than 0.0 percent as compared to the amount established for CY 
2021, and for CYs 2023 through 2025, payment may not be reduced by more 
than 15 percent as compared to the amount established for the preceding 
year.
    We recognize that private payor rates for CDLTs paid on the CLFS 
and the volumes paid at each rate for each test, which are used to 
determine the weighted medians of private payor rates for the CLFS 
payment rates, have changed since the first data collection period 
(January 1, 2016 through June 30, 2016) and data reporting period 
(January 1, 2017 through March 31, 2017). In addition, as discussed in 
section III.A. of this proposed rule, in the CY 2019 PFS final rule (83 
FR 59671 through 59676), we amended the definition of applicable 
laboratory to include hospital outreach laboratories that bill Medicare 
Part B using the CMS-1450 14x Type of Bill. As such, the PMAFSCA 
amendments to the data reporting period will delay using updated 
private payor rate data to set revised CLFS payment rates for CDLTs 
that are not ADLTs.
    Due to the unforeseen changes in private payor rates due to 
potential shifts in market-based pricing for laboratory tests and the 
unpredictable nature of test volumes and their impact on calculating 
updated CLFS payment rates based on the weighted median of private 
payor rates, it is uncertain whether the delay in data reporting would 
result in a measurable budgetary impact. In other words, in order to 
assess the impact of delayed reporting and subsequent implementation of 
updated CLFS rates, we would need to calculate weighted medians of 
private payor rates based on new data and compare the revised rates to 
the current rates. As such, we believe that we will only know the 
impact of the delay in data reporting after collecting actual updated 
applicable information from applicable laboratories, and calculating 
the updated CLFS rates.
    With regard to the proposed conforming changes to our requirements 
for the phase-in of payment reductions, we note that for CYs 2023 
through 2025, payment may not be reduced by more than 15 percent as 
compared to the amount established for the preceding year.
    Based on data reported in the 2017 data collection period, we 
estimate 14.8 percent (191) of tests on the CLFS may receive the full 
15 percent phase-in reduction in CY2023.
4. Expansion of Coverage for Colorectal Cancer Screening and Reducing 
Barriers
    In section III.D. of this proposed rule, we propose to expand CRC 
screening test coverage by modifying coverage and payment limitations 
of certain CRC screening tests to begin at age 45 instead of 50. An 
updated modeling study that accompanied the May 2021 updated USPSTF CRC 
screening recommendation found that the most efficient strategy for CRC 
screening began for individuals at 45 years of age. The expected 
benefits include longer life and fewer new cases and total deaths from 
colorectal cancer.\541\ We considered the comparatively small 
population of traditional Medicare enrollees in the affected age group. 
The CMS website reports that total Medicare beneficiary enrollment in 
Part A and/or Part B aged 45-54 years in CY 2020

[[Page 46398]]

totaled only 1,956,634, whereas total Medicare beneficiary enrollment 
in Part A and/or Part B of all ages totaled 62,840,267.\542\
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    \541\ https://www.uspreventiveservicestaskforce.org/uspstf/document/final-modeling-study18/colorectal-cancer-screening.
    \542\ https://data.cms.gov/summary-statistics-on-beneficiary-enrollment/medicare-and-medicaid-reports/medicare-total-enrollment.
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    In addition, we propose to expand CRC screening test coverage to 
include a follow-on screening colonoscopy after a Medicare covered non-
invasive stool-based CRC screening test returns a positive result. We 
anticipate the impact of beneficiary cost sharing no longer being 
applicable to the follow-on screening colonoscopy would be balanced, in 
part or in whole, by the benefits and savings of additional 
beneficiaries choosing a less expensive and non-invasive stool-based 
test as their first step in the CRC screening process.
    We anticipate that both proposals would result in some additional 
service utilization, but we also anticipate the additional utilization 
to be balanced, in part or in whole, by benefits and savings resulting 
from increased prevention, early detection (allowing for less invasive 
and more effective treatment) and reduced mortality. We do not 
anticipate expanding CRC screening test coverage (in accordance with 
recommendations by the USPSTF and in consultation with other 
appropriate organizations described earlier in our proposal) to result 
in a significant impact on the Medicare program.
    An internal analysis by the CMS Office of the Actuary of CY 2019 
Medicare FFS CRC screening test claims confirmed our understanding that 
our proposals would not likely result in a significant impact on the 
Medicare program. Regarding our proposal to expand CRC screening test 
coverage by modifying coverage and payment limitations of certain CRC 
screening tests to begin at age 45 instead of 50, we calculated CY 2019 
FFS CRC screening test spending and utilization for patients between 45 
and 55 years old, estimated CY 2019 Medicare FFS member months by age, 
and assumed that current colorectal screening test utilization for 45-
49 year old patients would increase on a per enrollee basis to that of 
patients between 50-55. We estimated the impact from additional 
utilization to be approximately $5 million in additional spending. 
Regarding our proposal to expand CRC screening test coverage to include 
a follow-on screening colonoscopy after a Medicare covered non-invasive 
stool-based CRC screening test returns a positive result, we matched CY 
2019 FFS colonoscopy claims to Cologuard usage claims, identified 
colonoscopy claims as screening or diagnostic, assumed that all 
diagnostic colonoscopy claims with a prior Cologuard test had a 
positive test result, and calculated the applicable beneficiary cost 
sharing for those claims. We estimated the impact from additional 
utilization to be approximately $5 million in additional spending.
5. Removal of Selected National Coverage Determinations (NCDs)
    We are proposing to remove one older NCD that no longer contains 
clinically pertinent and current information. Generally, proactively 
removing obsolete or unnecessary NCDs removes barriers to innovation 
and reduces burden for interested parties and CMS. NCDs generally fall 
into one of two impact categories. First, eliminating an NCD for items 
and services that were previously nationally covered means that the 
item or service will no longer be automatically nationally covered by 
Medicare. Instead, the coverage determinations for those items and 
services will be made by Medicare Administrative Contractors (MACs). 
Second, if the previous national coverage determination barred coverage 
for an item or service under title XVIII, MACs would now be able to 
cover the item or service if the MAC determines that such action is 
appropriate under the statute. We believe that allowing local 
contractor flexibility in these cases better serves the needs of the 
Medicare program and its beneficiaries since we believe the future 
utilization for items and services within this policy will be limited, 
affecting less than one percent of the Medicare FFS population.
    By proposing to remove NCD 160.22 Ambulatory EEG Monitoring, we are 
proposing to go from positive national coverage to local coverage by 
the MACs. Claims data for 2021 shows that for the 20 CPT/HCPCS codes 
associated with this NCD, CMS paid 167,242 Medicare FFS claims for 
approximately 78,267 unique beneficiaries totaling CMS payments of 
$48,702,876.00. We estimate there will be de minimis change to 2023 
payments, compared to 2021 because this is a long-established service 
for which the MACs already have LCDs and guidance articles. The NCD 
contains outdated language that is inconsistent with, and contrary to 
current standards of care. Therefore, we believe removing the outdated 
NCD will allow MACs to update local coverage guidance for this 
established diagnostic test, but would not result in significant 
changes to utilization or payments.
6. Modifications Related to Medicare Coverage for Opioid Use Disorder 
(OUD) Treatment Services Furnished by Opioid Treatment Programs (OTPs)
    As discussed in section III.F of this proposed rule, for CY 2023 
and subsequent years, we are proposing to revise our methodology for 
pricing the drug component of the methadone weekly bundle and the add-
on code for take-home supplies of methadone. Under this proposal, we 
would base the payment amount for the drug component of HCPCS codes 
G2067 and G2078 for CY 2023 and subsequent years on the payment amount 
for methadone in CY 2021 and update this amount annually to account for 
inflation using the PPI for Pharmaceuticals for Human Use 
(Prescription). We propose to update the methadone payment amount for 
CY 2023 based on the projected increase in the PPI for Pharmaceuticals 
for Human Use (Prescription) to reflect the forecasted price growth for 
prescription drugs for the 2-year period from CY 2021 to 2022 and from 
CY 2022 to 2023. Because we froze the payment amount for methadone at 
the 2021 amount for CY 2022, we propose to account for the inflation 
for both CY 2022 and CY 2023 in setting the payment rate for CY 2023. 
Based on the 2022 Q1 forecast from IHS Global Inc. (IGI) the proposed 
CY 2023 methadone payment amount would be $39.29, which is the CY 2022 
payment amount of $37.38 increased by a projected 5.1 percent growth in 
the PPI for Pharmaceuticals for Human Use (Prescription) from CY 2021 
to CY 2023 ($37.38 * 1.051 = $39.29). IGI is a nationally recognized 
economic and financial forecasting firm that contracts with CMS to 
forecast various price proxies used in the CMS market baskets. 
Additionally, we are proposing that if more recent data become 
subsequently available (for example, a more recent estimate of the 
PPI), we would use such data in the final rule to determine the final 
CY 2023 methadone payment amount. For subsequent years, we are 
proposing to continue to update this rate annually using the PPI for 
Pharmaceuticals for Human Use (Prescription).
    Overall, CMS estimates that the impact of our proposal to revise 
the OTP methadone pricing methodology would increase Medicare spending 
by roughly $2.5 million in CY 2023. This estimate is based on actual 
utilization of the OTP benefit by Medicare beneficiaries under Part B 
through CY 2021. The estimate does not reflect any additional 
utilization that may occur in CY 2023.

[[Page 46399]]

    Additionally, as discussed in section III.F of this proposed rule, 
we are proposing to modify the payment rate for the non-drug component 
of the bundled payment for an episode of care to base the rate for 
individual therapy on a crosswalk to CPT code 90834 (Psychotherapy, 45 
minutes with patient), instead of a crosswalk to CPT code 90832 
(Psychotherapy, 30 minutes with patient), as is our current policy. We 
believe CPT code 90834 most closely corresponds to a 50-minute therapy 
session, which interested parties have indicated is the typical amount 
of therapy received by patients in the first few months of treatment at 
an OTP. In the CY 2020 PFS final rule (84 FR 62658), we stated that we 
based the rate for individual therapy in the bundled payment on the 
2019 non-facility payment rate for CPT code 90832, which was $68.47. 
Therefore, to change the rate for individual therapy, we are proposing 
to substitute the 2019 rate for CPT code 90832 included in the non-drug 
component of each of the bundled payments for an episode of care with 
the 2019 PFS non-facility payment rate for CPT code 90834, which was 
$91.18, to determine an adjusted payment rate for CY 2020 for the non-
drug component of each applicable HCPCS code. As described in Sec.  
410.67(d)(4)(iii), we would then apply the Medicare Economic Index 
(MEI) updates for 2021, 2022, and 2023 to these adjusted payment rates 
to determine the CY 2023 payment amounts for the non-drug component of 
the bundled payments for an episode of care.
    CMS anticipates that the proposed increase to the bundled rates to 
reflect longer individual therapy sessions would result in an increase 
of $25.93 to the non-drug component of the weekly bundled payments for 
HCPCS codes G2067 through G2075 from CY 2022 to 2023. Based on 
utilization data from Medicare beneficiaries under the OTP benefit 
through CY 2021, the estimated impact of this policy is an increase in 
Medicare spending of approximately $27 million in CY 2023. This 
estimate does not reflect any additional utilization that may occur 
during CY 2023.
    Additionally, as discussed in section III.F. of this proposed rule, 
we are proposing to allow the OTP intake add-on code to be furnished 
via two-way audio-video communications technology when billed for the 
initiation of treatment with buprenorphine, to the extent that the use 
of audio-video telecommunications technology to initiate treatment with 
buprenorphine is authorized by DEA and SAMHSA at the time the service 
is furnished. We are also proposing to permit the use of audio-only 
communication technology to initiate treatment with buprenorphine in 
cases where audio-video technology is not available to the beneficiary.
    We believe the Part B cost impact of the proposed flexibilities for 
the use of telecommunications policies will be minimal because, we do 
not expect that this provision will increase the frequency at which 
medically necessary intake assessments are furnished.
7. Medicare Shared Savings Program
a. General Impacts
    As of January 1, 2022, over 11 million people with Medicare receive 
care from at least one health care provider in one of the 483 ACOs 
participating in the Medicare Shared Savings Program (Shared Savings 
Program), the largest value-based payment program in the country. The 
Shared Savings Program proposed policies advance Medicare's overall 
value-based care strategy of growth, alignment, and equity, with many 
proposals overlapping these categories. The proposed policies are 
designed to reverse recent trends where participation has plateaued in 
the Shared Savings Program has plateaued, higher spending populations 
are increasingly underrepresented in the program since the change to 
regionally-adjusted benchmarks, and access to ACOs appears inequitable 
as evidenced by data indicating underserved populations are less likely 
to be assigned to a Shared Savings Program and to encourage growth of 
ACOs in underserved communities based, in part, on recent observations 
where the highest earning ACOs had a higher proportion of beneficiaries 
who were members of racial and ethnic minority communities and included 
a greater proportion of ESRD, disabled, and aged/dual eligible 
beneficiaries than the lowest earning ACOs.
    Stagnation in overall participation in the Shared Savings Program 
in recent years has coincided with increasing total shared savings 
outlays, driven by sharply higher shared savings payments to ACOs that 
were already low spending relative to their region electing to 
transition to risk in the ENHANCED track. While this type of selection 
was anticipated in estimating the impacts of the December 2018 final 
rule (83 FR 67816), it was also assumed that: (1) ACOs making the 
transition to risk would respond with stronger efforts to improve 
efficiency, and (2) a broader spectrum of relatively higher-spending 
ACOs would be influenced by the revised benchmarking methodology to 
drive down spending for their assigned beneficiaries while 
participating under the BASIC track glide path in order to ultimately 
achieve sustainable participation under risk in following agreement 
periods.
    The overall increase in shared savings payments to ACOs 
transitioning to the ENHANCED track appears to be driven largely by 
favorable regional benchmark adjustments and the ENHANCED track's 
higher sharing rate, calling into question whether ACOs selecting risk 
will further improve efficiency or simply be content to collect steady 
shared savings by maintaining their spending level relative to their 
region. Meanwhile, ACO Investment Model participants--a subset of Track 
1 ACOs that meaningfully outperformed peer ACOs in reducing spending 
and earning shared savings over the period from 2016 through 2018--have 
also dropped out at an elevated frequency before even attempting the 
risk-free portion of the BASIC track glide path. The spending 
reductions achieved by AIM ACOs were found to be similar regardless of 
an AIM ACO's decision to continue or exit the program. Superior 
financial performance during an initial agreement period under a one-
sided mode therefore failed to provide sufficient incentive to overcome 
a pronounced aversion to risk demonstrated by this otherwise-effective 
subset of ACOs.\543\
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    \543\ Trombley, MJ, et al. ACO Investment Model Produced 
Savings, But the Majority of Participants Exited when Faced with 
Downside Risk. Health Affairs. 2020; 138-146. doi:10.1377/
hlthaff.2020.01819.
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    Without modification, the Shared Savings Program is at high risk of 
increasing overall Medicare spending over the coming decade. ACOs 
serving patients with low spending will likely continue to dominate the 
roster of ACOs making the transition to risk. Shared savings payments 
to low-spending ACOs will increase alongside a growing disincentive for 
ACOs to serve higher spending populations for whom potential savings 
from care management would likely be greater.\544\ This selective 
participation is in response to regional benchmark adjustments that 
have increased shared savings payments to low spending ACOs and has 
resulted in higher cost beneficiaries, who have the most need for ACO 
care management, being increasingly excluded from assignment to ACOs 
participating in the program. It currently appears very unlikely that 
selective transition to downside risk under the

[[Page 46400]]

current participation options and financial methodology will drive down 
spending enough to offset increased shared savings payments to ACOs 
with favorable regional benchmarks. Furthermore, a growing subset of 
ACOs that elect prospective beneficiary assignment are finding their 
regional benchmarks to be artificially inflated because of a systematic 
bias in calculations based on regional FFS expenditures resulting from 
comparing expenditures for the ACO's own assigned beneficiary 
population identified based on the offset assignment window, and 
expenditures for the assignable population of beneficiaries in the 
ACO's region identified based on the calendar year assignment window. 
Therefore, the program's baseline trajectory is now projected to 
increase net Medicare spending by approximately $4.2 billion over the 
period from 2024-2034, which spans two 5-year agreement periods for 
ACOs renewing or entering in 2024 and 2025. Absent proposed changes, 
the program is projected to violate the statutory requirement that 
provisions implemented under authority of section 1899(i)(3) of the Act 
not increase spending.
---------------------------------------------------------------------------

    \544\ McWilliams, JM, et al. Early Performance of Accountable 
Care Organizations in Medicare. New England Journal of Medicine. 
June 2016. 374:2357-2366. DOI: 10.1056/NEJMsa1600142.
---------------------------------------------------------------------------

    The proposals are designed to increase program participation for 
new ACOs through advance investment payments to promote health equity 
and provide ACOs greater choice in the pace of progression to 
performance-based risk; sustain program participation by reducing the 
effect of ACO performance on benchmark updates and benchmark rebasing; 
mitigate the bias in regional expenditure calculations that benefits 
ACOs electing prospective assignment; strengthen incentives for ACOs 
serving high risk and high dual populations; improve the risk 
adjustment methodology to better account for medically complex, high 
cost beneficiaries while continuing to guard against coding 
initiatives; increase opportunities for low revenue ACOs in the BASIC 
track to share in savings by allowing ACOs that do not meet the minimum 
savings rate (MSR) requirement to share in savings at a lower rate; 
encourage ACOs to transition more quickly to all-payer quality measure 
reporting; update the ACO beneficiary assignment methodology; and 
reduce administrative burden on ACOs.
    Reducing the cap on negative regional adjustments to high spending 
ACOs' benchmarks and offering eligible ACOs a shared savings-only BASIC 
track participation option for a full 5-year agreement period are 
expected to significantly re-engage participation for ACOs serving 
higher cost beneficiaries. While we are uncertain how large the group 
of new and re-entering ACOs would be and whether they would have a 
similar savings potential as the first implementation of Track 1, other 
proposed incentives targeted to low revenue (typically physician-led) 
ACOs, like advance investment payments and paying partial shared 
savings to low-revenue ACOs with savings under their MSR, as well as 
adjusting rebased benchmarks for prior savings should improve the 
incentive for new ACOs to join the program and reduce spending to a 
greater extent than the incentive provided under Track 1. Table 141 
shows the combined benchmark and the relative impact that 2024/2025 
renewing and new ACOs are expected to have on average over the two 5-
year agreement periods from 2024-2034. The Baseline columns show these 
projections under current program rules and the Proposed columns show 
the projections for performance under the proposed rule.
[GRAPHIC] [TIFF OMITTED] TP29JY22.198

b. Impacts for Renewing ACOs
    Renewing ACOs for the projected two 5-year agreement periods are 
anticipated at baseline to generate higher net shared savings earnings 
(2.8 percent of benchmark) than actual reductions in spending on claims 
(2.7 percent of benchmark). After also accounting for higher physician 
fee schedule payments to qualifying practitioners (QPs), totaling on 
average 0.3 percent of benchmark over 10 years, this cohort of ACOs is 
projected to increase net program spending by 0.4 percent of benchmark 
on average, or $2.9 billion over 10 years. For existing ACOs, the 
proposed changes would help retain more of the otherwise shrinking 
subset of ACOs that serve higher spending populations, would remove the 
bias favoring benchmarks for ACOs electing prospective assignment, and 
would marginally improve the incentive for efficiency via the use of a 
three-way blend of the Accountable Care Prospective Trend (ACPT)/
national-regional growth rates to update benchmarks and the prior 
savings adjustment. As a result, overall savings on claims are 
projected to increase by a small margin to 2.8 percent of benchmark 
while average shared savings payments would be reduced to an average of 
2.1 percent of benchmark. The total 10-year impact for this cohort 
would flip from a $2.9 billion cost at baseline (range of $1.4 billion 
savings to $7.0 billion cost at 10th and 90th percentiles) to a $3.6 
billion savings under the proposed changes (range of $10 billion 
savings to $3 billion cost at the 10th and 90th percentiles).

[[Page 46401]]

c. Impacts for New ACOs and Re-Entering ACOs
    At baseline without the proposed changes, the cohort of new ACOs 
and re-entering ACOs starting in 2024 would be relatively small (only 
$11 billion in annual benchmark) and skewed toward ACOs serving 
beneficiary populations that are already low cost at baseline. Shared 
savings payments to this group would also be elevated by the bias 
inflating benchmarks for ACOs electing prospective assignment. At 
baseline this cohort would increase net program spending by an 
estimated 1.2 percent of benchmark or $1.3 billion over 10 years 
(ranging from an increase of $0.5 to $2.0 billion at the 10th and 90th 
percentiles). Alternatively, under the proposed changes, the cohort of 
new and re-entering participation starting in 2024 is estimated to 
increase to $44 billion in combined benchmark per year. An anticipated 
influx of low revenue physician-led ACOs serving higher cost patients 
is expected to allow this cohort to produce significantly greater 
savings on claims (2.7 percent of benchmark) than would be paid out in 
shared savings (1.0 percent of benchmark) because these ACOs would be 
starting with lower relative benchmarks than existing low-spending ACOs 
and they would predominantly be paid under the lower 40 percent sharing 
rate offered in the BASIC track's one-sided models. After accounting 
for slightly higher physician fee schedule payments to QPs and a 
nominal net cost of advance investment payments, this cohort is 
projected to reduce net program spending about 1.6 percent of benchmark 
or $6.8 billion over a 10-year period (net savings range from $3.2 
billion to $11 billion at the 90th and 10th percentiles).
    Average gross savings for this cohort (2.7 percent of benchmark) 
are projected to roughly match average gross savings for renewing ACOs 
(2.8 percent of benchmark) despite being less-experienced and heavily 
concentrated in the BASIC track because they are both serving higher-
spending patients presenting greater savings opportunities and because 
they are anticipated to predominantly include low-revenue ACOs for whom 
sharing-only incentives are relatively strong despite not being pushed 
toward risk in their first agreement period. As a percentage of 
benchmark, these projected gross savings rates are consistent with the 
savings range estimated for historical performance for the Shared 
Savings Program detailed in Regulatory Impact Analysis for the December 
2018 final rule (83 FR 68047 through 68050) and would represent modest 
progression from the 1.3 to 2 percent savings estimated by MEDPAC using 
an ``intent to treat'' approach for evaluating performance through 
2016, which was dominated by participation in Track 1.\545\
---------------------------------------------------------------------------

    \545\ Report to Congress: Medicare and the Health Delivery 
System (Chapter 6). MEDPAC publication dated June 2019. https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun19_ch6_medpac_reporttocongress_sec.pdf.
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d. Annual Combined Impacts 2023-2034
    As described in Table 142, relative to baseline projections, the 
combined cohort entering or renewing for agreement periods beginning in 
2024 and 2025 is projected to add roughly $50 billion in annual 
benchmark, reduce claims costs by $15.5 billion, and on net increase 
aggregate shared savings payments by about $650 million. The proposed 
rule changes are estimated to reduce overall program spending by $14.8 
billion over 12 years relative to the $4.2 billion cost anticipated for 
the trajectory of the program at baseline, or $10.6 billion in absolute 
terms relative to a baseline without a Shared Savings Program in FFS 
Medicare. Approximately 80 percent of advance investment payments are 
anticipated to be recovered from shared savings payments by the middle 
of the second agreement period; the estimate shows $40 million in 
outstanding advance investment payments by the end of the projection 
period after an initial $210 million in initial funding. Approximately 
$60 million in net savings for 2023 is projected for retaining existing 
higher-spending ACOs that would have otherwise dropped out if not 
offered the ability to remain in one-sided risk for the remainder of 
their current agreement period.
    More importantly, the Shared Savings Program would increase 
participation from ACOs serving higher-spending beneficiaries by 
reducing the negative regional adjustment cap and creating a sharing-
only option covering an entire agreement period plus the first 2 years 
of the succeeding agreement period for eligible ACOs. Advance 
investment payments and partial shared savings payments for certain 
ACOs in the BASIC track with savings below their MSR would only 
marginally increase payments to ACOs while increasing overall program 
savings by drawing new participation from low revenue ACOs (typically 
physician-led ACOs), the type that performed well under Track 1. 
Including a prior savings adjustment as part of benchmark rebasing 
would broaden the incentive for ACOs to drive down spending over 
multiple agreement periods by mitigating the ratchet effect for high-
spending ACOs, for ACOs in competitive markets with collectively low 
trend, and for ACOs under prospective assignment that may be concerned 
about the proposal to remove the favorable bias in regional benchmark 
calculations. Modifications to the quality scoring system through 
adding a sliding scale approach to determining shared savings and 
offering bonus points to higher performing ACOs with a high proportion 
of underserved populations may increase shared savings payments 
marginally overall depending on how ACOs may otherwise have progressed 
in future years against what is still a relatively new quality rubric. 
The proposed changes are estimated to reduce overall program spending 
by $14.8 billion over 12 years relative to the $4.2 billion cost 
anticipated for the trajectory of the program at baseline, or $10.6 
billion in absolute terms relative to a baseline without a Shared 
Savings Program in FFS Medicare. The impact estimate ranges from a 
reduction of $8.2 billion to a reduction of $21.4 billion at the 10th 
and 90th percentiles.
BILLING CODE 4120-01-P

[[Page 46402]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.199

BILLING CODE 4120-01-C
e. Discussion of Key Proposals and Related Assumptions
    The stochastic model and associated assumptions previously 
described in the December 2018 final rule (83 FR 67816) were updated to 
produce this estimate. The model continues to assume that high-revenue 
ACOs are on average only 50 percent as effective as low-revenue ACOs at 
reducing spending because high-revenue ACOs include a more 
comprehensive mix of hospitals and other providers and suppliers for 
whom the incentive to potentially share in a fraction of savings from 
preventing utilization is weak compared to the immediate revenue from 
utilization--an expectation that has been supported by evaluation of 
actual program performance.\546\ Updates included accounting for the 
current mix of participating ACOs in constructing the potential ACOs 
making up the renewing cohort and considering the population of exiting 
ACOs to build a sample of higher spending populations that may be added 
to the program under the proposals that are expected to boost interest 
in the program from potential ACOs associated with average and higher 
spending populations. New low-revenue ACOs were assumed to always 
prefer the extended glidepath unless they expected a regional benchmark 
at least 3 percent higher than baseline spending, in which case a one-
third probability was assigned for the entrant to opt for higher 
potential earnings under Level E of the BASIC track. The model was also 
updated to first decrease the baseline savings potential for existing 
and new ACOs under the current program rules by about 25 to 50 percent 
(to better match emerging actual performance from selective low-
spending ACO participation) which was then scaled up for estimating the 
proposed impacts to account for new incentives driven mainly by the 
ACPT and prior savings adjustment, taking the form of a 0 to 50 percent 
increase in gross savings for low and average spending ACOs and a zero 
to 100 percent increase for new ACOs serving markedly high spending 
populations at baseline (at least 10 percent higher than their regional 
average benchmark spending level). The resulting savings ranges 
produced by the modeled participation are supported by the proximity to 
previous estimates of program savings under more balanced participation 
in Track 1, as noted previously in this section. Savings are expected 
to increase because of the many new features that would improve the 
incentive for ACOs to drive down spending over multiple agreement 
periods. Below is a further discussion of these factors.
---------------------------------------------------------------------------

    \546\ McWilliams JM, et al. Medicare Spending After 3 Years of 
the Medicare Shared Savings Program. New England Journal of 
Medicine. Sept. 2018. 379:1139-1149. DOI: 10.1056/NEJMsa1803388.
---------------------------------------------------------------------------

    Introducing a prospective 5-year growth rate to be blended with the 
existing retrospective benchmark trend would help address the so-called 
`rural glitch' complaint from ACOs and other interested parties and 
should at least marginally improve the incentive for ACOs to reduce 
spending, in particular when multiple ACOs are present in the same 
market and collectively driving down regional spending. The proposal 
that interested parties have floated for mitigating ACO effects on 
their region--effectively removing ACO assigned beneficiaries from the 
regional calculation--has multiple problems that would increase program 
spending. It would amplify the benefit to ACOs for selecting lower cost 
patients and avoiding higher needs groups, it would

[[Page 46403]]

drive market consolidation, and it would still fail to mitigate the 
cited problem for cases where multiple ACOs work in combination to 
drive down regional spending. Furthermore, it would increase program 
spending to such a degree that compliance with the requirements of 
section 1899(i)(3) of the Act, to use other payment models, would be 
violated.
    We acknowledge a potential elevated risk; however, that uncertainty 
around external conditions related to the end of the PHE for COVID-19 
and economic conditions like emerging inflation could cause a 
prospective trend to differ materially from actual program-wide growth 
in per capita spending. Blending the ACPT as one-third of the overall 
update helps lower the risk that projection error would create problems 
with appropriateness of spending targets. Risk-bearing ACOs would have 
extra protection against exposure to ACPT projection error because they 
would be held harmless on the downside if the new method would charge 
them more in losses than the prior retrospective trend method. Modeling 
indicates this safeguard would reduce shared losses owed by ACOs by 
about $100 million over 10 years, but the net impact of this provision 
is likely to save several times that amount by retaining ACOs that 
would have otherwise dropped out of the program.
    The most important factor returning the program to net savings is 
attracting more ACOs into the BASIC track that serve higher spending 
populations, particularly low revenue physician-led ACOs for whom a 40 
percent sharing rate is a strong incentive for efficiency even absent 
downside risk. The most important provision for growing this 
participation is the proposal to allow ACOs to stay sharing only (that 
is, Level A or Level B of the BASIC track) for a full 5-year agreement 
period. Advance investment payments and partial shared savings payments 
for savings under the MSR would help to increase the share of these new 
ACOs that are low revenue. These exclusive provisions for low revenue 
ACOs are estimated to drive $3 billion in net savings over the 
projection period notwithstanding marginal increases in shared savings 
outlays. This analysis highlights that the savings gained from 
increasing participation from this type of ACO would greatly exceed the 
marginal increase in program outlays from paying partial shared savings 
under the MSR and advance investment payments, as combined incentive 
payments (consisting mainly of shared savings payments combined with 
slightly higher payments to clinicians achieving QP status) to new and 
reentering ACOs are only projected to reach about 1.1 percent of 
benchmark over the projection period in return for savings on benefits 
of 2.7 percent (as detailed in Table 141).
    Another key proposal for improving the financial impact of the 
program is establishing a separate ratebook to calculate county-level 
expenditures for ACOs selecting prospective assignment using an 
assignable population of beneficiaries that is identified based on the 
offset assignment window. This proposal would remove a bias that would 
otherwise artificially boost benchmarks and thereby account for $3.7 
billion of the total savings projected above. Most existing ACOs 
currently benefiting from this bias would still expect to receive 
favorable regional adjustments at rebasing despite removal of the bias. 
The proposal to adjust benchmarks for prior savings would help restore 
a positive benchmark adjustment for the subset of ACOs for whom removal 
of the prospective assignment bias would minimize their regional 
adjustments at rebasing. However, because the prior savings adjustment 
would only be applied if it produced a higher adjustment than the 
regional benchmark adjustment, it would not further increase benchmarks 
for ACOs already benefiting from the existing regional adjustment.
    Modifications to the quality scoring system through the proposal to 
add a sliding scale approach to determining shared savings for ACOs to 
allow for payment of scaled shared savings and the proposal to award 
health equity bonus points to ACOs that perform well on at least one or 
more measures while serving a high proportion of duals or beneficiaries 
in areas with high Area Deprivation Index scores may increase shared 
savings payments marginally overall depending on how ACOs may otherwise 
have progressed in future years against what is still a relatively new 
quality rubric. The costs of adding these new methods for improving 
scores and paying scaled shared savings are projected to add about $1.3 
billion in program spending over 10 years. Other proposals related to 
assignment and risk adjustment are expected to have relatively nominal 
financial impacts on the program.
f. Compliance With Requirements of Section 1899(i)(3) of the Act
    Certain policies, including both existing policies and the proposed 
new policies described in this proposed rule, rely upon the authority 
granted in section 1899(i)(3) of the Act to use other payment models 
that the Secretary determines will improve the quality and efficiency 
of items and services furnished under the Medicare program, and that do 
not result in program expenditures greater than those that would result 
under the statutory payment model. The following proposals require the 
use of our authority under section 1899(i) of the Act: allowing for 
advance investment payments; the proposed modifications to the loss 
sharing rate under the ENHANCED track to allow for a sliding scale 
based on an alternative quality performance standard; use of the ACPT/
national-regional three-way blended benchmark update factor; expanding 
the criteria for certain low revenue ACOs participating in the BASIC 
track to qualify for shared savings in the event the ACO does not meet 
the MSR as required under section 1899(d)(1)(B)(i) of the Act; and 
exclusion of the proposed new supplemental payment for IHS/Tribal 
hospitals and Puerto Rico hospitals from the determination of Medicare 
Parts A and B expenditures used in certain financial calculations under 
the Shared Savings Program. These proposed changes to our payment 
methodology are expected to improve the quality and efficiency of care 
and are not expected to result in a situation in which the payment 
methodology under the Shared Savings Program, including all policies 
adopted under the authority of section 1899(i) of the Act, results in 
more spending under the program than would have resulted under the 
statutory payment methodology in section 1899(d) of the Act.
    A comparison was constructed between the projected impact of the 
payment methodology that incorporates all proposed changes and a 
hypothetical baseline payment methodology that excludes the policies 
that require section 1899(i)(3) of the Act authority. The hypothetical 
baseline was assumed to be limited to a 50 percent upside-only track 
rebased every three years but including adjustments allowed under 
section 1899(d)(1)(B)(ii) of the Act including the up to 50 percent 
weight used in calculating the regional adjustment to the ACO's rebased 
historical benchmark (capped on the upside or downside as detailed in 
this proposed rule) and the prior savings adjustment if producing a 
higher benchmark (also as detailed in this proposed rule). The 
stochastic model and associated assumptions described previously in 
this section were adapted to reflect a marginally reduced participation 
from low-revenue ACOs

[[Page 46404]]

because the hypothetical baseline would lack advance investment 
payments and partial shared savings payments for certain BASIC track 
ACOs with savings under their MSR. Such analysis estimated 
approximately $4.9 billion greater average net program savings under 
the alternative payment model (with the modifications proposed in this 
proposed rule) that includes all policies that require the authority of 
section 1899(i)(3) of Act than would be expected under the hypothetical 
baseline in total over the 2023 to 2034 projection period.
    Participation in performance-based risk in the ENHANCED track and 
the higher levels of the BASIC track is assumed to improve the 
incentive for ACOs to increase the efficiency of care for beneficiaries 
(similar to the assumptions used in the modeling of the impacts, 
described previously). Such added savings are partly offset by lower 
participation associated with the requirement to transition to 
performance-based risk. Despite the higher maximum sharing rate of 75 
percent in the ENHANCED track under the alternative payment model that 
includes all policies adopted under section 1899(i)(3) of the Act, 
relative to the 50 percent maximum sharing rate assumed for the single 
one-sided risk track under the hypothetical baseline, shared savings 
payments are expected to be reduced relative to the hypothetical 
baseline because of lower expected participation resulting from the 
eventual requirement to transition to risk in the second agreement 
period under the BASIC track and generally more accurate benchmarks due 
to the incorporation of regional factors into the calculation of 
benchmark updates for all ACOs.
    We will reexamine this projection in the future to ensure that the 
requirement under section 1899(i)(3)(B) of the Act that an alternative 
payment model not result in additional program expenditures continues 
to be satisfied. In the event that we later determine that the payment 
model that includes policies established under section 1899(i)(3) of 
the Act no longer meets this requirement, we would undertake additional 
notice and comment rulemaking to make adjustments to the payment model 
to assure continued compliance with the statutory requirements.
8. Medicare Part B Payment for Preventive Vaccine Administration 
Services
    In section III.H.2.c of this proposed rule, for CY 2023 we are 
proposing to annually adjust the payment amount for administration of 
preventive vaccines to reflect geographic locality cost differences. 
That is, we propose to use the Geographic Adjustment Factor (GAF) 
described in Sec.  414.26 to adjust the payment to reflect the costs of 
administering preventive vaccines in each of the PFS fee schedule 
areas. Additionally, in section III.H.2.d of this proposed rule, for CY 
2023 we are proposing to annually update the payment amount for the 
administration of preventive vaccines based upon the Medicare Economic 
Index (MEI). In section III.H.3.c. of this proposed rule, we are 
proposing to continue the additional payment of $35.50 when a COVID-19 
vaccine is administered in a beneficiary's home under the certain 
circumstances. Further, we are proposing to adjust and update the 
$35.50 by the GAF and MEI as we proposed for the preventive vaccine 
administration services.
    The estimated impact of the proposal to update the payment amount 
for the administration of preventive vaccines based upon the proposed 
MEI (3.8%) in CY 2023 is an increase in spending of roughly $40 
million. Approximately $30 million of the increase is for 
administration of the COVID-19 vaccine and the remaining $10 million is 
for the other preventive vaccines. Regarding the proposal to adjust the 
payment amount for the administration of preventive vaccines by the GAF 
and the proposal to continue the additional payment for at-home COVID-
19 vaccinations, these would have a negligible impact on Medicare 
spending.
9. Medical Necessity and Documentation Requirements for Nonemergency, 
Scheduled, Repetitive Ambulance Services
    In section III.I. of this proposed rule, we propose to clarify 
Sec.  410.40(e)(2)(ii) by reorganizing existing language and stating 
that the PCS and additional documentation from the beneficiary's 
medical record may be used to support a claim that transportation by 
ground ambulance is required. We are also clarifying that the PCS and 
additional documentation must provide detailed explanations, that are 
consistent with the beneficiary's current medical condition, that 
explains the beneficiary's need for transport by an ambulance. Finally, 
we are clarifying that coverage includes observation or other services 
rendered by qualified ambulance personnel. While we believe that 
clarification of the regulatory provisions is needed and would be well 
received by interested parties, we do not believe that these 
clarifications would have any substantive monetary or impact the amount 
of time needed submit claims. We believe the primary benefit of the 
clarification would be for providers and suppliers in preparing and 
submitting claims. It is feasible the clarification could result in 
fewer claims being denied. However, hypothetically, these denials are 
likely a small subset of the ambulance claim denials and those denied 
for technical PCS issues are likely appealed and overturned.
10. Medicare Provider and Supplier Enrollment Changes--Provider 
Enrollment
a. Expansion of Revocation Reasons
    As explained in section III.J. of this proposed rule, we propose 
changes to two of our existing revocation reasons:
    <bullet> We propose to expand Sec.  424.535(a)(2) to permit 
revocation based on an OIG exclusion of the provider's or supplier's 
managing organization, corporate officer, or corporate director.
    <bullet> We propose to expand Sec.  424.535(a)(3) to permit 
revocation based on a felony conviction of the provider's or supplier's 
managing organization, corporate officer, or corporate director.
    We believe these two changes would result in an increase in the 
number of revocations that CMS imposes. However, we believe this number 
would be rather small. We currently impose only a limited number of 
revocations under Sec. Sec.  424.535(a)(2) and (a)(3). Accordingly, 
since our expansion of these revocation reasons would be fairly modest, 
we do not foresee more than a very slight increase in revocations 
thereunder.
    Table 143 outlines the number of revocations we estimate would 
ensue under our proposed revocation expansions. These numbers only 
account for additional revocations stemming from our changes:

[[Page 46405]]

[GRAPHIC] [TIFF OMITTED] TP29JY22.200

    Internal CMS data indicates that the average provider/supplier that 
would be affected by these regulatory expansions receives roughly 
$50,000 in Medicare payments each year. (We used a similar $50,000 
annual payment estimate for our provider enrollment provisions in the 
CY 2022 PFS final rule) (86 FR 64995)). Providers/suppliers revoked 
under our proposed revocation expansions would thus not receive these 
payments. Hence, multiplying our $50,000 estimate by the revocation 
totals in Table 143 results in a projected transfer from these 
providers/suppliers to the Federal Government of $500,000 ($50,000 x 10 
revocations).
b. Expansion of Fingerprinting Requirements
    We propose the following three revisions to Sec.  424.518:
    <bullet> Adding changes of ownership and the reporting of a new 
owner as provider enrollment transactions falling within the scope of 
Sec.  424.518. (As explained in section III.J. of this proposed rule, 
affected parties would have to submit fingerprints and be subject to a 
fingerprint-based criminal background check (FBCBC) if the provider or 
supplier is in the ``high'' level of categorical screening.)
    <bullet> Stating that any screening level adjustment to ``high'' 
also applies to all other enrolled and prospective providers and 
suppliers that have the same legal business name and tax identification 
number as the provider or supplier that originally triggered the 
screening level increase.
    <bullet> Moving SNFs from the ``limited'' level of categorical 
screening to the ``high'' screening level.
    These proposed changes would result in an increase in the annual 
number of providers and suppliers that must furnish fingerprints for 
their 5 percent or greater direct or indirect owners. Based on existing 
enrollment statistics and our experience, we project that: (1) 29,726 
providers and suppliers per year would be required to submit the 
fingerprints of their owners (new or existing) pursuant to these 
changes; and (2) 29,726 owners would annually be fingerprinted (or one 
owner per provider/supplier, which is roughly consistent with prior 
estimates).
    Consistent with previous burden estimates we have made regarding 
fingerprinting, we estimate that it would take each owner approximately 
2 hours to be fingerprinted. According to the most recent BLS wage data 
for May 2021, the mean hourly wage for the general category of ``Top 
Executives'' (the most appropriate BLS category for owners) is $57.94. 
With fringe benefits and overhead, the figure is $115.88. This would 
result in an estimated annual burden involving our proposed changes to 
Sec.  424.518 of 59,452 hours at a cost of $6,889,298.
c. DME Payment Denials
    We are also proposing to add a new DMEPOS condition of payment to 
Sec.  424.57(b). It would require the DMEPOS supplier to be in 
compliance with all conditions of payment in Sec.  424.57(b), as well 
as with the licensure requirements of Sec.  424.57(c)(1)(ii)(A), at the 
time the item or service is furnished in order to receive payment. 
Based on data collected from our experience with the scenario our 
proposed change seeks to remedy, we project 6,100 claim denials per 
month associated with our proposal involving $1.3 million in denied/
unpaid claims. Over a 12-month period, this results in 73,200 claim 
denials and $15.6 million in unpaid claims, the latter constituting our 
estimated annual transfer to the federal government. We welcome 
comments on this estimate.
11. State Options for Implementing Medicaid Provider Enrollment 
Affiliation Provision
    We do not anticipate any additional costs or savings associated 
with our proposed revision to Sec.  455.107(b), for the latter merely 
involves giving the states somewhat greater flexibility in executing 
the provisions of Sec.  455.107.
12. Requirement for Electronic Prescribing for Controlled Substances 
for a Covered Part D Drug Under a Prescription Drug Plan or an MA-PD 
Plan (Section 2003 of the SUPPORT Act)
    In section III.M. of this proposed rule, we are proposing to extend 
the existing compliance action of sending letters to non-compliant 
prescribers from the CY 2023 EPCS program implementation year (January 
1, 2023 through December 31, 2023) to the CY 2024 year (January 1, 2024 
through December 31, 2024). Additionally, effective January 1, 2023, we 
are proposing to change the year from which PDE data is used from the 
preceding year to the current evaluated year when CMS determines 
whether a prescriber qualified for an exception based on the number of 
Part D controlled substance prescriptions (Sec.  423.160(a)(5)(ii)). We 
are also proposing to determine whether a prescriber qualifies for the 
emergency or disaster exception (Sec.  423.160(a)(5)(iii)) based on the 
prescriber's valid address in PECOS (Medicare Provider Enrollment, 
Chain, and Ownership System), instead of the NCPDP Pharmacy Database 
address, and for prescribers who are not enrolled or do not have a 
valid PECOS address, we are proposing to use the address in the 
National Plan and Provider Enumeration System (NPPES) data. We 
understand that with continuing the compliance action of sending 
letters to non-compliant prescribers for another year, some prescribers 
may delay EPCS implementation, but we also believe that our education 
and outreach with these prescribers during this additional year may 
help increase adoption. We do not anticipate these proposals to have 
any incremental impact on the cost or time associated with prescriber 
compliance of the electronic prescribing for controlled substances 
requirement or the cost to interested parties. However, we acknowledge 
there will be a delay in compliance enforcement by an additional year. 
We seek comment on our impact assumptions.
13. Medicare Ground Ambulance Data Collection System
    In section III.K. of this proposed rule, we propose a series of 
changes to the Medicare Ground Ambulance Data Collection System 
including the proposal to update Sec.  414.626(d)(1) and (e)(2) to give 
us the necessary flexibility to specify how ground ambulance 
organizations should submit the hardship exemption requests and 
informal review requests, including to our web-based portal once that 
portal is operational, and proposed revisions to

[[Page 46406]]

the Medicare Ground Ambulance Data Collection Instrument.
    The changes and clarifications aim to reduce burden on respondents, 
improve data quality, or both. We group our proposed changes and 
clarifications into four broad categories: editorial changes for 
clarity and consistency; updates to reflect the web-based system; 
clarifications responding to feedback from interested parties questions 
and testing and typos and technical corrections.
    While we believe that these changes and clarifications will be well 
received by the ground ambulance interested parties, we do not believe 
that these changes would have any substantive impact on the cost or 
time associated with completing the Medicare Ground Ambulance Data 
Collection Instrument. We note that the overall length of the Medicare 
Ground Ambulance Data Collection Instrument would be the same as 
previously finalized (84 FR 62888) with these changes. Additionally, 
some of the instructions which we propose to add are intended to 
improve clarity and may therefore reduce the time the ground ambulance 
organizations spend addressing the questions.
14. HCPCS Level II Coding for Wound Care Management Products
    We are proposing several changes to our policies for skin 
substitute products. Specifically, we are soliciting feedback on our 
key objectives related to skin substitute policies, proposing to change 
the terminology of skin substitutes to more accurately reflect how 
clinicians use these products, and to treat and pay for these products 
under section 1861(s)(2)(A) of the Act as incident to supplies the PFS 
beginning on Jan 1, 2024. Our estimates related to revising the benefit 
category to incident to supplies will be contained in the CY 2024 PFS 
rulemaking.
    Additionally, in section III.N. of this proposed rule, we are 
proposing to revise our HCPCS coding procedures, the impacts related to 
these proposals are in section III.N. The financial impact of this 
proposal will be largely contingent on the prices the MACs set for 
these products.
15. Effects of Proposals for Medicare Part A and B Payment for Dental
    In section II.L.2. of this proposed rule, we are: (1) proposing to 
clarify our interpretation of section 1862(a)(12) of the Act, and 
clarify and codify certain of our current Medicare FFS payment policies 
for medically necessary dental services; (2) proposing and seeking 
comment on payment for other dental services, such as dental 
examinations, including necessary treatment, performed as part of a 
comprehensive workup and certain diagnostic and treatment services 
prior to organ transplant surgery, or prior to cardiac valve 
replacement or valvuloplasty procedures, that are similarly 
inextricably linked to, and substantially related and integral to the 
clinical success of, certain covered medical services; and (3) 
requesting comments on other types of clinical scenarios where the 
dental services may be inextricably linked to, and substantially 
related and integral to the clinical success of, other covered medical 
services.
    If finalized, we do not believe the proposed codification of 
current payment policy would result in a significant payment impact 
because it would be a continuation of existing Medicare payment policy. 
If we were to finalize the payment for an oral or dental examination, 
including necessary treatment, performed as part of a comprehensive 
workup prior to organ transplant surgery, or prior to cardiac valve 
replacement or valvuloplasty procedures, we do not anticipate any 
significant increase in utilization or payment impact for additional 
dental services given the historically low utilization of organ 
transplant, cardiac valve replacement and valvuloplasty surgeries.
    To complete this analysis, and to ensure that we captured dental 
services that occurred prior to the covered medical service that 
occurred within CY 2019, we pulled claims data for which Medicare made 
payment for dental services from June 1, 2018 through December 31, 
2019. This allowed us to capture any dental services that were 
furnished prior to 90 days of a covered medical service. Further, we 
believe that the use of these claims data would be more representative 
of future utilization patterns given the COVID-19 PHE. Based on this 
analysis, we estimated that there were roughly 200,000 additional 
services where Medicare could provide payment for dental services prior 
to organ transplants, cardiac valve replacement or valvuloplasty 
surgeries. Based on claims data from this time period, Medicare 
provided payment for dental services for 186 patients with an average 
cost of care of roughly $525 per person. The majority of these claims 
were for tooth extraction in patients undergoing radiation treatment of 
the mouth as opposed to transplant patients, and the range in costs was 
from $33 to $5,711 per patient. Based on a review of claims data for 
our existing payment policies and our review of current utilization for 
beneficiaries, we estimated that effective rate of coverage of current 
utilization was less than 0.2 percent. We then used this utilization 
ratio to estimate projected payments for dental exams and treatments 
prior to organ transplants, cardiac valve replacement or valvuloplasty 
surgeries. Given current utilization of organ transplants, cardiac 
valve replacement or valvuloplasty procedures, current utilization and 
payment for dental exams and treatments, we are projecting an estimated 
cost of this proposal at approximately $65 million or roughly 0.07 
percent of Medicare PFS expenditures. Therefore, we do not anticipate a 
significant payment impact for these proposals. We note, however, that 
if we were to finalize, as discussed in section II.L.2.c.(i) of this 
proposed rule, payment in other clinical scenarios for dental services 
inextricably linked to, and substantially related and integral to the 
clinical success of, certain covered medical services, we may adjust 
this estimate. We further note that we have requested public comment on 
alternative ways to estimate the expected utilization and volume of 
these services under the proposal discussed further in section II.2.c. 
of this proposed rule.
16. Updates to the Quality Payment Program
    In this section, we estimate the overall and incremental impacts 
due to the Quality Payment Program policies proposed in this rule. We 
estimate participation, final scores, and payment adjustment for 
clinicians participating through traditional MIPS, MVPs, and the APM. 
We also present the incremental impacts to the number of expected QPs 
and associated APM Incentive Payments that result from our proposed 
policies relative to a baseline model that reflects the status quo in 
the absence of any modifications to the previously finalized policies.
a. Overall MIPS Modeling Approach and Data Assessment
(1) Updating the MIPS Model
    We created two MIPS RIA models: a baseline and proposed policies 
RIA model. The aim of the baseline model is to reflect participation, 
final scores, and payment adjustments for the CY 2023 performance 
period/2025 MIPS payment year based on previously finalized policies 
for the CY 2023 performance period/CY 2025 MIPS payment year. Examples 
of previously finalized policies are an increase in the APM qualified 
participants threshold

[[Page 46407]]

and the removal of the additional MIPS payment adjustment for 
exceptional performance and additional performance threshold. The 
proposed policies model builds off the baseline model and incorporates 
the MIPS policy proposals for the CY 2023 MIPS performance period/2025 
MIPS payment year included in this rule. The aim of the proposed 
policies model is to estimate the incremental impacts of the proposed 
policies in this proposed rule. There were two major updates to the 
modeling approach used in this RIA.
    First, we changed the MIPS modeling tool that we used in order to 
incorporate the same scoring engine as the one used to determine actual 
MIPS payment adjustments. We generally applied the same assumptions as 
our previous RIA analyses, but this update ensures that the clinician 
population and final scores in our model align as much as possible with 
actual MIPS scoring and minimizes differences between projections and 
policy implementation. It should be noted, data limitations and 
assumptions which may impact model results still remain and are 
described below.
    Second, we modeled participation, scoring, and payment adjustments 
for the MIPS Value Pathways (MVPs). The CY 2023 performance period/2025 
MIPS payment year is the first year where clinicians can voluntarily 
submit MVPs. Although we are modeling MVPs, we are not modeling 
subgroup reporting. A more detailed discussion of the approach used to 
model MVPs can be found in section VII.E.16.d.(2) of this RIA.
(2) Assessing Which Data To Use To Estimate Future MIPS Performance
    This RIA uses the 2019 MIPS performance period submissions that 
were used for the CY 2022 PFS final rule RIA (86 FR 65617 through 
65660). We discussed in the 2022 PFS final rule (86 FR 65637), how we 
assessed the use of 2020 performance period submissions and why we 
believed the 2019 performance period submissions would be a better data 
source, for the purposes of estimating future performance for the 
entire population of MIPS eligible clinicians. The submissions for the 
2021 MIPS performance period were not available in time to assess 
whether the data can be used to predict future performance. For the 
final rule, we will evaluate whether it is appropriate to use the 2021 
performance period data and whether adjustments would need to be made 
if CY 2021 performance category submissions data were used. For these 
reasons, we again used CY 2019 data to estimate the MIPS eligible 
clinician population and their associated final scores for the CY 2023 
MIPS performance period/CY 2025 MIPS payment year.
b. Estimated APM Incentive Payments to QPs in Advanced APMs and Other 
Payer Advanced APMs
    For payment years from 2019 through 2024, through the Medicare 
Option, eligible clinicians who have a sufficient percentage of their 
Medicare Part B payments for covered professional services or Medicare 
patients through Advanced APMs will be QPs in the applicable QP 
Performance Period for a year and the corresponding payment year. These 
QPs will receive a lump-sum APM Incentive Payment equal to 5 percent of 
their estimated aggregate paid amounts for Medicare covered 
professional services furnished during the calendar year immediately 
preceding the payment year. Beginning in payment year 2021, in addition 
to the Medicare Option, eligible clinicians may become QPs through the 
All-Payer Combination Option. The All-Payer Combination Option allows 
eligible clinicians to become QPs by meeting the QP payment amount or 
patient count threshold through a pair of calculations that assess a 
combination of both Medicare Part B covered professional services 
furnished or patients through Advanced APMs and services furnished or 
patients through Other Payer Advanced APMs. Eligible clinicians who 
become QPs for a year are not subject to MIPS reporting requirements 
and payment adjustments. Eligible clinicians who do not become QPs but 
meet a lower threshold to become Partial QPs for the year, may elect to 
report to MIPS and, if they elect to report, would then be scored under 
MIPS and receive a MIPS payment adjustment. Partial QPs are not 
eligible to receive the APM Incentive Payment.
    If an eligible clinician does not attain either QP or Partial QP 
status, and does not meet any another exemption category, the eligible 
clinician would be subject to the MIPS reporting requirements and would 
receive the corresponding MIPS payment adjustment.
    Beginning in payment year 2026, the update to the PFS CF for 
services that are furnished by clinicians who achieve QP status for a 
year is 0.75 percent, while the update to the PFS CF for services that 
are furnished by clinicians who do not achieve QP status for a year is 
0.25 percent. In addition, MIPS eligible clinicians would receive 
positive, neutral, or negative MIPS payment adjustments to payment for 
their Part B covered professional services in a payment year based on 
performance during a prior performance period.
    We incorporated this change into our baseline eligibility 
determination. In addition, the thresholds to achieve QP status 
beginning in the 2023 QP Performance Period will increase to 75 percent 
for payment amount, and 50 percent for patient count. Overall, we 
estimate that for the 2023 QP Performance Period between 144,700 and 
186,000 eligible clinicians would become QPs, and therefore be excluded 
from MIPS.
    In section VII.F.17.a. of this proposed rule, we projected the 
number of eligible clinicians that would be QPs, and thus excluded from 
MIPS, using several sources of information. First, the projections are 
anchored in the most recently available public information on Advanced 
APMs. The projections reflect Advanced APMs that would be operating 
during the 2023 QP Performance Period, as well as some Advanced APMs 
anticipated to be operational during the 2023 QP Performance Period. 
The projections also reflect an estimated number of eligible clinicians 
that would attain QP status through the All-Payer Combination Option. 
The following APMs are expected to be Advanced APMs for the 2023 QP 
Performance Period:
    <bullet> Bundled Payments for Care Improvement Advanced Model;
    <bullet> Comprehensive Care for Joint Replacement Payment Model 
(CEHRT Track);
    <bullet> ACO REACH Model (formerly Global and Professional Direct 
Contracting) Model;
    <bullet> Kidney Care Choices Model (Kidney Care First; Professional 
Option and Global Option);
    <bullet> Maryland Total Cost of Care Model (Care Redesign Program; 
Maryland Primary Care Program);
    <bullet> Medicare Shared Savings Program (Basic Track Level E, and 
the ENHANCED Track);
    <bullet> Primary Care First (PCF) Model;
    <bullet> Radiation Oncology Model; and,
    <bullet> Vermont All-Payer ACO Model (Vermont Medicare ACO 
Initiative).
    We used the Participation Lists and Affiliated Practitioner Lists, 
as applicable, (see 81 FR 77444 through 77445 for information on the 
APM Participant Lists and QP determinations) on the 2021 third snapshot 
participation file to estimate the number of QPs, total Part B paid 
amounts for covered professional services, and the aggregate total of 
APM Incentive Payments for the 2023 QP Performance Period. We examined 
the extent to which Advanced APM

[[Page 46408]]

participants would meet the QP Thresholds of having at least 75 percent 
of their Part B covered professional services or at least 50 percent of 
their Medicare beneficiaries furnished Part B covered professional 
services through the APM Entity.
c. Estimated Number of Clinicians Eligible for MIPS for the CY 2023 
Performance Period/2025 MIPS Payment Year
(1) Clinicians Included in the Model Prior To Applying the Low-Volume 
Threshold Exclusion
    For the baseline and proposed policies models, we generally used 
the same eligibility files, assumptions, and rules as described in the 
CY 2022 PFS final rule (86 FR 65639 through 65642), with the following 
updates:
    <bullet> We used the eligibility determination file that aligned 
with the performance period of our submission data. Previously, in the 
CY 2021 PFS final rule (85 FR 85013), we noted we used a combination of 
data from the first determination period for the 2020 MIPS performance 
period (from October 1, 2018 to September 30,2019) and data from the 
end of calendar year 2019 (from October 1, 2019 to December 31, 2019). 
We additionally noted that we used the determination period from the 
2020 MIPS performance period eligibility file because it was the most 
recent eligibility file available. As we updated our model, we now 
believe using the final eligibility file from 2019, which reconciles 
information from the two eligibility determination periods would be a 
better data source to pair with our performance period submission data.
    <bullet> Our new RIA models, based off of actual MIPS submissions 
and scores estimates scores for clinicians for NextGen ACOs and CPC+ 
(which were previously excluded from our CY 2022 PFS final rule RIA 
models (citation). The NextGen ACOs and CPC+ are both no longer 
available in the CY 2023 MIPS performance period, but we included these 
participants in our models because they comprised 18,892 MIPS eligible 
clinicians who we assume would continue to participate in MIPS.
    <bullet> We incorporated the QP thresholds for the 2025 payment 
year as defined at Sec.  414.1430.
    We are not proposing any modifications to eligibility, therefore 
our eligibility assumptions apply to both the baseline and proposed 
policies models. Our analysis resulted in 1.6 million clinicians who 
had PFS claims from October 1, 2018 to September 30, 2019 as well as 
additional clinicians associated with a group who had at least one PFS 
claim from October 1, 2019 through December 31, 2019.
(2) Estimation of MIPS Eligible Clinicians After Applying Assumptions 
Related To Applying the Low-Volume Threshold Exclusion
    The low-volume threshold policy may be applied at the individual 
(TIN/NPI) or group (TIN) levels based on how data are submitted to 
MIPS. A clinician or group that exceeds at least one, but not all three 
low-volume threshold criteria may become MIPS eligible by electing to 
opt-in and subsequently submitting data to MIPS, thereby getting 
measured on performance and receiving a MIPS payment adjustment.
    We describe below the estimated MIPS eligibility status and the 
associated PFS allowed charges of clinicians in the initial population 
of 1.6 million clinicians for the proposed policies model. We applied 
the same assumptions presented in the CY 2022 PFS final rule RIA (86 FR 
65617 through 65660) to apply the low-volume threshold and to determine 
whether clinicians participate as a group, virtual group, APM entity, 
or as individuals. Table 144 summarizes our eligibility estimates for 
the proposed policies model. We identify approximately 198,250 
clinicians as having ``required eligibility.'' These clinicians will be 
MIPS eligible because they exceed the low volume threshold as 
individuals and are not otherwise excluded. These clinicians may 
ultimately choose to participate in MIPS as an individual, group, 
virtual group or APM entity or to not participate. Regardless of 
participation method, these clinicians will be considered MIPS 
eligible. We estimate approximately 646,749 MIPS eligible clinicians as 
having ``group eligibility'' in Table 144. These clinicians belong to a 
group or virtual group that meets the low-volume threshold and submits 
to MIPS. If they were not associated with the group or virtual group 
submission, these clinicians would not be eligible for MIPS. Finally, 
we estimate about 10,933 clinicians will be eligible through ``opt-in 
eligibility'' through the ``opt-in'' policy for a total MIPS eligible 
clinician population of approximately 865,116. This leads to an 
associated $6.8 billion allowed PFS charges estimated to be included in 
the CY 2023 performance period/2025 MIPS payment year.
BILLING CODE 4120-01-P

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[GRAPHIC] [TIFF OMITTED] TP29JY22.201

BILLING CODE 4120-01-C
    Furthermore, we estimate there would be approximately 424,752 
clinicians who are not MIPS eligible, but could be if the clinician or 
their group elects to opt-in. We describe this group as ``Potentially 
MIPS eligible'' in Table 144. These clinicians would be included as 
MIPS eligible in the unlikely scenario in which all group practices 
elect to submit data as a group, or clinicians in a group that does not 
submit are eligible to opt-into MIPS individually and choose to do so. 
This assumption is important because it quantifies the maximum number 
of MIPS eligible clinicians. When this unlikely scenario is modeled, we 
estimate the MIPS eligible clinician population could be as high as 
1,280,868 clinicians. Finally, we estimate approximately 107,995 
clinicians would not be MIPS eligible because they and their group are 
below the low-volume threshold on all three criteria and another 
approximately 207,477 would not be MIPS eligible because they are 
categorically excluded regardless of volume or submission activity.
    Eligibility among many clinicians is contingent on submission to 
MIPS as a group, virtual group or election to opt-in, therefore we will 
not know the number of MIPS eligible clinicians who submit until the 
submission period for the 2023 MIPS performance period is closed. For 
the remaining analysis, we use the estimated population of 865,116 MIPS 
eligible clinicians described above.

[[Page 46410]]

d. Estimated Impacts on Payments to MIPS Eligible Clinicians for the CY 
2023 Performance Period/2025 MIPS Payment Year
(1) Summary of Approach for MVPs, Traditional MIPS and APM Performance 
Pathway
    In sections IV.A.3.a. through IV.A.3.F. of this proposed rule, we 
present several provisions which impact the measures and activities 
that impact the performance category scores, final score calculation, 
and the MIPS payment adjustment. We discuss these changes in more 
detail in section VII.E.16.d.(3) of this RIA as we describe our 
methodology to estimate MIPS payments for the CY 2023 performance 
period/2025 MIPS payment year. We then present the impact of the 
overall proposed policies on the CY 2023 performance period/2025 MIPS 
payment year and then compare select metrics to the baseline model, 
which only incorporates previously finalized policies for the CY 2023 
performance period/2025 MIPS payment year. By comparing the baseline 
model to the proposed policies model, we are able to estimate the 
incremental impact of the proposed policies for the CY 2023 performance 
period/2025 MIPS payment year.
    The payment impact for a MIPS eligible clinician is based on the 
clinician's final score, and MIPS eligible clinicians can participate 
as an individual, group, virtual group, APM Entity, clinicians 
participating in MIPS through the APM Performance Pathway or through an 
MVP in the four MIPS performance categories: quality, cost, improvement 
activities, and Promoting Interoperability. MIPS APM participants can 
participate in the APP as an individual, group, virtual group, APM 
Entity but are only scored on three MIPS performance categories: 
quality, improvement activities, and Promoting Interoperability. As 
discussed in section VII.E.16.a.(2) of this RIA, we generally used the 
most recently available submissions data from the Quality Payment 
Program, however, due to the automatic extreme and uncontrollable 
policy applied in the CY 2020 performance period, for the purposes of 
this RIA we used data submitted for the CY 2019 MIPS performance 
period. In the final rule, when data from the CY 2021 performance 
period will be available, we will revisit this decision. The average 
percentage change in total revenues that clinicians earn is less than 
the impact displayed here because MIPS eligible clinicians generally 
furnish services to both Medicare and non-Medicare patients; this 
program does not impact payment from non-Medicare patients. In 
addition, MIPS eligible clinicians may receive Medicare revenues for 
services under other Medicare payment systems, such as the Medicare 
Federally Qualified Health Center Prospective Payment System, that 
would not be affected by MIPS payment adjustment factors.
(2) Methodology To Assess Impact for MIPS Value Pathways
    In the 2022 PFS final rule (86 FR 65394 through 65397), we 
finalized policies at Sec.  414.1365 for implementing MVPs beginning in 
the CY 2023 MIPS performance period/2025 MIPS payment year. In updating 
our MIPS RIA model, we have made some assumptions for both the baseline 
and proposed policies model to simulate MVP participants and their MVP 
final score which are described in the following sections.
(a) MVP Participant Assumptions
    At Sec.  414.1365(b), we require MVP Participants (which can be a 
group, individual, subgroup or APM entity) to register prior to 
submitting an MVP. As we do not yet have information on who will 
register, we assume for purposes of this model, that MVP Participants 
are individual clinicians or groups that currently submit at least 4 
quality measures that are in an MVP. For these MVP Participants, we 
calculate both an MVP and a traditional MIPS score and take the highest 
score consistent with the scoring hierarchy as finalized in the CY 2022 
PFS final rule 86 FR 65537). For the baseline model, we looked for the 
quality measures finalized for MVPs in the 2022 PFS final rule (86 FR 
65441 through 65443):

<bullet> Advancing Rheumatology Patient Care
<bullet> Coordinating Stroke Care to Promote Prevention and Cultivate 
Positive Outcomes
<bullet> Advancing Care for Heart Disease MVP
<bullet> Optimizing Chronic Disease Management MVP
<bullet> Adopting Best Practices and Promoting Patient Safety within 
Emergency Medicine
<bullet> Improving Care for Lower Extremity Joint Repair
<bullet> Patient Safety and Support of Positive Experiences with 
Anesthesia MVP

    For the proposed policies model, we incorporate the proposed 
quality measure revisions for the above MVPs and use the quality 
measures to model scores for the new MVPs as proposed in Appendix X of 
this proposed rule:

<bullet> Advancing Cancer Care
<bullet> Optimal Care for Kidney Health
<bullet> Optimal Care for Neurological Conditions
<bullet> Supportive Care for Cognitive-Based Neurological Conditions
<bullet> Promoting Wellness

    Our MVP Participant assumptions have limitations: we are not 
incorporating subgroups due to lack of data, not all of the assumed 
participants may elect to register for an MVP, and we may have 
additional clinicians or groups register for an MVP. However, we 
believe this is a reasonable approach to simulate the impact of MVPs 
and we seek comment on this assumption.
(b) MVP Scoring Methods and Assumptions
    We simulate an MVP score using the same data sources as we did for 
traditional MIPS. We scored according to rules finalized in Sec.  
414.1365(d) and Sec.  414.1365(e) using the MVP reporting requirements 
listed in Sec.  414.1365(c) with one exception. We did not restrict the 
improvement activities to the activities listed in the MVP inventory. 
We believed this would lower our estimated MVP score as clinicians and 
groups were not required to select from a limited inventory in the 2019 
MIPS performance period (upon which our model is based.) Therefore, we 
scored any improvement activities the MVP Participants submitted in 
2019 as if those improvement activities are in the MVP inventory.
(3) Methodology To Assess Impact For Traditional MIPS
    To estimate the impact of MIPS policies on MIPS eligible 
clinicians, we generally used the CY 2019 MIPS performance period 
submissions data, including data submitted for the quality, improvement 
activities, and Promoting Interoperability performance categories. We 
supplemented this information with the most recent data available for 
CAHPS for MIPS and CAHPS for ACOs, testing data for the revised total 
per capita cost measure and Medicare Spending Per Beneficiary (MSPB) 
clinician measures which were finalized in the CY 2020 PFS final rule 
(84 FR 62969 through 62977), testing data for the new episode cost 
measures, administrative claims data for the new quality performance 
category measures, and other data sets. We calculated a hypothetical 
final score for the CY 2023 performance period/2025 MIPS payment year 
for the baseline and proposed policies scoring models for each MIPS 
eligible clinician using score estimates for quality, cost, Promoting 
Interoperability, and improvement activities performance categories, 
where

[[Page 46411]]

each are described in detail in the following sections.
(a) Methodology To Estimate the Quality Performance Category Score
    We estimated the quality performance category score using a 
methodology like the one described in the CY 2022 PFS final rule (86 FR 
65642 through 65643) for the baseline and proposed policies RIA models 
for the CY 2023 MIPS performance period/2025 MIPS payment year.
    To create the baseline policies RIA model, which does not reflect 
the proposed policies for the CY 2023 performance period/2025 MIPS 
payment year, we made the following modifications to the CY 2022 PFS 
final rule finalized policies model to reflect the previously finalized 
quality performance category policies for the CY 2023 performance 
period/2025 MIPS payment year:
    <bullet> As discussed in the CY 2022 PFS final rule (86 FR 65440), 
we finalized the removal of Web Interface measures after the CY 2022 
performance period/2024 MIPS payment year for groups and virtual groups 
using the existing 10 CMS Web Interface measures. To estimate a quality 
performance category score for clinicians in groups who previously used 
the CMS Web Interface as a collection type in 2019, we assumed these 
groups will use the other two other collection types (MIPS CQMs and 
eCQMs) available in the CY 2023 performance period/2025 MIPS payment 
year. We then applied the same methodology described in the CY 2021 PFS 
proposed rule using CY 2019 MIPS submissions data when the removal of 
Web Interface as a collection type was previously proposed (85 FR 50387 
through 50388).
    <bullet> As discussed in the CY 2022 PFS final rule (86 FR 65497 
through 65498), we finalized removing the 3-point floor for each 
measure that can be reliably scored against the benchmark and score the 
measure from 1 to 10 points starting with the CY 2023 performance 
period/2025 MIPS payment year. We implemented these changes. Due to 
technical limitation we were not able to simulate the removal of the 
special scoring policy of scoring 3 points for class 2 measures for 
clinicians not in a small practices beginning with the CY 2023 
performance period/2025 MIPS payment year. We note that this limitation 
does not change our findings regarding the incremental impact of our 
proposed polices since it is a change that effects both the baseline 
and proposed policies models.
    <bullet> In the CY 2022 PFS final rule (86 FR 65429), we also 
finalized extending the use of the CMS Web Interface as a reporting 
option under the APM Performance Pathway into the CY 2024 MIPS 
performance period/2026 MIPS payment year. Under this policy, for the 
CY 2023 MIPS performance period/2025 MIPS payment year, Web Interface 
reporting would work in the same manner as for the CY 2021 MIPS 
performance period/2023 MIPS payment year, where ACOs would have the 
option of reporting either the CMS Web Interface, the APP eCQM/MIPS CQM 
measure set, or both. In this baseline model, we calculated both a 
quality performance category score assuming APP submitted measures and 
another using Web Interface measures and took the highest score. To 
estimate a quality performance category for APP measures, we used the 
same methodology described in the CY 2021 PFS proposed rule when the 
Web Interface was not included in the APP (85 FR 50388).
    <bullet> Similar to the CY 2022 PFS final rule model (86 FR 65642), 
we utilized the most recent benchmark file: the CY 2021 MIPS 
performance period historical benchmarks; however for this baseline 
model, we calculated a performance period benchmark if a historical 
benchmark was not available.
    For the proposed policies model, we made the following 
modifications to the baseline model to reflect the newly proposed 
quality performance category policies for the CY 2023 MIPS performance 
period/2025 MIPS payment year:
    <bullet> As discussed in section IV.A.10.d.(1)(b)(i) of this 
proposed rule, we proposed to score administrative claims quality 
measures using a benchmark calculated from the performance period data. 
To simulate this policy in our proposed policies model, we used CY 2019 
performance period data to score administrative claims measures.
    <bullet> In Appendix 1 of this proposed rule, we added 9 new MIPS 
quality measures, removed 15 MIPS quality measures, partially removed 2 
MIPS quality measures that are proposed for removal from traditional 
MIPS and proposed for retention for use in MVPs, and proposed 75 
substantially modified MIPS quality measures. Consistent with prior 
rules, (83 FR 50053), our RIA estimates assume that clinicians who 
reported Medicare Part B claims, eCQM, MIPS CQM and QCDR measures that 
are removed would find alternate measures; therefore, we assign points 
to the measures that were submitted and included them in our scoring 
model.
    <bullet> In Appendix A, we propose one new administrative claims 
measure, Risk-Standardized Acute Cardiovascular-Related Hospital 
Admission Rates for Patients with Heart Failure under the Merit-based 
Incentive Payment System, for MIPS eligible clinicians, groups, 
subgroups, virtual groups, and APM Entities that include at least 1 
cardiologist. We included the test data for this measure into our model 
but we were not able to implement this model into our RIA estimation.
(b) Methodology To Estimate the Cost Performance Category Score
    We estimated the cost performance category score using a similar 
methodology described in the CY 2022 PFS final rule (86 FR 65643) for 
the baseline and the proposed policies RIA models described in this 
section.
    The baseline policies RIA model used the same methodology as the 
finalized policies model in the CY 2022 PFS final rule (86 FR 65643) 
since there are no previously finalized cost performance category 
policies that will apply beginning with the CY 2023 MIPS performance 
period.
    In section IV.A.10.c.(2)(b) of this proposed rule, we are proposing 
to revise the operational list of care episode and patient condition 
groups and codes by adding the Medicare Spending Per Beneficiary (MSPB) 
clinician cost measure as a care episode group. This recategorization 
of the MSPB measure does not affect the scoring of the cost performance 
category. Additionally, in section IV.A.10.d.(1)(c)(i) of this proposed 
rule, we are proposing to establish a maximum cost improvement score of 
1 percentage point out of 100 percentage points available for the cost 
performance category starting with the CY 2022 performance period/2024 
MIPS payment year. Due to data limitations, we do not have multiple 
years of cost measures to model improvement scoring. Therefore, we did 
not make any modifications between the proposed policies and baseline 
model for the cost performance category scoring.
(c) Methodology To Estimate the Facility-Based Measurement Scoring
    For the baseline model, we estimated the facility-based score using 
the scoring policies finalized in the CY 2018 Quality Payment Program 
final rule (82 FR 53763) and the methodology described in the CY 2020 
PFS final rule (84 FR 63169) incorporating the change to the facility-
based scoring hierarchy described in the CY 2022 PFS final rule (86 FR 
65526 through 65527). In our proposed policies model, we included two 
changes to facility-based scoring:

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    <bullet> As discussed in section IV.A.10.d.(2)(b)(i)(A) of this 
proposed rule, virtual groups would be able to receive a facility-based 
score.
    <bullet> Additionally, as discussed in section IV.A.10.d.(2)(a)(i) 
of this proposed rule, facility-based clinicians would be eligible to 
receive a complex patient bonus.
(d) Methodology To Estimate the Promoting Interoperability Performance 
Category Score
    For the baseline RIA model, we used the CY 2019 MIPS Promoting 
Interoperability performance period submissions data to estimate CY 
2023 MIPS performance for the Promoting Interoperability performance 
category. We did not make modifications to the Promoting 
Interoperability performance category baseline RIA model beyond what we 
finalized in the CY 2022 final rule (86 FR 64996).
    For the proposed rule model, we considered the following policy 
proposals as potential modifications to the baseline RIA model:
    <bullet> Require and modify the Query of PDMP measure for MIPS 
eligible clinicians participating in the Promoting Interoperability 
performance category and maintain the associated points at 10 points.
    <bullet> Expand the Query of PDMP measure to include not only 
Schedule II opioids but also Schedule III, and IV drugs.
    <bullet> Change the scoring for the e-Prescribing measure to 10 
points available and the maximum total points available for the 
Electronic Prescribing Objective would remain at 20 points for CY 2023.
    <bullet> Adding Enabling Exchange Under the Trusted Exchange 
Framework and Common Agreement (TEFCA) measure as an optional 
alternative measure in the Health Information Exchange (HIE) objective.
    <bullet> Modify the scoring methodology for the Promoting 
Interoperability performance category . We refer readers to section 
IV.A.10.c.(4) of this proposed rule, Table 87: Scoring Methodology for 
the Performance Period in CY 2023 of this proposed rule for further 
information on the scoring.
    <bullet> Consolidate the current options from three to two levels 
of active engagement for the Public Health and Clinical Data Exchange 
Objective and to require the reporting of active engagement for the 
measures under the objective
    <bullet> Removing the automatic reweighting of NPs, PAs, CRNAs, or 
CNSs.
    Due to limitations in our scoring engine-based model, we are unable 
to fully incorporate all of these changes into the proposed policies 
model. We incorporated into the model the modification to the scoring 
methodology for the Promoting Interoperability performance category and 
the removal of the automatic reweighting of NPs, PAs, CRNAs, and CNSs. 
We continue to use the scores for the e-Prescribing measure in the 
model as we only have data for the optional Query of PDMP measure. Due 
to the high submission rate for the optional measure and the expansion 
of the availability of PDMPs in all 50 States and several localities, 
we anticipate that clinicians who do not currently submit this newly 
required measure would now submit the measure or submit one of the 
associated exclusions. Because we lack CY 2019 MIPS submissions data 
for the Enabling Exchange Under TEFCA measure and the Health 
Information Exchange Bi-Directional exchange measure, previously 
finalized to be required beginning with the CY 2021 performance period, 
we only used past reporting on the existing Health Information Exchange 
Objective measures to estimate CY 2023 Promoting Interoperability 
performance for the proposed rule model. This may result in 
underestimating the Promoting Interoperability performance category 
scores if clinicians chose to report the bi-directional exchange 
measure for the CY 2021 performance period.
(e) Methodology To Estimate the Improvement Activities Performance 
Category Score
    For the baseline model, we modeled the improvement activities 
performance category score based on CY 2019 MIPS performance period 
data and APM participation identified in section IV.A.10.d.(1)(c)(i) of 
this proposed rule. For clinicians and groups not participating in a 
MIPS APM, we used their CY 2019 improvement activities score. We did 
not model the policy finalized in the CY 2020 performance period (84 FR 
62980) to require a minimum threshold of 50 percent of clinicians in a 
group to complete an improvement activity for the group to receive 
credit since we did not have data to determine the proportion of 
clinicians in a group that completed the improvement activity. We 
continued to apply the methodology described in the CY 2020 PFS final 
rule (84 FR 63170) to assign an improvement activities performance 
category score. For the APM participants identified in section 
VII.F.17.c.(1) of this proposed rule, we assigned an improvement 
activity performance category score of 100 percent.
(f) Methodology To Estimate the Complex Patient Bonus Points
    For the baseline and proposed policies RIA model, we used the 
previously established method to calculate the complex patient bonus as 
described in the CY 2022 PFS final rule (86 FR 64996). We calculated 
and applied the separate risk indicator complex patient bonus 
components methodology with a single overall cap described at section 
IV.A.10.d.(2).(a) of this proposed rule. In section 
IV.A.10.d.(2)(a)(ii) of this proposed rule, we propose to allow 
facility based clinicians to receive a complex patient bonus. We 
incorporated this change in our RIA policies model.
(g) Methodology To Estimate the Final Score
    We did not propose any changes for how we calculated the MIPS final 
score. Our baseline and proposed policies RIA models assigned a final 
score for each TIN/NPI by multiplying each estimated performance 
category score by the corresponding performance category weight, adding 
the products together, multiplying the sum by 100 points, adding the 
complex patient bonus, and capping at 100 points.
    For the baseline policies RIA model, we applied the performance 
category weights and redistribution weights finalized in the CY 2022 
PFS final rule (86 FR 65519 through 65524).
    For both models, after adding any applicable bonus for complex 
patients, we reset any final scores that exceeded 100 points to equal 
100 points. For MIPS eligible clinicians who were assigned a weight of 
zero percent for any performance category, we redistributed the weights 
according to Sec.  414.1380(c).
(h) Methodology To Estimate the MIPS Payment Adjustment
    For the baseline and proposed policies RIA models, we applied the 
hierarchy as finalized in the CY 2022 PFS final rule (86 FR 65536 
through 65537) to determine which final score should be used for the 
payment adjustment for each MIPS eligible clinician when more than one 
final score is available. We then calculated the parameters of an 
exchange function in accordance with the statutory requirements related 
to the linear sliding scale, budget neutrality, and minimum and maximum 
adjustment percentages.
    For the baseline model, we applied the performance threshold 
finalized in

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the 2022 PFS final rule (86 FR 65527) of 75 points finalized at Sec.  
[thinsp]414.1405. For the proposed policies model, we applied the 
performance threshold of 75 points proposed in section IV.A.10.e.(2) of 
this proposed rule. We used these resulting parameters to estimate the 
positive or negative MIPS payment adjustment based on the estimated 
final score and the allowed charges for covered professional services 
furnished by the MIPS eligible clinician.
(4) Impact of Payments by Practice Size
    We noticed minimal changes to the mean and median final score 
between our baseline and proposed policies model. In our baseline 
model, the mean and median final scores are 73.63 and 77.48, 
respectively. In the proposed policies model, the mean final score is 
73.57 and the median final score is 77.52. Because these mean and 
median final scores are so close to our performance threshold of 75, 
many clinicians are only slightly above or slightly below the 
performance threshold. For instance, in the proposed policies model, 
284,000 clinicians have a final score between 70 and 80 points. We 
recognize that, because many scores are clustered around the 
performance threshold of 75, any variation in scoring or submissions 
data such as the presence of submission data for the Trusted Exchange 
Framework and Common Agreement (TEFCA) measure and the Health 
Information Exchange bi-directional exchange measures, discussed in 
section VII.E.16.d.(3)(d) of this RIA, can have a significant impact on 
the proportion of clinicians receiving a positive or a negative payment 
adjustment. Between the baseline and proposed policies model we observe 
a slight difference in the percentage and distribution of clinicians 
receiving a negative payment adjustment. Overall, we project 66.5 
percent of engaged clinicians \547\ would receive a positive or neutral 
adjustment in our proposed policies model up from 62 percent in the 
baseline model.
---------------------------------------------------------------------------

    \547\ We define engaged MIPS clinicians as those who have 
submitted data for at least one MIPS performance category or are 
facility-based.
---------------------------------------------------------------------------

    We observe a slight difference in payment adjustments by practice 
size. Note that in the CY 2021 PFS final rule we did not report the 
solo clinician's category. This category, which encompasses 21,955 
clinicians, has a slightly larger share receiving a negative payment 
adjustment compared to other practice sizes. We note an increase in the 
percentage of clinicians receiving a positive or neutral payment 
adjustment between the baseline and proposed policies model for all 
practice sizes except for large practices where we see a slight 
decrease.
    Because many clinicians scores are close to the performance 
threshold, many of these clinician's payment adjustments are fairly 
small and many negative adjustments are much lower in magnitude than 
the statutory maximum negative adjustment of 9 percent. In our proposed 
policies model, we project a payment adjustment of negative 9 percent 
for clinicians with a score of 18 points or below and we project only 
3,481 clinicians would receive a score of 18 points or below and thus 
be subject to the maximum negative payment adjustment.
    In our baseline model, the average positive payment adjustment 
among engaged clinicians is 2.50 percent and the average negative 
payment adjustment is -1.68 percent. In our proposed policies model, 
the average positive payment adjustment among engaged clinicians is 
2.49 percent and the average negative payment adjustment among engaged 
clinicians is -1.64 percent. Only 6.84 percent of clinicians receive a 
score of less than 50 points and therefore a negative payment 
adjustment of more than 3 percent. Because there is only a slight 
difference in the proportion of clinicians receiving a negative payment 
adjustment between the proposed policies and baseline model, we 
anticipate only a modest change in the amount of funds redistributed 
due to budget neutrality (from $1 billion to $998 million) and a modest 
change in the maximum positive payment adjustment from 6.8 percent in 
the baseline to 6.9 percent in the proposed policies model, however, we 
recognize that a modest change in final scores could influence the 
amount of funds available for redistribution.
    These findings and proposed policies reflect movement away from the 
transition policies implemented during the early years of MIPS and how 
MIPS is focusing on value rather than primarily on engagement. However, 
a large proportion of those who are non-engaged, or not submitting data 
to MIPS, are clinicians in small practices. Among those who we estimate 
would not engage with MIPS, 79.8 percent are in small practices (16,614 
out of 20,810 clinicians who do not engage). We intend to continue 
working with interested parties to improve engagement in MIPS among 
clinicians in small practices.
    We want to highlight we are using 2019 MIPS performance period 
submissions data to simulate a CY 2023 MIPS performance period final 
score, and it is likely that there will be changes that we cannot 
account for at this time. It should also be noted that the estimated 
number of clinicians who do not submit data to MIPS may be an 
overestimate of non-engagement in MIPS for the CY 2023 performance 
period/2025 MIPS payment year. This is because the PHE for COVID-19 may 
have resulted in fewer clinicians submitting data to MIPS or more 
clinicians electing to apply for the extreme and uncontrollable 
circumstances policies due to the PHE for COVID-19 for the CY 2019 MIPS 
performance period. Therefore, engagement levels in MIPS for the CY 
2023 performance period/2025 MIPS payment year may differ from these 
reported estimates. We also note this participation data is generally 
based off participation for the CY 2019 performance period/2021 MIPS 
payment year, which is associated with a performance threshold of 30 
points, and that participation may change since the proposed 
performance threshold is 75 points.
    Finally, the combined impact of negative and positive adjustments 
as a percent of allowed charges among those that do not submit data to 
MIPS was not the maximum negative payment adjustment of 9 percent 
possible because some MIPS eligible clinicians that do not submit data 
to MIPS receive a non-zero score for the cost performance category, 
which utilizes administrative claims data and does not require separate 
data submission to MIPS.
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e. Additional Impacts From Outside Payment Adjustments
(1) Burden Overall
    In addition to policies affecting the payment adjustments, we are 
proposing several policies that have an impact on burden in the CY 2023 
performance period/2025 MIPS payment year. In section VII.E.16.e. of 
this proposed rule, we outline estimates of the costs of data 
collection that includes both the effect of proposed policy updates and 
adjustments due to the use of updated data sources. For each proposal 
included in this regulation which impacts our estimate of collection 
burden, the incremental burden for each is summarized in Table 147. We 
also provide proposed additional burden discussions that we are not 
able to quantify.

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(2) Additional Impacts to Clinicians
(a) MVP Maintenance and Development Process
    In section IV.A.8.a. of this rule, we propose updates to the 
previously finalized policies for the MVP development and maintenance 
process in the CY 2021 and 2022 PFS final rules (85 FR 84849 through 
84856 and 86 FR 65410). Specifically, we propose to modify the MVP 
development process such that we would evaluate a submitted candidate 
MVP through the MVP development process and if we determine it is 
``ready'' for feedback, we would post a draft version of the MVP on the 
Quality Payment Program website (https://qpp.cms.gov/) and solicit 
feedback for a 30-day period. Interested parties and the general public 
would have the opportunity to submit feedback on the candidate MVP for 
CMS's consideration through an email inbox. We would review the 
feedback received, and determine if any changes should be made to the 
candidate MVP prior to potentially including the MVP in a notice of 
proposed rulemaking. If we determine changes should be made to the 
candidate MVP, we would not notify the interested party who originally 
submitted the candidate MVP for CMS consideration in advance of the 
rulemaking process.
    We also propose that beginning with the CY 2023 performance period/
2025 MIPS payment year, to modify the MVP maintenance process such that 
interested parties and the general public would be able to submit their 
recommendations for potential revisions to established MVPs on a 
rolling basis throughout the year. We would then review the submitted 
recommendations and determine whether any are potentially feasible and 
appropriate. If we identify any submitted recommendations that are 
potentially feasible and appropriate, we would host a public facing 
webinar, open to interested parties and the general public, through 
which they may offer their feedback on the potential revisions we have 
identified. We would publish details related to the timing and

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registration process for the webinar through our Quality Payment 
Program Listserv.
    We acknowledge that there is administrative burden associated with 
the monitoring and review of the candidate MVPs. However, we are unable 
to estimate the impact of these proposals and quantify the number of 
interested parties and members of the general public that would review 
and submit their feedback for a candidate MVP. Similarly, we are 
uncertain on the number of interested parties and members of the 
general public that would submit their recommendations for potential 
revisions to established MVPs for an applicable performance period and 
if CMS would be hosting a public webinar based on the review of the 
recommendations. In summary, we are unable to quantify the impact 
associated with the proposed changes to the MVP development and 
maintenance process.
(b) Subgroup Registration
    In section IV.A.8.e.(3) of this rule, we propose that as part of 
the subgroup registration process, in addition to the previously 
established registration requirements, group TINs must provide a 
description of each subgroup that is registered. Under this proposed 
policy, we would identify some key scenarios for subgroups to select 
from that we expect might reflect a typical subgroup, but also wish to 
offer an opportunity for group TINs to describe how they constructed 
their subgroups by providing a narrative in a text-only field, if the 
options we provide do not correctly describe the subgroup. We recognize 
that there may be additional burden associated with the proposed 
description requirement for subgroup registration. However, we assume 
that the burden associated with choosing a key scenario would minimize 
the time required for subgroups to provide a narrative description. 
Additionally, we anticipate the narratives to be short descriptions of 
the nature of a group practice and appropriately reflect the subgroup 
composition. We are unable to quantify the additional impact for the 
proposed subgroup description requirement.
(c) Impact on Third Party Intermediaries
    In section IV.A.10.g.(3)(a) of this rule, we propose to revise the 
corrective action plan (CAP) requirement at Sec.  414.1400(e)(1)(i)(B) 
to address the impact to any affected parties, as appropriate. We also 
propose to add Sec.  414.1400(e)(1)(i)(E) to require the detailed 
communication plan for communicating the issues that contributed to the 
non-compliance and the impact to any affected parties, as appropriate. 
We anticipate administrative burden associated with the proposed 
requirement for third party intermediaries to submit a detailed 
communication plan. Because of the relatively low number (fewer than 10 
per year historically) of CAPs that we anticipate receiving from QCDRs 
for the CY 2023 performance period/2025 MIPS payment year, we are 
unable to quantify the burden associated with the development of a 
communication plan for third party intermediaries.
(d) Compare Tools: Public Reporting
    In section IV.A.10.h.(1) of this rule, we propose to identify 
clinicians who perform telehealth services using Place of Service Code 
02 (indicating telehealth) on paid physician & ancillary service (that 
is, carrier) claims, or modifier 95 appended on paid claims. 
Additionally, we propose publicly reporting Medicare procedural 
utilization data on the Compare tool clinician and group profile pages 
in a way that is understandable to patients and caregivers, based on 
user testing, and helps them make healthcare decisions. We would begin 
publicly reporting procedural utilization data no earlier than CY 2023. 
We will use a 12-month lookback period and bi-monthly data refresh 
frequency, as technically feasible. While the Compare tool proposals do 
not increase the burden of collections, we note that the PRA package 
may require relevant modification to reflect the Compare tool's new 
uses and public display.
(e) Administrative Claims Measure
    As discussed in appendix 1, we are proposing to add one new 
administrative claims quality measure beginning in the CY 2023 
performance period/2025 MIPS payment year and for future performance 
periods: Risk-standardized Acute Cardiovascular-Related Hospital 
Admission Rates for Patients with Heart Failure under the Merit-based 
Incentive Payment System. We acknowledge there are administrative 
burdens and related financial costs associated with each administrative 
claims measure that clinicians, groups, and organizations may choose to 
monitor. However, because these costs can vary significantly due to 
organizational size, number of administrative claims measures being 
reported, volume of clinicians reporting each measure, and the specific 
methods employed to improve performance, we are unable to provide an 
estimate of the financial impact each clinician, group, or organization 
may experience. In summary, we are acknowledging that while there are 
no data submission requirements per Sec.  414.1325(a)(2)(i) for 
administrative claim measures, there may be associated costs for 
clinicians and group practices to monitor new administrative claim 
measures; however, we are unable to quantify that impact.
(f) Modifications to the Improvement Activities Inventory
    As discussed in section IV.A.10.b of this proposed rule, we are 
proposing changes to the improvement activities inventory for the CY 
2023 performance period/2025 MIPS payment year and future years as 
follows: adding four new improvement activities; modifying five 
existing improvement activities; and removing six previously adopted 
improvement activities. We refer readers to Appendix 2 of this proposed 
rule for further details. We do not believe these proposed changes to 
the inventory will significantly impact time or financial burden on 
interested parties because MIPS eligible clinicians are still required 
to submit the same number of activities and the per response time for 
each activity is uniform. We recognize that different activities may 
require differing amount of time to complete, but for the purposes of 
the COI, we focus on the amount of time it takes to submit the 
associated information into the system. We do not expect these proposed 
changes to the inventory to affect our currently approved information 
collection burden estimates in terms of neither the number of estimated 
respondents nor the burden per response. We anticipate most clinicians 
performing improvement activities, to comply with existing MIPS 
policies, would continue to perform the same activities under the 
policies in this proposed rule because previously finalized improvement 
activities continue to apply for the current and future years unless 
otherwise modified per rulemaking (82 FR 54175). Most of the 
improvement activities in the Inventory remain unchanged for the CY 
2023 MIPS performance period.
g. Assumptions & Limitations
    In section VII.E.16.d.(4) of this RIA we noted the limitation that, 
because many scores are clustered near the performance threshold of 75 
points, minor variations in clinicians final scores relative to our 
estimations could have significant impacts on the proportion of 
clinicians receiving a positive or negative payment adjustment. In 
addition to this limitation, we note several other

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limitations to our estimates of clinicians' MIPS eligibility and 
participation, negative MIPS payment adjustments, and positive payment 
adjustments for the CY 2023 performance period/2025 MIPS payment year. 
Due to the PHE for COVID-19, we are aware that there may be changes in 
health care delivery and billing patterns that will impact results for 
the CY 2023 performance period/2025 MIPS payment year that we are not 
able to model with our historic data sources. The scoring model results 
presented in this proposed rule assume that CY 2019 Quality Payment 
Program data submissions and performance are representative of CY 2023 
Quality Payment Program data submissions and performance. The estimated 
performance for the CY 2023 performance period/2025 MIPS payment year 
using CY 2019 Quality Payment Program data may be underestimated 
because the performance threshold to avoid a negative payment 
adjustment for the CY 2019 performance period/2021 MIPS payment year 
was significantly lower (30 out of 100 points) than the proposed 
performance threshold for the CY 2023 performance period/2025 MIPS 
payment year (75 out of 100). We anticipate clinicians may submit more 
performance categories to meet the higher performance threshold to 
avoid a negative payment adjustment.
    In our MIPS eligible clinician assumptions, we assumed that 
clinicians who elected to opt-in in the CY 2019 Quality Payment Program 
and submitted data would continue to elect to opt-in in the CY 2023 
performance period/2025 MIPS payment year. It is difficult to predict 
whether clinicians will elect to opt-in to participate in MIPS with the 
proposed policies.
    There are additional limitations to our estimates In addition to 
the limitations described throughout the methodology sections: (1) to 
the extent that there are year-to-year changes in the data submission, 
volume and mix of services provided by MIPS eligible clinicians, the 
actual impact on total Medicare revenues will be different from those 
shown in Table 144 and (2) our data for the cost performance category 
does not overlap with CY 2019 so we may not be capturing performance 
for all clinicians. Due to the limitations described, there is 
considerable uncertainty around our estimates that is difficult to 
quantify.

F. Alternatives Considered

    This proposed rule contains a range of policies, including some 
provisions related to specific statutory provisions. The preceding 
preamble provides descriptions of the statutory provisions that are 
addressed, identifies those policies when we propose to exercise agency 
discretion, presents rationale for our policies and, where relevant, 
alternatives that were considered. For purposes of the payment impact 
on PFS services of the policies contained in this proposed rule, we 
present above the estimated impact on total allowed charges by 
specialty.
1. Alternatives Considered for Adjusting RVUs To Match PE Share of the 
Medicare Economic Index (MEI)
    As discussed in section II.B. of this proposed rule, ``(5) PE RVU 
Methodology,'' Steps 3, 10, and 18, and ``3. Adjusting RVUs To Match PE 
Share of the Medicare Economic Index (MEI)'', we hold the work RVUs 
constant and adjust the PE RVUs, MP RVUs, and CF to produce the 
appropriate balance in RVUs among the PFS components and payment rates 
for individual services, that is, that the total RVUs on the PFS are 
proportioned to approximately 51 percent work RVUs, 45 percent PE RVUs, 
and 4 percent MP RVUs. As the Medicare Economic Index (MEI) cost shares 
are updated, we typically propose to modify steps 3 and 10 described in 
section II.B. of this proposed rule to adjust the aggregate pools of PE 
costs (direct PE in step 3 and indirect PE in step 10) in proportion to 
the change in the PE share in the rebased and revised MEI cost share 
weights, as previously described in the CY 2014 PFS final rule (78 FR 
74236 and 74237), and to recalibrate the relativity adjustment that we 
apply in step 18 described in section II.B. of this proposed rule. The 
most recent recalibration was done for the CY 2014 RVUs, when the MEI 
was last updated.
    As an alternative to adjusting the aggregate pools of direct and 
indirect PE costs and using a relativity adjustment based on the 
current CY 2014 MEI update, we considered using the proposed rebased 
and revised MEI cost share weights for CY 2023, as discussed in detail 
in section II.M. of this proposed rule, for purposes of adjusting the 
RVUs to match PE share of the MEI for CY 2023. We considered using the 
rebased and revised cost share weights to adjust the aggregate pools of 
PE RVUs and the relativity adjustment to reflect more recent data, 
shifting over a 4 year transition to reach the proportions of work, PE, 
and MP, as proposed in section II.M. of this proposed rule.
    Table 148 illustrates specialty-specific impacts for the proposed 
rule if we were to use the proposed rebased and revised MEI cost share 
weights to adjust the RVUs to match the PE share of the MEI. Column C 
represents specialty level impacts of our proposals for CY 2023 without 
the recalibration of RVU proportions based on the proposed rebased and 
revised MEI cost share weights, shown for comparison to the 
alternatives considered (same impacts as shown in Table 139). Column E 
represents the specialty level impacts of our proposals for CY 2023 
with Year 1 of a 4-year phased in recalibration of RVU proportions 
based on the proposed rebased and revised MEI cost share weights. 
Column F represents the specialty level impacts of our proposals for CY 
2023 with the recalibration of RVU proportions based on the proposed 
rebased and revised MEI cost share weights, without a 4-year phase in, 
but rather, a full implementation for CY 2023.
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    The majority of specialties would experience shifts of 1 percent or 
greater if we used the proposed rebased and revised MEI cost share 
weights, as opposed to the current weights, displayed in Table 148, for 
proportioning work, PE, and MP RVUs. Several specialties shifted by 
greater than 3 percent, particularly the specialties with relatively 
higher PE costs, which are mostly realizing a positive shift, or 
relatively higher physician work costs, which are realizing a negative 
shift. As shown in Column F, the shifts are amplified, both negatively 
and positively, when use of the proposed rebased and revised MEI cost 
share weights is not phased in over several years; therefore, we did 
not consider this a viable alternative for consideration. We note that 
there are significant shifts in specialty level payments if we used the 
proposed rebased and revised MEI cost share weights, some of which 
counter other CY 2023 proposals (that is, changes to Evaluation and 
Management (E/M) services, chronic pain management, and behavioral 
health services).
    We have proposed to delay the adjustments to allow public comment 
and finalization of the proposed rebased and revised MEI, and to 
maintain use of the current MEI cost share weights while presenting the 
information in section II.M. of this proposed rule and the specialty 
level impacts in Table 148. We are also soliciting comment on the use 
of a transition to phase in use of the proposed rebased and revised MEI 
cost share weights, if and as finalized, for potential future 
rulemaking. Because there are significant proposed methodological and 
data source changes to the MEI for CY 2023 and significant time has 
elapsed since the last rebasing and revision of the MEI, we believe it 
is important to allow public comment and finalization of the proposed 
MEI changes based on the review of public comment before we incorporate 
the updated MEI into PFS ratesetting, and we believe this is consistent 
with our efforts to balance payment stability and predictability with 
incorporating new data through more routine updates. Similarly, we are 
proposing to delay the implementation of the proposed rebased and 
revised MEI for use in the PE geographic practice cost index (GPCI) to 
allow public comment and finalization of the proposed MEI changes based 
on the review of public comment before we incorporate the updated MEI 
into the PE GPCIs.

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2. Alternatives Considered for the Practice Expense (PE) Geographic 
Practice Cost Index (GPCI)
    As discussed in section II.G. of this proposed rule, we use the MEI 
cost share weights to weight the four components of the PE GPCI: 
employee compensation, the office rent, purchased services, and medical 
equipment, supplies, and other miscellaneous expenses. As the MEI cost 
shares are updated, we have historically updated the GPCI cost share 
weights to make them consistent with the most recent update to the MEI. 
Instead, we are proposing to maintain the use of the current 2006-based 
MEI cost share weights for the CY 2023 proposed GPCIs, allowing 
interested parties the opportunity to review and comment on, and for us 
to respond to comments and finalize, the proposed rebased and revised 
MEI cost share weights. Because there are significant proposed 
methodological and data source changes to the MEI for CY 2023 and 
significant time has elapsed since the last rebasing and revision of 
the MEI, we believe it is important to allow public comment and 
finalization of the proposed MEI changes based on the review of public 
comment before we incorporate the updated MEI into the PE GPCI.
    As an alternative to using the current 2006-based cost share 
weights, we considered using the proposed rebased and revised Medicare 
Economic Index (MEI) cost share weights for CY 2023, as discussed in 
detail in section II.M. of this proposed rule for purposes of weighting 
the four components of the CY 2023 PE GPCI. Specifically, within the 
four components of the PE GPCI, we considered proposing to update the 
employee compensation component from 16.553 percent to 24.716 percent, 
the office rent component from 10.223 percent to 5.893 percent, the 
purchased services component from 8.095 percent to 13.914 percent, and 
the medical equipment, supplies, and other miscellaneous expense 
component from 9.968 percent to 6.819 percent, as shown in Table 149.
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    The use of the proposed rebased and revised MEI cost share weights 
only impacts the PE GPCI. When the PE GPCI was calculated using the 
proposed rebased and revised MEI cost share weights, 10 of the 112 PE 
GPCI values remained the same compared to the calculated PE GPCI using 
the current 2006-based MEI cost share weights. Three of the 112 PE GPCI 
values differed by <plus-minus>0.001 and 68 of the 112 PE GPCI values 
differ less than or equal to <plus-minus>0.009. Therefore, the proposal 
to maintain the use of the current 2006-based MEI cost share weights 
has little to no effect on over 70 percent of the localities' PE GPCIs. 
Of the remaining 31 localities with a difference of greater than <plus-
minus>0.009 between the proposed PE GPCI and the alternative 
considered, 10 realize an increased PE GPCI when the current 2006-based 
MEI cost share weights were used, ranging from an increase of 0.010 to 
0.012, as compared to the PE GPCI if the proposed rebased and revised 
MEI cost share weights were incorporated. The remaining 21 localities 
realize a decrease in PE GPCI when the current 2006-based MEI cost 
share weights were used, ranging from a decrease of 0.010 to 0.028. We 
note that we are seeking comment in section II.G. of this proposed rule 
on the proposal to maintain the use of the current 2006-based MEI cost 
share weights and postpone the implementation of the proposed rebased 
and revised MEI cost share weights for consideration through potential 
future rulemaking. See Alternate Addenda D and E to this proposed rule 
for the CY 2023 GPCIs and summarized GAFs if the rebased and revised 
MEI cost share weights proposed in section II.M. of this proposed rule, 
were incorporated to weight the proposed CY 2023 PE GPCIs (for 
comparison to Addenda D and E with the proposal to maintain the current 
2006-based MEI cost share weights for the PE GPCIs). Because the PE 
GPCIs factor into the GAF equation, we created an Alternate Addendum D 
to show the recalculated GAFs if the rebased and revised MEI cost share 
weights were incorporated to weight the CY 2023 PE GPCIs as well. These 
alternative addenda are available on the CMS website under the 
supporting documents section of the CY 2023 PFS proposed rule at 
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html. We note that only the PE GPCI and GAF 
values differ between Addenda D and E, and Alternate Addenda D and E, 
as the proposed rebased and revised cost share weights do not impact 
the work or MP GPCIs.
3. Alternatives Considered Related to Payment for E/M Services
    In developing our policies for other E/M visits effective January 
1, 2023, we considered a number of alternatives. For reasons discussed 
in our E/M policy section (section II.F. of this proposed rule) we 
considered several refinements for the RUC-recommended work RVUs for 
several of the codes in the families based on survey time changes to 
include Hospital Inpatient or Observation Care, Nursing Facility 
visits, and Home or Residence Services. We proposed to accept the RUC 
recommendations for the work RVUs because we believe they are more 
accurate values. For some of these codes the overall times changed and 
the RUC recommended work RVUs accurately reflect changes based on 
changes in the times for the service. For

[[Page 46425]]

some of the codes, changes were noted in the total time and intra-
service times which was reflected in the intra-time and total time 
ratios that led to an increase. Given our interest in maintaining 
continuity in the overall code set, we are proposing to accept the RUC 
recommendations for the work time values and work RVUs for these codes 
and are seeking public comment on our concerns for specific codes.
    We considered adopting the CPT coding for prolonged services as an 
alternative but after thoughtful consideration we are proposing to 
develop Medicare-specific coding (three G-codes, one per setting) to 
avoid potentially substantial overpayment, provide administrative 
simplification, enable CMS to determine how much time is being spent 
with patients using claims data, and facilitate program integrity. 
Allowing for CMS to determine how much time is being spent with 
patients using claims data is important for future valuation of 
services on the PFS, and for program integrity. If we proposed to 
merely accept the CPT prolonged service coding changes, we would not be 
able to identify the time spent with patients in the claims data alone, 
because we might not know which primary service is the companion code 
to the prolonged service code(s) due to the wide service timespan (for 
prolonged services without direct patient contact) and non-specific 
care settings within the prolonged CPT code descriptors. We considered 
two options in coming to our proposal. First, we considered using the 
descriptor time plus 15 minutes which would allow for prolonged 
services to be reportable once the practitioner spends 15 additional? 
minutes beyond the ceiling time of the primary service. Or, our second 
option was to use total time plus 15 minutes allowing for prolonged 
services to be reportable once the practitioner spends 15 additional 
minutes beyond the total time of the primary service. Both of these 
options would allow for time to be counted on any day within the survey 
period with no frequency limit. However, we decided to take the same 
approach we did for the office/outpatient E/M visits by proposing 
Medicare specific coding (GXXX1 through GXXX3) for prolonged services 
for other E/Ms. We proposed to value the G codes similarly to the 
parallel CPT codes, and require total time to be met before prolonged 
time starts. Reporting this way, through the use of a G code for each 
of the specified code families, allows for administrative simplicity 
and payment accuracy.
4. Alternatives Considered Related to Proposal To Allow Audiologists To 
Furnish Diagnostic Tests, as Appropriate Without a Physician Order
    As discussed in section II.K. of this proposed rule, interested 
parties have told us that our regulatory requirement for a physician or 
NPP order for diagnostic audiology services may be impeding access to 
audiologists. More recently they have requested that we eliminate the 
treating physician (or NPP) order requirement for the diagnostic 
hearing and balance assessment services furnished by audiologists--via 
notice and comment rulemaking--to enable greater access to these 
services.
    As we also discussed in section II.K. of the proposed rule, we are 
concerned that direct access of audiologists' services, that is the 
removal of the order requirement for these hearing and balance services 
furnished by audiologists, might lead to payment for services that are 
not medically necessary because the results are not being used by a 
treating physician or NPP in the management of the patient's medical 
condition. Nonetheless, after careful consideration of the interested 
parties' requests, we have proposed to amend the regulation at Sec.  
410.32(a)(4) to remove the order requirement for certain audiology 
services furnished personally by an audiologist once per beneficiary 
per 12-month period for non-acute hearing conditions. We also propose 
to create HCPCS code GAUDX (Audiology service(s) furnished personally 
by an audiologist without a physician/NPP order for non-acute hearing 
assessment unrelated to disequilibrium or hearing aids or examinations 
for the purpose of prescribing, fitting, or changing hearing aids; may 
be performed on an annual basis) to describe audiology services 
furnished without the order of a treating physician or practitioner.
    When developing our proposed policy, we considered adding 
audiologists to Sec.  410.32(a)(2), under the provision that permits 
nonphysician practitioners to order diagnostic tests. However, unlike 
audiologists, the practitioners identified in this provision are all 
required to accept payment on an assignment-related basis under section 
1842(b)(18)(C) of the Act and must accept the Medicare payment amount 
as payment in full. Medicare payment for audiology services provided by 
audiologists who do not accept assignment would result in higher out-
of-pocket expense (that is, the balance billed amount) than if they did 
accept assignment. In addition, Medicare Part B does not recognize 
audiologists to treat or manage patients, unlike PAs, NPs or CNSs who 
may bill for E/M services, and for whom Medicare Part B covers services 
and supplies incident to their own professional services as provided in 
the regulation at Sec.  410.26. Rather, because audiology services 
furnished by audiologists include only diagnostic hearing and balance 
assessment services, we concluded that adding audiologists with the 
NPPs listed in Sec.  410.32(a)(2) was inappropriate.
    We also considered alternatively removing the requirement for the 
order of a treating physician or practitioner for audiology services 
without the annual limitation. However, we had concerns about the 
possibility of overutilization of HCPCS code GAUDX if the results of 
audiology testing are not used by a treating clinician to manage the 
patient's medical condition. Additionally, we do not have the ability 
to predict the behavioral response of audiologists to removal of order 
requirements. Therefore, we believe that adding an annual limitation 
would serve to address some of our concerns of overutilization. To 
monitor for the appropriate use of HCPCS code GAUDX, we will establish 
system edits through our usual change management process to ensure that 
GAUDX is only paid once every 12 months per each beneficiary. This will 
also help address program integrity concerns about audiologists billing 
GAUDX more frequently, furnishing services that are not reasonable or 
necessary for the treatment of the beneficiary's illness or injury, or 
billing more than one unit of GAUDX on a claim. Finally, because we are 
concerned about beneficiaries with acute onset conditions that require 
immediate medical intervention, and the potential loss of valuable time 
for medical intervention if the patient sees an audiologist first, we 
are limiting the direct access to audiology services to non-acute 
hearing conditions and conditions for which patients' experience 
disequilibrium symptomology. To help address these safety concerns 
about direct access to audiologists, we want to stress the importance 
that such hearing conditions with a rapid onset and balance conditions 
with disequilibrium symptoms are to be referred directly to the primary 
care physician, ENT or other physician or NPP treating the beneficiary.

[[Page 46426]]

5. Alternatives Related to Proposals for Medicare Part A and B Payment 
for Dental Services and Request for Information
    As explained in this proposed rule, we believe there are instances 
where the medical services necessary for treating the individual's 
underlying medical condition and clinical status may require the 
performance of certain dental or oral health services. In these 
instances, we believe that the dental and oral health services are not 
in connection with the care, treatment, filling, removal or replacement 
of teeth or structures directly supporting teeth, and instead are 
inextricably linked to, and substantially related and integral to the 
clinical success of, certain covered medical services such that the 
dental or oral health services are not subject to the statutory payment 
preclusion under section 1862(a)(12) of the Act. We also believe that 
there are circumstances where the dental or oral health services are in 
connection with the care, treatment, filling, removal or replacement of 
teeth or structures directly supporting teeth, and are not inextricably 
linked to the clinical success of an otherwise covered medical service 
such that Medicare payment for the dental or oral health services is 
precluded by section 1862(a)(12) of the Act. And we believe that there 
may circumstances where, because of the patient's underlying medical 
condition and clinical status or because the severity of the dental 
procedure, the patient requires hospitalization to receive services in 
connection with the care, treatment, filling, removal or replacement of 
teeth or structures directly supporting teeth such that payment could 
be made under Medicare Part A for inpatient hospital services in 
connection with the dental or oral health services under the exception 
provided under section 1886(a)(12) of the Act.
    In section II.L.2. of this proposed rule, we are: (1) proposing to 
clarify our interpretation of section 1862(a)(12) of the Act, and 
clarify and codify certain of our current Medicare FFS payment policies 
for medically necessary dental services; (2) proposing and seeking 
comment on payment for other dental services, such as dental 
examinations, including necessary treatment, performed as part of a 
comprehensive workup prior to organ transplant surgery, or prior to 
cardiac valve replacement or valvuloplasty procedures, that are 
similarly inextricably linked to, and substantially related and 
integral to the clinical success of, certain other covered medical 
services; (3) requesting comments on other types of clinical scenarios 
where the dental services may be inextricably linked and substantially 
related and integral to the clinical success of other covered medical 
services; (4) requesting comments on the potential establishment of a 
process to identify for our consideration and review submissions of 
additional dental services that are inextricably linked and 
substantially related and integral to the clinical success of other 
covered medical services; (5) requesting comment on other potentially 
impacted policies;, and (6) requesting comment on potential future 
payment models for dental and oral health care services.
    We note that we are open to considering and finalizing payment 
under Medicare Parts A and B for dental services under additional 
circumstances to those for which payment is already made under our 
current policy or for which we are specifically proposing to make 
payment beginning in CY 2023. Specifically, we would consider 
finalizing Medicare Part A and Part B payment for dental services if 
there are other circumstances in which such dental services are so 
integral to other medically necessary services that they are not in 
connection with the care, treatment, filling, removal or replacement of 
teeth or structures directly supporting teeth; but rather, are 
inextricably linked to, and substantially related and integral to the 
clinical success of, certain covered medical services. In that case, 
the dental services would not be subject to the Medicare payment 
exclusion provided under section 1862(a)(12) of the Act. We considered 
whether to propose Medicare payment for the performance of other 
services where a comprehensive dental or oral health exam, and 
potential treatment, might be considered a standard of care prior to 
the performance of an otherwise covered medical service, such as before 
certain treatment of head and neck cancers, such as radiation therapy 
with or without chemotherapy, before the initiation of medically 
necessary immunosuppressant therapy, such as those used during cancer 
treatments, prior to joint replacement surgery (such as total hip and 
knee arthroplasty surgery). However, we decided not to specifically 
propose payment in these circumstances because we believe more clinical 
data is necessary to determine whether the dental services would be 
inextricably linked to, and substantially related and integral to the 
clinical success of, these medically necessary services. We welcome 
public comments on all of these alternatives discussed, including 
whether Medicare payment should be specified for other types of 
services where the dental services may be so inextricably linked to the 
clinical success of an otherwise covered medical service that they are 
not in connection with the care, treatment, filling, removal or 
replacement of teeth or structures directly supporting the teeth. We 
welcome public comments on these alternatives and others, which we may 
consider finalizing in the CY 2023 PFS final rule, or through future 
rulemaking after considering the comments received.
    In section II.L.2.c.(ii) of this proposed rule, we seek comment on 
the potential establishment of a process to accept, review and consider 
additional clinical scenarios where payment may be permitted under 
Medicare Part A and Part B for certain additional dental services. We 
note that we considered establishing categorical clinical criteria and 
review process for submissions in order to consider whether these 
dental services are inextricably linked to an otherwise covered medical 
service, and therefore not subject to the Medicare payment exclusion 
provided under section 1862(a)(12) of the Act. However, we decided not 
to establish specific review criteria at this time because we believed 
a more open-ended clinical review process was preferable as we began to 
carefully consider payment policies for dental services in light of our 
longstanding interpretation of section 1862(a)(12) of the Act. We seek 
comment on alternative approaches to reviewing these submissions if we 
finalize the proposed process, such as outlining the specific types of 
medical literature needed to support the inclusion of services for 
Medicare FFS payment purposes, or legal and clinical analysis needed to 
consider whether the services do or do not fall within the statutory 
exclusion for dental services under section 1862(a)(12) of the Act 
based on our proposed interpretation within this proposed rule. We 
welcome public comments on these alternatives and others, which we may 
consider finalizing in the CY 2023 PFS final rule or future rulemaking 
after considering the comments received.
    If we were to finalize a change in the CY 2023 PFS rulemaking to 
expand the types of dental services for which payment can be made under 
Medicare Parts A and B, we remain open to adjusting any finalized 
policy through future rulemaking, and conducting further impact 
analysis while also providing an opportunity for public comment on such 
analysis.

[[Page 46427]]

6. Alternatives Considered Related to Medicare Shared Savings Program
    One purpose of the proposed prior savings adjustment is to mitigate 
the rebasing ratchet effect on an ACO's benchmark in order to improve 
the incentive for higher spending ACOs to reduce spending in advance of 
eventual rebasing and to encourage their renewal for successive 
agreement periods. It remains a possibility, however, that even with 
this provision, higher spending ACOs that are effective in reducing 
spending may eventually drop out of the Shared Savings Program absent 
the opportunity to participate in a one-sided model in the succeeding 
agreement period. While we project only 1 to 5 percent of new ACOs 
dropping out before the end of their first agreement period, the 
dropout rate could reach as high as 30 percent during the second 
agreement period. Signaling that risk will eventually be mandatory 
could prevent the formation of low-revenue ACOs for whom a sharing-only 
incentive has proven to be effective. We considered an alternative in 
which low revenue ACOs would be permitted to participate in a one-sided 
model for a second full agreement period and estimate it would further 
increase program savings by at least $1 billion because it would 
increase retention for the type of ACO that has favorably responded to 
a moderate upside-only incentive in the past. This additional savings 
would result from (1) about a 60 percent reduction in the projected 
dropout rate by the end of the second agreement period for new and re-
entering ACOs and (2) an assumed incremental increase in the share of 
ACOs that would form as low revenue (a type that is assumed to be more 
effective at reducing spending). This alternative estimate is likely 
conservative, as the savings impact could be significantly greater if 
such signaling regarding the second agreement period were to prove to 
be a key factor motivating a significant increase in the overall number 
of ACOs that enter a first agreement period under the Shared Savings 
Program (instead of just the proportion that form as low revenue versus 
high revenue).
    Commenters may support also adding guardrails for calculating 
shared savings by limiting the difference the ACPT may be allowed to 
show (in either direction) from actual national assignable trend. 
Setting a prospective symmetric threshold for correcting extreme 
projection error would automatically correct for bias in either 
direction and prevent the need for CMS to address pressure to correct 
projection error on an ad hoc basis. Public pressure to correct for 
projection error would be strongest in situations where actual growth 
eclipses the ACPT by a significant margin. If CMS were assumed to only 
update the ACPT in years where such pressures were magnified because a 
change would favor ACOs, this impact estimate would show $1.3 billion 
in additional spending over 10 years. This estimate presumes that CMS 
would limit deviation in ACPT from actual national trend to no more 
than 2 percent in years where the ACPT understates national trend. The 
cost of such policy to asymmetrically correct for unfavorable 
projection error would grow if the threshold for making such 
adjustments were assumed to move lower than 2 percent.
7. Alternatives Considered for the Quality Payment Program
    For purposes of the payment impact on the Quality Payment Program, 
we view the performance threshold as a critical factor affecting the 
distribution of payment adjustments. We ran separate proposed policies 
RIA models based on the actual mean for the CY 2019 performance period/
2021 MIPS payment year and the CY 2020 performance period/2022 MIPS 
payment year with a performance threshold of 86 and 89, respectively 
which are potential values that may be used for the performance 
threshold for CY 2023 performance period/2025 MIPS payment year. The 
models have the same mean and median final score as our proposed 
policies RIA model since the performance threshold does not change the 
final score. In the iteration with a performance threshold of 86, 82.3 
percent of MIPS eligible clinicians would receive a negative payment 
adjustment among those that submit data. In the model with a 
performance threshold of 89 points, 89.1 percent of MIPS eligible 
clinicians would receive a negative payment adjustment among those that 
submit data.
    We report the findings for the baseline RIA model which describes 
the impact for the CY 2023 MIPS performance period/2025 MIPS payment 
year if this proposed regulation did not exist. The baseline RIA model 
has a mean final score of 73.63 and median final score of 77.48. We 
estimate that $1 billion would be redistributed through budget 
neutrality. There would be a maximum payment adjustment of 6.8 percent 
after considering the MIPS payment adjustment. In addition, 39.4 
percent of MIPS eligible clinicians would receive a negative payment 
adjustment among those that submit data.

G. Impact on Beneficiaries

1. Shared Savings Program Provisions
    As noted previously, a number of changes in this proposed rule 
collectively aim to increase participation in a more sustainable way 
for ACOs serving medically complex, high cost beneficiaries. The 
proposed policies are designed to reverse recent trends where growth 
has plateaued in the Shared Savings Program, higher spending 
populations are increasingly underrepresented in the program since the 
change to regionally-adjusted benchmarks, and access to ACOs appears 
inequitable as evidenced by data indicating that Black (or African 
American), Hispanic, Asian/Pacific Islander, and American Indian/Alaska 
Native beneficiaries are less likely to be assigned to a Shared Savings 
Program ACO than their Non-Hispanic White counterparts, and to 
encourage growth of ACOs in underserved communities.
    ACOs have been found to perform better on certain patient-
experience and performance measures than physician groups participating 
in the MIPS. In addition, ACOs have consistently demonstrated their 
ability to improve quality with 64 percent of ACOs participating during 
both 2019 and 2020 receiving Quality Improvement Reward points with the 
majority of ACOs showing the greatest improvement in the Preventive 
Health domain.
    Increased participation in the Shared Savings Program will extend 
ACO care coordination and quality improvement to segments of the 
beneficiary population that potentially have more to benefit from care 
management, and would stave off the risk apparent in the current 
trajectory of the Shared Savings Program where ACO participants and ACO 
providers/suppliers may feel pressure to avoid engaging with 
beneficiaries in high needs communities in order to avoid assignment of 
high cost beneficiaries to their ACO and to improve their performance 
relative to a regional expenditures. In combination with proposed new 
participation options that are expected attract a mix of new 
participants, targeted proposals such as using an offset factor to 
reduce the negative regional adjustment for ACOs serving high risk and 
high dual populations, aim to increase the reach of ACO care 
coordination to more beneficiaries with high needs.
2. Quality Payment Program
    There are several changes in this proposed rule that are expected 
to have a positive effect on beneficiaries. In general, we believe that 
many of these changes, including the MVP and

[[Page 46428]]

subgroup proposals, if finalized, will lead to meaningful feedback to 
beneficiaries on the type and scope of care provided by clinicians. 
Additionally, beneficiaries could use the publicly reported information 
on clinician performance in subgroups to identify and choose clinicians 
in multispecialty groups relevant to their care needs. Consequently, we 
anticipate this will improve the quality and value of care provided to 
Medicare beneficiaries. For example, several of the proposed new 
quality measures include patient-reported outcome-based measures, which 
may be used to help patients make more informed decisions about 
treatment options. Patient-reported outcome-based measures provide 
information on a patient's health status from the patient's point of 
view and may also provide valuable insights on factors such as quality 
of life, functional status, and overall disease experience, which may 
not otherwise be available through routine clinical data collection. 
Patient-reported outcome-based measured are factors frequently of 
interest to patients when making decisions about treatment.

H. Estimating Regulatory Familiarization Costs

    If regulations impose administrative costs on private entities, 
such as the time needed to read and interpret this rule, we should 
estimate the cost associated with regulatory review. Due to the 
uncertainty involved with accurately quantifying the number of entities 
that will review the rule, we assumed that the total number of unique 
commenters on this year's rule will be the number of reviewers of last 
year's rule. We acknowledge that this assumption may understate or 
overstate the costs of reviewing this rule. It is possible that not all 
commenters will review this year's rule in detail, and it is also 
possible that some reviewers will choose not to comment on the rule. 
For these reasons we thought that the number of commenters will be a 
fair estimate of the number of reviewers of last year's rule.
    We also recognized that different types of entities are in many 
cases affected by mutually exclusive sections of this rule, and 
therefore for the purposes of our estimate we assume that each reviewer 
reads approximately 50 percent of the rule.
    Using the wage information from the BLS for medical and health 
service managers (Code 11-9111), we estimate that the cost of reviewing 
this rule is $115.22 per hour, including overhead and fringe benefits 
https://www.bls.gov/oes/current/oes_nat.htm. Assuming an average 
reading speed, we estimate that it will take approximately 8.0 hours 
for the staff to review half of this rule. For each facility that 
reviews the rule, the estimated cost is $921.76 (8.0 hours x $115.22). 
Therefore, we estimated that the total cost of reviewing this 
regulation is $32,657,957 ($931.35 x 35,430 reviewers on last year's 
proposed rule).

I. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Tables 150 through 
152 (Accounting Statements), we have prepared an accounting statement. 
This estimate includes growth in incurred benefits from CY 2021 to CY 
2022 based on the FY 2022 President's Budget baseline.
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[GRAPHIC] [TIFF OMITTED] TP29JY22.212


[[Page 46429]]


[GRAPHIC] [TIFF OMITTED] TP29JY22.213

J. Conclusion

    The analysis in the previous sections, together with the remainder 
of this preamble, provided an initial Regulatory Flexibility Analysis. 
The previous analysis, together with the preceding portion of this 
preamble, provides an RIA. In accordance with the provisions of 
Executive Order 12866, this regulation was reviewed by the Office of 
Management and Budget.

Chiquita Brooks-LaSure,

Administrator of the Centers for Medicare & Medicaid Services, 
approved this document on June 21, 2022.

List of Subjects

42 CFR Part 405

    Administrative practice and procedure, Diseases, Health facilities, 
Health insurance, Health professions, Medical devices, Medicare, 
Reporting and recordkeeping requirements, Rural areas, X-rays.

42 CFR Part 410

    Diseases, Health facilities, Health professions, Laboratories, 
Medicare, Reporting and recordkeeping requirements, Rural areas, X-
rays.

42 CFR Part 411

    Diseases, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 414

    Administrative practice and procedure, Biologics, Diseases, Drugs, 
Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements.

42 CFR Part 415

    Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements.

42 CFR Part 423

    Administrative practice and procedure, Emergency medical services, 
Health facilities, Health maintenance organizations (HMO), Health 
professionals, Medicare, Penalties, Privacy, Reporting and 
recordkeeping requirements.

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 425

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 455

    Fraud, Grant programs--health, Health facilities, Health 
professions, Investigations, Medicaid, Reporting and recordkeeping 
requirements.

    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 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

0
1. The authority citation for part 405 continues to read as follows:

    Authority: 42 U.S.C. 263a, 405(a), 1302, 1320b-12, 1395x, 
1395y(a), 1395ff, 1395hh, 1395kk, 1395rr, and 1395ww(k).

0
2. Section 405.2463 is amended by revising paragraph (b)(3) 
introductory text to read as follows:


Sec.  405.2463  What constitutes a visit.

* * * * *
    (b) * * *
    (3) Visit--Mental health. A mental health visit is a face-to-face 
encounter or an encounter furnished using interactive, real-time, audio 
and video telecommunications technology or audio-only interactions in 
cases where the patient is not capable of, or does not consent to, the 
use of video technology for the purposes of diagnosis, evaluation or 
treatment of a mental health disorder, including an in-person mental 
health service, beginning 152 days after the end of the COVID-19 public 
health emergency, furnished within 6 months prior to the furnishing of 
the telecommunications service and that an in-person mental health 
service (without the use of telecommunications technology) must be 
provided at least every 12 months while the beneficiary is receiving 
services furnished via telecommunications technology for diagnosis, 
evaluation, or treatment of mental health disorders, unless, for a 
particular 12-month period, the physician or practitioner and patient 
agree that the risks and burdens outweigh the benefits associated with 
furnishing the in-person item or service, and the practitioner 
documents the reasons for this decision in the patient's medical 
record, between an RHC or FQHC patient and one of the following:
* * * * *
0
3. Section 405.2469 is amended by revising paragraph (d) to read as 
follows:


Sec.  405.2469  FQHC supplemental payments.

* * * * *
    (d) Per visit supplemental payment. A supplemental payment required 
under this section is made to the FQHC when a covered face-to-face 
encounter or an encounter furnished using interactive, real-time, audio 
and video telecommunications technology or audio-only interactions in 
cases where beneficiaries do not wish to use or do not have access to 
devices that permit

[[Page 46430]]

a two-way, audio/video interaction for the purposes of diagnosis, 
evaluation or treatment of a mental health disorder occurs between a MA 
enrollee and a practitioner as set forth in Sec.  405.2463. 
Additionally, beginning 152 days after the end of the COVID-19 public 
health emergency, there must be an in-person mental health service 
furnished within 6 months prior to the furnishing of the 
telecommunications service and that an in-person mental health service 
(without the use of telecommunications technology) must be provided at 
least every 12 months while the beneficiary is receiving services 
furnished via telecommunications technology for diagnosis, evaluation, 
or treatment of mental health disorders, unless, for a particular 12-
month period, the physician or practitioner and patient agree that the 
risks and burdens outweigh the benefits associated with furnishing the 
in-person item or service, and the practitioner documents the reasons 
for this decision in the patient's medical record.

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
4. The authority citation for part 410 continues to read as follows:

    Authority: 42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.

0
5. Amend Sec.  410.10 by revising paragraphs (l) and (p) to read as 
follows--


Sec.  410.10  Medical and other health services: Included services.

* * * * *
    (l) Pneumococcal, influenza, and COVID-19 vaccines and their 
administration.
* * * * *
    (p) Hepatitis B vaccine and its administration, as defined in Sec.  
410.63(a) of this subchapter.
* * * * *
0
6. Amend Sec.  410.26 by revising paragraph (b)(5) to read as follows:


Sec.  410.26  Services and supplies incident to a physician's 
professional services: Conditions.

* * * * *
    (b) * * *
    (5) In general, services and supplies must be furnished under the 
direct supervision of the physician (or other practitioner). Designated 
care management services can be furnished under general supervision of 
the physician (or other practitioner) when these services or supplies 
are provided incident to the services of a physician (or other 
practitioner). Behavioral health services can be furnished under 
general supervision of the physician (or other practitioner) when these 
services or supplies are provided by auxiliary personnel incident to 
the services of a physician (or other practitioner). The physician (or 
other practitioner) supervising the auxiliary personnel need not be the 
same physician (or other practitioner) who is treating the patient more 
broadly. However, only the supervising physician (or other 
practitioner) may bill Medicare for incident to services.
* * * * *
0
7. Amend Sec.  410.32 by adding paragraph (a)(4), as follows:


Sec.  410.3  2 Diagnostic x-ray tests, diagnostic laboratory test, and 
other diagnostic tests: Conditions.

    (a) * * *
    (4) Application to audiologists. Except as otherwise provided in 
this paragraph, audiologists may personally furnish diagnostic 
audiology tests for a patient once per patient per 12-month period 
without an order from the physician or nonphysician practitioner 
treating the patient. Such diagnostic audiology tests can be for non-
acute hearing conditions, but may not include audiology services that 
are related to disequilibrium, or hearing aids or examinations for the 
purpose of prescribing, fitting, or changing hearing aids that are 
outlined at Sec.  411.15(d). Audiology services furnished without an 
order from the treating physician or practitioner are billed using a 
code CMS designates for this purpose.
* * * * *
0
8. Amend Sec.  410.37--
0
a. In paragraph (c)(1), by removing the phrase ``under age 50'' and 
adding in its place the phrase ``under age 45'';
0
b. In paragraph (c)(2), by removing the phrase ``individual 50 years of 
age'' and adding in its place the phrase ``individual 45 years of 
age'';
0
c. In paragraph (e)(1), by removing the phrase ``under age 50'' and 
adding in its place the phrase ``under age 45'';
0
d. In paragraph (e)(2), by removing the phrase ``individual 50 years of 
age'' and adding in its place the phrase ``individual 45 years of 
age'';
0
e. In paragraph (i)(1), by removing the phrase ``individual age 50'' 
and adding in its place the phrase ``individual age 45''; and
0
f. By adding paragraph (k).
    The addition reads as follows:


Sec.  410.37  Colorectal cancer screening tests: Conditions for and 
limitations on coverage.

* * * * *
    (k) A complete colorectal cancer screening. Effective January 1, 
2023, colorectal cancer screening tests include a follow-on screening 
colonoscopy after a Medicare covered non-invasive stool-based 
colorectal cancer screening test returns a positive result. The 
frequency limitations described for screening colonoscopy in paragraph 
(g) of this section shall not apply in the instance of a follow-on 
screening colonoscopy test described in this paragraph.
0
9. Amend Sec.  410.40 by revising paragraph (e)(2)(ii) to read as 
follows:


Sec.  410.40  Coverage of ambulance services.

* * * * *
    (e) * * *
    (2) * * *
    (ii) In all cases, the provider or supplier must keep appropriate 
documentation on file and, upon request, present it to CMS. The 
ambulance service must meet all program coverage criteria including 
vehicle and staffing requirements. While a signed physician 
certification statement (PCS), does not alone demonstrate that 
transportation by ground ambulance was medically necessary, the PCS and 
additional documentation from the beneficiary's medical record may be 
used to support a claim that transportation by ground ambulance is 
medically necessary. The PCS and additional documentation must provide 
detailed explanations, that are consistent with the beneficiary's 
current medical condition, that explains the beneficiary's need for 
transport by an ambulance, as described at Sec.  410.41(a), that 
includes observation or other services rendered by qualified ambulance 
personnel, as described in Sec.  410.41(b).
* * * * *
0
10. Amend Sec.  410.57 by--
0
a. Revising the section heading and paragraph (a); and
0
b. Adding paragraph (d).
    The revisions and addition read as follows:


Sec.  410.57  Preventive vaccines.

    (a) Medicare Part B pays for the pneumococcal vaccine and its 
administration.
* * * * *
    (d) Medicare Part B pays for the Hepatitis B vaccine and its 
administration, as defined in Sec.  410.63(a).


Sec.  410.63  [Amended]

0
11. Amend Sec.  410.63 in the introductory text by removing the phrase 
``vaccines (see Sec.  405.310 of this chapter)'' and adding in its 
place the phrase ``vaccines (see Sec.  411.15 of this chapter)''.

[[Page 46431]]

0
12. Amend Sec.  410.67 by--
0
a. Revising paragraphs (b)(6) and (d)(2)(i)(B)(2);
0
b. Adding paragraph (d)(2)(iv); and
0
c. Revising paragraph (d)(4)(ii).
    The revisions and addition read as follows:


Sec.  410.67  Medicare coverage and payment of Opioid use disorder 
treatment services furnished by Opioid treatment programs.

* * * * *
    (b) * * *
    (6) Intake activities, including initial medical examination 
services required under Sec.  8.12(f)(2) of this title and initial 
assessment services required under Sec.  8.12(f)(4) of this title. 
Services to initiate treatment with buprenorphine may be furnished via 
two-way interactive audio-video communication technology, as clinically 
appropriate, and in compliance with all applicable requirements. In 
cases where audio-video communications technology is not available to 
the beneficiary, services to initiate treatment with buprenorphine may 
be furnished using audio-only telephone calls if all other applicable 
requirements are met.
* * * * *
    (d) * * *
    (2) * * *
    (i) * * *
    (B) * * *
    (2) For CY 2022, the payment amount for methadone is the payment 
amount determined under paragraph (d)(2)(i)(B)(1) of this section for 
methadone in CY 2021. For CY 2023 and subsequent years, the payment 
amount for methadone will be based on the payment amount determined 
under paragraph (d)(2)(i)(B)(1) of this section for methadone in CY 
2021 and updated by the PPI for Pharmaceuticals for Human Use 
(Prescription).
* * * * *
    (iv) Increased level of psychotherapy. For CY 2023 and subsequent 
years, the payment for the non-drug component of the bundled payment 
for an episode of care under paragraph (d)(2) of this section is 
adjusted to reflect the CY 2019 Medicare physician fee schedule non-
facility rate for psychotherapy, 45 minutes with patient.
* * * * *
    (4) * * *
    (ii) The payment amounts for the non-drug component of the bundled 
payment for an episode of care, the adjustments for counseling or 
therapy, intake activities, periodic assessments, and the non-drug 
component of the adjustment for take-home supplies of opioid antagonist 
medications will be geographically adjusted using the Geographic 
Adjustment Factor described in Sec.  414.26 of this subchapter. For 
purposes of this adjustment, OUD treatment services that are furnished 
via an OTP mobile unit will be treated as if they were furnished at the 
physical location of the OTP registered with the Drug Enforcement 
Administration (DEA) and certified by SAMHSA.
* * * * *


Sec.  410.78  [Amended]

0
13. Amend Sec.  410.78 in paragraph (b)(3)(xiv), by removing the phrase 
``the first day'' and adding in its place the phrase ``the day that is 
the 152nd day''.
0
14. Amend Sec.  410.152--
0
a. By revising paragraph (h);
0
b. In paragraph (l)(1), by removing the phrase ``(as specified in 
paragraph (h) of this section)''.
    The revision reads as follows:


Sec.  410.152  Amounts of payment.

* * * * *
    (h) Amount of payment: Preventive vaccine administration. For the 
administration of the preventive vaccines described in paragraph (l)(1) 
of this section, as furnished by providers described in Sec. Sec.  
409.100 and 410.150 of this subchapter, Medicare Part B pays the 
following amounts, except as otherwise provided under this subchapter:
    (1) Effective January 1, 2022, for administration of an influenza, 
hepatitis B or pneumococcal vaccine, $30 per dose.
    (2) Effective January 1, 2022, for administration of a COVID-19 
vaccine, $40 per dose.
    (3) For services furnished on or after January 1 of the year 
following the year in which the Secretary ends the Emergency Use 
Authorization for drugs and biologicals issued pursuant to section 564 
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bbb-3), for 
administration of a COVID-19 vaccine, an amount equal to the amount 
that would be paid for the administration of a preventive vaccine 
described in paragraph (h)(1).
    (4) The payment amount for the administration of a preventive 
vaccine described in paragraphs (h)(1) through (3) of this section is 
adjusted to reflect geographic cost variations:
    (i) For services furnished before January 1, 2023, using the 
Geographic Practice Cost Indices (GPCIs) established for the year, as 
described in section 1848(e)(1) of the Act and Sec. Sec.  414.2 and 
414.26 of this subchapter.
    (ii) For services furnished on or after January 1, 2023, using the 
Geographic Adjustment Factor (GAF) established for the year as 
described in section 1848(e)(2) of the Act and Sec. Sec.  414.2 and 
414.26 of this subchapter.
    (5) The payment amount for administration of a preventive vaccine 
described in paragraphs (h)(1) through (3) of this section is updated 
annually using the percentage change in the Medicare Economic Index 
(MEI) as described in section 1842(i)(3) of the Act and Sec.  
405.504(d) of this subchapter.
* * * * *

PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE 
PAYMENT

0
15. The authority citation for part 411 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh, 
and 1395nn.

0
16. Section 411.15 is amended by revising paragraph (i) to read as 
follows:


Sec.  411.15  Particular services excluded from coverage.

* * * * *
    (i) Dental services.--(1) Basic rule. Dental services in connection 
with the care, treatment, filling, removal, or replacement of teeth, or 
structures directly supporting the teeth,
    (2) Exception. Except for inpatient hospital services in connection 
with such dental procedures when hospitalization is required because 
of--
    (i) The individual's underlying medical condition and clinical 
status; or
    (ii) The severity of the dental procedures.\1\
---------------------------------------------------------------------------

    \1\ Before July 1981, inpatient hospital care in connection with 
dental procedures was covered only when required by the patient's 
underlying medical condition and clinical status.
---------------------------------------------------------------------------

    (3) Inapplicability. (i) Dental services that are inextricably 
linked to, and substantially related and integral to the clinical 
success of, a certain covered medical service are not excluded; payment 
may be made under Medicare Part A and B for services furnished in the 
inpatient or outpatient setting. Such services include, but are not 
limited to:
    (A) Dental or oral examination performed as part of a comprehensive 
workup in either the inpatient or outpatient setting prior to Medicare-
covered organ transplant, cardiac valve replacement, or valvuloplasty 
procedures; and, medically necessary diagnostic and treatment services 
to eliminate an oral or dental infection prior to the organ transplant, 
cardiac valve replacement, or valvuloplasty procedure.
    (B) The reconstruction of a dental ridge performed as a result of 
and at the same time as the surgical removal of a tumor.

[[Page 46432]]

    (C) The wiring or immobilization of teeth in connection with the 
reduction of a jaw fracture.
    (D) The extraction of teeth to prepare the jaw for radiation 
treatment of neoplastic disease.
    (E) Dental splints only when used in conjunction with covered 
treatment of a covered medical condition.
    (ii) Ancillary services and other supplies furnished incident to 
covered dental services are not excluded, and Medicare payment may be 
made under Part A or Part B, as applicable, whether the service is 
performed in the inpatient or outpatient setting, including, but not 
limited to the administration of anesthesia, diagnostic x-rays, use of 
operating room, and other related procedures.
* * * * *

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

0
17. The authority citation for part 414 continues to read as follows:


    Authority: 42 U.S.C. 1302, 1395hh, and 1395rr(b)(l).
0
18. Amend Sec.  414.502 by revising the definitions of ``Data 
collection period'' and ``Data reporting period'' to read as follows:


Sec.  414.502  Definitions.

* * * * *
    Data collection period is the 6 months from January 1 through June 
30 during which applicable information is collected and that precedes 
the data reporting period, except that for the data reporting period of 
January 1, 2023 through March 31, 2023, the data collection period is 
January 1, 2019 through June 30, 2019.
    Data reporting period is the 3-month period, January 1 through 
March 31, during which a reporting entity reports applicable 
information to CMS and that follows the preceding data collection 
period, except that for the data collection period of January 1, 2019 
through June 30, 2019, the data reporting period is January 1, 2023 
through March 31, 2023.
* * * * *


Sec.  414.504  [Amended]

0
19. Amend Sec.  414.504 in paragraph (a)(1) by removing the reference 
``January 1, 2022'' and adding in its place the reference ``January 1, 
2023''.
0
20. Amend Sec.  414.507 by--
0
a. Revising paragraph (d) introductory text and paragraph (d)(5);
0
b. Adding paragraph (d)(8); and
0
c. Removing paragraph (f).
0
d. Redesignating paragraphs (g) and (h) as paragraphs (f) and (g), 
respectively.
    The revisions and addition read as follows:


Sec.  414.507  Payment for clinical diagnostic laboratory tests.

* * * * *
    (d) Phase-in of payment reductions. For years 2018 through 2025, 
the payment rates established under this section for each CDLT that is 
not a new ADLT or new CDLT, may not be reduced by more than the 
following amounts for--
* * * * *
    (5) 2022--0.0 percent of the payment rate established in 2021.
* * * * *
    (8) 2025--15 percent of the payment rate established in 2024.
* * * * *
0
21. Section Sec.  414.523 is added to subpart G to read as follows:


Sec.  414.523  Payment for laboratory specimen collection fee and 
travel allowance.

    (a) Specimen collection fee and travel allowance. In addition to 
the payment amounts provided under this subpart for CDLTs, new CDLTs, 
and new ADLTs, CMS pays a specimen collection fee, as set forth in 
paragraph (a)(1) of this section, and a travel allowance, as set forth 
in paragraph (a)(2) of this section.
    (1) Payment for specimen collection. Except as provided in 
paragraph (a)(1)(iv) of this section, CMS pays $3 for all specimens 
collected in one patient encounter, where the specimen(s) is:
    (i) Used to perform a CDLT paid under this subpart G;
    (ii) Collected by a trained technician from a Medicare beneficiary 
who is--
    (A) Homebound as described in 42 CFR 424.22(a)(1)(ii).
    (B) A non-hospital inpatient, but only when no qualified personnel 
are available at the facility to collect the specimen;
    (iii) Of the following type--
    (A) Blood specimen collected through venipuncture.
    (B) A urine sample collected by catheterization.
    (iv) Beginning April 1, 2014, for a specimen collected from a 
Medicare beneficiary in a skilled nursing facility or on behalf of a 
home health agency, the specimen collection fee otherwise paid under 
paragraph (a)(1) of this section is increased by $2.
    (2) Payment for travel allowance--(i) General requirement. CMS pays 
a travel allowance, as calculated under paragraph (a)(2)(iii) of this 
section, where the specimen is one for which a specimen collection fee 
is paid under paragraph (a)(1) of this section.
    (ii) Travel allowance basis. CMS pays a travel allowance on the 
following bases:
    (A) Flat-rate travel allowance. The flat-rate travel allowance 
applies when the trained technician travels 20 eligible miles or less 
(calculated in accordance with paragraph (a)(2)(iii)(A) of this 
section) to and from one location for specimen collection from one or 
more Medicare beneficiaries; or
    (B) Per-mile travel allowance. The per-mile travel allowance 
applies when:
    (1) The trained technician travels more than 20 eligible miles 
(calculated in accordance with paragraph (a)(2)(iii)(A) of this 
section) to and from one location for specimen collection from one or 
more Medicare beneficiaries; or
    (2) The trained technician travels to more than one location for 
specimen collection from more than one Medicare beneficiary.
    (iii) Travel allowance amount--(A) Eligible miles. Eligible miles 
begin at the laboratory and end at the laboratory where the trained 
technician returns the specimen(s) for testing. Eligible miles do not 
include miles traveled for any purpose unrelated to specimen collection 
as specified in paragraph (a)(1) of this section, such as collecting 
specimens from non-Medicare beneficiaries or for personal reasons.
    (B) Travel allowance mileage rate. The travel allowance mileage 
rate is equal to the IRS standard mileage rate plus an amount to cover 
expenses for a trained technician equal to the most recent median 
hourly wage for phlebotomists, as published by the United States Bureau 
of Labor Statistics, divided by 40 to represent an average miles-per-
hour driving speed.
    (C) Travel allowance amount calculation. (1) For the flat-rate 
travel allowance basis specified in paragraph (a)(2)(ii)(A) of this 
section, the travel allowance amount is the travel allowance mileage 
rate specified in paragraph (a)(2)(iii)(B) of this section multiplied 
by ten, divided by the number of beneficiaries for whom a specimen 
collection fee is paid under paragraph (a)(1) of this section.
    (2) For the per-mile travel allowance basis specified in paragraph 
(a)(2)(ii)(B) of this section, the travel allowance amount is the 
number of eligible miles multiplied by the travel allowance mileage 
rate specified in paragraph (a)(2)(iii)(B) of this section, divided by 
the number of beneficiaries for whom a specimen collection fee is paid 
under paragraph (a)(1) of this section.

[[Page 46433]]

    (b) [Reserved]


Sec.  414.626  [Amended]

0
22. Amend Sec.  414.626--
0
a. In paragraph (d)(1) introductory text, by removing the phrase ``must 
submit a request form (accessed on the Ambulances Services Center 
website (https://www.cms.gov/Center/Provider-Type/Ambulances-Services-Center.html) to CMS'' and adding in its place the phrase ``must submit 
a request to CMS, in the form and manner specified by CMS,''; and
0
b. In paragraph (e)(2) introductory text, by removing the phrase ``by 
submitting all of the following information:'' and adding in its place 
the phrase ``by submitting a request to CMS, in the form and manner 
specified by CMS, that includes all of the following information:''.


Sec.  414.707  [Amended]

0
23. Amend Sec.  414.707 in paragraph (a)(2)(iii), by removing the 
phrase ``(as determined by the Secretary)'' and adding in its place the 
phrase ``(as defined in Sec.  410.63(a) of this subchapter).''
0
24. Amend Sec.  414.902 by adding the definition of ``Refundable 
single-dose container or single-use package drug'' in alphabetical 
order to read as follows:


Sec.  414.902  Definitions.

* * * * *
    Refundable single-dose container or single-use package drug means a 
single source drug or biological or a biosimilar biological product for 
which payment is made under this part and that is furnished from a 
single-dose container or single-use package based on FDA-approved 
labeling or product information. The term ``refundable single-dose 
container or single-use package drug'' excludes--
    (1) A drug that is a therapeutic radiopharmaceutical, a diagnostic 
radiopharmaceutical, or an imaging agent as identified in the drug's 
FDA-approved labeling.
    (2) A drug for which the FDA-approved labeling for any National 
Drug Code assigned to a billing and payment code of such drug requires 
filtration during the drug preparation process, prior to dilution and 
administration and that any unused portion of such drug after the 
filtration process be discarded after the completion of such filtration 
process.
    (3) A drug approved or licensed by the FDA on or after November 15, 
2021, until the last day of the sixth full quarter for which the drug 
has been marketed (as reported to CMS) for the first National Drug Code 
assigned to the billing and payment code of such drug.
* * * * *


Sec.  414.904  [Amended]

0
25. Amend 414.904 in paragraph (e)(1), by removing the phrase ``(as 
determined by the Secretary)'' and adding in its place the phrase ``(as 
defined in Sec.  410.63(a) of this subchapter).''
0
26. Section Sec.  414.940 is added to subpart K to read as follows:


Sec.  414.940  Refund for certain discarded single-dose container or 
single-use package drugs.

    (a) Provision of information to manufacturers--(1) In general. For 
each calendar quarter beginning on or after January 1, 2023, CMS 
reports to each manufacturer (as defined in Sec.  414.802) of a 
refundable single-dose container or single-use package drug the 
following for the calendar quarter:
    (i) Information on the total number of billing units of the billing 
and payment code of such drug, if any, that were discarded during such 
quarter, as determined by the JW modifier (or any successor modifier 
that includes the same data).
    (ii) The refund amount that the manufacturer is liable for pursuant 
to paragraph (a)(3) of this section.
    (iii) For purposes of this section, the term billing unit means the 
identifiable quantity associated with a billing and payment code, as 
established by CMS.
    (2) Exclusion of units of packaged drugs. The total number of 
billing units of the billing and payment code of a refundable single-
dose container or single-use package drug of a manufacturer furnished 
during a calendar quarter for purposes of paragraph (a)(1) of this 
section, and the determination of the estimated total allowed charges 
for the drug in the quarter for purposes of paragraph (c)(2) of this 
section, shall not include such units that are packaged into the 
payment amount for an item or service and are not separately payable.
    (3) Reports. Reports are sent once annually in the following 
manner:
    (i) For 2023, the report is sent no later than October 1 of that 
year and includes only the first calendar quarter of 2023.
    (ii) Beginning in 2024 and for all subsequent years, the report is 
sent no later than October 1 of the given year and includes the second, 
third, and fourth calendar quarters of the prior year and the first 
calendar quarter of the current year.
    (iii) Beginning in 2024 and for all subsequent years, the report 
includes new information (as described in paragraph (a)(1)(i) of this 
section) for the second, third, and fourth calendar quarter of the year 
that is 2 years prior and the first calendar quarter of the prior year 
that was not reflected in the previous year's report.
    (b) Manufacturer requirement. For each calendar quarter beginning 
on or after January 1, 2023, the manufacturer of a refundable single-
dose container or single-use package drug shall, for such drug, pay a 
refund that is equal to the amount determined in accordance with 
paragraph (c) of this section for such drug for such quarter.
    (1) Refund amounts that the manufacturer is liable for pursuant to 
this paragraph are paid in 12-month intervals no later than December 31 
of the year in which the report was sent to the manufacturer, in a 
manner specified by CMS.
    (2) Amounts paid as refunds pursuant to this paragraph shall be 
deposited into the Federal Supplementary Medical Insurance Trust Fund 
established under section 1841 of the Act.
    (c) Refund amount. The amount of the refund specified in this 
paragraph is, with respect to a refundable single-dose container or 
single-use package drug of a manufacturer assigned to a billing and 
payment code for a calendar quarter beginning on or after January 1, 
2023, an amount equal to the estimated amount (if any) by which--
    (1) The product of:
    (i) The total number of units of the billing and payment code for 
such drug that were discarded during such quarter; and
    (ii) The amount of payment determined for such drug or biological 
under this section for such quarter.
    (2) Exceeds an amount equal to the applicable percentage of the 
estimated total allowed charges for such drug for the quarter.
    (3) For purposes of paragraph (c)(1)(ii) of this section, the term 
``applicable percentage'' means 10 percent.
    (d) Dispute resolution. Each manufacturer has an opportunity to 
dispute information in the report described in paragraph (a) of this 
section by submitting an error report as described in this paragraph.
    (1) Error report information. To assert that there have been one or 
more errors in the report, a manufacturer must submit a dispute with 
each asserted error and provide the following information--
    (i) Manufacturer name and address;
    (ii) The name, telephone number, and email address of one or more 
employees or representatives of the manufacturer.
    (iii) For a mathematical calculation error, the specific 
calculation element(s)

[[Page 46434]]

that the manufacturer disputes and its proposed corrected calculation;
    (iv) For any other asserted error, an explanation of the nature of 
the error, how the error affects the refund calculation, an explanation 
of why the manufacturer believes that an error occurred, the proposed 
correction to the error, and an explanation of why CMS should use the 
proposed corrected data.
    (2) Form, manner, and timing of submission. Each manufacturer 
asserting an error must submit its error report(s), in the form and 
manner specified by CMS, within 30-days after the issuance of the 
report.
    (e) Enforcement. (1) Manufacturer audits. Each manufacturer of a 
refundable single-dose container or single-use package drug that is 
required to provide a refund under this subsection shall be subject to 
periodic audit with respect to such drug and such refunds.
    (2) Civil money penalty. The Secretary shall impose a civil money 
penalty on a manufacturer of a refundable single-dose container or 
single-use package drug who has failed to comply with the requirement 
under paragraph (b) of this section for such drug for a calendar 
quarter in an amount equal to the sum of--
    (i) The amount that the manufacturer would have paid under such 
paragraph with respect to such drug for such quarter; and
    (ii) 25 percent of such amount.
0
27. Section Sec.  414.1305 is amended by--
0
a. Adding the definition of ``Facility-based group'';
0
b. Revising the definitions of ``Facility-based MIPS eligible 
clinician'', ``High priority measure'', ``Multispecialty group'', 
``Single specialty group'', and ``Third party intermediary'' to read as 
follows:


Sec.  414.1305  Definitions.

* * * * *
    Facility-based group means a group that CMS determines meets the 
criteria specified in Sec.  414.1380(e)(2)(ii).
    Facility-based MIPS eligible clinician means an individual MIPS 
eligible clinician who CMS determines meets the criteria specified in 
Sec.  414.1380(e)(2)(i).
* * * * *
    High priority measure means an outcome (including intermediate-
outcome and patient-reported outcome), appropriate use, patient safety, 
efficiency, patient experience, care coordination, opioid, or health 
equity-related quality measure.
* * * * *
    Multispecialty group means a group as defined at Sec.  414.1305 
that consists of two or more specialty types as determined by CMS using 
Medicare Part B claims.
* * * * *
    Single specialty group means a group as defined at Sec.  414.1305 
that consists of one specialty type as determined by CMS using Medicare 
Part B claims.
* * * * *
    Third party intermediary means an entity that CMS has approved 
under Sec.  414.1400 to submit data on behalf of a MIPS eligible 
clinician, group, virtual group, subgroup, or APM Entity for one or 
more of the quality, improvement activities, and Promoting 
Interoperability performance categories.
* * * * *
0
28. Amend Sec.  414.1318 by--
0
a. Revising paragraph (a)(1);
0
b. Adding paragraphs (a)(3) and (4); and
0
c. Revising paragraphs (b) and (c)(2).
    The revisions and addition read as follows:


Sec.  414.1318  Subgroups.

    (a) * * *
    (1) General. Except as provided under paragraph (a)(2) of this 
section and subject to paragraph (a)(4) of this section, for a MIPS 
payment year, determinations of meeting the low-volume threshold 
criteria and special status for a subgroup is determined at the group 
level in accordance with Sec. Sec.  414.1305 and 414.1310.
* * * * *
    (3) Single subgroup per eligible clinician. An individual eligible 
clinician (as represented by a TIN-NPI combination) may register for no 
more than one subgroup within a group's TIN.
    (4) Subgroup determination period. CMS will apply the low-volume 
threshold criteria for a subgroup as described under paragraph (a)(1) 
of this section using information from the initial 12-month segment of 
the applicable MIPS determination period.
    (b) Final score. Except as provided under Sec.  414.1317(b) and 
paragraph (b)(1) of this section, each MIPS eligible clinician in the 
subgroup receives a final score based on the subgroup's combined 
performance.
    (1) CMS will not assign a final score for a subgroup that registers 
and does not submit data as a subgroup for the applicable performance 
period.
    (2) [Reserved]
    (c) * * *
    (2) Individual eligible clinicians that elect to participate in 
MIPS as a subgroup will have their performance assessed at the subgroup 
level across all the MIPS performance categories based on an MVP in 
accordance with Sec.  414.1365. Subgroups that are MVP Participants 
must adhere to an election process described in Sec.  414.1365(b).
0
29. Amend Sec.  414.1340 by adding paragraphs (a)(4) and (b)(4) to read 
as follows:


Sec.  414.1340  Data completeness criteria for the quality performance 
category.

    (a) * * *
    (4) At least 75 percent of the MIPS eligible clinician or group's 
patients that meet the measure's denominator criteria, regardless of 
payer for MIPS payment years 2026 and 2027.
* * * * *
    (b) * * *
    (4) At least 75 percent of the applicable Medicare Part B patients 
seen during the performance period to which the measure applies for 
MIPS payment years 2026 and 2027.
* * * * *
0
30. Amend Sec.  414.1365 by--
0
a. Adding paragraphs (b)(2)(iii);
0
b. Revising paragraph (d)(3)(i)(A)(1);
0
c. Adding paragraph (d)(3)(i)(B)(1);
0
d. Reserving paragraph (d)(3)(i)(B)(2);
0
e. Adding paragraph (d)(3)(ii)(A); and
0
f. Reserving paragraph (d)(3)(ii)(B).
    The additions and revisions read as follows:


Sec.  414.1365  MIPS Value Pathways.

* * * * *
    (b) * * *
    (2) * * *
    (iii) TINs must provide a description of each subgroup that is 
registered.
* * * * *
    (d) * * *
    (3) * * *
    (i) * * *
    (A) * * *
    (1) A subgroup is scored on each selected population health measure 
based on its affiliated group score, if available. If the subgroup's 
affiliated group score is not available, each such measure is excluded 
from the subgroup's total measure achievement points and total 
available measure achievement points.
* * * * *
    (B) * * *
    (1) A subgroup is scored on each selected outcomes-based 
administrative claims measure based on its affiliated group score, if 
available. If the subgroup's affiliated group score is not available, 
each such measure will receive zero measure achievement points.
    (2) [Reserved]
    (ii) * * *
    (A) A subgroup is scored on each cost measure included in the MVP 
that it

[[Page 46435]]

selects and reports based on its affiliated group score for each such 
measure, if available. If the subgroup's affiliated group score is not 
available for a measure, the measure is excluded from the subgroup's 
total measure achievement points and total available measure 
achievement points, as described under Sec.  414.1380(b)(2)(i) through 
(v).
    (B) [Reserved]
* * * * *
0
31. Amend Sec.  414.1380 by--
0
a. Adding paragraph (b)(1)(ii)(D); and
0
b. Revising paragraphs (b)(2)(iv)(E), (b)(4)(ii)(B) and (C), 
(c)(2)(i)(A)(4)(i) and (iii), (c)(3) introductory text, (e)(2) 
introductory text, (e)(2)(ii), (e)(4), (e)(5)(i) and (ii), (e)(6)(iv) 
and (v), and (e)(6)(vi)(A) and (B).
    The addition and revisions read as follow:


Sec.  414.1380  Scoring.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (D) Beginning with the CY 2023 performance period/2025 MIPS payment 
year, CMS will calculate a benchmark for an administrative claims 
quality measure using the performance on the measures during the 
current performance period.
* * * * *
    (2) * * *
    (iv) * * *
    (E) The maximum cost improvement score for the 2020, 2021, 2022, 
and 2023 MIPS payment years is zero percentage points. The maximum cost 
improvement score beginning with the 2024 MIPS payment year is 1 
percentage point.
* * * * *
    (4) * * *
    (ii) * * *
    (B) For the 2019 performance period/2021 MIPS payment year through 
the 2022 performance period/2024 MIPS payment year, each required 
measure is worth 10, 20, or 40 points, as specified by CMS. For the 
2023 performance period/2025 MIPS payment year and subsequent years, 
each required measure is worth 10, 15, 25 or 30 points, as specified by 
CMS.
    (C) For the 2019 performance period/2021 MIPS payment year through 
the 2022 performance period/2024 MIPS payment year, each optional 
measure is worth five or ten bonus points, as specified by CMS. For the 
2023 performance period/2025 MIPS payment year and subsequent years, 
each optional measure is worth five bonus points, as specified by CMS.
    (c) * * *
    (2) * * *
    (i) * * *
    (A) * * *
    (4) * * *
    (i) For the 2021 through 2025 MIPS payment years, the MIPS eligible 
clinician is a physical therapist, occupational therapist, clinical 
psychologist, qualified audiologist, qualified speech-language 
pathologist, or a registered dietitian or nutrition professional. In 
the event that a MIPS eligible clinician submits data for the Promoting 
Interoperability performance category, the scoring weight specified in 
paragraph (c)(1) of this section will be applied and its weight will 
not be redistributed.
* * * * *
    (iii) For the 2024 through 2025 MIPS payment years, the MIPS 
eligible clinician is a clinical social worker. In the event that a 
MIPS eligible clinician submits data for the Promoting Interoperability 
performance category, the scoring weight specified in paragraph (c)(1) 
of this section will be applied and its weight will not be 
redistributed.
* * * * *
    (3) Complex patient bonus. For the CY 2020, 2021, 2022, and 2023 
MIPS payment years and associated performance periods, provided that a 
MIPS eligible clinician, group, virtual group or APM Entity submits 
data for at least one MIPS performance category for the applicable 
performance period for the MIPS payment year, a complex patient bonus 
will be added to the final score for the MIPS payment year, as stated 
in paragraphs (c)(3)(i) through (iv) of this section. For the CY 2022 
MIPS performance period/CY 2024 MIPS payment year, provided that a MIPS 
eligible clinician, group, subgroup, virtual group or APM Entity 
submits data for at least one MIPS performance category for the 
applicable performance period for the MIPS payment year, a complex 
patient bonus will be added to the final score for the MIPS payment 
year, if applicable, as described in paragraphs (c)(3)(v) through 
(viii) of this section. Beginning with the CY 2023 MIPS performance 
period/CY 2025 MIPS payment year, provided that a MIPS eligible 
clinician, group, subgroup, virtual group or APM Entity submits data 
for at least one MIPS performance category for the applicable 
performance period for the MIPS payment year, or is a facility-based 
MIPS eligible clinician, a complex patient bonus will be added to the 
final score for the MIPS payment year, if applicable, as described in 
paragraphs (c)(3)(v) through (viii) of this section.
* * * * *
    (e) * * *
    (2) Eligibility for facility-based measurement. A MIPS eligible 
clinician is eligible for facility-based measurement for a MIPS payment 
year if CMS determines the MIPS eligible clinician to be facility-based 
as an individual clinician or as part of a group, or beginning with the 
2023 performance period/2025 MIPS payment year, a virtual group, as 
follows:
* * * * *
    (ii) Facility-based MIPS eligible group determination. A facility-
based MIPS eligible group is a group in which 75 percent or more of its 
eligible clinician NPIs billing under the group's TIN meet the 
requirements under paragraph (e)(2)(i) of this section.
* * * * *
    (4) Data submission for facility-based measurement. There are no 
data submission requirements for a MIPS eligible individual clinician 
to be scored under facility-based measurement. A MIPS eligible group 
must submit data in the improvement activities or Promoting 
Interoperability performance categories in order to be scored as a 
facility-based MIPS eligible group.
    (5) * * *
    (i) A facility-based MIPS eligible clinician is scored with 
facility-based measurement using the score derived from the value-based 
purchasing score for the facility at which the clinician provided 
services to the most Medicare beneficiaries during the period the 
claims are drawn from in paragraph (e)(2) of this section. If there is 
an equal number of Medicare beneficiaries treated at more than one 
facility, the value-based purchasing score for the highest scoring 
facility is used.
    (ii) A facility-based MIPS eligible group is scored with facility-
based measurement using the score derived from the value-based 
purchasing score for the facility at which the plurality of clinicians 
identified as facility-based would have had their score determined 
under paragraph (e)(5)(i) of this section.
    (6) * * *
    (iv) Quality. The quality performance category score is established 
by determining the percentile performance of the facility in the value-
based purchasing program for the specified year as described in 
paragraph (e)(1) of this section and awarding a score associated with 
that same percentile performance in the MIPS quality performance 
category score for those MIPS-eligible clinicians who are not

[[Page 46436]]

eligible to be scored using facility-based measurement for the MIPS 
payment year. A MIPS eligible clinician or group receiving a facility-
based performance score will not earn improvement points based on prior 
performance in the MIPS quality performance category.
    (v) Cost. The cost performance category score is established by 
determining the percentile performance of the facility in the value-
based purchasing program for the specified year as described in 
paragraph (e)(1) of this section and awarding a score associated with 
that same percentile performance in the MIPS cost performance category 
score for those MIPS eligible clinicians who are not eligible to be 
scored using facility-based measurement for the MIPS payment year. A 
MIPS eligible clinician or MIPS eligible group receiving a facility-
based performance score will not earn improvement points based on prior 
performance in the MIPS cost performance category.
* * * * *
    (vi) * * *
    (A) For the CY 2019 MIPS performance period/2021 MIPS payment year, 
through the CY 2021 MIPS performance period/2023 MIPS payment year, a 
MIPS eligible clinician or group receives a higher combined MIPS 
quality and cost performance category score through another MIPS 
submission.
    (B) Beginning with the CY 2022 MIPS performance period/2024 MIPS 
payment year, a MIPS eligible clinician or group receives a higher MIPS 
final score through another MIPS submission.
0
32. Amend Sec.  414.1400 by--
0
a. Revising paragraphs (b)(4)(i)(B), (b)(4)(iii)(A)(3), and 
(e)(1)(i)(B);
0
b. Adding paragraphs (e)(1)(i)(E);
0
c. Revising paragraph (e)(2) introductory text and (e)(3);
0
d. Adding paragraph (e)(5); and
0
e. Revising paragraph (f)(1).
    The revisions and additions read as follows:


Sec.  414.1400  Third party intermediaries.

* * * * *
    (b) * * *
    (4) * * *
    (i) * * *
    (B) For a QCDR measure, the entity must submit for CMS approval 
measure specifications including: Name/title of measure, NQF number (if 
NQF--endorsed), descriptions of the denominator, numerator, and when 
applicable, denominator exceptions, denominator exclusions, risk 
adjustment variables, and risk adjustment algorithms. In addition, no 
later than 15 calendar days following CMS posting of all approved 
specifications for a QCDR measure, the entity must publicly post the 
CMS-approved measure specifications for the QCDR measure (including the 
CMS- assigned QCDR measure ID) and provide CMS with a link to where 
this information is posted.
* * * * *
    (iii) * * *
    (A) * * *
    (3) Beginning with the CY 2022 performance period/2024 MIPS payment 
year, CMS may approve a QCDR measure only if the QCDR measure meets 
face validity. Beginning with the CY 2024 performance period/2026 MIPS 
payment year, a QCDR measure approved for a previous performance year 
must be fully developed and tested, with complete testing results at 
the clinician level, prior to self-nomination.
* * * * *
    (e) * * *
    (1) * * *
    (i) * * *
    (B) The impact to individual clinicians, groups, virtual groups, 
subgroups, or APM Entities, regardless of whether they are 
participating in the program because they are MIPS eligible, 
voluntarily participating, or opting in to participating in the MIPS 
program, and any QCDRs that were granted licenses to the measures of a 
QCDR upon which a CAP has been imposed.
* * * * *
    (E) The communication plan for communicating the impact to the 
parties identified in paragraph (e)(1)(i)(B) of this section.
    (2) CMS may immediately or with advance notice terminate a third 
party intermediary for one or more of the following reasons:
* * * * *
    (3) A data submission that contains data inaccuracies affecting the 
third party intermediary's total clinicians may lead to remedial 
action/termination of the third party intermediary for future program 
year(s) based on CMS discretion.
* * * * *
    (5) Beginning with the CY 2024 performance period/2026 MIPS payment 
year, a QCDR or qualified registry that submits a participation plan as 
required under paragraph (b)(3)(viii) of this section, but does not 
submit MIPS data for the applicable performance period for which they 
self-nominated under paragraph (b)(3)(viii) of this section, will be 
terminated.
    (f) * * *
    (1) The entity must make available to CMS the contact information 
of each MIPS eligible clinician, group, virtual group, subgroup, or APM 
Entity on behalf of whom it submits data. The contact information must 
include, at a minimum, the MIPS eligible clinician, group, virtual 
group, subgroup, or APM Entity phone number, address, and, if 
available, email.
* * * * *
0
33. Amend Sec.  414.1405 by revising paragraph (b)(9) to read as 
follows:


Sec.  414.1405  Payment.

* * * * *
    (b) * * *
    (9) Pursuant to the methodology established at paragraph (g) of 
this section:
    (i) The performance threshold for the 2024 MIPS payment year is 75 
points. The prior period used to determine the performance threshold is 
the 2019 MIPS payment year.
    (ii) The performance threshold for the 2025 MIPS payment year is 75 
points. The prior period used to determine the performance threshold is 
the 2019 MIPS payment year.
* * * * *
0
34. Amend Sec.  414.1415 by--
0
a. Revising paragraphs (b)(3),
0
b. Adding paragraph (b)(4); and
0
c. Revising paragraphs (c)(3)(i)(A) and (c)(7).
    The revisions and addition read as follows:


Sec.  414.1415  Advanced APM criteria.

* * * * *
    (b) * * *
    (3) The quality measures upon which an Advanced APM bases the 
payment in paragraph (b)(1) of this section must include at least one 
measure that is an outcome measure unless CMS determines that there are 
no available or applicable outcome measures included in the MIPS final 
quality measures list for the Advanced APM's first QP Performance 
Period. Beginning January 1, 2020, the included outcome measure must 
satisfy the criteria in paragraph (b)(2) of this section.
    (4) A single quality measure that meets the criteria under both 
paragraphs (b)(2) and (3) of this section may be used to satisfy the 
requirements of paragraph (b)(1) of this section.
    (c) * * *
    (3) * * *
    (i) * * *
    (A) For QP Performance Periods beginning in 2023, 8 percent of the 
average estimated total Medicare Parts A and B revenue of all providers 
and suppliers in participating APM Entities; or
* * * * *

[[Page 46437]]

    (7) Medical Home Model 50 eligible clinician limit. Beginning in 
the 2023 QP Performance Period, notwithstanding paragraphs (c)(2) and 
(4) of this section, if an APM Entity participating in a Medical Home 
Model is comprised of more than 50 eligible clinicians, as determined 
by that APM Entity's Participation List on any of the three QP 
determination dates (March 31, June 30, and August 31 of the QP 
Performance Period), the requirements of paragraphs (c)(1) and (3) of 
this section apply.
0
35. Amend Sec.  414.1420 by--
0
a. Revising paragraph (c)(3)(ii);
0
b. Adding paragraph (c)(4); and
0
c. Revising paragraphs (d)(3)(i) and (d)(8).
    The revisions and addition read as follows:


Sec.  414.1420  Other payer advanced APM criteria.

* * * * *
    (c) * * *
    (3) * * *
    (ii) For QP Performance Periods on or after January 1, 2020, use at 
least one measure that is an outcome measure and meets the criteria in 
paragraph (c)(2)(ii) of this section if there is such an applicable 
outcome measure on the MIPS quality measure list.
    (4) A single quality measure that meets the criteria under both 
paragraphs (c)(2) and (3) of this section may be used to satisfy the 
requirements of paragraph (c)(1) of this section.
    (d) * * *
    (3) * * *
    (i) For QP Performance Periods beginning in 2023, 8 percent of the 
total combined revenues from the payer to providers and other entities 
under the payment arrangement if financial risk is expressly defined in 
terms of revenue; or, 3 percent of the expected expenditures for which 
an APM Entity is responsible under the payment arrangement.
* * * * *
    (8) Aligned Other Payer Medical Home Model and Medicaid Medical 
Home Model 50 eligible clinician limit. Beginning with the 2023 QP 
Performance Period, notwithstanding paragraphs (d)(2) and (4) of this 
section, if an APM Entity participating in an Aligned Other Payer 
Medical Home Model or Medicaid Medical Home Model is comprised of 50 or 
more eligible clinicians is comprised of more than 50 eligible 
clinicians, as determined by the information submitted for any of the 
three QP determination dates (March 31, June 30, and August 31 of the 
QP Performance Period) as specified in Sec.  414.1440(e), the 
requirements of paragraphs (d)(1) and (3) of this section apply.
0
36. Amend Sec.  414.1430 by--
0
a. Revising paragraphs (a)(2)(iii);
0
b. Removing the second paragraph (a)(3)(ii);
0
c. Adding paragraphs (a)(3)(iii) and (iv);
0
d. Revising paragraph (a)(4)(iii);
0
e. Adding paragraph (a)(4)(iv); and
0
f. Revising paragraphs (b)(3)(i)(A) and (B), and (b)(4)(i)(A) and (B).
    The revisions and additions read as follows:


Sec.  414.1430  Qualifying APM participant determination: QP and 
partial QP thresholds.

    (a) * * *
    (2) * * *
    (iii) 2023 and 2024: 40 percent.
* * * * *
    (3) * * *
    (iii) 2023 and 2024: 35 percent.
    (iv) 2025 and later: 50 percent.
    (4) * * *
    (iii) 2023 and 2024: 25 percent.
    (iv) 2025 and later: 35 percent.
    (b) * * *
    (3) * * *
    (i) * * *
    (A) 2021 through 2024: 35 percent.
    (B) 2025 and later: 50 percent.
* * * * *
    (4) * * *
    (i) * * *
    (A) 2021 through 2024: 25 percent.
    (B) 2025 and later: 35 percent.
* * * * *
0
37. Amend Sec.  414.1440 by revising paragraph (e)(2) to read as 
follows:


Sec.  414.1440  Qualifying APM participant determination: All-payer 
combination option.

* * * * *
    (e) * * *
    (2) To request a QP determination under the All-Payer Combination 
Option, for each payment arrangement submitted as set forth in 
paragraph (e)(1) of this section, the APM Entity or eligible clinician 
must include:
    (i) The amount of revenue for services furnished through the 
payment arrangement, the total revenue received from all payers except 
those excluded as provided in paragraph (a)(2) of this section, the 
number of patients furnished any service through the arrangement, and 
the total number of patients furnished any services, except those 
excluded as provided in paragraph (a)(2) of this section; and
    (ii) In the case of an APM Entity or eligible clinician requesting 
a QP determination under either a Medicaid Medical Home Model or 
Aligned Other Payer Medical Home Model pursuant to the criteria in 
Sec.  414.1420, information specified by CMS for purposes of compliance 
with the 50 eligible clinician limit specified at Sec.  414.1420(d)(8).
* * * * *


Sec.  414.1450  [Amended]

0
38. Amend Sec.  414.1450(c)(8) by removing the reference ``November 1'' 
and adding in its place the reference ``September 1''.

PART 415--SERVICES FURNISHED BY PHYSICIANS IN PROVIDERS, 
SUPERVISING PHYSICIANS IN TEACHING SETTINGS, AND RESIDENTS IN 
CERTAIN SETTINGS

0
39. The authority for part 415 continues to read as follows:

    Authority:  42 U.S.C. 1302 and 1395hh.


Sec.  415.140  [Amended]

0
40. Amend Sec.  415.140 by redesignating this section from subpart D to 
subpart C in numerical order.
0
41. Amend Sec.  415.140(a) in the definition of ``Substantive portion'' 
by removing the reference ``2022'' and adding in its place the 
reference ``2022 and 2023''.

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
42. The authority citation for part 423 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, 
and 1395hh.

0
43. Amend Sec.  423.160 by revising paragraphs (a)(5)(ii) and (iii) to 
read as follows:


Sec.  423.160  Standards for electronic prescribing.

    (a) * * *
    (5) * * *
    (ii) Prescriber issues 100 or fewer controlled substance 
prescriptions for Part D drugs per calendar year as determined using 
CMS claims data with dates of service as of December 31st of the 
current year.
    (iii) Prescriber has an address in PECOS in the geographic area of 
an emergency or disaster declared by a Federal, State, or local 
government entity. If a prescriber does not have an address in PECOS, 
prescriber has an address in NPPES in the geographic area of an 
emergency or disaster declared by a Federal, State, or local government 
entity.
* * * * *

[[Page 46438]]

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
44. The authority for part 424 continues to read as follows:

    Authority:  42 U.S.C. 1302 and 1395hh.

0
45. Amend Sec.  424.57 by adding paragraph (b)(6) to read as follows:


Sec.  424.57  Special payment rules for items furnished by DMEPOS 
suppliers and issuance of DMEPOS supplier billing privileges.

* * * * *
    (b) * * *
    (6) The supplier is in compliance with all conditions of payment in 
paragraph (b) of this section, as well as with paragraph (c)(1)(ii)(A) 
of this section, at the time the item or service is furnished.
* * * * *
0
46. Amend Sec.  424.502 by adding the definitions of ``Director'', 
``Managing organization'' and ``Officer'' in alphabetical order to read 
as follows:


Sec.  424.502  Definitions.

* * * * *
    Director means a director of a corporation, regardless of whether 
the provider or supplier is a non-profit entity. This includes any 
member of the corporation's governing body irrespective of the precise 
title of either the board or the member.
* * * * *
    Managing organization means an entity that exercises operational or 
managerial control over, or who directly or indirectly conducts, the 
day-to-day operations of the provider or supplier, either under 
contract or through some other arrangement.
* * * * *
    Officer means an officer of a corporation, regardless of whether 
the provider or supplier is a non-profit entity.
* * * * *
0
47. Amend Sec.  424.518 by--
0
a. Revising the introductory text;
0
b. Removing paragraph (a)(1)(xviii);
0
c. Adding paragraphs (b)(1)(xiv);
0
d. Revising paragraph (c)(1) introductory text; and
0
e. Adding paragraphs (c)(1)(v) and (vi), and (c)(4).
    The revision and additions read as follows:


Sec.  424.518  Screening levels for Medicare providers and suppliers.

    A Medicare contractor is required to screen all initial 
applications, revalidation applications, change of ownership 
applications pursuant to 42 CFR 489.18, applications to add a new 
practice location, and applications to report any new owner (regardless 
of ownership percentage) pursuant to a change of information or other 
enrollment transaction under title 42, based on a CMS assessment of 
risk and assignment to a level of ``limited,'' ``moderate,'' or 
``high.''
* * * * *
    (b) * * *
    (1) * * *
    (xiv) Revalidating skilled nursing facilities (SNFs)
* * * * *
    (c) * * *
    (1) High categorical risk: Provider and supplier categories. CMS 
has designated the following provider and supplier types as ``high'' 
categorical risk:
* * * * *
    (v) Prospective (newly enrolling) skilled nursing facilities 
(SNFs).
    (vi) Enrolled OTPs that have not been fully and continuously 
certified by SAMHSA since October 23, 2018, DMEPOS suppliers, MDPP 
suppliers, HHAs, and SNFs that are submitting a change of ownership 
application pursuant to 42 CFR 489.18 or reporting any new owner 
(regardless of ownership percentage) pursuant to a change of 
information or other enrollment transaction under title 42.
* * * * *
    (4) Any screening level adjustment under paragraph (c)(3) of this 
section also applies to all other enrolled and prospective providers 
and suppliers that have the same legal business name and tax 
identification number as the provider or supplier for which the 
screening level under paragraph (c)(3) of this section was originally 
raised.
* * * * *
0
48. Amend Sec.  424.530 by--
0
a. Revising paragraph (a)(2) and paragraph (a)(3) introductory text;
0
b. Adding paragraph (a)(3)(iii); and
0
c. Revising paragraph (c).
    The revisions and addition read as follows:


Sec.  424.530  Denial of enrollment in the Medicare program.

    (a) * * *
    (2)(i) Provider or supplier conduct. The provider or supplier, or 
any owner, managing employee, managing organization, officer, director, 
authorized or delegated official, medical director, supervising 
physician, or other health care or administrative or management 
services personnel furnishing services payable by a federal health care 
program, of the provider or supplier is--
    (A) Excluded from the Medicare, Medicaid, and any other Federal 
health care program, as defined in Sec.  1001.2 of this chapter, in 
accordance with section 1128, 1128A, 1156, 1842, 1862, 1867 or 1892 of 
the Act.
    (B) Debarred, suspended, or otherwise excluded from participating 
in any other Federal procurement or nonprocurement activity in 
accordance with section 2455 of the Federal Acquisition Streamlining 
Act (FASA).
    (ii) The individuals and organizations identified in paragraph 
(a)(2)(i) of this section include, but are not limited to, W-2 
employees and contracted individuals and organizations of the provider 
or supplier.
    (3) Felonies. The provider, supplier, or any owner, managing 
employee, managing organization, officer, or director of the provider 
or supplier was, within the preceding 10 years, convicted (as that term 
is defined in 42 CFR 1001.2) of a Federal or State felony offense that 
CMS determines is detrimental to the best interests of the Medicare 
program and its beneficiaries.
* * * * *
    (iii) The individuals and organizations identified in paragraph 
(a)(3) of this section include, but are not limited to, W-2 employees 
and contracted individuals and organizations of the provider or 
supplier.
* * * * *
    (c) Reversal of denial. If the denial was due to adverse activity 
(sanction, exclusion, debt, felony) of an owner, managing employee, 
managing organization, officer, director, an authorized or delegated 
official, medical director, supervising physician, or other health care 
personnel of the provider or supplier furnishing Medicare reimbursable 
services, the denial may be reversed if the provider or supplier 
terminates and submits proof that it has terminated its business 
relationship with that individual or organization within 30 days of the 
denial notification.
* * * * *
0
49. Amend Sec.  424.535 by--
0
a. Revising paragraphs (a)(2) and (a)(3)(i);
0
b. Adding paragraph (a)(3)(iv); and
0
c. Revising paragraphs (a)(12)(ii) and (e).
    The revisions and addition read as follows:


Sec.  424.535  Revocation of enrollment in the Medicare program.

    (a) * * *
    (2)(i) Provider or supplier conduct. The provider or supplier, or 
any owner, managing employee, managing organization, officer, director, 
authorized or delegated official, medical

[[Page 46439]]

director, supervising physician, or other health care or administrative 
or management services personnel furnishing services payable by a 
federal health care program, of the provider or supplier is--
    (A) Excluded from the Medicare, Medicaid, and any other Federal 
health care program, as defined in Sec.  1001.2 of this chapter, in 
accordance with section 1128, 1128A, 1156, 1842, 1862, 1867 or 1892 of 
the Act.
    (B) Debarred, suspended, or otherwise excluded from participating 
in any other Federal procurement or nonprocurement activity in 
accordance with section 2455 of the Federal Acquisition Streamlining 
Act (FASA).
    (ii) The individuals and organizations identified in paragraph 
(a)(2)(i) of this section include, but are not limited to, W-2 
employees and contracted individuals and organizations of the provider 
or supplier.
    (3) * * *
    (i) The provider, supplier, or any owner, managing employee, 
managing organization, officer, or director of the provider or supplier 
was, within the preceding 10 years, convicted (as that term is defined 
in 42 CFR 1001.2) of a Federal or State felony offense that CMS 
determines is detrimental to the best interests of the Medicare program 
and its beneficiaries.
* * * * *
    (iv) The individuals and organizations identified in paragraph 
(a)(3) of this section include, but are not limited to, W-2 employees 
and contracted individuals and organizations of the provider or 
supplier.
* * * * *
    (12) * * *
    (ii) Medicare may not revoke unless and until a provider or 
supplier has exhausted all applicable appeal rights or the timeframe 
for filing an appeal has expired without the provider or supplier 
filing an appeal.
* * * * *
    (e) Reversal of revocation. If the revocation was due to adverse 
activity (sanction, exclusion, or felony) against the provider's or 
supplier's owner, managing employee, managing organization, officer, 
director, authorized or delegated official, medical director, 
supervising physician, or other health care or administrative or 
management services personnel furnishing services payable by a Federal 
health care program, the revocation may be reversed if the provider or 
supplier terminates and submits proof that it has terminated its 
business relationship with that individual within 30 days of the 
revocation notification.
* * * * *

PART 425--MEDICARE SHARED SAVINGS PROGRAM

0
50. The authority citation for part 425 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1306, 1395hh, and 1395jjj.


Sec.  425.20  [Amended]

0
51. Amend Sec.  425.20 by--
0
a. In paragraph (2) of the definition of ``Experienced with 
performance-based risk Medicare ACO initiatives'' by removing the 
phrase ``prior to the agreement start date'';
0
b. In paragraph (2) of the definition of ``Inexperienced with 
performance-based risk Medicare ACO initiatives'' by removing the 
phrase ``prior to the agreement start date''
0
c. Revising paragraph (1)(i) in the definition of ``Performance-based 
risk Medicare ACO initiative'';.
0
d. Redesignating paragraphs (1)(ii) and (1)(iii) as paragraphs (1)(iii) 
and (1)(iv), respectively; in the definition of ``Performance-based 
risk Medicare ACO initiative'' by and
0
e. Adding paragraph (1)(ii) in the definition of ``Performance-based 
risk Medicare ACO initiative''.


Sec.  425.20  Definitions.

* * * * *
    Performance-based risk Medicare ACO initiative
* * * * *
    (1) * * *
    (i) For performance years beginning prior to January 1, 2023, BASIC 
track (Levels A through E).
    (ii) For performance years beginning January 1, 2023 and in 
subsequent years, BASIC track (Levels C through E).
* * * * *
0
52. Amend Sec.  425.100 by--
0
a. Revising paragraph (b)(1); and
0
b. Adding paragraph (d).
    The revision and addition read as follows:


Sec.  425.100  General.

* * * * *
    (b) * * *
    (1) The ACO meets or exceeds the applicable minimum savings rate 
established under Sec. Sec.  425.604, 425.605 (except as provided under 
Sec.  425.605(h)), 425.606, 425.609, or 425.610.
* * * * *
    (d) An ACO is eligible to receive advance investment payments if it 
meets the criteria under Sec.  425.630(b).


Sec.  425.204  [Amended]

0
53. Amend Sec.  425.204(g) by removing the references ``Sec.  425.601, 
Sec.  425.602, or Sec.  425.603'' and adding in its place the 
references ``Sec. Sec.  425.601, 425.602, 425.603, or 425.652''.


Sec.  425.224  [Amended]

0
54. Amend Sec.  425.224(a)(4) by removing the phrase ``, or a one-sided 
model of the BASIC track's glide path (Level A or Level B),''.
0
55. Amend Sec.  425.302 by adding paragraph (a)(3)(iv) to read as 
follows:


Sec.  425.302  Program requirements for data submission and 
certifications.

    (a) * * *
    (3) * * *
    (iv) That the ACO has moved all advance investment payments 
received during that performance year into a designated advance 
investment payments account established under Sec.  425.630(e) and the 
advance investment payments have been dispersed only for allowable 
uses.
* * * * *
0
56. Amend Sec.  425.308 by adding paragraph (b)(8) to read as follows:


Sec.  425.308  Public reporting and transparency.

* * * * *
    (b) * * *
    (8) Information, updated annually about the ACO's use of advance 
investment payments under Sec.  425.630, for each performance year, 
including the following:
    (i) The ACO's spend plan.
    (ii) The total amount of any advance investment payments received 
from CMS.
    (iii) An itemization of how advance investment payments were spent 
during the year, including expenditure categories, the dollar amounts 
spent on the various categories, any changes to the spend plan 
submitted under Sec.  425.630(d), and such other information as may be 
specified by CMS.
* * * * *
0
57. Section 425.310 is revised to read as follows:


Sec.  425.310  Marketing requirements.

    (a) Requirements. Marketing materials and activities must:
    (1) Use template language developed by CMS, if available.
    (2) Not be used in a discriminatory manner or for discriminatory 
purposes.
    (3) Comply with Sec.  425.304 regarding beneficiary incentives.
    (4) Not be materially inaccurate or misleading.
    (b) Monitoring. (1) CMS may request the submission of marketing 
materials

[[Page 46440]]

and activities at any time. If CMS determines that the marketing 
materials and activities do not comply with the requirements of 
paragraph (a) of this section, CMS will issue written notice of 
disapproval to the ACO.
    (2) The ACO shall discontinue, and require its ACO participants, 
ACO providers/suppliers, and other individuals or entities performing 
functions or services related to ACO activities to discontinue, use of 
any marketing materials or activities disapproved by CMS.
    (c) Sanctions. Failure to comply with this section will subject the 
ACO to the penalties set forth in Sec.  425.216, termination under 
Sec.  425.218, or both.
0
58. Amend Sec.  425.312 by revising paragraph (a)(2) to read as 
follows:


Sec.  425.312  Beneficiary notifications.

    (a) * * *
    (2) Notification of the information specified in paragraph (a)(1) 
of this section must be carried out through the following methods:
    (i) By an ACO participant posting signs in all of its facilities.
    (ii) By an ACO participant making standardized written notices 
available upon request in all settings in which beneficiaries receive 
primary care services.
    (iii) In the case of an ACO that has selected preliminary 
prospective assignment with retrospective reconciliation, by the ACO or 
ACO participant providing each fee-for-service beneficiary with a 
standardized written notice at least once during an agreement period in 
the form and manner specified by CMS. The standardized written notice 
must be furnished to all fee-for-service beneficiaries prior to or at 
the first primary care service visit during the first performance year 
in which the beneficiary receives a primary care service from an ACO 
participant.
    (iv) In the case of an ACO that has selected prospective 
assignment, by the ACO or ACO participant providing each prospectively 
assigned beneficiary with a standardized written notice at least once 
during an agreement period in the form and manner specified by CMS. The 
standardized written notice must be furnished during the performance 
year for which the beneficiary is prospectively assigned to the ACO.
    (v) Following the provision of the standardized written notice to a 
beneficiary, as specified in paragraphs (a)(2)(iii) and (iv) of this 
section, the ACO or ACO participant must provide a verbal or written 
follow-up communication to the beneficiary.
    (A) The follow-up communication must occur no later than the 
earlier of the beneficiary's next primary care service visit or 180 
days from the date the standardized written notice was provided.
    (B) The ACO must retain a record of all beneficiaries receiving the 
follow-up communication, and the form and manner in which the 
communication was made available to the beneficiary. The ACO must make 
these records available to CMS upon request.
* * * * *
0
59. Amend Sec.  425.316 by adding paragraph (e) to read as follows:


Sec.  425.316  Monitoring of ACOs.

* * * * *
    (e) Monitoring ACO eligibility for advance investment payments. (1) 
CMS monitors an ACO that receives advance investment payments pursuant 
to Sec.  425.630 for changes in its ACO participants that may cause the 
ACO to no longer meet the standards specified in Sec.  425.630(b)(3) 
and (4).
    (2) If CMS determines that an ACO receiving advance investment 
payments is experienced with performance-based risk Medicare ACO 
initiatives or is a high revenue ACO, CMS--
    (i) Will cease payment of advance investment payments, starting the 
quarter after the ACO became experienced with performance-based risk 
Medicare ACO initiatives or became a high revenue ACO.
    (ii) May take compliance action as specified in Sec. Sec.  425.216 
and 425.218.
    (3) If an ACO remains an ACO experienced with performance-based 
risk Medicare ACO initiatives or a high revenue ACO after a deadline 
specified by CMS pursuant to compliance action under this section, the 
ACO must repay all advance investment payments it received. CMS will 
provide written notification to the ACO of the amount due and the ACO 
must pay such amount no later than 90 days after the receipt of such 
notification.
0
60. Amend Sec.  425.400 by--
0
a. Revising paragraph (c)(1)(vi) introductory text; and
0
b. Adding paragraph (c)(1)(vii).
    The addition and revision read as follows:


Sec.  425.400  General.

* * * * *
    (c) * * *
    (1) * * *
    (vi) For the performance year starting on January 1, 2022 as 
follows:
* * * * *
    (vii) For the performance year starting on January 1, 2023, and 
subsequent performance years as follows:
    (A) CPT codes:
    (1) 96160 and 96161 (codes for administration of health risk 
assessment).
    (2) 99201 through 99215 (codes for office or other outpatient visit 
for the evaluation and management of a patient).
    (3) 99304 through 99318 (codes for professional services furnished 
in a nursing facility; professional services or services reported on an 
FQHC or RHC claim identified by these codes are excluded when furnished 
in a SNF).
    (4) 99319 through 99340 (codes for patient domiciliary, rest home, 
or custodial care visit).
    (5) 99341 through 99350 (codes for evaluation and management 
services furnished in a patient's home).
    (6) 99354 and 99355 (add-on codes, for prolonged evaluation and 
management or psychotherapy services beyond the typical service time of 
the primary procedure; when the base code is also a primary care 
service code under this paragraph (c)(1)(vii)).
    (7) 99421, 99422, and 99423 (codes for online digital evaluation 
and management).
    (8) 99424, 99425, 99426, and 99427 (codes for principal care 
management services).
    (9) 99437, 99487, 99489, 99490 and 99491 (codes for chronic care 
management).
    (10) 99439 (code for non-complex chronic care management).
    (11) 99483 (code for assessment of and care planning for patients 
with cognitive impairment).
    (12) 99484, 99492, 99493 and 99494 (codes for behavioral health 
integration services).
    (13) 99495 and 99496 (codes for transitional care management 
services).
    (14) 99497 and 99498 (codes for advance care planning; services 
identified by these codes furnished in an inpatient setting are 
excluded).
    (B) HCPCS codes:
    (1) G0402 (code for the Welcome to Medicare visit).
    (2) G0438 and G0439 (codes for the annual wellness visits).
    (3) G0442 (code for alcohol misuse screening service).
    (4) G0443 (code for alcohol misuse counseling service).
    (5) G0444 (code for annual depression screening service).
    (6) G0463 (code for services furnished in ETA hospitals).
    (7) G0506 (code for chronic care management).
    (8) G2010 (code for the remote evaluation of patient video/images).
    (9) G2012 and G2252 (codes for virtual check-in).

[[Page 46441]]

    (10) G2058 (code for non-complex chronic care management).
    (11) G2064 and G2065 (codes for principal care management 
services).
    (12) G2212, GXXX2, and GXXX3 (codes for prolonged office or other 
outpatient visit for the evaluation and management of a patient).
    (13) G2214 (code for psychiatric collaborative care model).
    (14) GYYY1 and GYYY2 (codes for chronic pain management).
    (C) Primary care service codes include any CPT code identified by 
CMS that directly replaces a CPT code specified in paragraph 
(c)(1)(vii)(A) of this section or a HCPCS code specified in paragraph 
(c)(1)(vii)(B) of this section, when the assignment window (as defined 
in Sec.  425.20) for a benchmark or performance year includes any day 
on or after the effective date of the replacement code for payment 
purposes under FFS Medicare.
* * * * *
0
61. Amend Sec.  425.402 by adding paragraph (f) to read as follows:


Sec.  425.402  Basic assignment methodology.

* * * * *
    (f) For performance year 2023 and subsequent performance years, CMS 
employs the following process to identify services furnished by FQHCs, 
RHCs, Method II CAHs, and ETA hospitals for purposes of the beneficiary 
assignment methodology under this section.
    (1) Prior to the start of the performance year and periodically 
during the performance year, CMS will determine the CCNs for all FQHCs, 
RHCs, Method II CAHs, and ETA hospitals enrolled under the TIN of an 
ACO participant, including all CCNs with an active enrollment in 
Medicare and all CCNs with a deactivated enrollment status.
    (2) CMS uses the CCNs identified in paragraph (f)(1) of this 
section in determining assignment for the performance year.
    (3) CMS accounts for changes in CCN enrollment status during the 
performance year as follows:
    (i) If a CCN with no prior Medicare claims experience enrolls under 
the TIN of an ACO participant after the ACO certifies its ACO 
participant list for a performance year as required under Sec.  
425.118(a)(3), CMS will consider services furnished by that CCN in 
determining beneficiary assignment to the ACO for the applicable 
performance year for ACOs under preliminary prospective assignment with 
retrospective reconciliation.
    (ii) Services furnished by a CCN with a deactivated enrollment 
status that is enrolled under an ACO participant at the start of a 
performance year will be considered in determining beneficiary 
assignment to the ACO for the applicable performance year or benchmark 
year.
    (iii) If a CCN enrolled under the TIN of an ACO participant at the 
start of the performance year enrolls under a different TIN during a 
performance year, CMS will continue to treat services billed by the CCN 
as services furnished by the ACO participant it was enrolled under at 
the start of the performance year for purposes of determining 
beneficiary assignment to the ACO for the applicable performance year.
0
62. Amend Sec.  425.512--
0
a. In paragraph (a)(4)(i)(A), by removing the phrase ``quality 
performance score'' and adding in its place the phrase ``health equity 
adjusted quality performance score'';
0
b. By redesignating paragraph (a)(4)(ii) as paragraph (a)(4)(iii);
0
c. By adding new paragraph (a)(4)(ii);
0
d. Revising newly redesignated paragraph (a)(4)(iii);
0
e. By revising paragraph (a)(5)(i);
0
f. By redesignating paragraph (a)(5)(ii) as paragraph (a)(5)(iii);
0
g. By adding new paragraph (a)(5)(ii);
0
h. By revising newly redesignated paragraph (a)(5)(iii);
0
i. By adding paragraph (a)(6);
0
j. By redesignating paragraph (b) as paragraph (c);
0
k. By adding new paragraph (b);
0
l. In newly redesignated paragraph (c)(2) introductory text, by 
removing the reference ``paragraph (b)(1) of this section'' and adding 
in its place the reference ``paragraph (c)(1) of this section''; and
0
m. By revising newly redesignated paragraph (c)(3).
    The revisions and additions read as follows:


Sec.  425.512  Determining the ACO quality performance standard for 
performance years beginning on or after January 1, 2021.

    (a) * * *
    (4) * * *
    (ii) For performance year 2023, CMS designates an alternative 
quality performance standard for an ACO that does not meet the criteria 
described in paragraphs (a)(2) or (a)(4)(i) of this section, but 
reports quality data via the APP established under Sec.  414.1367 of 
this subchapter according to the method of submission established by 
CMS and achieves a quality performance score equivalent to or higher 
than the 10th percentile of the performance benchmark on at least one 
of the four outcome measures in the APP measure set.
    (iii) If an ACO does not report any of the ten CMS Web Interface 
measures or any of the three eCQMs/MIPS CQMs and does not administer a 
CAHPS for MIPS survey under the APP, the ACO will not meet the quality 
performance standard or the alternative quality performance standard.
* * * * *
    (5) * * *
    (i) Except as specified in paragraph (a)(2) of this section, CMS 
designates the quality performance standard as the ACO reporting 
quality data via the APP established under Sec.  414.1367 of this 
subchapter, according to the method of submission established by CMS 
and the following:
    (A) For performance year 2024--
    (1) Achieving a health equity adjusted quality performance score 
that is equivalent to or higher than the 40th percentile across all 
MIPS Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring, or
    (2) If the ACO reports the three eCQMs/MIPS CQMs in the APP measure 
set, meeting the data completeness requirement at Sec.  414.1340 of 
this subchapter and the case minimum requirement at Sec.  414.1380 of 
this subchapter for all three eCQMs/MIPS CQMs, achieving a quality 
performance score equivalent to or higher than the 10th percentile of 
the performance benchmark on at least one of the four outcome measures 
in the APP measure set and a quality performance score equivalent to or 
higher than the 40th percentile of the performance benchmark on at 
least one of the remaining five measures in the APP measure set.
    (B) For performance year 2025 and subsequent years--Achieving a 
health equity adjusted quality performance score that is equivalent to 
or higher than the 40th percentile across all MIPS Quality performance 
category scores, excluding entities/providers eligible for facility-
based scoring.
    (ii) CMS designates an alternative quality performance standard for 
an ACO that does not meet the criteria described in paragraphs (a)(2) 
or (a)(5)(i) of this section, but reports quality data via the APP 
established under Sec.  414.1367 of this subchapter according to the 
method of submission established by CMS and achieves a quality 
performance score equivalent to or higher than the 10th percentile of 
the performance benchmark on at least one of the four outcome measures 
in the APP measure set.
    (iii) An ACO will not meet the quality performance standard or the 
alternative quality performance standard if:

[[Page 46442]]

    (A) For performance year 2024, the ACO does not report any of the 
ten CMS Web Interface measures or any of the three eCQMs/MIPS CQMs and 
does not administer a CAHPS for MIPS survey under the APP.
    (B) For performance year 2025 and subsequent years, the ACO does 
not report any of the three eCQMs/MIPS CQMs and does not administer a 
CAHPS for MIPS survey under the APP.
    (6) For performance years 2022, 2023, and 2024, CMS designates a 
performance benchmark and minimum attainment level for each CMS Web 
Interface measure and establishes a point scale for the measure as 
described in Sec.  425.502(b).
    (b) Calculation of ACO's health equity adjusted quality performance 
score for performance year 2023 and subsequent performance years.
    (1) For an ACO that reports the three eCQMs/MIPS CQMs in the APP 
measure set, meeting the data completeness requirement at Sec.  
414.1340 of this subchapter for all three eCQMs/MIPS CQMs, and 
administers the CAHPS for MIPS survey, CMS calculates the ACO's health 
equity adjusted quality performance score as the sum of the ACO's MIPS 
Quality performance category score for all measures in the APP measure 
set and the ACO's health equity adjustment bonus points calculated in 
accordance with paragraph (b)(2) of this section. The sum of these 
values may not exceed 100 percent.
    (2) CMS calculates the ACO's health equity adjustment bonus points 
as follows:
    (i) For each measure in the APP measure set, CMS groups an ACO's 
performance into the top, middle, or bottom third of ACO measure 
performers by reporting mechanism.
    (ii) CMS assigns values to the ACO for its performance on each 
measure as follows:
    (A) Values of four, two, or zero for each measure for which the 
ACO's performance places it in the top, middle, or bottom third of ACO 
measure performers, respectively.
    (B) Values of zero for each measure that CMS does not evaluate 
because the ACO does not meet the case minimum or the minimum sample 
size for the measure.
    (iii) CMS sums the values assigned to the ACO according to 
paragraph (b)(2)(ii) of this section, to calculate the ACO's measure 
performance scaler.
    (iv) CMS calculates an underserved multiplier for the ACO.
    (A) CMS determines the proportion ranging from zero to one of the 
ACO's assigned beneficiary population for the performance year that is 
considered underserved based on the higher value of either the 
proportion of the ACO's assigned beneficiaries residing in a census 
block group with an Area Deprivation Index national percentile rank of 
at least 85 or the proportion of the ACO's assigned beneficiaries that 
are dually eligible for Medicare and Medicaid.
    (B) If the proportion determined in accordance with paragraph 
(b)(2)(iv)(A) of this section is lower than 20 percent, the ACO is 
ineligible for health equity adjustment bonus points.
    (v) Except as specified in paragraph (b)(2)(iv)(B) of this section, 
CMS calculates the ACO's health equity adjustment bonus points as the 
product of the measure performance scaler determined under paragraph 
(b)(2)(iii) of this section and the underserved multiplier determined 
under paragraph (b)(2)(iv) of this section. If the product of these 
values is greater than 10, the value of the ACO's health equity 
adjustment bonus points is set equal to 10.
    (3) The ACO's health equity adjusted quality performance score, 
determined in accordance with paragraphs (b)(1) and (b)(2) of this 
section, is used as follows:
    (i) In determining whether the ACO meets the quality performance 
standard as specified under paragraphs (a)(4)(i)(A), (a)(5)(i)(A)(1), 
and (a)(5)(i)(B) of this section.
    (ii) In determining the final sharing rate for calculating shared 
savings payments under the BASIC track in accordance with Sec.  
425.605(d), and under the ENHANCED track in accordance with Sec.  
425.610(d), for an ACO that meets the alternative quality performance 
standard by meeting the criteria specified in paragraphs (a)(4)(ii) or 
(a)(5)(ii) of this section.
    (iii) In determining the shared loss rate for calculating shared 
losses under the ENHANCED track in accordance with Sec.  425.610(f), 
for an ACO that meets the quality performance standard established in 
paragraphs (a)(2), (a)(4)(i) and (a)(5)(i) of this section or the 
alternative quality performance standard established in paragraphs 
(a)(4)(ii) of this section.
    (iv) In determining the quality performance score for an ACO 
affected by extreme and uncontrollable circumstances as described in 
paragraphs (c)(3)(ii) and (iii) of this section.
    (c) * * *
    (3) If the ACO reports quality data via the APP and meets data 
completeness and case minimum requirements:
    (i) For performance years 2021 and 2022, CMS will use the higher of 
the ACO's quality performance score or the equivalent of the 30th 
percentile MIPS Quality performance category score across all MIPS 
Quality performance category scores, excluding entities/providers 
eligible for facility-based scoring, for the relevant performance year.
    (ii) For performance year 2023, CMS will use the higher of the 
ACO's health equity adjusted quality performance score or the 
equivalent of the 30th percentile MIPS Quality performance category 
score across all MIPS Quality performance category scores, excluding 
entities/providers eligible for facility-based scoring, for the 
relevant performance year.
    (iii) For performance year 2024 and subsequent performance years, 
CMS will use the higher of the ACO's health equity adjusted quality 
performance score or the equivalent of the 40th percentile MIPS Quality 
performance category score across all MIPS Quality performance category 
scores, excluding entities/providers eligible for facility-based 
scoring, for the relevant performance year.
* * * * *
0
63. Amend Sec.  425.600--
0
a. By revising paragraph (a)(4)(i)(B) introductory heading;
0
b. In paragraph (a)(4)(i)(B)(2)(ii), revise the last sentence.
0
c. In paragraph (a)(4)(i)(B)(2)(iv), by removing the phrase ``For 
performance year 2023, the ACO is automatically advanced to the level 
of the BASIC track's glide path to which the ACO would have 
automatically advanced absent the election to maintain its 
participation level for performance year 2022'' and adding in its place 
the phrase ``Except as provided in paragraph (a)(4)(i)(B)(2)(vi) of 
this section, for performance year 2023, the ACO is automatically 
advanced to the level of the BASIC track's glide path to which the ACO 
would have automatically advanced absent the election to maintain its 
participation level for performance year 2022'';
0
d. By adding paragraphs (a)(4)(i)(B)(2)(vi) and (vii), and 
(a)(4)(i)(C);
0
e. In paragraph (a)(4)(ii), by removing the reference ``paragraph (d) 
of this section'' and adding in its place the references ``paragraph 
(d) or paragraph (g)(2) of this section, as applicable'';
0
f. In paragraph (d) introductory text, by removing the phrase 
``beginning on July 1, 2019, and in subsequent years'' and adding in 
its place the phrase ``beginning on or after July 1, 2019, and before 
January 1, 2024'';
0
g. By revising paragraph (e) introductory text;

[[Page 46443]]

0
h. In paragraph (f)(4)(ii), by removing the reference ``Sec.  
425.601(f)'' and adding in its place the references ``Sec. Sec.  
425.601(f), and 425.656(d)'';
0
i. In paragraph (f)(4)(iii), by removing the reference ``Sec.  
425.601(e)'' and adding in its place the references ``Sec. Sec.  
425.601(e), and 425.652(c)(2)''; and
0
j. By adding paragraphs (g) and (h).
    The revisions and additions read as follows:


Sec.  425.600  Selection of risk model.

    (a) * * *
    (4) * * *
    (i) * * *
    (B) Glide path progression for agreement periods beginning on or 
after July 1, 2019 and before January 1, 2024.
* * * * *
    (2) * * *
    (ii) * * * In the case of an ACO that elects to remain in Level B 
for an additional performance year pursuant to the second sentence of 
paragraph (a)(4)(i)(B)(2)(ii) of this section, and except as provided 
in paragraph (a)(4)(i)(B)(2)(vi) of this section, the ACO is 
automatically advanced to Level E under paragraph (a)(4)(i)(A)(5) of 
this section at the start of performance year 4 (or performance year 5 
in the case of ACOs entering an agreement period beginning on July 1, 
2019).
* * * * *
    (vi) For performance year 2023, an ACO in Level A under paragraph 
(a)(4)(i)(A)(1) of this section or in Level B under paragraph 
(a)(4)(i)(A)(2) of this section may elect to remain in the same level 
of the BASIC track's glide path in which it participated during 
performance year 2022, for the remainder of the agreement period, 
unless the ACO elects to transition to a higher level of risk and 
potential reward within the BASIC track's glide path as provided in 
Sec.  425.226(a)(2)(i). If the ACO does not elect to remain under Level 
A or Level B, for performance year 2023, the ACO is automatically 
advanced to the next level of the BASIC track's glide path to which the 
ACO would have automatically advanced absent any election to maintain 
its participation level for performance year 2022 under paragraph 
(a)(4)(i)(B)(2)(iv) of this section and, if applicable, the election to 
maintain its participation level for performance year 2021 under 
paragraph (a)(4)(i)(B)(2)(iii) of this section, unless the ACO elects 
to transition to a higher level of risk and potential reward within the 
BASIC track's glide path as provided in Sec.  425.226(a)(2)(i). A 
voluntary election by an ACO under this paragraph must be made in the 
form and manner and by a deadline established by CMS.
    (vii) For performance year 2024, an ACO with an agreement period 
beginning January 1, 2023 in Level A under paragraph (a)(4)(i)(A)(1) of 
this section or in Level B under paragraph (a)(4)(i)(A)(2) of this 
section may elect to remain in the same level of the BASIC track's 
glide path in which it participated during performance year 2023, for 
the remainder of the agreement period, unless the ACO elects to 
transition to a higher level of risk and potential reward within the 
BASIC track's glide path as provided in Sec.  425.226(a)(2)(i). If the 
ACO does not elect to remain under Level A or Level B, for performance 
year 2024, the ACO is automatically advanced to the next level of the 
BASIC track's glide path, unless the ACO elects to transition to a 
higher level of risk and potential reward within the BASIC track's 
glide path as provided in Sec.  425.226(a)(2)(i). A voluntary election 
by an ACO under this paragraph must be made in the form and manner and 
by a deadline established by CMS.
* * * * *
    (C) Glide path progression for agreement periods beginning on or 
after January 1, 2024.
    (1) Level of glide path entry. An ACO eligible to enter the BASIC 
track's glide path as determined under paragraph (g)(1) of this section 
may elect to enter its agreement period at any of the levels of risk 
and potential reward available under paragraphs (a)(4)(i)(A)(1) through 
(5) of this section.
    (2) Automatic advancement. An ACO is automatically advanced to the 
next level of the BASIC track's glide path at the start of each 
subsequent performance year of the agreement period, if a higher level 
of risk and potential reward is available under the BASIC track, except 
as follows:
    (i) The ACO elects to transition to a higher level of risk and 
potential reward within the BASIC track's glide path as provided in 
Sec.  425.226(a)(2)(i).
    (ii) The ACO elects to maintain its level of participation as 
provided in paragraph (a)(4)(i)(C)(3) of this section.
    (iii) The ACO is automatically advanced to Level E pursuant to 
paragraph (h)(2)(i) of this section.
    (3) Election to remain under a one-sided model. An eligible ACO 
that enters the BASIC track's glide path at Level A under paragraph 
(a)(4)(i)(A)(1) of this section and is currently at Level A may elect 
to remain in Level A under paragraph (a)(4)(i)(A)(1) of this section 
for all subsequent performance years of the agreement period.
    (i) To be eligible to participate under Level A of the BASIC track 
as described in this paragraph, the ACO must meet the following 
requirements: the ACO is participating in its first agreement period 
under the BASIC track under paragraph (a)(4) of this section, and is 
not participating in an agreement period under the BASIC track as a 
renewing ACO (as defined at Sec.  425.20) or a re-entering ACO (as 
defined in Sec.  425.20) that previously participated in the BASIC 
track's glide path under paragraph (a)(4) of this section; and the ACO 
is inexperienced with performance-based risk Medicare ACO initiatives 
(as defined in Sec.  425.20).
    (ii) A voluntary election by an ACO under this paragraph 
(a)(4)(i)(C)(3) must be made in the form and manner and by a deadline 
established by CMS.
    (iii) The ACO's election to remain in Level A applies for the 
entirety of the agreement period, unless the ACO elects to transition 
to a higher level of risk and potential reward within the BASIC track's 
glide path as provided in Sec.  425.226(a)(2)(i).
    (4) Prior to entering performance-based risk, an ACO must meet all 
requirements to participate under performance-based risk, including 
establishing an adequate repayment mechanism as specified under Sec.  
425.204(f) and selecting a MSR/MLR from the options specified under 
Sec.  425.605(b).
    (5) If the ACO fails to meet the requirements to participate under 
performance-based risk under paragraph (a)(4)(i)(C)(4) of this section, 
the agreement is terminated.
    (6) If, in accordance with Sec.  425.226(a)(2)(i), the ACO elects 
to transition to a higher level of risk and reward available under 
paragraphs (a)(4)(i)(A)(3) through (5) of this section, then the 
automatic transition to levels of higher risk and reward specified in 
paragraph (a)(4)(i)(C)(2) of this section applies to all subsequent 
performance years of the agreement period.
* * * * *
    (e) For performance years beginning on or after July 1, 2019 and 
before January 1, 2024, CMS monitors low revenue ACOs identified as 
experienced with performance-based risk Medicare ACO initiatives, 
during an agreement period in the BASIC track, for changes in the 
revenue of ACO participants that would cause the ACO to be considered a 
high revenue ACO and ineligible for participation in the BASIC track. 
If the ACO meets the definition of a high revenue ACO (as specified in 
Sec.  425.20)--
* * * * *
    (g) For agreement periods beginning on or after January 1, 2024, 
CMS

[[Page 46444]]

determines an ACO's eligibility for the Shared Savings Program 
participation options specified in paragraph (a) of this section as 
follows:
    (1) If an ACO is determined to be inexperienced with performance-
based risk Medicare ACO initiatives, the ACO may enter either the BASIC 
track's glide path at any of the levels of risk and potential reward 
under paragraphs (a)(4)(i)(A)(1) through (5) of this section, or the 
ENHANCED track under paragraph (a)(3) of this section.
    (i) An ACO that is inexperienced with performance-based risk 
Medicare ACO initiatives may participate under the BASIC track's glide 
path for a maximum of two agreement periods, as specified in paragraph 
(a)(4)(i)(C) of this section.
    (ii) An ACO that enters an agreement under the BASIC track's glide 
path at either Level A under paragraph (a)(4)(i)(A)(1) of this section 
or Level B under paragraph (a)(4)(i)(A)(2) of this section is deemed to 
have completed one agreement under the BASIC track's glide path and is 
only eligible to enter a second agreement under the BASIC track's glide 
path if the ACO continues to meet the definition of inexperienced with 
performance-based risk Medicare ACO initiatives and satisfies either of 
the following:
    (A) The ACO is the same legal entity as a current or previous ACO 
that previously entered into a participation agreement for 
participation in the BASIC track's glide path only one time.
    (B) For a new ACO identified as a re-entering ACO, the ACO in which 
the majority of the new ACO's participants were participating 
previously entered into a participation agreement for participation in 
the BASIC track's glide path only one time.
    (iii) An ACO that is determined to be inexperienced with 
performance-based risk Medicare ACO initiatives but is not eligible to 
enter the BASIC track's glide path as specified in paragraph 
(a)(4)(i)(C) of this section may enter either the BASIC track Level E 
under paragraph (a)(4)(i)(A)(5) of this section for all performance 
years of the agreement period, or the ENHANCED track under paragraph 
(a)(3) of this section.
    (2) If an ACO is determined to be experienced with performance-
based risk Medicare ACO initiatives, the ACO may enter either the BASIC 
track Level E under paragraph (a)(4)(i)(A)(5) of this section for all 
performance years of the agreement period, or the ENHANCED track under 
paragraph (a)(3) of this section.
    (h)(1) For performance years beginning on or after January 1, 2024, 
CMS monitors ACOs identified as inexperienced with performance-based 
risk Medicare ACO initiatives and participating in the BASIC track 
under a one-sided model during an agreement period pursuant to an 
election under paragraph (a)(4)(i)(B)(2)(vi), paragraph 
(a)(4)(i)(B)(2)(vii), or paragraph (a)(4)(i)(C)(3) of this section for 
changes to their certified list of ACO participants that would cause 
the ACO to be considered experienced with performance-based risk 
Medicare ACO initiatives and ineligible for participation in a one-
sided model.
    (2) If the ACO meets the definition of experienced with 
performance-based risk Medicare ACO initiatives (under Sec.  425.20)--
    (i) The ACO is permitted to complete the performance year for which 
it met the definition of experienced with performance-based risk 
Medicare ACO initiatives in a one-sided model of the BASIC track, but 
is ineligible to continue participation in the one-sided model after 
the end of that performance year if it continues to meet the definition 
of experienced with performance-based risk Medicare ACO initiatives. 
The ACO will be automatically advanced to Level E within the BASIC 
track under paragraph (a)(4)(i)(A)(5) of this section at the start of 
the next performance year and will remain in Level E for all subsequent 
performance years of the agreement period; and
    (ii) Prior to entering performance-based risk, the ACO must meet 
all requirements to participate under performance-based risk, including 
establishing an adequate repayment mechanism as specified under Sec.  
425.204(f) and selecting a MSR/MLR from the options specified under 
Sec.  425.605(b), in accordance with paragraph (a)(4)(i)(B)(2)(v) of 
this section or paragraph (a)(4)(i)(C)(4) of this section, as 
applicable. If the ACO fails to meet the requirements to participate 
under performance-based risk, the agreement is terminated in accordance 
with paragraph (a)(4)(i)(B)(3) of this section or paragraph 
(a)(4)(i)(C)(5) of this section, as applicable.
0
64. Amend Sec.  425.601 by--
0
a. Revising the section heading, and paragraphs (a)(1)(i) and 
(c)(2)(i);
0
b. Removing paragraph (d)(3);
0
c. In paragraph (f)(5)(ii), by removing the reference ``paragraph 
(f)(4)(i) of this section'', and adding in its place the reference 
``paragraph (f)(5)(i) of this section''; and
0
d. In paragraph (f)(5)(iv), by removing the references ``paragraphs 
(f)(1) and (2) of this section'', and adding in their place the 
references ``paragraphs (f)(1) through (3) of this section''.
    The revisions read as follows:


Sec.  425.601  Establishing, adjusting, and updating the benchmark for 
agreement periods beginning on or after July 1, 2019, and before 
January 1, 2024.

* * * * *
    (a) * * *
    (1) * * *
    (i) This calculation excludes indirect medical education (IME) and 
disproportionate share hospital (DSH) payments, and the supplemental 
payment for IHS/Tribal hospitals and Puerto Rico hospitals.
* * * * *
    (c) * * *
    (2) * * *
    (i) Excludes IME and DSH payments, and the supplemental payment for 
IHS/Tribal hospitals and Puerto Rico hospitals; and
* * * * *
0
65. Amend Sec.  425.605--
0
a. By revising paragraph (a) introductory text, paragraphs (a)(1)(i) 
and (ii), paragraph(a)(2) introductory text, and paragraphs (a)(5)(i) 
and (a)(6);
0
b. By adding paragraph (b)(2)(ii)(E);
0
c. By revising paragraphs (b)(3), and (c)(2);
0
d. In paragraph (d)(1) introductory text, by removing the reference 
``Sec.  425.600(d)'' and adding in its place the references ``Sec.  
425.600(d) or Sec.  425.600(g)'';
0
e. By revising paragraph (d)(1)(i)(A)(2) introductory heading;
0
f. By adding paragraphs (d)(1)(i)(A)(3) and (4);
0
g. By revising paragraph (d)(1)(i)(B)(1);
0
h. By revising the paragraph heading of paragraph (d)(1)(ii)(A)(2);
0
i. By adding paragraphs (d)(1)(ii)(A)(3) and (4);
0
j. By revising paragraph (d)(1)(ii)(B)(1);
0
k. By revising the paragraph heading of paragraph (d)(1)(iii)(A)(2);
0
l. By adding paragraphs (d)(1)(iii)(A)(3) and (4);
0
m. By revising paragraph (d)(1)(iii)(B)(1);
0
n. In paragraph (d)(1)(iii)(D)(2), by removing the reference ``Sec.  
425.601'' and adding in its place the references ``Sec.  425.601 or 
Sec.  425.652'';
0
o. By revising the paragraph heading of paragraph (d)(1)(iv)(A)(2);
0
p. By adding paragraphs (d)(1)(iv)(A)(3) and (4);
0
q. By revising paragraph (d)(1)(iv)(B)(1);
0
r. In paragraph (d)(1)(iv)(D)(2), by removing the reference ``Sec.  
425.601'' and adding in its place the references ``Sec.  425.601 or 
Sec.  425.652'';

[[Page 46445]]

0
s. By revising the paragraph heading of paragraph (d)(1)(v)(A)(2);
0
t. By adding paragraphs (d)(1)(v)(A)(3) and (4);
0
u. By revising paragraph (d)(1)(v)(B)(1);
0
v. In paragraph (d)(1)(v)(D)(2), by removing the reference ``Sec.  
425.601'' and adding in its place the references ``Sec.  425.601 or 
Sec.  425.652'';
0
w. In paragraph (d)(2), by removing the reference ``Sec.  425.600(d)'' 
and adding in its place the references ``Sec.  425.600(d) or Sec.  
425.600(g)''; and
0
x. By adding paragraph (h).
    The revisions and additions read as follows:


Sec.  425.605  Calculation of shared savings and losses under the BASIC 
track.

    (a) General rules. For each performance year, CMS determines 
whether the estimated average per capita Medicare Parts A and B fee-
for-service expenditures for Medicare fee-for-service beneficiaries 
assigned to the ACO are above or below the updated benchmark determined 
under Sec.  425.601 or Sec.  425.652, as applicable. In order to 
qualify for a shared savings payment under the BASIC track, or to be 
responsible for sharing losses with CMS, an ACO's average per capita 
Medicare Parts A and B fee-for-service expenditures for its assigned 
beneficiary population for the performance year must be below or above 
the updated benchmark, respectively, by at least the minimum savings or 
loss rate under paragraph (b) of this section except as provided in 
paragraph (h) of this section.
    (1) * * *
    (i) For agreement periods beginning before January 1, 2024:
    (A) Positive adjustments in prospective HCC risk scores are subject 
to a cap of 3 percent.
    (B) This cap is the maximum increase in risk scores for each 
agreement period, such that any positive adjustment between BY3 and any 
performance year in the agreement period cannot be larger than 3 
percent.
    (ii) For agreement periods beginning on January 1, 2024, and in 
subsequent years:
    (A) Positive adjustments in prospective HCC risk scores are subject 
to a cap equal to the ACO's aggregate growth in demographic risk scores 
between BY3 and the performance year (positive or negative) plus 3 
percentage points.
    (B) The cap described in paragraph (a)(1)(ii)(A) of this section 
will apply to prospective HCC risk score growth for a population 
described in paragraph (a)(2) of this section only if the ACO's 
aggregate growth in prospective HCC risk scores between BY3 and the 
performance year across all of the populations described in paragraph 
(a)(2) of this section exceeds this cap. If the cap described in 
paragraph (a)(1)(ii)(A) of this section is determined to apply, the 
value of the cap is the maximum increase in risk scores for the 
applicable performance year, such that any positive adjustment between 
BY3 and the performance year cannot be larger than the value of the cap 
for any of the populations described in paragraph (a)(2) of this 
section.
    (C) The aggregate growth in demographic risk scores for purposes of 
paragraph (a)(1)(ii)(A) of this section and the aggregate growth in 
prospective HCC risk scores for purposes of paragraph (a)(1)(ii)(B) of 
this section is calculated by taking a weighted average of the growth 
in demographic risk scores or prospective HCC risk scores, as 
applicable, across the populations described in paragraph (a)(2) of 
this section. To calculate aggregate growth in demographic risk scores 
or prospective HCC risk scores, as applicable, CMS does the following:
    (1) Multiplies the growth in risk scores (expressed as a ratio of 
the ACO's performance year risk score to the ACO's BY3 risk score) for 
each population of beneficiaries (ESRD, disabled, aged/dual eligible 
Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare 
and Medicaid beneficiaries) by the applicable proportion of total 
historical benchmark dollars associated with that population.
    (2) Sums the amounts determined in paragraph (a)(1)(ii)(C)(1) of 
this section across the populations of beneficiaries (ESRD, disabled, 
aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual 
eligible Medicare and Medicaid beneficiaries).
    (2) In risk adjusting the benchmark as described in Sec. Sec.  
425.601(a)(10) and 425.652(a)(10), CMS makes separate adjustments for 
each of the following populations of beneficiaries:
* * * * *
    (5) * * *
    (i) These calculations exclude indirect medical education (IME) and 
disproportionate share hospital (DSH) payments, and the supplemental 
payment for IHS/Tribal hospitals and Puerto Rico hospitals.
* * * * *
    (6) In order to qualify for a shared savings payment, the ACO's 
average per capita Medicare Parts A and B fee-for-service expenditures 
for the performance year must be below the applicable updated benchmark 
by at least the minimum savings rate established for the ACO under 
paragraph (b) of this section except as provided in paragraph (h) of 
this section.
    (b) * * *
    (2) * * *
    (ii) * * *
    (E) Automatic transition from Level A to Level E of the BASIC 
track's glide path under Sec.  425.600(h)(2).
    (3) Except as provided in paragraph (h) of this section, in order 
to qualify for a shared savings payment, an ACO's average per capita 
Medicare Parts A and B fee-for-service expenditures for its assigned 
beneficiary population for the performance year must be below its 
updated benchmark by at least the MSR established for the ACO.
* * * * *
    (c) * * *
    (2) For performance years beginning on or after January 1, 2021. To 
qualify for shared savings, an ACO must--
    (i) Meet either the minimum savings rate requirement established 
under paragraph (b) of this section, or the criteria described in 
paragraph (h) of this section;
    (ii) Meet either the quality performance standard or alternative 
quality performance standard established under Sec.  425.512; and
    (iii) Otherwise maintain its eligibility to participate in the 
Shared Savings Program under this part.
    (d) * * *
    (1) * * *
    (i) * * *
    (A) * * *
    (2) For performance years beginning on January 1, 2021, or January 
1, 2022. * * *
    (3) For the performance year beginning on January 1, 2023. An ACO 
that meets all the requirements for receiving shared savings payments 
under the BASIC track, Level A, receives a shared savings payment equal 
to a percentage of all the savings under the updated benchmark (up to 
the performance payment limit described in paragraph (d)(1)(i)(B) of 
this section). The percentage is as follows:
    (i) 40 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(4)(i).
    (ii) 40 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(4)(ii).
    (4) For performance years beginning on or after January 1, 2024. An 
ACO

[[Page 46446]]

that meets all the requirements for receiving shared savings payments 
under the BASIC track, Level A, receives a shared savings payment equal 
to a percentage of all the savings under the updated benchmark (up to 
the performance payment limit described in paragraph (d)(1)(i)(B) of 
this section). Except as provided in paragraph (h) of this section, the 
percentage is as follows:
    (i) 40 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(5)(i).
    (ii) 40 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(5)(ii).
    (B) * * *
    (1) If an ACO qualifies for savings by meeting or exceeding the 
MSR, or as provided in paragraph (h) of this section, the final sharing 
rate specified in paragraph (d)(1)(i)(A) of this section applies to an 
ACO's savings on a first dollar basis.
* * * * *
    (ii) * * *
    (A) * * *
    (2) For performance years beginning on January 1, 2021, or January 
1, 2022. * * *
    (3) For the performance year beginning on January 1, 2023. An ACO 
that meets all the requirements for receiving shared savings payments 
under the BASIC track, Level B, receives a shared savings payment equal 
to a percentage of all the savings under the updated benchmark (up to 
the performance payment limit described in paragraph (d)(1)(ii)(B) of 
this section). The percentage is as follows:
    (i) 40 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(4)(i).
    (ii) 40 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(4)(ii).
    (4) For performance years beginning on or after January 1, 2024. An 
ACO that meets all the requirements for receiving shared savings 
payments under the BASIC track, Level B, receives a shared savings 
payment equal to a percentage of all the savings under the updated 
benchmark (up to the performance payment limit described in paragraph 
(d)(1)(ii)(B) of this section). Except as provided in paragraph (h) of 
this section, the percentage is as follows:
    (i) 40 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(5)(i).
    (ii) 40 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(5)(ii).
    (B) * * *
    (1) If an ACO qualifies for savings by meeting or exceeding the 
MSR, or as provided in paragraph (h) of this section, the final sharing 
rate specified in paragraph (d)(1)(ii)(A) of this section applies to an 
ACO's savings on a first dollar basis.
* * * * *
    (iii) * * *
    (A) * * *
    (2) For performance years beginning on January 1, 2021, or January 
1, 2022. * * *
    (3) For the performance year beginning on January 1, 2023. An ACO 
that meets all the requirements for receiving shared savings payments 
under the BASIC track, Level C, receives a shared savings payment equal 
to a percentage of all the savings under the updated benchmark (up to 
the performance payment limit described in paragraph (d)(1)(iii)(B) of 
this section). The percentage is as follows:
    (i) 50 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(4)(i).
    (ii) 50 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(4)(ii).
    (4) For performance years beginning on or after January 1, 2024. An 
ACO that meets all the requirements for receiving shared savings 
payments under the BASIC track, Level C, receives a shared savings 
payment equal to a percentage of all the savings under the updated 
benchmark (up to the performance payment limit described in paragraph 
(d)(1)(iii)(B) of this section). Except as provided in paragraph (h) of 
this section, the percentage is as follows:
    (i) 50 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(5)(i).
    (ii) 50 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(5)(ii).
    (B) * * *
    (1) If an ACO qualifies for savings by meeting or exceeding the 
MSR, or as provided in paragraph (h) of this section, the final sharing 
rate specified in paragraph (d)(1)(iii)(A) of this section applies to 
an ACO's savings on a first dollar basis.
* * * * *
    (iv) * * *
    (A) * * *
    (2) For performance years beginning on January 1, 2021, or January 
1, 2022. * * *
    (3) For the performance year beginning on January 1, 2023. An ACO 
that meets all the requirements for receiving shared savings payments 
under the BASIC track, Level D, receives a shared savings payment equal 
to a percentage of all the savings under the updated benchmark (up to 
the performance payment limit described in paragraph (d)(1)(iv)(B) of 
this section). The percentage is as follows:
    (i) 50 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(4)(i).
    (ii) 50 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(4)(ii).
    (4) For performance years beginning on or after January 1, 2024. An 
ACO that meets all the requirements for receiving shared savings 
payments under the BASIC track, Level D, receives a shared savings 
payment equal to a percentage of all the savings under the updated 
benchmark (up to the performance payment limit described in paragraph 
(d)(1)(iv)(B) of this section). Except as provided in paragraph (h) of 
this section, the percentage is as follows:
    (i) 50 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(5)(i).
    (ii) 50 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(5)(ii).
    (B) * * *
    (1) If an ACO qualifies for savings by meeting or exceeding the 
MSR, or as

[[Page 46447]]

provided in paragraph (h) of this section, the final sharing rate 
specified in paragraph (d)(1)(iv)(A) of this section applies to an 
ACO's savings on a first dollar basis.
* * * * *
    (v) * * *
    (A) * * *
    (2) For performance years beginning on January 1, 2021, or January 
1, 2022. * * *
    (3) For the performance year beginning on January 1, 2023. An ACO 
that meets all the requirements for receiving shared savings payments 
under the BASIC track, Level E, receives a shared savings payment equal 
to a percentage of all the savings under the updated benchmark (up to 
the performance payment limit described in paragraph (d)(1)(v)(B) of 
this section). The percentage is as follows:
    (i) 50 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(4)(i).
    (ii) 50 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(4)(ii).
    (4) For performance years beginning on or after January 1, 2024. An 
ACO that meets all the requirements for receiving shared savings 
payments under the BASIC track, Level E, receives a shared savings 
payment equal to a percentage of all the savings under the updated 
benchmark (up to the performance payment limit described in paragraph 
(d)(1)(v)(B) of this section). Except as provided in paragraph (h) of 
this section, the percentage is as follows:
    (i) 50 percent for an ACO that that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(5)(i).
    (ii) 50 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(5)(ii).
    (B) * * *
    (1) If an ACO qualifies for savings by meeting or exceeding the 
MSR, or as provided in paragraph (h) of this section, the final sharing 
rate specified in paragraph (d)(1)(v)(A) of this section applies to an 
ACO's savings on a first dollar basis.
* * * * *
    (h) Calculation of shared savings for certain BASIC track ACOs not 
meeting MSR requirement. An ACO that does not meet the minimum savings 
rate requirement established under paragraph (b) of this section but 
meets the other criteria described in paragraphs (c)(2)(ii) and (iii) 
of this section may qualify for a shared savings payment as provided in 
this paragraph.
    (1) To qualify for a shared savings payment under this paragraph, 
an ACO must meet all of the following criteria:
    (i) The ACO has average per capita Medicare Parts A and B fee-for-
service expenditures for the performance year below the updated 
benchmark determined under Sec.  425.652.
    (ii) The ACO is a low revenue ACO as defined in Sec.  425.20 as 
determined at the time of financial reconciliation for the performance 
year.
    (iii) The ACO has at least 5,000 assigned beneficiaries for the 
relevant performance year as determined at the time of financial 
reconciliation for the performance year.
    (iv) The ACO is participating in an agreement period beginning on 
January 1, 2024, or in subsequent years.
    (2) The ACO's shared savings payment will be calculated as 
described in paragraph (d) of this section according to the ACO's 
applicable level of the BASIC track with the exception that the final 
sharing rate applied will equal one-half of the applicable percentage 
described in paragraph (d)(1)(i)(A)(4), (d)(1)(ii)(A)(4), 
(d)(1)(iii)(A)(4), (d)(1)(iv)(A)(4), or (d)(1)(v)(A)(4) of this 
section.
0
66. Amend Sec.  425.610--
0
a. In paragraph (a) introductory text, by removing the references 
``Sec.  425.601, Sec.  425.602 or Sec.  425.603'' and adding in its 
place the references ``Sec.  425.601, Sec.  425.602, Sec.  425.603, or 
Sec.  425.652'';
0
b. By revising paragraphs (a)(2)(i) and (ii), (a)(3) introductory text, 
(a)(6)(i) and (d)(2) paragraph heading;
0
c. By adding paragraphs (d)(3) and (4);
0
d. By revising paragraph heading of paragraph (f)(2);
0
e. By adding paragraphs (f)(3) and (4); and
0
f. In paragraph (g), by removing the references ``Sec.  425.601, Sec.  
425.602 or Sec.  425.603'' and adding in its place the references 
``Sec.  425.601, Sec.  425.602, Sec.  425.603 or Sec.  425.652''.
    The revisions and additions read as follows:


Sec.  425.610  Calculation of shared savings and losses under the 
ENHANCED track.

    (a) * * *
    (2) * * *
    (i) For agreement periods beginning before January 1, 2024:
    (A) Positive adjustments in prospective HCC risk scores are subject 
to a cap of 3 percent.
    (B) This cap is the maximum increase in risk scores for each 
agreement period, such that any positive adjustment between BY3 and any 
performance year in the agreement period cannot be larger than 3 
percent.
    (ii) For agreement periods beginning on January 1, 2024, and in 
subsequent years:
    (A) Positive adjustments in prospective HCC risk scores are subject 
to a cap equal to the ACO's aggregate growth in demographic risk scores 
between BY3 and the performance year (positive or negative) plus 3 
percentage points.
    (B) The cap described in paragraph (a)(2)(ii)(A) of this section 
will apply to prospective HCC risk score growth for a population 
described in paragraph (a)(3) of this section only if the ACO's 
aggregate growth in prospective HCC risk scores between BY3 and the 
performance year across all of the populations described in paragraph 
(a)(3) of this section exceeds this cap. If the cap described in 
paragraph (a)(2)(ii)(A) of this section is determined to apply, the 
value of the cap is the maximum increase in risk scores for the 
applicable performance year, such that any positive adjustment between 
BY3 and the performance year cannot be larger than the value of the cap 
for any of the populations described in paragraph (a)(3) of this 
section.
    (C) The aggregate growth in demographic risk scores for purposes of 
paragraph (a)(2)(ii)(A) of this section and the aggregate growth in 
prospective HCC risk scores for purposes of paragraph (a)(2)(ii)(B) of 
this section is calculated by taking a weighted average of the growth 
in demographic risk scores or prospective HCC risk scores, as 
applicable, across the populations described in paragraph (a)(3) of 
this section. To calculate aggregate growth in demographic risk scores 
or prospective HCC risk scores, as applicable, CMS does the following:
    (1) Multiplies the growth in risk scores (expressed as a ratio of 
the ACO's performance year risk score to the ACO's BY3 risk score) for 
each population of beneficiaries (ESRD, disabled, aged/dual eligible 
Medicare and Medicaid beneficiaries, aged/non-dual eligible Medicare 
and Medicaid beneficiaries) by the applicable proportion of total 
historical benchmark dollars associated with that population.
    (2) Sums the amounts determined in paragraph (a)(2)(ii)(C)(1) of 
this section across the populations of beneficiaries (ESRD, disabled, 
aged/dual eligible Medicare and Medicaid beneficiaries, aged/non-dual 
eligible Medicare and Medicaid beneficiaries).

[[Page 46448]]

    (3) In risk adjusting the benchmark as described in Sec. Sec.  
425.601(a)(10), 425.602(a)(9), 425.603(c)(10), and 425.652(a)(10) CMS 
makes separate adjustments for each of the following populations of 
beneficiaries:
* * * * *
    (6) * * *
    (i) These calculations will exclude indirect medical education 
(IME) and disproportionate share hospital (DSH) payments, and the 
supplemental payment for IHS/Tribal hospitals and Puerto Rico 
hospitals.
* * * * *
    (d) * * *
    (2) For performance years beginning on January 1, 2021, or January 
1, 2022. * * *
    (3) For the performance year beginning on January 1, 2023. An ACO 
that meets all the requirements for receiving shared savings payments 
under the ENHANCED track will receive a shared savings payment equal to 
a percentage of all the savings under the updated benchmark (up to the 
performance payment limit described in paragraph (e)(2) of this 
section). The percentage is as follows:
    (i) 75 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(4)(i).
    (ii) 75 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(4)(ii).
    (4) For performance years beginning on or after January 1, 2024. An 
ACO that meets all the requirements for receiving shared savings 
payments under the ENHANCED track will receive a shared savings payment 
equal to a percentage of all the savings under the updated benchmark 
(up to the performance payment limit described in paragraph (e)(2) of 
this section). The percentage is as follows:
    (i) 75 percent for an ACO that meets the quality performance 
standard by meeting the criteria specified in Sec.  425.512(a)(2) or 
(a)(5)(i).
    (ii) 75 percent multiplied by the ACO's health equity adjusted 
quality performance score calculated according to Sec.  425.512(b) for 
an ACO that meets the alternative quality performance standard by 
meeting the criteria specified in Sec.  425.512(a)(5)(ii).
* * * * *
    (f) * * *
    (2) For performance years beginning on January 1, 2021, or January 
1, 2022. * * *
    (3) For the performance year beginning on January 1, 2023. For an 
ACO that is required to share losses with the Medicare program for 
expenditures over the updated benchmark, the amount of shared losses is 
determined as follows:
    (i) If the ACO meets either the quality performance standard 
established in Sec.  425.512 applicable for the performance year by 
meeting the criteria specified in Sec.  425.512(a)(2) or (a)(4)(i), or 
the alternative quality performance standard established in Sec.  
425.512(a)(4)(ii), CMS determines the shared loss rate as follows:
    (A) Calculate the product of 75 percent and the ACO's health equity 
adjusted quality performance score calculated according to Sec.  
425.512(b).
    (B) Calculate the shared loss rate as 1 minus the product 
determined in paragraph (f)(3)(i)(A) of this section. The shared loss 
rate--
    (1) May not exceed 75 percent; and
    (2) May not be less than 40 percent.
    (ii) If the ACO fails to meet either the quality performance 
standard or the alternative quality performance standard established in 
Sec.  425.512 applicable for the performance year, the shared loss rate 
is 75 percent.
    (4) For performance years beginning on or after January 1, 2024. 
For an ACO that is required to share losses with the Medicare program 
for expenditures over the updated benchmark, the amount of shared 
losses is determined as follows:
    (i) If the ACO meets either the quality performance standard 
established in Sec.  425.512 applicable for the performance year by 
meeting the criteria specified in Sec.  425.512(a)(2) or (a)(5)(i), or 
the alternative quality performance standard established in Sec.  
425.512(a)(5)(ii), CMS determines the shared loss rate as follows:
    (A) Calculate the product of 75 percent and the ACO's health equity 
adjusted quality performance score calculated according to Sec.  
425.512(b).
    (B) Calculate the shared loss rate as 1 minus the product 
determined in paragraph (f)(4)(i)(A) of this section. The shared loss 
rate--
    (1) May not exceed 75 percent; and
    (2) May not be less than 40 percent.
    (ii) If the ACO fails to meet either the quality performance 
standard or the alternative quality performance standard established in 
Sec.  425.512 for the applicable performance year, the shared loss rate 
is 75 percent.
* * * * *
0
67. Amend Sec.  425.611--
0
a. In paragraph (c)(2)(i), by removing the references ``Sec. Sec.  
425.601(c) and 425.603(e)'' and adding in its place the references 
``Sec. Sec.  425.601(c), 425.603(e), and 425.654(a)'';
0
b. In paragraph (c)(2)(ii)(A), by removing the references ``Sec. Sec.  
425.601(a)(4), 425.602(a)(4), and 425.603(c)(4)'' and adding in its 
place the references ``Sec. Sec.  425.601(a)(4), 425.602(a)(4), 
425.603(c)(4), and 425.652(a)(4)'';
0
c. In paragraph (c)(2)(ii)(B), by removing the references ``Sec. Sec.  
425.601(c)(3) and 425.603(e)(3)'' and adding in its place the 
references ``Sec. Sec.  425.601(c)(3), 425.603(e)(3), and 
425.654(a)(3)'';
0
d. By revising paragraph (c)(2)(iii);
0
e. In paragraph (c)(2)(v), by removing the reference ``Sec.  
425.601(a)(5)(ii)'' and adding in its place the references ``Sec. Sec.  
425.601(a)(5)(ii) and 425.652(a)(5)(ii)'';
0
f. In paragraph (c)(2)(v), by removing the reference ``Sec.  
425.601(b)(2)'' and adding in its place the references ``Sec. Sec.  
425.601(b)(2) and 425.652(b)(2)(i)''; and
0
g. By revising paragraph (c)(4).
    The revisions read as follows:


Sec.  425.611  Adjustments to Shared Savings Program calculations to 
address the COVID-19 pandemic.

    (c) * * *
    (2) * * *
    (iii) Determining national per capita expenditures for Parts A and 
B services under the original Medicare fee-for-service program for 
assignable beneficiaries for purposes of capping the regional 
adjustment to the ACO's historical benchmark according to Sec. Sec.  
425.601(a)(8)(ii)(C) and 425.656(c)(3), and capping the prior savings 
adjustment according to Sec.  425.652(a)(8)(iv).
* * * * *
    (4) Calculation of total Medicare Parts A and B fee-for-service 
revenue of ACO participants and total Medicare Parts A and B fee-for-
service expenditures for the ACO's assigned beneficiaries for purposes 
of identifying whether an ACO is a high revenue ACO or low revenue ACO, 
as defined under Sec.  425.20, determining an ACO's eligibility for 
participation options according to Sec.  425.600(d), and determining an 
ACO's eligibility to receive advance investment payments according to 
Sec.  425.630.
* * * * *
0
68. Amend Sec.  425.612 by--
0
a. Revising paragraph (a)(1)(i)(A) introductory text; and
0
b. In paragraph (a)(1)(i)(A)(1) by removing the phrase ``The 
communication plan'' and adding in its place the phrase ``A 
communication plan''.
    The revision reads as follows:

[[Page 46449]]

Sec.  425.612  Waivers of payment rules or other Medicare requirements.

    (a) * * *
    (1) * * *
    (i) * * *
    (A) An attestation that it has established and will make available 
to CMS upon request the following narratives describing how the ACO 
plans to implement the waiver:
* * * * *


Sec. Sec.  425.614 through 425.629  [Reserved]

0
69. Section 425.630 is added to subpart G to read as follows:


Sec.  425.630  Option to receive advance investment payments.

    (a) Purpose. Advance investment payments are intended to encourage 
low-revenue ACOs that are inexperienced with risk to participate in the 
Shared Savings Program and to provide additional resources to such ACOs 
in order to support care improvement for underserved beneficiaries.
    (b) Eligibility. An ACO is eligible to receive advance investment 
payments as specified in this section if CMS determines that all of the 
following criteria are met:
    (1) The ACO is not a renewing or a re-entering ACO.
    (2) The ACO has applied to participate in the Shared Savings 
Program under any level of the BASIC track's glide path and is eligible 
to participate in the Shared Savings Program.
    (3) The ACO is inexperienced with performance-based risk Medicare 
ACO initiatives.
    (4) The ACO is a low revenue ACO.
    (c) Application procedure. To obtain a determination regarding 
whether an ACO may receive advance investment payments, the ACO must 
submit to CMS complete supplemental information as part of its 
application to participate in the Shared Savings Program (filed 
pursuant to Sec.  425.202) in the form and manner and by a deadline 
specified by CMS.
    (d) Application contents and review. (1) General. An ACO must 
submit to CMS supplemental application information sufficient for CMS 
to determine whether the ACO is eligible to receive advance investment 
payments. In addition, the ACO must submit a proposed spend plan as 
part of the supplemental application information.
    (2) Spend plan. The spend plan must:
    (i) Describe how the ACO will spend its advance investment payments 
during the agreement period to build care coordination capabilities 
(including coordination with community-based organizations, as 
appropriate), address specific health disparities, and meet other 
criteria under this section.
    (ii) Identify the categories of goods and services that will be 
purchased with advance investment payment funds (including any 
allowable uses under paragraph (e) of this section), the dollar amounts 
to be spent on the various categories, and such other information as 
may be specified by CMS.
    (iii) State that the ACO has established a separate designated 
account for the deposit and expenditure of all advance investment 
payments in accordance with paragraph (e)(4) of this section.
    (3) CMS review. CMS will review the supplemental application 
information to determine whether an ACO meets the eligibility criteria 
and other requirements for advance investment payments and will approve 
or deny the advance investment payment application accordingly. CMS may 
review an ACO's spend plan at any time and require the ACO to modify 
its spend plan to comply with the requirements of this paragraph (d) 
and paragraph (e) of this section.
    (e) Use and management of advance investment payments.
    (1) Allowable uses. An ACO must use an advance investment payment 
to improve the quality and efficiency of items and services furnished 
to beneficiaries by investing in increased staffing, health care 
infrastructure, and the provision of accountable care for underserved 
beneficiaries, which may include addressing social determinants of 
health. Expenditures of advance investment payments must comply with 
the beneficiary incentive provision at Sec.  425.304, paragraph (e)(2) 
of this section, and all other applicable laws and regulations.
    (2) Prohibited uses. Advance investment payments may not be used 
for any expense other than allowable uses under paragraph (e)(1) of 
this section. In the case of an ACO participating in Level E of the 
BASIC track, the repayment of any shared losses incurred as specified 
in a written notice in accordance with Sec.  425.605(e)(2).
    (3) Duration for spending payments. An ACO may spend an advance 
investment payment over its entire agreement period. An ACO must repay 
to CMS any unspent funds remaining at the end of the ACO's agreement 
period.
    (4) Segregation of advance investment payments. An ACO must 
segregate advance investment payments from all other revenues by 
establishing and maintaining a separate account into which all advance 
investment payments will be deposited immediately and from which all 
disbursements of such funds are made only for allowable uses in 
accordance with this paragraph.
    (f) Payment methodology. An ACO receives two types of advance 
investment payments: a one-time payment of $250,000 and quarterly 
payments calculated pursuant to the methodology defined in paragraph 
(f)(2) of this section. CMS notifies in writing each ACO of its 
determination of the amount of advance investment payment. If CMS does 
not make any advance investment payment, the notice will specify the 
reason(s) why and inform the ACO of its right to request 
reconsideration review in accordance with the procedures specified in 
subpart I of this part.
    (1) Frequency of payments. An ACO will receive the one-time payment 
at the beginning of Performance Year 1 of the ACO's agreement period. 
An ACO will receive quarterly payments each quarter for the first two 
performance years of the ACO's agreement period. An ACO may receive no 
more than eight quarterly payments.
    (2) Quarterly payment amount calculation methodology. CMS does all 
of the following in determining the quarterly payment amount prior to 
the start of the quarter.
    (i) Determines the ACO's assigned beneficiary population. The 
assigned beneficiaries used in determining the quarterly payment amount 
are the beneficiaries most recently assigned to the ACO under Sec.  
425.400(a)(2) (for an ACO under preliminary prospective assignment with 
retrospective reconciliation) or Sec.  425.400(a)(3) (for an ACO under 
prospective assignment), based on the certified ACO participant list 
for the relevant performance year.
    (ii) Assigns each beneficiary a risk factors-based score. For each 
beneficiary in the assigned population identified in paragraph 
(f)(2)(i) of this section, CMS applies the following requirements in 
assigning a risk factors-based score:
    (A) The risk factors-based score will be set to 100 if the 
beneficiary is dually eligible for Medicare and Medicaid.
    (B) The risk factors-based score will be set to the Area 
Deprivation Index national percentile rank matched to the beneficiary's 
mailing address if the beneficiary is not dually eligible for Medicare 
and Medicaid and sufficient data is available to match the beneficiary 
to an Area Deprivation Index national percentile rank.
    (C) The risk factors-based score will be set to 50 if the 
beneficiary is not dually eligible for Medicare and Medicaid and 
sufficient data is not

[[Page 46450]]

available to match the beneficiary to an Area Deprivation Index 
national percentile rank.
    (iii) Determines a beneficiary's payment amount. For each 
beneficiary in the assigned population identified in paragraph 
(f)(2)(i) of this section, CMS determines the payment amount that 
corresponds to the beneficiary's risk factors-based score determined in 
paragraph (f)(2)(ii) of this section. The beneficiary payment amount is 
as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                Risk factors-based score                     1-24        25-34       35-44       45-54       55-64       65-74       75-84      85-100
--------------------------------------------------------------------------------------------------------------------------------------------------------
Payment amount..........................................         $0         $20         $24         $28         $32         $36         $40         $45
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (iv) Calculates the ACO's quarterly payment amount. The ACO's 
quarterly payment amount is the sum of the beneficiary payment amounts 
corresponding to each assigned beneficiary's risk factors-based score, 
specified in paragraph (f)(2)(iii) of this section, capped at 10,000 
beneficiaries. If the ACO has more than 10,000 assigned beneficiaries 
according to paragraph (f)(2)(i) of this section, CMS will calculate 
the quarterly payment amount based on the 10,000 assigned beneficiaries 
with the highest risk factors-based scores determined according to 
paragraph (f)(2)(ii) of this section.
    (g) Recoupment and recovery of advance investment payments, and 
notice of bankruptcy.
    (1) CMS will recoup advance investment payments made to an ACO from 
any shared savings the ACO earns until CMS has recouped in full the 
amount of advance investment payments made to the ACO. For both 
renewing and re-entering ACOs, CMS will carry forward any remaining 
balance owed to subsequent performance year(s) in which the ACO 
achieves shared savings, including in any performance year(s) in a 
subsequent agreement period.
    (2) If the amount of shared savings earned by the ACO is revised 
upward by CMS for any reason, CMS will reduce the redetermined amount 
of shared savings by the amount of advance investment payments made to 
the ACO as of the date of the redetermination. If the amount of shared 
savings earned by the ACO is revised downward by CMS for any reason, 
the ACO will not receive a refund of any portion of the advance 
investment payments previously recouped or otherwise repaid.
    (3) Except as provided for in paragraphs (g)(4) of this section and 
Sec.  425.316(e)(3), for each performance year, CMS will not recover an 
amount of advance investment payments greater than the shared savings 
earned by an ACO in that performance year.
    (4) If an ACO terminates its participation agreement during the 
agreement period in which it received an advance investment payment, 
the ACO must repay all advance investment payments it received. CMS 
will provide written notification to the ACO of the amount due and the 
ACO must pay such amount no later than 90 days after the receipt of 
such notification.
    (5) In the event of bankruptcy-- (i) If an ACO has filed a 
bankruptcy petition, whether voluntary or involuntary, the ACO must 
provide written notice of the bankruptcy to CMS and to the U.S. 
Attorney's Office in the district where the bankruptcy was filed, 
unless final payment for the agreement period has been made by either 
CMS or the ACO and all administrative or judicial review proceedings 
relating to any payments under the Shared Savings Program have been 
fully and finally resolved.
    (ii) The notice of bankruptcy must be sent by certified mail no 
later than 5 days after the petition has been filed and must contain a 
copy of the filed bankruptcy petition (including its docket number). 
The notice to CMS must be addressed to the CMS Office of Financial 
Management at 7500 Security Boulevard, Mailstop C3-01-24, Baltimore, MD 
21244 or such other address as may be specified on the CMS website for 
purposes of receiving such notices.
    (h) Termination of advance investment payments. (1) General. Except 
as provided in paragraph (h)(2) of this section, CMS may terminate an 
ACO's advance investment payments if the ACO-
    (i) Fails to comply with the requirements of this section; or
    (ii) Meets any of the grounds for ACO termination set forth in 
Sec.  425.218(b).
    (2) Eligibility sanction. CMS will terminate an ACO's advance 
investment payments in accordance with Sec.  425.316(e) if the ACO no 
longer meets the eligibility requirements specified in paragraphs 
(b)(3) and (b)(4) of this section.
    (3) No pre-termination actions. CMS may immediately terminate an 
ACO's advance investment payments without taking any of the pre-
termination actions set forth in Sec.  425.216.


Sec. Sec.  425.631 through 425.649  [Reserved]

0
70. Section 425.650 is added to subpart G to read as follows:


Sec.  425.650  Benchmarking methodology.

    (a) Scope and purpose. The methodology by which CMS establishes, 
adjusts, updates and resets an ACO's historical benchmark is described 
within this subpart G. The benchmarking methodology for agreement 
periods beginning before January 1, 2024, is specified in Sec. Sec.  
425.601, 425.602, and 425.603. The benchmarking methodology for 
agreement periods beginning on or after January 1, 2024, is specified 
in Sec. Sec.  425.652 through 425.660.
    (b) [Reserved]
0
71. Section 425.652 is added to subpart G to read as follows:


Sec.  425.652  Establishing, adjusting, and updating the benchmark for 
agreement periods beginning on January 1, 2024, and in subsequent 
years.

    (a) Computing per capita Medicare Part A and Part B benchmark 
expenditures for an ACO's first agreement period. For agreement periods 
beginning on January 1, 2024, and in subsequent years, in computing an 
ACO's historical benchmark for its first agreement period under the 
Shared Savings Program, CMS determines the per capita Parts A and B 
fee-for-service expenditures for beneficiaries that would have been 
assigned to the ACO in any of the 3 most recent years prior to the 
start of the agreement period using the ACO participant TINs identified 
before the start of the agreement period as required under Sec.  
425.118(a) and the beneficiary assignment methodology selected by the 
ACO for the first performance year of the agreement period as required 
under Sec.  425.226(a)(1). CMS does all of the following:
    (1) Calculates the payment amounts included in Parts A and B fee-
for-service claims using a 3-month claims run out with a completion 
factor.
    (i) This calculation excludes indirect medical education (IME) and 
disproportionate share hospital (DSH) payments, and the supplemental 
payment for IHS/Tribal hospitals and Puerto Rico hospitals.
    (ii) This calculation includes individually beneficiary 
identifiable final payments made under a

[[Page 46451]]

demonstration, pilot or time limited program.
    (2) Makes separate expenditure calculations for each of the 
following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries and aged/non-dual eligible 
Medicare and Medicaid beneficiaries.
    (3) Adjusts expenditures for changes in severity and case mix using 
prospective HCC risk scores.
    (4) Truncates an assigned beneficiary's total annual Parts A and B 
fee-for-service per capita expenditures at the 99th percentile of 
national Medicare fee-for-service expenditures for assignable 
beneficiaries identified for the 12-month calendar year corresponding 
to each benchmark year in order to minimize variation from 
catastrophically large claims.
    (5) Trends forward expenditures for each benchmark year (BY1 and 
BY2) to the third benchmark year (BY3) dollars using a blend of 
national and regional growth rates.
    (i) To trend forward the benchmark, CMS makes separate calculations 
for expenditure categories for each of the following populations of 
beneficiaries:
    (A) ESRD.
    (B) Disabled.
    (C) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (D) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (ii) National growth rates are computed using CMS Office of the 
Actuary national Medicare expenditure data for each of the years making 
up the historical benchmark for assignable beneficiaries identified for 
the 12-month calendar year corresponding to each benchmark year.
    (iii) Regional growth rates are computed using expenditures for the 
ACO's regional service area for each of the years making up the 
historical benchmark as follows:
    (A) Determine the counties included in the ACO's regional service 
area based on the ACO's assigned beneficiary population for the 
relevant benchmark year.
    (B) Determine the ACO's regional expenditures as specified under 
Sec.  425.654 of this section.
    (iv) The national and regional growth rates are blended together by 
taking a weighted average of the two. The weight applied to the--
    (A) National growth rate is calculated as the share of assignable 
beneficiaries in the ACO's regional service area for BY3 that are 
assigned to the ACO in BY3, as calculated in paragraph (a)(5)(v) of 
this section; and
    (B) Regional growth rate is equal to 1 minus the weight applied to 
the national growth rate.
    (v) CMS calculates the share of assignable beneficiaries in the 
ACO's regional service area that are assigned to the ACO by doing all 
of the following:
    (A) Calculating the county-level share of assignable beneficiaries 
that are assigned to the ACO for each county in the ACO's regional 
service area. The assignable population of beneficiaries is identified 
for the assignment window corresponding to BY3 that is consistent with 
the assignment window that applies under the beneficiary assignment 
methodology selected by the ACO for the performance year according to 
Sec.  425.400(a)(4)(ii).
    (B) Weighting the county-level shares according to the ACO's 
proportion of assigned beneficiaries in the county, determined by the 
number of the ACO's assigned beneficiaries residing in the county in 
relation to the ACO's total number of assigned beneficiaries.
    (C) Aggregating the weighted county-level shares for all counties 
in the ACO's regional service area.
    (6) Restates BY1 and BY2 trended and risk adjusted expenditures 
using BY3 proportions of ESRD, disabled, aged/dual eligible Medicare 
and Medicaid beneficiaries and aged/non-dual eligible Medicare and 
Medicaid beneficiaries.
    (7) Weights each year of the benchmark for an ACO's initial 
agreement period using the following percentages:
    (i) BY3 at 60 percent.
    (ii) BY2 at 30 percent.
    (iii) BY1 at 10 percent.
    (8) Adjusts the historical benchmark based on the ACO's regional 
service area expenditures (as specified under Sec.  425.656), or for 
savings generated by the ACO, if any, in the 3 most recent years prior 
to the start of the agreement period, if applicable (as specified under 
Sec.  425.658), or a combination of these two adjustments. CMS does all 
of the following to determine the adjustment(s) applied to the 
historical benchmark:
    (i) Computes the regional adjustment in accordance with Sec.  
425.656 and the prior savings adjustment in accordance with Sec.  
425.658.
    (ii) If an ACO is not eligible to receive a prior savings 
adjustment under Sec.  425.658(b)(3)(i), the ACO will receive the 
regional adjustment to its benchmark as described in Sec.  425.656.
    (iii) If an ACO is eligible to receive a prior savings adjustment, 
CMS compares the pro-rated positive average per capita savings amount 
calculated in Sec.  425.658(b)(3)(ii) with the regional adjustment 
described in Sec.  425.656(c), expressed as a single per capita value 
by taking a person-year weighted average of the Medicare enrollment 
type-specific regional adjustment values.
    (A) If the regional adjustment, expressed as a single value, is 
negative or zero, calculate the sum of the regional adjustment value 
and the pro-rated positive average per capita savings amount.
    (1) If the sum is positive, the ACO will receive a prior savings 
adjustment in place of the negative regional adjustment equal to the 
lesser of 50 percent of the positive sum and the cap described in 
paragraph (a)(8)(iv) of this section. The adjustment will be applied as 
a flat dollar amount to the following populations of beneficiaries: 
ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries, 
and aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (2) If the sum is negative, the ACO will receive a reduced negative 
regional adjustment amount equal to the negative sum. The adjustment 
will be applied as a flat dollar amount to the following populations of 
beneficiaries: ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, and aged/non-dual eligible Medicare and Medicaid 
beneficiaries.
    (B) If the regional adjustment, expressed as a single value, is 
positive, the ACO will receive an adjustment to the benchmark equal to 
the higher of the following:
    (1) The positive regional adjustment amount. The adjustment will be 
calculated as described in Sec.  425.656(c) and applied separately to 
the following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.
    (2) A prior savings adjustment equal to the lesser of 50 percent of 
the pro-rated positive average per capita savings amount described in 
Sec.  425.658(b)(3)(ii) and the cap described in paragraph (a)(8)(iv) 
of this section. The adjustment will be applied as a flat dollar amount 
to the following populations of beneficiaries: ESRD, disabled, aged/
dual eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries.
    (iv) The cap on the prior savings adjustment calculated in either 
paragraph (a)(8)(iii)(A)(1) or paragraph (a)(8)(iii)(B)(2) of this 
section is equal to 5 percent of national per capita expenditures for 
Parts A and B services under the original Medicare fee-for-service 
program in BY3 for assignable beneficiaries identified for the 12-month

[[Page 46452]]

calendar year corresponding to BY3 using data from the CMS Office of 
the Actuary and expressed as single value by taking a person-year 
weighted average of the Medicare enrollment type-specific values.
    (9) For the second and each subsequent performance year during the 
term of the agreement period, the ACO's benchmark is adjusted for the 
following, as applicable: For the addition and removal of ACO 
participants or ACO providers/suppliers in accordance with Sec.  
425.118(b), for a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.226(a)(1), and for a change to 
the beneficiary assignment methodology specified in subpart E of this 
part. To adjust the benchmark, CMS does the following:
    (i) Takes into account the expenditures of beneficiaries who would 
have been assigned to the ACO in any of the 3 most recent years prior 
to the start of the agreement period.
    (ii) Redetermines the regional adjustment amount under Sec.  
425.656 according to the ACO's assigned beneficiaries for BY3, and 
based on the assignable population of beneficiaries identified for the 
assignment window corresponding to BY3 that is consistent with the 
assignment window that applies under the beneficiary assignment 
methodology selected by the ACO for the performance year according to 
Sec.  425.226(a)(1).
    (iii) Redetermines the offset factor used in determining the 
negative regional adjustment amount under Sec.  425.656(c)(4) and (5).
    (iv) Redetermines the proration factor used in calculating the 
prior savings adjustment under Sec.  425.658(b)(3)(ii) to account for 
changes in the ACO's assigned beneficiary population in the benchmark 
years of the ACO's current agreement period due to the addition and 
removal of ACO participants or ACO providers/suppliers in accordance 
with Sec.  425.118(b), a change to the ACO's beneficiary assignment 
methodology selection under Sec.  425.400(a)(4)(ii), or changes to the 
beneficiary assignment methodology under subpart E of this part.
    (v) In accordance with paragraph (a)(8) of this section, CMS 
redetermines the adjustment to the historical benchmark based on the 
redetermined regional adjustment (as specified under Sec.  425.656), or 
the prior savings adjustment (as specified under Sec.  425.658), or a 
combination of these two adjustments.
    (10) The historical benchmark is further adjusted at the time of 
reconciliation for a performance year to account for changes in 
severity and case mix of the ACO's assigned beneficiary population as 
described under Sec. Sec.  425.605(a) and 425.610(a).
    (b) Updating the benchmark. For all agreement periods beginning on 
January 1, 2024, and in subsequent years, CMS updates the historical 
benchmark annually for each year of the agreement period using a three-
way blend calculated as a weighted average of a two-way blend of 
national and regional growth rates determined after the end of each 
performance year and a fixed projected growth rate determined at the 
beginning of the ACO's agreement period called the Accountable Care 
Prospective Trend (ACPT).
    (1) To update the benchmark, CMS makes separate calculations for 
expenditure categories for each of the following populations of 
beneficiaries:
    (i) ESRD.
    (ii) Disabled.
    (iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (2) CMS computes the two-way blend of national and regional growth 
rates as follows:
    (i) Computes national growth rates using CMS Office of the Actuary 
national Medicare expenditure data for BY3 and the performance year for 
assignable beneficiaries identified for the 12-month calendar year 
corresponding to each year.
    (ii) Computes regional growth rates using expenditures for the 
ACO's regional service area for BY3 and the performance year, computed 
as follows:
    (A) Determine the counties included in the ACO's regional service 
area based on the ACO's assigned beneficiary population for the year.
    (B) Determine the ACO's regional expenditures as specified under 
Sec.  425.654.
    (iii) The national and regional growth rates are blended together 
by taking a weighted average of the two. The weight applied to the--
    (A) National growth rate is calculated as the share of assignable 
beneficiaries in the ACO's regional service area that are assigned to 
the ACO for the applicable performance year as specified in paragraph 
(b)(2)(iv) of this section; and
    (B) Regional growth rate is equal to 1 minus the weight applied to 
the national growth rate.
    (iv) CMS calculates the share of assignable beneficiaries in the 
ACO's regional service area that are assigned to the ACO by doing all 
of the following:
    (A) Calculating the county-level share of assignable beneficiaries 
that are assigned to the ACO for each county in the ACO's regional 
service area. The assignable population of beneficiaries is identified 
for the assignment window corresponding to the performance year that is 
consistent with the assignment window that applies under the 
beneficiary assignment methodology selected by the ACO for the 
performance year according to Sec.  425.400(a)(4)(ii).
    (B) Weighting the county-level shares according to the ACO's 
proportion of assigned beneficiaries in the county, determined by the 
number of the ACO's assigned beneficiaries residing in the county in 
relation to the ACO's total number of assigned beneficiaries.
    (C) Aggregating the weighted county-level shares for all counties 
in the ACO's regional service area.
    (3) CMS computes the ACPT as described in Sec.  425.660.
    (4) The two-way blend computed under paragraph (b)(2) of this 
section and the ACPT are blended together by taking a weighted average 
of the two.
    (i) Absent unforeseen circumstances, the weight applied to the 
components of the blend is as follows--
    (A) Two-way blend is equal to two-thirds; and
    (B) ACPT is equal to one-third.
    (ii) CMS has sole discretion to determine whether an unforeseen 
circumstance exists that warrants a reduction to the weight of the ACPT 
and the reduced weight that will apply to the ACPT.
    (5) If an ACO's average per capita Medicare expenditures for the 
performance year are above its updated benchmark for the year 
determined as described in paragraph (b)(4) of this section by at least 
the MLR or negative MSR established for the ACO, CMS will compute a 
recalculated updated benchmark using the two-way blend described in 
paragraph (b)(2) of this section.
    (i) If the ACO's average per capita Medicare expenditures for the 
performance year are above the recalculated updated benchmark by a 
smaller amount than the amount by which they are above the updated 
benchmark determined as described in paragraph (b)(4) of this section, 
CMS will use the recalculated updated benchmark to determine the 
following:
    (A) The ACO's responsibility for sharing losses with the Medicare 
program for ACOs in two-sided models as described under Sec. Sec.  
425.605 and 425.610.
    (B) The ACO's financial performance for purposes of monitoring ACO 
financial performance as described under Sec.  425.316(d).
    (ii) If the ACO's average per capita Medicare expenditures for the

[[Page 46453]]

performance year are below the recalculated updated benchmark, the ACO 
will neither be responsible for sharing losses with the Medicare 
program nor eligible for sharing in savings.
    (c) Resetting the benchmark. (1) An ACO's benchmark is reset at the 
start of each subsequent agreement period.
    (2) For second or subsequent agreements periods beginning on 
January 1, 2024, and in subsequent years, CMS establishes, adjusts, and 
updates the rebased historical benchmark in accordance with paragraphs 
(a) and (b) of this section except that rather than weighting each year 
of the benchmark using the percentages provided in paragraph (a)(7) of 
this section, each benchmark year is weighted equally.
0
72. Section 425.654 is added to subpart G to read as follows:


Sec.  425.654  Calculating county expenditures and regional 
expenditures.

    (a) Calculating county expenditures. For agreement periods 
beginning on January 1, 2024, and in subsequent years, CMS does all of 
the following to determine risk adjusted county fee-for-service 
expenditures for use in calculating the ACO's regional fee-for-service 
expenditures:
    (1)(i) Determines average county fee-for-service expenditures based 
on expenditures for the assignable population of beneficiaries in each 
county in the ACO's regional service area. The assignable population of 
beneficiaries is identified for the assignment window corresponding to 
the relevant benchmark or performance year that is consistent with the 
assignment window that applies under the beneficiary assignment 
methodology selected by the ACO for the performance year according to 
Sec.  425.400(a)(4)(ii).
    (ii) Makes separate expenditure calculations for each of the 
following populations of beneficiaries:
    (A) ESRD.
    (B) Disabled.
    (C) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (D) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (2) Calculates assignable beneficiary expenditures using the 
payment amounts included in Parts A and B fee-for-service claims with 
dates of service in the 12-month calendar year for the relevant 
benchmark or performance year, using a 3-month claims run out with a 
completion factor. The calculation--
    (i) Excludes IME and DSH payments, and the supplemental payment for 
IHS/Tribal hospitals and Puerto Rico hospitals; and
    (ii) Considers individually beneficiary identifiable final payments 
made under a demonstration, pilot or time limited program.
    (3) Truncates a beneficiary's total annual Parts A and B fee-for-
service per capita expenditures at the 99th percentile of national 
Medicare fee-for-service expenditures for assignable beneficiaries 
identified for the 12-month calendar year that corresponds to the 
relevant benchmark or performance year, in order to minimize variation 
from catastrophically large claims.
    (4) Adjusts fee-for-service expenditures for severity and case mix 
of assignable beneficiaries in the county using prospective HCC risk 
scores. The calculation is made according to the following populations 
of beneficiaries:
    (i) ESRD.
    (ii) Disabled.
    (iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (b) Calculating regional expenditures. For all agreement periods 
beginning on January 1, 2024, and in subsequent years, CMS calculates 
an ACO's risk adjusted regional expenditures by:
    (1) Weighting the risk adjusted county-level fee-for-service 
expenditures determined under paragraph (a) of this section according 
to the ACO's proportion of assigned beneficiaries in the county, 
determined by the number of the ACO's assigned beneficiaries in the 
applicable population (according to Medicare enrollment type) residing 
in the county in relation to the ACO's total number of assigned 
beneficiaries in the applicable population (according to Medicare 
enrollment type) for the relevant benchmark or performance year for 
each of the following populations of beneficiaries:
    (i) ESRD.
    (ii) Disabled.
    (iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (2) Aggregating the values determined under paragraph (b)(1) of 
this section for each population of beneficiaries (according to 
Medicare enrollment type) across all counties within the ACO's regional 
service area.
0
73. Section 425.656 is added to subpart G to read as follows:


Sec.  425.656  Calculating the regional adjustment to the historical 
benchmark.

    (a) General. This section describes the methodology for calculating 
the regional adjustment to the historical benchmark based on the ACO's 
regional service area expenditures, making separate calculations for 
the following populations of beneficiaries: ESRD, disabled, aged/dual 
eligible Medicare and Medicaid beneficiaries, and aged/non-dual 
eligible Medicare and Medicaid beneficiaries. This section applies to 
regional adjustment calculations for agreement periods beginning on 
January 1, 2024, and in subsequent years.
    (b) Calculation of an average per capita expenditure amount for the 
ACO's regional service area. To compute an average per capita 
expenditure amount for the ACO's regional service area, CMS does all of 
the following:
    (1) Determines the counties included in the ACO's regional service 
area based on the ACO's BY3 assigned beneficiary population.
    (2) Determines the ACO's regional expenditures as specified under 
Sec.  425.654 for BY3.
    (3) Adjusts for differences in severity and case mix between the 
ACO's assigned beneficiary population for BY3 and the assignable 
population of beneficiaries for the ACO's regional service area for 
BY3. The assignable population of beneficiaries is identified using the 
assignment window corresponding to BY3 that is consistent with the 
assignment window that applies under the beneficiary assignment 
methodology selected by the ACO for the performance year according to 
Sec.  425.400(a)(4)(ii).
    (c) Calculation of the adjustment. To calculate the adjustment, CMS 
does all of the following:
    (1) Determines the difference between the average per capita amount 
of expenditures for the ACO's regional service area as specified under 
paragraph (b)(1) of this section and the average per capita amount of 
the ACO's historical benchmark determined under Sec.  425.652(a)(1) 
through (7) and (c)(2), for each of the following populations of 
beneficiaries:
    (i) ESRD.
    (ii) Disabled.
    (iii) Aged/dual eligible Medicare and Medicaid beneficiaries.
    (iv) Aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (2) Applies a percentage, as determined in paragraph (d) of this 
section.
    (3) Caps the per capita dollar amount for each Medicare enrollment 
type (ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, aged/non-dual eligible Medicare and Medicaid 
beneficiaries) calculated under paragraph (c)(2) of this section at a 
dollar amount equal to a percentage of

[[Page 46454]]

national per capita expenditures for Parts A and B services under the 
original Medicare fee-for-service program in BY3 for assignable 
beneficiaries in that enrollment type identified for the 12-month 
calendar year corresponding to BY3 using data from the CMS Office of 
the Actuary. The cap is applied as follows:
    (i) For positive adjustments, the per capita dollar amount for a 
Medicare enrollment type is capped at 5 percent of the national per 
capita expenditure amount for the enrollment type for BY3.
    (ii) For negative adjustments, the per capita dollar amount for a 
Medicare enrollment type is capped at negative 1.5 percent of the 
national per capita expenditure amount for the enrollment type for BY3.
    (4) For negative adjustments, CMS will multiply the regional 
adjustments calculated in paragraphs (c)(2) or (3) of this section by 1 
minus an offset factor equal to the sum of the following--
    (i) Proportion of the ACO's BY3 assigned beneficiaries that are 
dual eligible for Medicare and Medicaid; and
    (ii) The difference between the ACO's weighted average prospective 
HCC risk score for BY3 taken across the four Medicare enrollment types 
and 1.
    (5) The offset factor described in paragraph (c)(4) of this section 
is subject to a minimum value of zero (representing no offset to the 
negative regional adjustment) and a maximum value of 1 (representing a 
full offset to the negative regional adjustment).
    (d) Phase-in of weights used in regional adjustment calculation.
    (1) The first time that an ACO's benchmark is adjusted based on the 
ACO's regional service area expenditures, CMS calculates the regional 
adjustment as follows:
    (i) Using 35 percent of the difference between the average per 
capita amount of expenditures for the ACO's regional service area and 
the average per capita amount of the ACO's initial or rebased 
historical benchmark, if the ACO is determined to have lower spending 
than the ACO's regional service area.
    (ii) Using 15 percent of the difference between the average per 
capita amount of expenditures for the ACO's regional service area and 
the average per capita amount of the ACO's initial or rebased 
historical benchmark, if the ACO is determined to have higher spending 
than the ACO's regional service area.
    (2) The second time that an ACO's benchmark is adjusted based on 
the ACO's regional service area expenditures, CMS calculates the 
regional adjustment as follows:
    (i) Using 50 percent of the difference between the average per 
capita amount of expenditures for the ACO's regional service area and 
the average per capita amount of the ACO's rebased historical benchmark 
if the ACO is determined to have lower spending than the ACO's regional 
service area.
    (ii) Using 25 percent of the difference between the average per 
capita amount of expenditures for the ACO's regional service area and 
the average per capita amount of the ACO's rebased historical benchmark 
if the ACO is determined to have higher spending than the ACO's 
regional service area.
    (3) The third time that an ACO's benchmark is adjusted based on the 
ACO's regional service area expenditures, CMS calculates the regional 
adjustment as follows:
    (i) Using 50 percent of the difference between the average per 
capita amount of expenditures for the ACO's regional service area and 
the average per capita amount of the ACO's rebased historical benchmark 
if the ACO is determined to have lower spending than the ACO's regional 
service area.
    (ii) Using 35 percent of the difference between the average per 
capita amount of expenditures for the ACO's regional service area and 
the average per capita amount of the ACO's rebased historical benchmark 
if the ACO is determined to have higher spending than the ACO's 
regional service area.
    (4) The fourth or subsequent time that an ACO's benchmark is 
adjusted based on the ACO's regional service area expenditures, CMS 
calculates the regional adjustment to the historical benchmark using 50 
percent of the difference between the average per capita amount of 
expenditures for the ACO's regional service area and the average per 
capita amount of the ACO's rebased historical benchmark.
    (5) To determine if an ACO has lower or higher spending compared to 
the ACO's regional service area, CMS does the following:
    (i) Multiplies the difference between the average per capita amount 
of expenditures for the ACO's regional service area and the average per 
capita amount of the ACO's historical benchmark for each population of 
beneficiaries (ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, aged/non-dual eligible Medicare and Medicaid 
beneficiaries) as calculated under paragraph (c)(1) of this section by 
the applicable proportion of the ACO's assigned beneficiary population 
(ESRD, disabled, aged/dual eligible Medicare and Medicaid 
beneficiaries, aged/non-dual eligible Medicare and Medicaid 
beneficiaries) for BY3 of the historical benchmark.
    (ii) Sums the amounts determined in paragraph (d)(5)(i) of this 
section across the populations of beneficiaries (ESRD, disabled, aged/
dual eligible Medicare and Medicaid beneficiaries, aged/non-dual 
eligible Medicare and Medicaid beneficiaries).
    (iii) If the resulting sum is a net positive value, the ACO is 
considered to have lower spending compared to the ACO's regional 
service area. If the resulting sum is a net negative value, the ACO is 
considered to have higher spending compared to the ACO's regional 
service area.
    (iv) If during the term of the agreement period CMS adjusts the 
ACO's benchmark, as specified in Sec.  425.652(a)(9), CMS redetermines 
whether the ACO is considered to have lower spending or higher spending 
compared to the ACO's regional service area for purposes of determining 
the percentage in paragraphs (d)(1) through (3) of this section used in 
calculating the regional adjustment.
    (e) Special rules for determining the weights used in the regional 
adjustment calculation for a re-entering ACO. For a re-entering ACO 
whose prior agreement period benchmark was calculated according to 
Sec.  425.603(c), CMS determines the weight used in the regional 
adjustment calculation described in paragraphs (b) through (d) of this 
section by considering the agreement period the ACO is entering into 
according to Sec.  425.600(f) in combination with either of the 
following--
    (1) The weight previously applied to calculate the regional 
adjustment to the ACO's benchmark under Sec.  425.603(c)(9) in its most 
recent prior agreement period; or
    (2) For a new ACO identified as a re-entering ACO, CMS considers 
the weight previously applied to calculate the regional adjustment to 
the benchmark under Sec.  425.603(c)(9) in its most recent prior 
agreement period of the ACO in which the majority of the new ACO's 
participants were participating previously.
0
74. Section 425.658 is added to subpart G to read as follows:


Sec.  425.658  Calculating the prior savings adjustment to the 
historical benchmark.

    (a) General. For agreement periods beginning on January 1, 2024, 
and in subsequent years, CMS calculates an adjustment to the historical 
benchmark to account for savings generated in the 3 years prior to the 
start of the ACO's current agreement period for renewing or re-entering 
ACOs that were reconciled for one or more performance

[[Page 46455]]

years in the Shared Savings Program during this period.
    (b) Calculate average per capita savings amount. (1) Calculate 
total per capita savings or losses for each performance year during the 
3 years prior to the start of the ACO's current agreement period. CMS 
applies the following requirements in determining the amount of per 
capita savings or losses for each performance year:
    (i) Per capita savings or losses will be set to zero for a 
performance year if the ACO was not reconciled for the performance 
year.
    (ii) If an ACO generated savings for a performance year but was not 
eligible to receive a shared savings payment for that year due to 
noncompliance with the requirements of this part, per capita savings 
for that year will be set to zero.
    (iii) For a new ACO identified as re-entering ACO, per capita 
savings or losses will be determined based on the per capita savings or 
losses of the ACO in which the majority of the ACO's ACO participants 
were participating.
    (2) Take the simple average of the per capita savings or losses 
calculated in paragraph (b)(1) of this section, including values of 
zero, if applicable.
    (3) Determine the ACO's eligibility for the prior savings 
adjustment as follows:
    (i) If the average per capita amount computed in paragraph (b)(2) 
of this section is less than or equal to zero, the ACO is not eligible 
to receive an adjustment for prior savings. The ACO will receive the 
regional adjustment to its benchmark as described in Sec.  425.656.
    (ii) If the average per capita amount computed in paragraph (b)(2) 
of this section is positive, apply a proration factor to account for 
any upward growth in the ACO's assigned population in the benchmark 
years of the ACO's current agreement period as compared to the size of 
the assigned population when the ACO was reconciled for the 
corresponding performance years in its prior agreement period.
    (c) Applicability of the prior savings adjustment. CMS compares the 
pro-rated average per capita savings amount determined in paragraph 
(b)(3)(ii) of this section with the regional adjustment described in 
Sec.  425.656(c), to determine the applicability of the prior savings 
adjustment, the regional adjustment or a combination of these two 
adjustments in accordance with Sec.  425.652(a)(8).
0
75. Section 425.660 is added to subpart G to read as follows:


Sec.  425.660  Accountable Care Prospective Trend (ACPT).

    (a) General. For agreement periods beginning on January 1, 2024, 
and in subsequent years, CMS incorporates a fixed projected growth rate 
determined at the beginning of the ACO's agreement period called the 
Accountable Care Prospective Trend (ACPT) into the blended update 
factor described in Sec.  425.652(b) when updating an ACO's benchmark 
for each performance year of the agreement period.
    (b) Determination of ACPT. An ACPT is a flat dollar amount 
calculated using one or more annualized growth rates based on national 
fee-for-service Medicare expenditures projected by the CMS Office of 
the Actuary. In determining the ACPT for an enrollment type for each 
performance year, CMS does all of the following:
    (1) Projects per capita growth in Parts A and B fee-for-service 
expenditures for benchmark year 3 (BY3) and each performance year of 
the ACO's agreement period. The calculation--
    (i) Excludes IME and DSH payments, and the supplemental payment for 
IHS/Tribal hospitals and Puerto Rico hospitals; and
    (ii) Makes separate expenditure calculations for each of the 
following populations of beneficiaries:
    (A) ESRD.
    (B) Aged/Disabled.
    (2) Calculates one or more annualized growth rates for the 
population of beneficiaries described in paragraph (b)(1)(ii)(A) of 
this section (the ESRD ACPT) and one or more annualized growth rates 
for the population of beneficiaries described in paragraph 
(b)(1)(ii)(B) of this section (the Aged/Disabled ACPT). These 
annualized growth rates will remain fixed over the ACO's agreement 
period. The annualized growth rate is an annual rate of growth in 
projected expenditures during the ACO's 5-year agreement period 
relative to BY3, calculated as follows--
    (i) Using a uniform annualized projected rate of growth over each 
of the 5 performance years of the 5-year agreement period; or
    (ii) If annualization as specified in paragraph (b)(2)(i) of this 
section is determined not to reasonably fit the anticipated growth 
curve, CMS will apply an alternative annualization technique using two 
or more annualized growth rates reflecting the projected rates of 
growth during the 5 performance years comprising the 5-year agreement 
period.
    (3) For each performance year, multiplies the applicable annualized 
growth rate described in paragraph (b)(2) of this section by BY3 
truncated national per capita fee-for-service Medicare expenditures for 
assignable beneficiaries for each Medicare enrollment type (ESRD, 
disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and 
aged/non-dual eligible Medicare and Medicaid beneficiaries) identified 
for the 12-month calendar year corresponding to BY3 to express the 
annualized growth rate as a flat dollar amount as follows:
    (i) The ESRD ACPT is used for the ESRD population.
    (ii) The Aged/Disabled ACPT is used for the following populations: 
disabled, aged/dual eligible Medicare and Medicaid beneficiaries, and 
aged/non-dual eligible Medicare and Medicaid beneficiaries.
    (4) Adjusts the flat dollar amounts described in paragraph (b)(3) 
of this section for each performance year for differences in severity 
and case mix between the ACO's BY3 assigned beneficiary population and 
the national assignable FFS population for each Medicare enrollment 
type identified for the 12-month calendar year corresponding to BY3.
    (5) Divides the risk adjusted flat dollar amounts described in 
paragraph (b)(4) of this section by the ACO's historical benchmark 
expenditures described in Sec.  425.652(a) for each Medicare enrollment 
type to calculate the percent increase to be included in the blended 
update factor described in Sec.  425.652(b)(4).
0
76. Amend Sec.  425.702 by adding paragraph (c)(2)(iii) to read as 
follows:


Sec.  425.702  Aggregate reports.

* * * * *
    (c) * * *
    (2) * * *
    (iii) As an organized health care arrangement (as defined at 45 CFR 
160.103), and the request reflects the minimum data necessary for the 
ACO to conduct health care operations work that falls within the first 
or second paragraph of the definition of health care operations at 45 
CFR 164.501 on behalf of the organized health care arrangement.
* * * * *
0
77. Amend Sec.  425.704 by--
0
a. Revising paragraph (b) introductory text; and
0
b. Adding paragraph (b)(3).
    The revision and addition read as follows:


Sec.  425.704  Beneficiary-identifiable claims data.

* * * * *
    (b) The ACO must certify that it is requesting claims data about 
any of the following:
* * * * *
    (3) The patients of the organized health care arrangement (as 
defined at 45 CFR 160.103) in which the ACO is

[[Page 46456]]

participating with its ACO participants and ACO providers/suppliers, 
and the request reflects the minimum data necessary for the ACO to 
conduct health care operations work that falls within the first or 
second paragraph of the definition of health care operations at 45 CFR 
164.501 on behalf of the organized health care arrangement.
* * * * *


Sec.  425.800  [Amended]

0
78. Amend Sec.  425.800 in paragraph (a)(4) by removing the references 
``Sec. Sec.  425.601, 425.602, 425.603, 425.604, 425.605, 425.606, and 
425.610'' and adding in its place the references ``Sec. Sec.  425.601, 
425.602, 425.603, 425.604, 425.605, 425.606, 425.610, and 425.652''.

PART 455--PROGRAM INTEGRITY: MEDICAID

0
79. The authority citation for part 455 continues to read as follows:

    Authority:  42 U.S.C. 1302.

0
80. Amend Sec.  455.107 by revising paragraph (b)(1)(ii) to read as 
follows:


Sec.  455.107  Disclosure of affiliations.

* * * * *
    (b) * * *
    (1) * * *
    (ii) Change of selection. A State may, in consultation with CMS, 
change its selection after it has been made from the option in 
paragraph (b)(2)(ii) of this section to that in paragraph (b)(2)(i) of 
this section.
* * * * *

    Dated: July 1, 2022.
Xavier Becerra,
Secretary,
    Department of Health and Human Services.

    Note:  The following appendices will not appear in the Code of 
Federal Regulations.

APPENDIX 1: MIPS QUALITY MEASURES

    Note: Except as otherwise noted in this proposed rule, 
previously finalized measures and specialty measures sets will 
continue to apply for the CY 2023 performance period/2025 MIPS 
payment year and future years. In addition, electronic clinical 
quality measures (eCQMs) that are National Quality Forum (NQF) 
endorsed are shown in Table A as follows: NQF #/eCQM NQF #.
BILLING CODE 4120-01-P

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AB
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[FR Doc. 2022-14562 Filed 7-7-22; 4:15 pm]
 BILLING CODE 4120-01-C


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