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Proposed Rule

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2007 and Other Changes to Payment Under Part B

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Information about this document as published in the Federal Register.

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Start Preamble Start Printed Page 48982

AGENCY:

Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule would address certain provisions of the Deficit Reduction Act of 2005, as well as make other proposed changes to Medicare Part B payment policy.

We are proposing these changes to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. This proposed rule also discusses geographic practice cost indices (GPCI) changes; requests for additions to the list of telehealth services; payment for covered outpatient drugs and biologicals; payment for renal dialysis services; policies related to private contracts and opt-out; policies related to bone mass measurement services, independent diagnostic testing facilities, the physician self-referral prohibition; laboratory billing for the technical component (TC) of physician pathology services; the clinical laboratory fee schedule; certification of advanced practice nurses; health information technology, and the health care information transparency initiative.

DATES:

Comment Date: Comments will be considered if we receive them at one of the addresses provided below, no later than 5 p.m. on October 10, 2006.

ADDRESSES:

In commenting, please refer to file code CMS-1321-P. Because of staff and resource limitations, we cannot accept comments by facsimile (fax) transmission.

You may submit comments in one of three ways (no duplicates, please):

1. Electronically. You may submit electronic comments on specific issues in this regulation to http://www.cms.hhs.gov/​eRulemaking. Click on the link “Submit electronic comments on CMS regulations with an open comment period.” (Attachments should be in Microsoft Word, WordPerfect, or Excel; however, we prefer Microsoft Word.)

2. By mail. You may mail written comments (one original and two copies) to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1321-P, P.O. Box 8015, Baltimore, MD 21244-8015.

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 (one original and two copies) to the following address only: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1321-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) before the close of the comment period to one of the following addresses. If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786-7197 in advance to schedule your arrival with one of our staff members.

Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD 21244-1850.

(Because access to the interior of the HHH Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

Submission of comments on paperwork requirements. You may submit comments on this document's paperwork requirements by mailing your comments to the addresses provided at the end of the “Collection of Information Requirements” section in this document.

For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Pam West, (410) 786-2302 (for issues related to practice expense).

Stephanie Monroe, (410) 786-6864 (for issues related to the geographic practice cost index).

Craig Dobyski, (410) 786-4584 (for issues related to list of telehealth services).

Roberta Epps, (410) 786-4503 (for issues related to diagnostic imaging services).

Bill Larson, (410) 786-4639 (for issues related to coverage of bone mass measurement and addition of ultrasound screening for abdominal aortic aneurysm to the “Welcome to Medicare” benefit).

Dorothy Shannon, (410) 786-3396 (for issues related to the outpatient therapy cap).

Catherine Jansto, (410) 786-7762 (for issues related to payment for covered outpatient drugs and biologicals).

Henry Richter, (410) 786-4562 (for issues related to payments for end-stage renal disease facilities).

Fred Grabau, (410) 786-0206 (for issues related to private contracts and opt-out provision).

Lisa Ohrin, (410) 786-4565 (for issues related to physician self-referral prohibitions).

David Walczak (410) 786-4475 (for issues related to reassignment provisions).

August Nemec (410) 786-0612 (for issues related to independent diagnostic testing facilities).

Anita Greenberg, (410) 786-4601 (for issues related to the clinical laboratory fee schedule).

James Menas (410) 786-4507 (for issues related to payment for physician pathology services).

Diane Milstead, (410) 786-3355 or Gaysha Brooks (410) 786-9649 (for all other issues).

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Submitting Comments: We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. You can assist us by referencing the file code CMS-1321-P and the specific “issue identifier” that precedes the section on which you choose to comment.

Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.cms.hhs.gov/​eRulemaking. Click on the link “Electronic Comments on CMS Regulations” on that Web site to view public comments.

Comments received timely will also be available for public inspection as Start Printed Page 48983they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.

Information on the physician fee schedule can be found on the CMS homepage. You can access this data by using the following directions:

1. Go to the following Web site: http://www.cms.hhs.gov/​PhysicianFeeSched/​.

2. Select “PFS Federal Regulation Notices.”

To assist readers in referencing sections contained in this preamble, we are providing the following table of contents. Some of the issues discussed in this preamble affect the payment policies, but do not require changes to the regulations in the Code of Federal Regulations. Information on the regulation's impact appears throughout the preamble and is not exclusively in section VI.

Table of Contents

I. Background

A. Development of the Relative Value System

1. Work RVUs

2. Practice Expense Relative Value Units (PE RVUs)

3. Resource-Based Malpractice RVUs

4. Refinements to the RVUs

5. Adjustments to RVUs Are Budget Neutral

B. Components of the Fee Schedule Payment Amounts

C. Most Recent Changes to the Fee Schedule

II. Provisions of the Proposed Rule

A. Resource-Based PE RVUs and Practice Expense Proposals for Calendar Year 2007

B. Geographic Practice Cost Indices

C. Medicare Telehealth Services

D. Miscellaneous Coding Issues

1. Global Period for Remote Afterloading High Intensity Brachytherapy Procedures

2. Assignment of RVUS to CPT Codes for Proton Beam Treatment Delivery Services

E. Deficit Reduction Act (DRA) Related Proposals

1. Section 5102 of the DRA—Proposed Adjustments for Payments to Imaging Services

2. Section 5107 of the DRA—Revisions to Payments for Therapy Services

3. Section 5112 of the DRA—Proposed Addition of Ultrasound Screening for Abdominal Aortic Aneurysm (AAA)

4. Section 5113 of the DRA—Proposed Non-Application of the Part B Deductible for Colorectal Cancer Screening Tests

5. Section 5114—Proposed Addition of Diabetes Outpatient Self-Management Training Services (DSMT) and Medical Nutrition Therapy (MNT) for the FQHC Program

F. Proposed Payment for Covered Outpatient Drugs and Biologicals (ASP Issues)

G. Proposed Provisions Related to Payment for Renal Dialysis Services Furnished by End Stage Renal Disease (ESRD) Facilities

H. Private Contracts and Opt-Out Provision—Practitioner Definition

I. Proposed Changes to Reassignment and Physician Self-Referral Rules Relating to Diagnostic Tests

J. Supplier Access to Claims Billed on Reassignment

K. Coverage of Bone Mass Measurement Tests

L. Independent Diagnostic Testing Facility (IDTF) Issues

1. Proposed IDTF Changes in the Physician Fee Schedule Proposed Rule

2. Proposed Performance Standards for IDTFs

3. Supervision

4. Place of Service

M. Independent Laboratory Billing for the Technical Component (TC) of Physician Pathology Services to Hospital Patients

N. Public Consultation for Medicare Payment for New Outpatient Clinical Diagnostic Laboratory Tests

O. Proposal To Establish Criteria for National Certifying Bodies That Certify Advanced Practice Nurses

P. Chiropractic Services Demonstration

Q. Promoting Effective Use of Health Information Technology

R. Health Care Information Transparency Initiative

III. Collection of Information Requirements

IV. Response to Comments

V. Regulatory Impact Analysis

Regulation Text

Addendum A—Explanation and Use of Addendum B

Addendum B—2007 Relative Value Units and Related Information Used in Determining Medicare Payments for 2007

Addendum C—Codes for Which We Received Practice Expense Review Committee (PERC) Recommendations on Practice Expense Direct Cost Inputs

Addendum D—2007 Geographic Practice Cost Indices (GPCIs) by Medicare Carrier and Locality

Addendum E—2007 Geographic Adjustment Factors (GAF)

Addendum F—Proposed CPT/HCPCS Imaging Codes Defined by Section 5102(b) of the DRA

In addition, because of the many organizations and terms to which we refer by acronym in this proposed final rule, we are listing these acronyms and their corresponding terms in alphabetical order below:

AADA American Academy of Dermatology Association

AAH American Association of Homecare

AAP Average acquisition price

ACC American College of Cardiology

ACG American College of Gastroenterology

ACHPN Advanced Certified Hospice and Palliative Nurse

ACOG American College of Obstetrics and Gynecology

ACR American College of Radiology

ADA American Dietetic Association

AFROC Association of Freestanding Radiation Oncology Centers

AGA American Gastroenterological Association

AHRQ Agency for Healthcare Research and Quality

AMA American Medical Association

AMP Average manufacturer price

ASA American Society of Anesthesiologists

ASGE American Society of Gastrointestinal Endoscopy

ASP Average sales price

ASTRO American Society for Therapeutic Radiation Oncology

ATA American Telemedicine Association

AUA American Urological Association

AWP Average wholesale price

BBA Balanced Budget Act of 1997

BBRA Balanced Budget Refinement Act of 1999

BES (Bureau of the Census) Business Expenditure Survey

BIPA Medicare, Medicaid, and SCHIP Benefits Improvement Protection Act of 2000

BLS Bureau of Labor Statistics

BMD Bone mineral density

BMI Body mass index

BMM Bone mass measurement

BNF Budget neutrality factor

BP Best price

BSA Body surface area

CAH Critical access hospital

CAP College of American Pathologists

CBSA Core-Based Statistical Area

CCI Correct Coding Initiative

CF Conversion factor

CFR Code of Federal Regulations

CMA California Medical Association

CMS Centers for Medicare & Medicaid Services

CNS Clinical nurse specialist

CPEP Clinical Practice Expert Panel

CPI Consumer Price Index

CPO Care Plan Oversight

CPT (Physicians') Current Procedural Terminology (4th Edition, 2002, copyrighted by the American Medical Association)

CRNA Certified Registered Nurse Anesthetist

CT Computed tomography

CTA Computed tomographic angiography

CY Calendar year

DHS Designated health services

DME Durable medical equipment

DMERC Durable Medical Equipment Regional Carrier

DRA Deficit Reduction Act

DSMT Diabetes outpatient self-management training services

DXA Dual energy x-ray absorptiometry

E&M Evaluation and management

EPO Erythopoeitin

ESRD End stage renal disease

FAX Facsimile

FI Fiscal intermediary

FR Federal Register

GAF Geographic adjustment factor

GAO General Accounting Office

GDP Gross domestic product

GPO Group purchasing organizationStart Printed Page 48984

GPCI Geographic practice cost index

HCPAC Health Care Professional Advisory Committee

HCPCS Healthcare Common Procedure Coding System

HCRIS Healthcare Cost Report Information System

HSA Health Savings Account

HHA Home health agency

HHS (Department of) Health and Human Services

HIT Health information technology

HOCM High osmolar contrast media

HPSA Health Professional Shortage Area

HRSA Health Resources Services Administration (HHS)

HUD (Department of) Housing and Urban Development

IDTF Independent diagnostic testing facility

IPF Inpatient psychiatric facility

IPPS Inpatient prospective payment system

IRF Inpatient rehabilitation facility

ISO Insurance Services Office

IVIG Intravenous immune globulin

JCAAI Joint Council of Allergy, Asthma, and Immunology

JUA Joint underwriting association

LCD Local coverage determination

LTCH Long-term care hospital

LOCM Low osmolar contrast media

LOINC® Logical Observation Identifiers Names and Codes

MA Medicare Advantage

MCAC Medicare Coverage Advisory Committee

MCG Medical College of Georgia

MedPAC Medicare Payment Advisory Commission

MEI Medicare Economic Index

MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003

MNT Medical nutrition therapy

MRA Magnetic resonance angiography

MRI Magnetic resonance imaging

MSA Metropolitan statistical area

NCD National coverage determination

NCQDIS National Coalition of Quality Diagnostic Imaging Services

NDC National drug code

NECMA New England County Metropolitan Area

NECTA New England City and Town Area

NP Nurse practitioner

NPP Nonphysician practitioners

NPWP Nonphysician Work Pool

OBRA Omnibus Budget Reconciliation Act

OIG Office of Inspector General

OMB Office of Management and Budget

OPD Outpatient Department

OPPS Outpatient prospective payment system

OSCAR Online Survey and Certification and Reporting

PA Physician assistant

PBM Pharmacy benefit managers

PC Professional component

PE Practice Expense

PEAC Practice Expense Advisory Committee

PERC Practice Expense Review Committee

PET Positron emission tomography

PFS Physician Fee Schedule

PLI Professional liability insurance

PPI Producer price index

PPO Preferred provider organization

PPS Prospective payment system

PRA Paperwork Reduction Act

PT Physical therapy

QCT Quantitative computerized tomography

RFA Regulatory Flexibility Act

RIA Regulatory impact analysis

RN Registered nurse

RUC (AMA's Specialty Society) Relative (Value) Update Committee

RVU Relative value unit

SXA Single energy x-ray absorptiometry

SPA Single photon absorptiometry

SGR Sustainable growth rate

SMS (AMA's) Socioeconomic Monitoring System

SNF Skilled Nursing Facility

SNM Society for Nuclear Medicine

TA Technology Assessment

TC Technical Component

UAF Update adjustment factor

UPIN Unique Physician Identification Number

WAC Wholesale acquisition cost

WAMP Widely available market price

I. Background

[If you choose to comment on issues in this section, please include the caption “BACKGROUND” at the beginning of your comments.]

Since January 1, 1992, Medicare has paid for physicians' services under section 1848 of the Social Security Act (the Act), “Payment for Physicians’ Services.” The Act requires that payments under the physician fee schedule (PFS) be based on national uniform relative value units (RVUs) based on the resources used in furnishing a service. Section 1848(c) of the Act requires that national RVUs be established for physician work, practice expense (PE), and malpractice expense. Before the establishment of the resource-based relative value system, Medicare payment for physicians’ services was based on reasonable charges.

A. Development of the Relative Value System

1. Work RVUs

The concepts and methodology underlying the PFS were enacted as part of the Omnibus Budget Reconciliation Act (OBRA) of 1989, Pub. L. 101-239, and OBRA 1990, (Pub. L. 101-508). The final rule, published November 25, 1991 (56 FR 59502), set forth the fee schedule for payment for physicians’ services beginning January 1, 1992. Initially, only the physician work RVUs were resource-based, and the PE and malpractice RVUs were based on average allowable charges.

The physician work RVUs established for the implementation of the fee schedule in January 1992 were developed with extensive input from the physician community. A research team at the Harvard School of Public Health developed the original physician work RVUs for most codes in a cooperative agreement with the Department of Health and Human Services (HHS). In constructing the code-specific vignettes for the original physician work RVUs, Harvard worked with panels of experts, both inside and outside the Federal government, and obtained input from numerous physician specialty groups.

Section 1848(b)(2)(A) of the Act specifies that the RVUs for radiology services are based on relative value scale we adopted under section 1834(b)(1)(A) of the Act, (the American College of Radiology (ACR) relative value scale), which we integrated into the overall PFS. Section 1848(b)(2)(B) of the Act specifies that the RVUs for anesthesia services are based on RVUs from a uniform relative value guide. We established a separate conversion factor (CF) for anesthesia services, and we continue to utilize time units as a factor in determining payment for these services. As a result, there is a separate payment methodology for anesthesia services.

We establish physician work RVUs for new and revised codes based on recommendations received from the American Medical Association's (AMA) Specialty Society Relative Value Update Committee (RUC).

2. Practice Expense Relative Value Units (PE RVUs)

Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 103-432), enacted on October 31, 1994, amended section 1848(c)(2)(C)(ii) of the Act and required us to develop resource-based PE RVUs for each physician's service beginning in 1998. We were to consider general categories of expenses (such as office rent and wages of personnel, but excluding malpractice expenses) comprising practice expenses.

Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33), amended section 1848(c)(2)(C)(ii) of the Act to delay implementation of the resource-based PE RVU system until January 1, 1999. In addition, section 4505(b) of the BBA provided for a 4-year transition period from charge-based PE RVUs to resource-based RVUs.

We established the resource-based PE RVUs for each physician's service in a final rule, published November 2, 1998 (63 FR 58814), effective for services furnished in 1999. Based on the requirement to transition to a resource-based system for PE over a 4-year period, resource-based PE RVUs did not become fully effective until 2002.Start Printed Page 48985

This resource-based system was based on two significant sources of actual PE data: The Clinical Practice Expert Panel (CPEP) data and the AMA's Socioeconomic Monitoring System (SMS) data. The CPEP data were collected from panels of physicians, practice administrators, and nonphysicians (for example, registered nurses) nominated by physician specialty societies and other groups. The CPEP panels identified the direct inputs required for each physician's service in both the office setting and out-of-office setting. The AMA's SMS data provided aggregate specialty-specific information on hours worked and practice expenses.

Separate PE RVUs are established for procedures that can be performed in both a nonfacility setting, such as a physician's office, and a facility setting, such as a hospital outpatient department. The difference between the facility and nonfacility RVUs reflects the fact that a facility receives separate payment from Medicare for its costs of providing the service, apart from payment under the PFS. The nonfacility RVUs reflect all of the direct and indirect practice expenses of providing a particular service.

Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113) directed the Secretary of Health and Human Services (the Secretary) to establish a process under which we accept and use, to the maximum extent practicable and consistent with sound data practices, data collected or developed by entities and organizations to supplement the data we normally collect in determining the PE component. On May 3, 2000, we published the interim final rule (65 FR 25664) that set forth the criteria for the submission of these supplemental PE survey data. The criteria were modified in response to comments received, and published in the Federal Register (65 FR 65376) as part of a November 1, 2000 final rule. The PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 and 68 FR 63196) extended the period during which we would accept these supplemental data.

3. Resource-Based Malpractice RVUs

Section 4505(f) of the BBA amended section 1848(c) of the Act to require us to implement resource-based malpractice RVUs for services furnished on or after 2000. The resource-based malpractice RVUs were implemented in the PFS final rule published November 2, 1999 (64 FR 59380). The malpractice RVUs were based on malpractice insurance premium data collected from commercial and physician-owned insurers from all the States, the District of Columbia, and Puerto Rico.

4. Refinements to the RVUs

Section 1848(c)(2)(B)(i) of the Act requires that we review all RVUs no less often than every 5 years. The first 5-year review of the physician work RVUs went into effect in 1997, published on November 22, 1996 (61 FR 59489). The second 5-year review went into effect in 2002, published on November 1, 2001 (66 FR 55246). The next scheduled 5-year review is scheduled to go into effect in 2007.

In 1999, the AMA's RUC established the Practice Expense Advisory Committee (PEAC) for the purpose of refining the direct PE inputs. Through March of 2004, the PEAC provided recommendations to CMS for over 7,600 codes (all but a few hundred of the codes currently listed in the AMA's Current Procedural Terminology (CPT) codes).

In the November 15, 2004, PFS final rule (69 FR 66236), we implemented the first 5-year review of the malpractice RVUs (69 FR 66263).

5. Adjustments to RVUS Are Budget Neutral

Section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments in RVUs for a year may not cause total PFS payments to differ by more than $20 million from what they would have been if the adjustments were not made. In accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if adjustments to RVUs cause expenditures to change by more than $20 million, we make adjustments to ensure that expenditures do not increase or decrease by more than $20 million.

B. Components of the Fee Schedule Payment Amounts

To calculate the payment for every physician service, the components of the fee schedule (physician work, PE, and malpractice RVUs) are adjusted by a geographic practice cost index (GPCI). The GPCIs reflect the relative costs of physician work, PEs, and malpractice insurance in an area compared to the national average costs for each component.

Payments are converted to dollar amounts through the application of a CF, which is calculated by the Office of the Actuary and is updated annually for inflation.

The general formula for calculating the Medicare fee schedule amount for a given service and fee schedule area can be expressed as:

Payment = [(RVU work × GPCI work) + (RVU PE × GPCI PE) + (RVU malpractice × GPCI malpractice)] × CF.

(Note: As discussed in the June 29, 2006 proposed notice for the Five-Year Review of Work Relative Value Units Under the Physician Fee Schedule and Proposed Changes to the Practice Expense Methodology (71 FR 37170), we have proposed to establish a separate budget neutrality adjustor that would be applied in the calculation of the work RVUs. Application of this budget neutrality adjustor would enable us to meet the budget neutrality provisions of section 1848(c)(2)(B)(ii) of the Act.)

C. Most Recent Changes to the Fee Schedule

The final rule with comment period that appeared in the Federal Register on November 21, 2005 (70 FR 70116) addressed Medicare Part B payment policy, including the physician fee schedule, that is applicable for calendar year (CY) 2006; and finalized certain provisions of the interim final rule to implement the Competitive Acquisition Program (CAP) for Part B Drugs.

It also revised Medicare Part B payment and related policies regarding: Physician work, practice expense and malpractice RVUs; Medicare telehealth services; multiple diagnostic imaging procedures; covered outpatient drugs and biologicals; supplemental payments to Federally Qualified Health Centers (FQHCs); renal dialysis services; coverage for glaucoma screening services; National Coverage Determination (NCD) timeframes; and physician referrals for nuclear medicine services and supplies to health care entities with which physicians have financial relationships.

In addition, the rule finalized the interim RVUs for CY 2005 and issued interim RVUs for new and revised procedure codes for CY 2006. The rule also updated the codes subject to the physician self-referral prohibition and discussed payment policies relating to teaching anesthesia services, therapy caps, private contracts and opt-out, and chiropractic and oncology demonstrations.

In accordance with section 1848(d)(1)(E)(i) of the Act, we also announced that the PFS update for CY 2006 would be −4.4 percent; the initial estimate for the sustainable growth rate for CY 2006 would be 1.7; and the CF for CY 2006 would be $36.1770. However, subsequent to publication of the CY 2005 PFS final rule with comment period, section 5104 of the Deficit Reduction Act (DRA) of 2005 (Pub. L. 109-171, February 8, 2006), was enacted which amended section 1848(d) Start Printed Page 48986of the statute to provide for a 0 percent update effective January 1, 2006.

We also note that the Five-Year Review of Work Relative Value Units Under the Physician Fee Schedule and Proposed Changes to the Practice Expense Methodology proposed notice appeared in the Federal Register on June 29, 2006 (71 FR 37170). In that notice, we proposed revisions to work RVUs affecting payment for physicians’ services. The revisions reflect changes in medical practice, coding changes, and new data on relative value components that affect the relative amount of physician work required to perform each service, as required by the statute. We also proposed revisions to our methodology for calculating PE RVUs, including changes based on supplemental survey data for PE. This revised methodology would be used to establish payment for services beginning January 1, 2007.

As indicated in the June 29, 2006 proposed notice, we will respond to the comments received on that notice as part of the final Medicare PFS rule for CY 2007 scheduled for publication this fall. If adopted, the RVU revisions would be fully implemented for services furnished to Medicare beneficiaries on or after January 1, 2007. The PE revisions would be phased-in over a four-year period; although, as we gain experience with the new methodology, we will reexamine this policy beginning next year and propose necessary revisions through future rulemaking.

II. Provisions of the Proposed Rule

[If you choose to comment on issues in this section, please include the caption “PROVISIONS” at the beginning of your comments.]

A. Resource-Based Practice Expense (PE) RVU Proposals for CY 2007

Major changes to the PE methodology for 2007, as well as a detailed discussion of the current PE methodology, are discussed in the June 29, 2006 proposed notice (71 FR 37170 through 37430).

This proposed rule contains proposals for direct PE including clinical labor, medical supplies and medical equipment.

1. RUC Recommendations for Direct PE Inputs and Other PE Input Issues

The following discussions are proposals concerning direct PE inputs.

(a) RUC Recommendations

The AMA's Relative Value Update Committee (RUC) established a new committee, the Practice Expense Review Committee (PERC), to assist the RUC in recommending direct PE inputs (clinical staff, supplies, and equipment) for new and existing CPT codes.

The PERC reviewed the PE inputs for over 2000 existing codes, some of which were unresolved PE issues from the CY 2006 PFS final rule with comment period, at their meetings held in September 2005, February 2006 and April 2006. (A list of these reviewed codes can be found in Addendum C of this proposed rule.)

We have reviewed the PERC-submitted recommendations and propose to adopt all of them. We have worked with the AMA staff to make corrections for any typographical errors and to ensure that previously PEAC-accepted standards are incorporated in the recommendations.

The complete PERC recommendations and the revised PE database can be found on our Web site. (See the SUPPLEMENTARY INFORMATION section of this proposed rule for directions on accessing our Web site.)

(b) Standard Supplies and Equipment for 90-Day Global Codes

We are proposing to revise the CPEP supply and equipment inputs for those 90-day global procedures for which the RUC has only refined the clinical labor inputs. We are proposing to apply the standard supply and equipment inputs for the facility setting for 90-day global services to these remaining unrefined 90-day global procedure codes. As recommended by the RUC, for supplies, we propose to include one minimum supply visit package for each post-operative visit assigned to each code and a post-surgical incision care kit (suture, staples, or both) where appropriate, along with additional items recommended by the RUC for certain procedures. For equipment, we are proposing to include an exam table and light. However, there are several issues on which we need input before we finalize the recommended standards. For example, for many of the 90-day codes in question, the current supply input data contain supplies in far larger quantities than are contained in either the visit package or incision care kit. For other codes, the current data includes items that are not contained in the package or kit. In other cases, the recommendations from the RUC contain additional items in quantities that appear excessive. We plan to work with all the concerned specialties to ensure that the finalized inputs do represent the typical supplies needed to perform each procedure.

Because the application of the 90-day global standard supplies and equipment would result in the deletion of some original CPEP inputs, we are requesting that all the medical specialties examine the direct PE inputs on our Web site and let us know whether there are additional items from the original CPEP data that are a necessary part of the post-operative care and if the PE inputs listed are correct. (See the SUPPLEMENTARY INFORMATION section of this proposed rule for directions on accessing our Web site.)

2. Payment for Splint and Cast Supplies

In the PFS final rules published November 1999 (64 FR 59380) and November 2000 (65 FR 65376), we removed splint and cast supplies from the PE database for the CPT codes for fracture management and cast/strapping application procedures. Because splint and cast supplies could be separately billed using Healthcare Common Procedure Coding System (HCPCS) codes (Q4001-Q4051) that were established for payment of these supplies under section 1861(s)(5) of the Act, we did not want to make duplicate payment under the PFS for these items.

In the CY 2006 PFS proposed rule (70 FR 70116), we proposed to reinstate payment for all splints and cast supplies through the PE component of the PFS because we believed we may have unintentionally prohibited remuneration for these supplies when they are not used for reduction of a fracture or dislocation (covered under section 1861(s)(5) of the Act), but rather are provided (and covered) as “incident to” a physician service under section 1861(s)(2)(A) of the Act. This proposal was not finalized; however, in our final rule we asked the medical specialties and the PERC to determine the typical supplies for splints and casts necessary for each of the fracture management codes and the cast/strapping application codes because we wanted to make certain that the supply inputs were correct before we proceeded with rulemaking for the CY 2007 PFS. At its February 2006 meeting, the PERC reviewed and approved the supply inputs submitted by the AAOS for each CPT code for fracture management and cast/strapping application and these were forwarded to us as PERC recommendations. During this interim period we also reassessed the options for payment of materials for splints and casts.

We believe that the majority of the splint and cast supplies that are currently paid through the Q-codes are furnished in relationship to cast/strapping procedures for the management of fractures and dislocations. However, we did not intend for the medically necessary Start Printed Page 48987splint and cast supplies used for other reasons (for example, serial casting, wound care, or protection) not to be paid. Because it may be difficult for the contractors to identify the purpose for the cast/strapping application procedure on a claim form, we believe that contractors may have been paying for the splint and cast supply Q-codes when the service is performed for other purposes than treatment of fractures and dislocations.

Since these splint and cast supplies can be covered under both sections 1861(s)(5) and 1861(s)(2)(A) of the Act, we are proposing to include payment for both statutory benefits using the separate HCPCS Q-codes. This would allow for payment for these medically necessary supplies whether based on sections 1861(s)(5) or 1861(s)(2)(A) of the Act, while ensuring that no duplicate payments are made. Physicians would continue to bill the HCPCS Q-codes, in addition to the cast/strapping application procedure codes, to be paid for these materials.

The following supplies would continue to be paid separately using the HCPCS Q-codes and would not be included in the PE database upon adoption of this proposal:

  • Fiberglass roll.
  • Cast padding.
  • Cast shoe.
  • Stockingnet/stockinette.
  • Plaster bandage.
  • Denver splint.
  • Dome paste bandage.
  • Cast sole.
  • Elastoplast roll.
  • Fiberglass splint.
  • Ace wrap.
  • Kerlix.
  • Webril.
  • Malleable arch bars and elastics.

The splint and cast supplies would not be included in the PEs for the following CPT codes:

  • 24500 through 24685
  • 25500 through 25695
  • 26600 through 26785
  • 27500 through 27566
  • 27750 through 27848
  • 28400 through 28675
  • 29000 through 29750.

We are requesting input, specifically from medical specialties and contractors on this proposal.

3. Medical Nutrition Therapy Services

In 2000, the Health Care Professional Advisory Committee (HCPAC) recommended that we assign work RVUs to three new medical nutrition therapy (MNT) CPT codes—97802 Medical nutrition therapy; initial assessment and intervention, individual, face-to-face with the patient, each 15 minutes at 0.45 RVUs, 97803 Medical nutrition therapy; re-assessment and intervention, individual, face-to-face with the patient, each 15 minutes at 0.37 RVUs, and 97804 Medical nutrition therapy; group (two or more individuals), each 30 minutes at 0.25 RVUs. However, during rulemaking for the CY 2001 PFS final rule, we indicated that MNT was not covered because there was yet no statutory benefit category that would allow medical nutritionists to bill these services. We also did not accept the HCPAC recommendations for work RVUs for these MNT services because the codes were designed for use only by nonphysicians. The following year, section 105(c) of the Medicare, Medicaid, and SCHIP Benefits Improvement Protection Act of 2000 (BIPA) provided for the coverage of MNT services when furnished by registered dietitians or nutritional professionals at 85 percent of the amount that a physician would be paid for the same services. As a result, we established values for these MNT services for the 2002 PFS. In keeping with our earlier decision, we did not assign the HCPAC-recommended work values. However, the associated work value for each code was utilized in the conversion of work to clinical labor time for MNTs as part of the PE component. At that time we received several comments, including one from the American Dietetic Association (ADA), urging us to adopt the work values recommended by the HCPAC.

More recently, the ADA has requested us to reconsider our decision not to accept the HCPAC recommended work RVUs. The ADA contends that the payment rate established by section 105(c) of BIPA, 85 percent of the PFS amount that would be paid for the same service if furnished by a physician, is based on the premise that work values are inherent to these MNT services. The ADA believes that without work RVUs, the payment for these services does not reflect 85 percent of what a physician would be paid for performing the same service. Because these MNT codes were created specifically for MNT professionals, the ADA compared the work associated with their services to physician E/M services of CPT 99203 and 99213, which have respective work RVUs of 1.34 and 0.67.

After reviewing the issues and relevant arguments raised by the ADA, we are persuaded that it would be appropriate to include work RVUs for the MNT services. Consequently, we are proposing to establish work RVUs for each code at the level previously recommended by the HCPAC, as follows:

  • CPT 97802 = 0.45 RVUs.
  • CPT 97803 = 0.37 RVUs.
  • CPT 97804 = 0.25.

Because we propose to add the work RVUs to these services, the MNT clinical labor time in the direct input database would be removed with the adoption of this proposal. Additionally, two HCPCS codes, G0270 MNT subs tx for change dx and G0271 Group MNT 2 or more 30 mins were created to track MNT services following the second referral in the same year. These HCPCS codes correspond to CPT codes 97803 and 97804, respectively. Therefore, we would also propose to add the same work RVUs to these HCPCS codes and to delete the clinical labor inputs from the PE database upon adoption of this policy. We encourage specialty societies and other professional groups to comment on this proposal.

4. Surgical Pathology Codes

We heard from the College of American Pathologists (CAP) regarding the equipment times assigned to CPT codes 88304 and 88305 in the basic surgical pathology family of codes. While all six codes in this family have been refined by the PEAC, this refinement occurred at 4 separate PEAC meetings. CPT codes 88304 and 88305 were refined at the first PEAC meeting in April 1999 before time standards were established for the equipment at subsequent PEAC meetings when the other four CPT codes 88300, 88302, 88307, and 88309 were reviewed. Using our proposed bottom-up PE methodology to value these codes, the lack of the equipment time standards for CPT codes 88304 and 88305 create a rank-order anomaly in this family. Consequently, CAP, after reviewing and applying current standards for the equipment times, submitted suggested revised equipment times to us. We are proposing to accept these times and the proposed times will be reflected in the PE database on our Web site (See the SUPPLEMENTARY INFORMATION section of this proposed notice for directions on accessing our Web site.)

5. Other PE Issues

In the CY 2006 PFS final rule with comment period (70 FR 70116), we explained that we were not implementing the PERC or other proposed PE changes for CY 2006 due to issues with the PE methodology. In this proposed rule, we are proposing that the PERC and other PE changes originally proposed for CY 2006 would be implemented and effective with the CY 2007 PFS. The following Start Printed Page 48988subsections, (a) through (j), summarize the PE proposals from the CY 2006 PFS final rule with comment period that we are including in this proposed rule. Additionally, we are including several other items which concern inputs for PE that are discussed below in subsections (k) through (n).

(a) PE Recommendations on CPEP Inputs for CY 2006

We are proposing to use a clinical labor time of 167 minutes for the service period for CPT code 36522, Extracorporeal Photopheresis; maintain the nonfacility setting PE RVUs for CPT code 78350, single photon bone densitometry; and remove the PE inputs for the nonfacility setting for CPT codes 76975, GI endoscopic ultrasound, and 15852, Dressing change not for burn. (70 FR 70136 through 70137)

(b) Supply Items for CPT Code 95015 (Which Is Used for Intradermal Allergy Tests With Drugs, Biologicals, or Venoms)

We are proposing to implement the allergy and immunology specialty's recommendation to change the test substance in CPT code 95015 to venom, at $10.70 (from single antigen, at $5.18) and the quantity to 0.3 ml (from 0.1 ml). (See 70 FR 70138.)

(c) Flow Cytometry Services

Based on information from the society representing independent laboratories, we are proposing to implement the following direct PE inputs:

  • Clinical Labor—We are proposing to change the staff type in the service (intra) period in both CPT codes 88184 and 88185 to cytotechnologist, at $0.45 per minute (currently lab technician, at $0.33 per minute).
  • Supplies—We are proposing to change the antibody cost for both CPT codes 88184 and 88185 to $8.50 (from $3.544).
  • Equipment—We are proposing to add the following equipment to CPT code 88184:

+ Computer.

+ Printer.

+ Slide strainer.

+ Biohazard hood.

+ Wash assistant.

+ FAC loader.

+ We are proposing to add a computer and printer to the equipment for CPT code 88185 (70 FR 70138).

(d) Low Osmolar Contrast Media (LOCM) and High Osmolar Contrast Media (HOCM)

Because separate payment is available for both types of contrast media, we are proposing to delete LOCM and HOCM from the PE database with the CY 2007 PFS rule. (See 70 FR 70138).

(e) Imaging Rooms

We are proposing to implement the updates for the contents and prices of 5 “rooms” used in imaging procedures including—

  • Basic radiology room;
  • Radiographic-fluoroscopic room;
  • Mammography room;
  • Computed tomography (CT) room; and
  • Magnetic resonance imaging (MRI) room (See 70 FR 70139).

(f) Equipment Pricing for Select Services and Procedures

We are proposing to accept the following equipment pricing information provided by various specialty societies for select services and procedures as discussed in the CY 2006 PFS final rule with comment period. (See 70 FR 70139):

  • Equipment pricing for certain radiology services received from the ACR as presented in Table 15 of the CY 2006 PFS proposed rule.
  • Equipment pricing on the ultrasound color doppler transducers and vaginal probe received from the American College of Obstetrics and Gynecology (ACOG).
  • For CPT 36522, extracorporeal photopheresis, equipment pricing information specific to this procedure.
  • Pricing of EMG botox machine used in CPT code 92265 as presented by the American Academy of Ophthalmology.

(g) Supply Item for In Situ Hybridization Codes (CPT Codes 88365, 88367, and 88368)

We are proposing to implement the Society for Clinical Pathologists’ request to change the probe quantity for CPT code 88367 In situ hybridization, auto to 1.5, equal to that of the other two codes in the family.

(h) Supply Item for Percutaneous Vertebroplasty Procedures (CPT codes 22520 and 22525)

Based on documentation provided by the Society for Interventional Radiology, we are proposing to implement a new price of $696.00 for the vertebroplasty kit, to replace a temporary price of $660.50 that was a placeholder price from the CY 2006 PFS final rule with comment period. (See 70 FR 70139.)

(i) Clinical Labor for G-Codes Related to Home Health and Hospice Physician Supervision, Certification and Recertification

We are proposing to apply the refinements made to the PE inputs to CPT codes 99375 and 99378 for home health and hospice supervision to 4 G-codes that are related to home health and hospice physician supervision, certification and recertification, G0179, GO180, GO181, and GO182. These G-codes are incorrectly valued for clinical labor. These G-codes are cross-walked from CPT codes 99375 and 99378, which underwent PEAC refinement in January 2003 for the CY 2004 PFS. However, at that time we inadvertently did not apply the new refinements to these specific G-codes. (See 70 FR 70139 through 70140.)

(j) Programmers for Implantable Neurostimulators and Intrathecal Drug Infusion Pumps

Although we had initially proposed, in the CY 2006 PFS proposed rule, to remove two programmers from the PE database (EQ208 for medication pump from two codes (CPT 62367 and 62368) and EQ209 for the neurostimulator from 8 codes (CPT 95970-97979)), based on comments received as discussed in the CY 2006 PFS final rule with comment period (see 70 FR 70140), we determined that we will retain these programmers in the database. In addition, we added “with printer” to the description of EQ208 based on comments received. We are proposing to implement these decisions for CY 2007.

(k) Cardiac Monitoring Services

We are requesting more specific PE information related to remote cardiac monitoring services because these services do not fit the direct PE model used for typical physician services. These services are overwhelmingly performed by specialized independent diagnostic testing facilities (IDTFs) that are paid under the PFS, but due to the characteristics of cardiac monitoring services, frequently maintain more extensive operating hours than the typical physician office. Specifically, we are looking for data to indicate the typical number and type of transmissions or other encounters per day between the beneficiary and the IDTF for each of the remote monitoring services. We would also like to know the number and type of clinical staff, as well as the corresponding time, that are necessary to ensure appropriate services are available for each patient. Additionally, we are interested in identifying any other direct PE inputs for typical supplies and equipment relating to these services, and any data that would reflect indirect PEs, such as overhead and non-clinical payroll expenses. We believe that the following codes represent atypical PE scenarios Start Printed Page 48989and would like to receive PE information regarding these services:

  • Cardiac event monitoring (CPT codes 93271, 93012 and 93270).
  • Pacemaker monitoring (CPT codes 93733 and 93736).
  • Holter monitoring (CPT codes 93232, 93226, 93231 and 93225).
  • INR monitoring (HCPCS codes G0248 and G0249).

(l) Clarification With Respect to Non-Facility PE RVUs

In the CY 2006 PFS final rule with comment (70 FR 70335) we provided a clarification in Addendum A concerning use of “NA” in the PE RVU columns for Addendum B. Commenters requested that further clarification be made concerning the payment amount for procedures performed in the non-facility setting if there is an “NA” in the non-facility PE RVU column. Our policy is that if the Medicare carrier pays for the service in the non-facility setting, the service will be paid at the facility PE RVU rate. In this proposed rule, we are proposing revisions to Addendum A to include this clarification.

(m) Supply for CPT Code 50384, Removal (via Snare/Capture) of Internally Dwelling Ureteral Stent Via Percutaneous Approach, Including Radiological Supervision and Interpretation

Upon review of the RUC-recommended direct PE inputs for CPT 50384, a new procedure for CPT 2006, we identified the inappropriate inclusion of a ureteral stent that we are proposing to delete for CY 2007. We believe that the addition of the ureteral stent, valued by the specialty at $162, to CPT code 50384, which is the procedure for the removal of a stent, was an inadvertent error by the specialty during the April 2005 RUC meeting.

(n) Supply and Equipment Items Needing Specialty Input

We have identified certain supply and equipment items for which we were unable to verify the pricing information (see Table 1: Supply Items Needing Specialty Input for Pricing and Table 2: Equipment Items Needing Specialty Input for Pricing). During the CY 2006 rulemaking process, we listed both supply and equipment items for which pricing documentation was needed from the medical specialty societies and, for many of these items, we received sufficient documentation in the form of catalog listings, vendor Web sites, invoices, and manufacturer quotes. We have accepted the documented prices for many of these items and these prices are reflected in the PE RVUs in Addendum B of this proposed rule. The items listed below in Tables 1 and 2 represent the outstanding items from CY 2006 and new items added from the current RUC recommendations. We are requesting that commenters provide pricing information on items in these tables along with acceptable documentation, as noted in the footnote to each table, to support recommended prices. For supplies or equipment that have previously appeared on this list, and for which we received no or inadequate documentation, we are proposing to delete these items unless we receive adequate information to support current pricing by the conclusion of the comment period for this proposed rule.

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B. Geographic Practice Cost Indices (GPCI)

[If you choose to comment on issues in this section, please include the caption “GPCI” at the beginning of your comments.]

Section 1848(e)(1)(A) of the Act requires us to develop separate GPCIs to measure resource cost differences among localities compared to the national average for each of the three fee schedule components. While requiring that the PE and malpractice GPCIs reflect the full relative cost differences, section 1848(e)(1)(A)(iii) of the Act requires that the physician work GPCIs reflect only one-quarter of the relative cost differences compared to the national average.

Section 1848(e)(1)(C) of the Act requires us, in consultation with appropriate physician representatives, to review the GPCIs at least every 3 years and allows us to make adjustments based on our review. This section of the Act also requires us to phase-in the adjustment over 2 years, implementing only one-half of any adjustment in the first year if more than 1 year has elapsed since the last GPCI revision. The GPCIs were first implemented in 1992. The first review and revision was implemented in 1995 and the last GPCI revision was implemented in 2005. The next update is scheduled to be implemented in January 2008.

We do not anticipate proposing significant changes to the GPCIs in response to changes in the source data. There have been no new Census data to affect the work GPCI, the PE GPCI will reflect any changes in the Department of Housing and Urban Development (HUD) rental data, and the malpractice GPCI (based on malpractice RVUs) will reflect the national claims-based premium data for 2004 and 2005. Details of the methodology, data sources, and adjustments to the GPCIs will be made available for public comment in the CY 2008 PFS proposed rule.

In addition, section 412 of the MMA amended section 1848(e)(1) of the Act to establish a floor of 1.0 for the work GPCI for any locality where the GPCI would otherwise fall below 1.0 for purposes of payment for services furnished on or after January 1, 2004 and before January 1, 2007. Beginning on January 1, 2007, the 1.00 floor will be removed and the work GPCI will revert to the fully implemented value. The values for the work GPCI and subsequent changes to the Geographic Adjustment Factor (GAF) published in this proposed rule reflect the removal of the 1.0 floor. For many payment localities this change had no impact on the GAF; however, the GAFs for a number of payment localities were reduced due to this change. The impact of this change on the GAFs for those payment localities is shown below in Table 3.

The proposed GPCIs for 2007 are shown in Addendum D and the proposed GAFs for 2007 are shown in Addendum E. The GPCIs shown in Addendum D are fully implemented and reflect 2007 budget neutrality scaling coefficients provided by the Office of the Actuary.

Table 3.—Payment Localities With Negative Percent Change in GAF 1 Between 2006 and 2007 Due to Removal of the 1.000 Work Floor

Locality name2006 GAF2007 GAFPercent change
Fort Worth, TX0.9980.996−0.17
Rest of Michigan0.9860.984−0.20
Rest of New York0.9520.950−0.21
Rest of Maryland0.9820.978−0.36
Metropolitan St. Louis, MO0.9780.974−0.41
Rest of Pennsylvania0.9500.946−0.44
Ohio0.9700.966−0.44
Austin, TX1.0201.015−0.47
New Hampshire1.0101.005−0.50
Minnesota0.9800.975−0.53
Galveston, TX0.9910.986−0.54
Metropolitan Kansas City, MO0.9870.981−0.56
Fort Lauderdale, FL1.0221.016−0.59
Arizona0.9990.993−0.65
Wisconsin0.9560.950−0.65
Colorado0.9980.991−0.67
East St. Louis, IL1.0030.996−0.68
New Orleans, LA0.9840.977−0.73
Rest of Washington0.9840.976−0.77
Indiana0.9370.930−0.79
Beaumont, TX0.9510.942−0.96
Alabama0.9230.914−0.99
Virginia0.9580.948−1.06
Southern Maine0.9920.981−1.09
Rest of Georgia0.9430.932−1.14
Tennessee0.9330.921−1.27
Utah0.9600.948−1.30
South Carolina0.9300.917−1.41
Rest of Illinois0.9520.938−1.43
Rest of Florida0.9820.968−1.45
West Virginia0.9420.928−1.47
North Carolina0.9510.936−1.55
New Mexico0.9470.932−1.57
Kansas*0.9340.919−1.60
Rest of Louisiana0.9360.919−1.78
Kentucky0.9320.915−1.80
Kansas*0.9360.919−1.81
Rest of Oregon0.9460.929−1.81
Start Printed Page 48994
Vermont0.9680.950−1.82
Virgin Islands1.0070.989−1.83
Rest of Texas0.9470.929−1.87
Idaho0.9220.904−1.91
Iowa0.9270.909−1.97
Rest of Maine0.9360.916−2.14
Oklahoma0.9130.893−2.14
Mississippi0.9190.898−2.31
Arkansas0.9050.884−2.34
Puerto Rico0.9050.883−2.44
Nebraska0.9250.902−2.44
Wyoming0.9340.910−2.55
Montana0.9280.902−2.83
Rest of Missouri *0.9100.883−2.97
North Dakota0.9240.895−3.16
South Dakota0.9220.891−3.35
1 Calculation for the GAF: (.52466*work gpci) + (.03865*mp gpci) + (.52466*pe gpci).

In the CY 2005 PFS proposed rule, published August 15, 2004, we discussed the issue of changes to the GPCI payment localities (69 FR 47504). In that proposed rule, we noted that we look for the support of a State medical society as the impetus for changes to existing payment localities. Because the GPCIs for each locality are calculated using the average of the county-specific data from all of the counties in the locality, removing high cost counties from a locality will result in lower GPCIs for the remaining counties. Therefore, because of this redistributive impact, we have refrained, in the past, from making changes to payment localities unless the State medical association provides evidence that any proposed change has statewide support.

We would be interested in receiving suggestions on alternative ways that we could administratively reconfigure payment localities that could be developed and proposed in future rulemaking. In addition, MEDPAC and the GAO have both expressed interest in studying the physician payment localities. CMS intends to work with both groups to study our current methodology and develop alternative options.

C. Medicare Telehealth Services

[If you choose to comment on issues in this section, please include the caption “TELEHEALTH” at the beginning of your comments.]

1. Requests for Adding Services to the List of Medicare Telehealth Services

Section 1834(m)(4)(F) of the Act defines telehealth services as professional consultations, office visits, and office psychiatry services (identified as of July 1, 2000 by CPT codes 99241 through 99275, 99201 through 99215, 90804 through 90809, and 90862) and any additional service specified by the Secretary. In addition, the statute requires us to establish a process for adding services to or deleting services from the list of telehealth services on an annual basis.

In the December 31, 2002 Federal Register (67 FR 79988), we established a process for adding services to or deleting services from the list of Medicare telehealth services. This process provides the public an ongoing opportunity to submit requests for adding services. We assign any request to make additions to the list of Medicare telehealth services to one of the following categories:

  • Category #1: Services that are similar to office and other outpatient visits, consultation, and office psychiatry services. In reviewing these requests, we look for similarities between the proposed and existing telehealth services for the roles of, and interactions among, the beneficiary, the physician (or other practitioner) at the distant site and, if necessary, the telepresenter. We also look for similarities in the telecommunications system used to deliver the proposed service, for example, the use of interactive audio and video equipment.
  • Category #2: Services that are not similar to the current list of telehealth services. Our review of these requests includes an assessment of whether the use of a telecommunications system to deliver the service produces similar diagnostic findings or therapeutic interventions as compared with the faceπtoπface “hands on” delivery of the same service. Requestors should submit evidence showing that the use of a telecommunications system does not affect the diagnosis or treatment plan as compared to a faceπtoπface delivery of the requested service.

Since establishing the process, we have added the following to the list of Medicare telehealth services: psychiatric diagnostic interview examination; ESRD services with two to three visits per month and four or more visits per month (although we require at least one visit a month by a physician, CNS, NP, or PA to examine the vascular access site); and individual medical nutritional therapy.

Requests to add services to the list of Medicare telehealth services must be submitted and received no later than December 31 of each CY to be considered for the next proposed rule. For example, requests submitted before the end of CY 2005 are considered for the CY 2007 proposed rule. For more information on submitting a request for an addition to the list of Medicare telehealth services, visit our Web site at www.cms.hhs.gov/​telehealth.

2. Submitted Requests for Addition to the List of Telehealth Services

We received the following requests for additional approved services in CY 2005: (1) Nursing facility care; (2) speech language pathology; (3) audiology; and (4) physical therapy services. The following is a discussion of the requests submitted in CY 2005.

Nursing Facility Care

The American Telemedicine Association (ATA) and an individual practitioner submitted a request to add the following services: Initial nursing facility care (as represented by HCPCS Start Printed Page 48995codes 99304 through 99306); subsequent nursing facility care (HCPCS codes 99307 through 99310); nursing facility discharge services (HCPCS codes 99315 and 99316); and other nursing facility services as described by HCPCS code 99318. The requestors explained that the primary purpose of using telehealth in the Skilled Nursing Facility (SNF) setting is to provide urgent consultation when the patient has a sudden change in his or her condition, and to provide increased availability to primary and specialty care on days when the physician is not present in the SNF or when traveling is a hardship. The requestors believe that the current list of Medicare telehealth services is not appropriate because the list does not include codes that are specifically intended for nursing facility residents.

CMS Review

Nursing Facility Care

Section 1834(m)(C)(ii) of the Act defines a telehealth originating site as a physician's or practitioner's office; or a hospital, critical access hospital (CAH), rural health clinic, or FQHC. SNFs are not defined in the statute as originating sites.

However, section 418 of the MMA required the Health Resources Services Administration (HRSA), a component of HHS, in consultation with CMS, to conduct an evaluation of demonstration projects under which SNFs, as defined in section 1819(a) of the Act, are treated as originating sites for Medicare telehealth services. The MMA also required the Secretary to submit a report to the Congress that includes recommendations on “mechanisms to ensure that permitting a SNF to serve as an originating site for the use of telehealth services or any other service delivered via a telecommunications system does not serve as a substitute for in-person visits furnished by a physician, or for in-person visits furnished by a physician assistant (PA), nurse practitioner (NP), or clinical nurse specialist (CNS), as is otherwise required by the Secretary” and provides the authority to include SNFs as a Medicare telehealth originating site, if the Secretary concludes in the report that it is advisable to do so and that mechanisms could be established to ensure that the use of a telecommunications system does not serve as a substitute for the required in-person physician or practitioner SNF visits. This report is currently under review in DHHS.

Given that SNFs are not defined in the statute as a telehealth originating site and the report to the Congress, as discussed above, is currently being reviewed within DHHS, we cannot consider approving nursing facility care for telehealth at this time. We will review and consider the recommendations of the report to the Congress once it is issued. If it is determined that SNFs should be added as an originating site, this change will be considered in future rulemaking.

Speech Language Pathology, Audiology and Physical Therapy

The ATA and an individual practitioner submitted a request to add various speech therapy, audiology and physical therapy services to the list of Medicare telehealth services. The requestors also asked us to add physical therapists, speech language pathologists and audiologists to the list of approved telehealth practitioners.

CMS Review

Physical therapists, speech language pathologists and audiologists are not permitted under current law to provide and receive payment for Medicare telehealth services at the distant site. The statute permits only a physician, as defined by section 1861(r) of the Act or a practitioner as described in section 1842(b)(18)(C) of the Act (CNS, NP, PA, nurse midwife, clinical psychologist, clinical social worker, registered dietitian or other nutrition professional), to furnish Medicare telehealth services. Since speech language pathologists, audiologists and physical therapists are not permitted under current law to provide and receive payment for Medicare telehealth services at the distant site, we cannot fully consider the request to add speech therapy, audiology services and physical therapy to the list of Medicare telehealth services. We are exploring this issue as part of a report to the Congress (required by section 223(d) of BIPA) on additional sites and settings, geographic areas, and types of non-physician practitioners that could be reimbursed for the provision of telehealth services.

D. Miscellaneous Coding Issues

[If you choose to comment on issues in this section, please include the caption “Miscellaneous Coding Issues” at the beginning of your comments.]

The following sections address specific coding issues related to payment for services under the PFS.

1. Global Period for Remote Afterloading High Intensity Brachytherapy Procedures

CPT Code 77783, Remote afterloading high intensity brachytherapy; 9-12 source positions or catheters, resides in a family of codes with varying numbers of source positions. All of the codes in the family, CPT codes 77781-77784 are currently designated as 90-day global services. CPT codes 77781-77784 are used to treat many clinical conditions, but primarily patients with prostate cancer, breast cancer and sarcoma. Patients with any of these conditions usually receive several treatments (2-10) over a two to ten day period of time. Due to the increasing variability in treatment regimens, it is difficult to assign RVUs for a “typical” patient based on a global period of 90 days.

Therefore, we are proposing that this family of codes (CPT codes 77781, 77782, 77783 and 77784) be assigned a global period of “XXX”, which will permit separate payment each time the services are provided and allow payment to be based on the actual service(s) provided. We will request that the RUC revalue the work RVUs and the PE inputs for these services if a change in the global period is finalized. However we are proposing, on an interim basis, to revise the work RVUs and PE inputs to reflect the removal of the postoperative visit, CPT code 99212, that is currently assigned to these services. The proposed interim work RVUs for these services would be as follows:

  • 77781 = 1.21
  • 77782 = 2.04
  • 77783 = 3.27
  • 77784 = 5.15

We are also proposing to delete the registered nurse (RN) time in the post-service period as well as the patient gowns for the post-service visit. We would also note that, to the extent that these services are performed as staged procedures, providers may make use of applicable modifiers.

2. Assignment of RVUs to CPT Codes for Proton Beam Treatment Delivery Services

We have received a request to assign PE inputs for the non-facility setting to Proton Beam treatment delivery services represented by CPT codes 77520 through 77525.

These services are currently carrier-priced; therefore, payment in the facility or non-facility setting is established by each carrier. To the extent that physicians and suppliers wish to have national RVUs assigned for these services, there is an established process utilizing the AMA-RUC to recommend work RVUs, as well as the direct PE inputs used to compute the PE RVUs, to CMS. We would strongly encourage the physicians and suppliers to use this established process, and would also be Start Printed Page 48996interested in receiving comments on this issue.

E. Deficit Reduction Act (DRA) Related Proposals

[If you choose to comment on issues in this section, please include the caption “DRA PROPOSALS” at the beginning of your comments.]

The DRA of 2005 (Pub. L. 109-171), was enacted February 8, 2006 and included provisions that affect the Medicare program. The following section addresses the specific DRA provisions that are being addressed in this proposed rule.

1. Section 5102—Proposed Adjustments for Payments to Imaging Services

Section 5102 of the DRA includes two provisions that affect payment of imaging services under the Medicare physician fee schedule. The first provision addresses payment for certain multiple imaging procedures for CY 2007 and application of budget neutrality while the second provision addresses limiting the payment amount under PFS to the outpatient department (OPD) payment amount for the technical component (TC) of certain imaging services.

(a) Payment for Multiple Imaging Procedures for 2007

In general, Medicare prices diagnostic imaging procedures in the following three ways:

  • The professional component (PC) represents the physician's interpretation (PC-only services are billed with the 26 modifier).
  • The TC represents PE and includes clinical staff, supplies, and equipment (TC-only services are billed with the TC modifier).
  • The global service represents both PC and TC.

As discussed in the CY 2006 PFS final rule with comment period (70 FR 70261), in the CY 2006 PFS proposed rule (70 FR 45764 through 46064), we had proposed to reduce payment for the TC of selected diagnostic imaging procedures belonging to one of eleven imaging families when the procedures are performed on contiguous body areas by 50 percent for CY 2006. However, in the final rule with comment period, we stated that we would phase-in the 50 percent reduction over two years, beginning with a 25 percent reduction in 2006. We also sought additional data and comments on the appropriateness of 50 percent as the final level of reduction. The reduction applies to the TC and the technical portion of the global service, but does not apply to the PC of the service. Currently, we make full payment for the highest priced procedure and reduce payment for each additional procedure by 25 percent, when more than one procedure from the same imaging family is performed during the same session on the same day.

As described in the CY 2006 PFS final rule with comment period, at the time, the statute required us to make changes such as this in a budget neutral manner, meaning that the estimated savings generated by the application of the multiple imaging procedure payment reduction were used to increase payment for other physician fee schedule services. We increased the CY 2006 PE RVUs by 0.3 percent to offset the estimated savings generated by the multiple imaging payment reduction policy.

Subsequent to the publication of the CY 2006 PFS final rule with comment period, section 5102(a) of the DRA (Multiple Procedure Payment Reduction for Imaging Exempted From Budget Neutrality), required that “effective for fee schedules established beginning with 2007, reduced expenditures attributable to the multiple procedure payment reduction for imaging under the final rule published by the Secretary in the Federal Register on November 21, 2005 (42 CFR 405, et al.) insofar as it relates to the physician fee schedules for 2006 and 2007” are exempted from the budget neutrality provision. As a result, we are proposing to remove the 0.3 percent increase to the CY 2006 PE RVUs from the CY 2007 PE RVUs in accordance with the statute.

In addition, in response to our request for data on the appropriateness of the 50 percent reduction in the CY 2006 PFS final rule with comment period (70 FR 70261), the ACR provided information for 25 code combinations supporting a reduction of between 21 and 44 percent. Given the expected interaction between the multiple procedure imaging policy and the further imaging payment reductions mandated by section 5102(b) of the DRA described below, along with the new information we have received from the ACR on the multiple imaging procedure policy as it applies to common combinations of imaging services, we believe it would be prudent to maintain the multiple imaging payment reduction at its current 25 percent level while we continue to examine the appropriate payment levels. Therefore, we are proposing to continue the multiple imaging payment reduction for 2007 at the 25 percent level. We would proceed through future rulemaking in the event we determine that revisions to the policy are warranted.

(b) Reduction in TC for Imaging Services Under the PFS to OPD Payment Amount

Section 5102(b)(1) of the DRA amended section 1848 of the Act and requires that, with respect to imaging services, if—

“(i) The technical component (including the technical component 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 for hospital outpatient department services * * * for such service for such year, determined without regard to geographic adjustment * * *, 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 technical component for such year.”

As required by the statute, for imaging services (described below) furnished on or after January 1, 2007, we will cap the PFS payment amount for the year (prior to geographic adjustment) by the CY 2007 outpatient prospective payment system (OPPS) payment amount (prior to geographic adjustment). We will then apply the PFS geographic adjustment to the capped payment amount.

Section 5102(b)(2) of the DRA exempts the estimated savings from this provision from the PFS budget neutrality requirement. Section 5102(b)(1) of the DRA defines imaging services as “* * * imaging and computer-assisted imaging services, including X-ray, ultrasound (including echocardiography), nuclear medicine (including positron emission tomography), magnetic resonance imaging, computed tomography, and fluoroscopy, but excluding diagnostic and screening mammography.”

In order to apply section 5102(b) of the DRA, we needed to determine the CPT and alpha-numeric HCPCS codes that fall within the scope of “imaging services” defined by the DRA provision. In general, we believe that imaging services provide visual information regarding areas of the body that are not normally visible, thereby assisting in the diagnosis or treatment of illness or injury. We began by considering the CPT 7XXXX series codes for radiology services and then adding in other CPT codes and alpha-numeric HCPCS codes that describe imaging services. We then excluded nuclear medicine services that were either non-imaging diagnostic or treatment services. We also excluded all Start Printed Page 48997codes for unlisted procedures, since we would not know in advance of any specific clinical scenario whether or not the unlisted procedure was an imaging service. We excluded all mammography services, consistent with the statute. We excluded radiation oncology services that were not imaging or computer-assisted imaging services. We also excluded all HCPCS codes for imaging services that are not separately paid under the OPPS since there would be no corresponding OPPS payment to serve as a TC cap. We excluded any service where the CPT code describes a procedure for which fluoroscopy, ultrasound, or another imaging modality is either included in the code whether or not it is used or is employed peripherally in the performance of the main procedure, for example, 31622 for bronchoscopy with or without fluoroscopic guidance and 43242 for upper gastrointestinal endoscopy with transendoscopic ultrasound-guided intramural or transmural fine needle aspiration/biopsy(s). In these cases, we are unable to clearly distinguish imaging from non-imaging services because, for example, a specific procedure may or may not utilize an imaging modality, or the use of an imaging technology cannot be segregated from the performance of the main procedure. Note that we included carrier priced services since these services are within the statutory definition of imaging services and are also within the statutory definition of PFS services (that is, carrier-priced TCs of PET scans).

Our proposed list of codes that identify imaging services defined by the DRA OPPS cap provision can be found in Addendum F to this proposed rule. Note that this is the list of imaging services for which we propose to make the comparison between the PFS TC payment amount and the OPPS payment amount used to establish OPD payment. Payment for an individual service on this list would only be capped if the PFS TC payment amount exceeds the OPPS payment amount.

To the extent changes are made to codes for services already on the list, we propose to update the list through program instructions to our contractors. To the extent that the same imaging service is coded differently under the PFS and the OPPS, we propose to crosswalk the code under the PFS to the appropriate code under the OPPS that could be reported for the same service provided in the hospital outpatient setting. Our proposed list of crosswalks is below:

MFS codeDescriptorOPPS codeDesc
74185Mri angio, abdom w or w/o dyeC8900MRA w/cont, abd.
76093Magnetic image, breastC8905MRI w/o fol w/cont, brst, un.
76094Magnetic image, both breastsC8908MRI w/o fol w/cont, breast.
71555Mri angio chest w or w/o dyeC8909MRA w/cont, chest.
73725Mr ang lwr ext w or w/o dyeC8912MRA w/cont, lwr ext.
72198Mr angio pelvis w/o & w/dyeC8918MRA w/cont, pelvis.

(c) Interaction of the Multiple Imaging Payment Reduction and the OPPS Cap

For CY 2007 imaging services potentially subject to both the multiple imaging reduction and the OPPS cap, we propose to first apply the multiple imaging payment reduction and then apply the OPPS cap to the reduced amount as illustrated in the following example.

HCPCSPre-OPPS cap MPFS rate25% Multiple imaging reductionOPPS cap rateFinal MPFS payment
7XXX1$341.89$256.42$316.55$256.42
7XXX2552.86414.65391.83391.83

We considered first applying the OPPS cap and then applying the multiple procedure reduction. However, as indicated in the CY 2006 OPPS final rule, we received public comments suggesting that the OPPS payment rates may implicitly include at least some multiple imaging discount. While we continue to examine this issue, we believe the most appropriate policy is to apply the multiple imaging payment reduction prior to the application of the OPPS cap.

2. Section 5107—Revisions to Payments for Therapy Services

Section 1833(g) of the Act applies an annual per beneficiary combined cap beginning January 1, 1999, on outpatient physical therapy and speech-language pathology services and a similar separate cap on outpatient occupational therapy services. These caps apply to expenses incurred for the respective therapy services under Medicare Part B, with the exception of outpatient hospital services. The caps were in effect from January 1, through December 31, 1999, from September 1, 2003 through December 7, 2003, and beginning January 1, 2006. In 2000 through 2002, and from December 8, 2003 through December 31, 2005, the Congress placed moratoria on implementation of the caps. Section 1833(g)(2) of the Act provides that, for 1999 through 2001, the caps were $1500, and for years after 2001, the caps are equal to the preceding year's cap increased by the percentage increase in the Medicare Economic Index (MEI) (except that if an increase for a year is not a multiple of $10, it is rounded to the nearest multiple of $10).

We implemented the separate statutory limits of $1740 for outpatient physical therapy and speech-language pathology services and $1740 for occupational therapy on January 1, 2006. The DRA of 2005 was enacted on February 8, 2006. Section 5107(a) of the DRA required the Secretary to develop an exceptions process for the therapy caps effective January 1, 2006. The exceptions process applies only to expenses incurred in 2006. Details of the exceptions process were published in a manual change on February 13, 2006 (CR4364). The change request Start Printed Page 48998consists of three transmittals with current numbers of—

  • Transmittal 855, CR 4364, Pub. L. 100-04;
  • Transmittal 47, CR 4365, Pub. L. 100-02; and
  • Transmittal 140, CR 4364, Pub. L. 100-08.

The transmittals are available on our Web site at http://www.cms.hhs.gov/​Transmittals/​.

In accordance with the statute, the therapy caps will remain in effect, but without the exceptions process, with respect to expenses incurred beginning on January 1, 2007. The dollar amount of the therapy caps in 2007 will be the 2006 rate ($1740) increased by the percentage increase in the MEI. As noted above, under current law, the exceptions process will not apply to therapy services incurred after December 31, 2006, but the therapy caps will remain inapplicable to therapy services provided in the outpatient hospital setting as provided in section 1833(g) of the Act.

Section 5107(b) of the DRA requires the Secretary to implement, by July 1, 2006, edits for clinically illogical combinations of procedure codes and other edits in order to limit inappropriate payment for therapy services. In January 2006, we implemented Correct Coding Initiative (CCI) edits for the therapy providers that bill to the fiscal intermediaries, thus, addressing the section 5107 of the DRA requirement with respect to edits for clinically illogical combinations of procedure codes. Adoption of these code edits ensures that these providers of outpatient Part B therapy services, including SNFs, comprehensive outpatient rehabilitation facilities, certain outpatient physical therapy and speech-language therapy providers (rehabilitation agencies) and home health agencies (HHAs) (where beneficiary is not under a Part A plan of care) meet the same CCI edit requirements as those that have been in place for physicians, private practice therapists, and OPPS hospitals. We are considering the implementation of other edits in the future to further address concerns about inappropriate payment for therapy services.

3. Section 5112-Proposed Addition of Ultrasound Screening for Abdominal Aortic Aneurysm (AAA)

Section 5112 of the DRA of 2005 amended section 1861 of the Act to provide for coverage under Part B of ultrasound screening for AAAs, effective for services furnished on or after January 1, 2007, subject to certain eligibility and other limitations. This screening test will be available even if the qualifying patient does not present signs or symptoms of disease or illness.

To conform the regulations to the statutory requirements of section 5112 of the DRA, we are proposing to include an exception in § 411.15(a)(1) to permit coverage for ultrasound screening for AAAs that meet the conditions for coverage that we are proposing to specify under new § 410.19(b) (Conditions for coverage of an ultrasound screening for abdominal aortic aneurysms). We are also adding a new § 411.15(k)(12).

As provided in the DRA, this new coverage allows payment for a one-time only screening examination. We are proposing to add new § 410.19(b) to provide for the coverage of the screening examinations for AAAs as specified in section 5112 of the DRA. We are also proposing to add new § 410.19(c) (Limitation on coverage of ultrasound screening for abdominal aortic aneurysms.) to provide the limitation on coverage for an individual who is not an eligible beneficiary as defined in proposed new § 410.19(a).

We are proposing definitions set forth in new § 410.19(a) of this proposed rule that would be included to implement the statutory provisions and to help the reader in understanding the provisions of this regulation. The proposed definitions include the following terms:

  • Eligible beneficiary.
  • Ultrasound screening for abdominal aortic aneurysms.

Specifically, section 5112(a)(1) of the DRA amended section 1861 of the Act to provide that coverage of ultrasound screening for AAAs will be available for an individual—(i) who receives a referral for such an ultrasound screening as a result of an initial preventive physical examination (as defined in section 1861(ww)(1) of the Act); (ii) who has not been previously furnished such an ultrasound screening under this title; and (iii) who has a family history of AAA or manifests risk factors included in a beneficiary category recommended for screening by the United States Preventive Services Task Force regarding AAAs.

Section 5112(a)(2) of the DRA also adds a definition of the term “ultrasound screening for an Abdominal Aortic Aneurysm” to mean, “(1) a procedure using sound waves (or other procedures using alternative technologies, of commensurate accuracy and cost, that the Secretary may specify) provided for the early detection of abdominal aortic aneurysm; and (2) includes a physician's interpretation of the results of the procedure.”

In developing the proposed rule based on this provision, we reviewed the 2005 United States Preventive Services Task Force (USPSTF) recommendations and related material on ultrasound screening for AAAs. This includes—

  • A recommendation for a one-time ultrasound screening for men aged 65 to 75 who have smoked at least 100 cigarettes in their lifetime;
  • No recommendation for or against ultrasound screening for AAAs for men who have not smoked at least 100 cigarettes in their lifetime; and
  • A recommendation against routine screening for AAAs in women.

Based on the statutory language and the USPSTF recommendations outlined above, we are proposing to define the term “eligible beneficiary” for coverage of ultrasound screening examinations for AAA to mean an individual who—

  • Has received a referral for an ultrasound screening as a result of an initial preventive physical examination (as defined in section 1861(ww)(1) of the Act);
  • Has not been previously furnished such a covered ultrasound screening examination under the Medicare program; and
  • Is included in at least one of the following risk categories:

+ Has a family history of an AAA; or

+ Is a man age 65 to 75 years who smoked at least 100 cigarettes in his lifetime; or

+ Is an individual who manifests other risk factors that are described in a benefit category recommended by the USPSTF regarding an AAA that has been determined by the Secretary through the NCD process.

To facilitate our consideration of possible expansions of coverage in the future for identifying (1) other risk factors in a benefit category recommended for screening for the early detection of AAAs by the USPSTF, and (2) alternative screening technologies to ultrasound screening for AAAs of commensurate accuracy and cost, we are proposing to add language to our regulations that would allow us to make determinations through the NCD process. The NCD process would allow the Secretary to expand coverage more quickly following an assessment of those subjects than is possible under the standard rulemaking process. We intend to use the NCD process, which includes an opportunity for public comments, for evaluating the medical and scientific issues relating to the coverage of alternative screening technologies and the identification of other risk factors for AAAs recommended by the USPSTF that may be brought to our attention in the future. Use of an NCD to establish Start Printed Page 48999a change in the scope of benefits is authorized by section 1871(a)(2) of the Act. An aggrieved party can challenge an NCD under the procedures established by section 1869(f) of the Act. These proposed coverage provisions would be set forth in proposed new § 410.19 (a)(1)(i) and § 410.19(a)(2)(iii)(C).

Section 5112(b) of DRA also amended section 1861(ww)(2) of the Act (the initial preventive physical examination benefit) by adding the new ultrasound screening benefit to the list of preventive services for which physicians and other qualified nonphysician practitioners must provide “education, counseling and referral” to new beneficiaries who take advantage of the initial preventive physical examination benefit within the first 6 months after the effective date of their first Part B coverage period. Therefore, we are also proposing to amend § 410.16(a)(7) of the regulations so that it reflects the additional responsibilities that physicians and qualified nonphysician practitioners will have under the initial preventive physical examination benefit with respect to the new ultrasound screening benefit.

Beginning January 1, 2007, we are proposing to pay for ultrasound screening for AAAs through the use of a new HCPCS code GXXX1, Ultrasound, B-scan and/or real time with image documentation; for abdominal aortic aneurysm (AAA) screening. We are proposing that payment for this service be made at the same level as CPT code 76775 Ultrasound, retroperitoneal (e.g., renal, aorta, nodes), B-scan and/or real time with image documentation; limited. CPT code 76775 is used to bill for the service when it is provided as a diagnostic test, and we believe the service associated with the proposed HCPCS code reflects equivalent resources and work intensity to those contained in CPT code 76775.

In addition, since the DRA provides that the Medicare Part B deductible will not apply with respect to ultrasound screening for abdominal aortic aneurysm (as defined in section 1861(bbb) of the Act), we are proposing to revise § 410.160 to include an exception from the Medicare Part B deductible for the ultrasound screening for abdominal aortic aneurysm as described in proposed § 410.19. (Conditions for coverage of an ultrasound screening for abdominal aortic aneurysms.)

4. Section 5113—Proposed Non-Application of the Part B Deductible for Colorectal Cancer Screening Tests

Current Medicare policy requires that, with limited exceptions, incurred expenses for covered part B services are subject to, and count toward meeting the Part B annual deductible. Section 5113 of the DRA amended section 1833(b) of the Act to provide for an exception to the application of the Part B deductible with respect to colorectal cancer screening tests. Beginning January 1, 2007, colorectal cancer screening services, as described in section 1861(pp)(1) of the Act, are no longer subject to the Part B deductible. The conditions for and limitations on coverage for colorectal cancer screening tests under Medicare part B are described in § 410.37.

To conform our regulations to this statutory change, we are proposing to revise § 410.160 to include an exception from the Part B annual deductible for the colorectal cancer screening services described in § 410.37.

5. Section 5114—Proposed Addition of Diabetes Outpatient Self-Management Training Services (DSMT) and Medical Nutrition Therapy (MNT) for the FQHC Program

Section 5114 of the DRA amended section 1861(aa)(3) of the Act to add DSMT and MNT services to the list of Medicare covered and reimbursed services under the Medicare FQHC benefit, effective for services provided on or after January 1, 2006. Although this statutory change has already been implemented in administrative instructions, we are proposing to conform the regulations to the new statutory requirement.

FQHCs certified as DSMT and MNT providers have been allowed to bundle the cost of those services into their FQHC payment rates. But before the enactment of the DRA, the provision of these services would not generate a separate FQHC visit payment. Effective for services furnished on or after January 1, 2006, FQHCs that are certified providers of DSMT and MNT services can receive per visit payments for covered services furnished by registered dietitians or nutrition professionals. In other words, if all relevant program requirements are met, these services are included under the Medicare FQHC benefit as billable visits.

In order to conform the regulations, we are proposing to amend § 405.2446(b) to expand the scope of FQHC services to include certified providers of DSMT and MNT services by adding a new paragraph (10). We are also proposing to revise § 405.2463 by—

  • Revising paragraph (a) to expand the definition of an FQHC visit to include certified providers of DSMT and MNT services under new sub-paragraph (a)(1)(ii)(B). We would also revise the definition of an RHC visit in new subparagraph (a)(1)(i) to include a face-to-face encounter between a patient and a clinical psychologist or clinical social worker to conform to statutory language at section 1861(aa)(1)(B) of the Act. We are also proposing to redesignate and revise paragraphs (b) and (c) as new paragraphs (a)(2) and (a)(3), respectively.
  • We are proposing to incorporate paragraph (a)(2) into (a)(1), and to redesignate and revise current paragraph (a)(3) as new paragraph (b). We would also clarify that it is generally permissible for both FQHCs and Rural Health Clinics to furnish, when necessary, most types of medical and other health visits on the same day to the same patient. We are also proposing to amend this paragraph to permit a separate additional FQHC visit for DSMT and MNT services (which may occur on the same date of service when the beneficiary receives care from their FQHC physician or non-physician practitioner) when reasonable and necessary, consistent with the Congressional mandate under section 5114 of the DRA to provide coverage and adequate access to these services in the FQHC setting.
  • We are proposing to redesignate and revise current paragraph (a)(4) as new paragraph (c).

F. Proposed Payment for Covered Outpatient Drugs and Biologicals (ASP Issues)

[If you choose to comment on issues in this section, please include the caption “ASP Issues” at the beginning of your comments.]

Medicare Part B covers a limited number of prescription drugs and biologicals. For the purposes of this proposed rule, the term “drugs” will hereafter refer to both drugs and biologicals. Medicare Part B covered drugs not paid on a cost or prospective payment basis generally fall into the following three categories:

  • Drugs furnished incident to a physician's service.
  • DME drugs.
  • Drugs specifically covered by statute (certain immunosuppressive drugs, for example).

Beginning in CY 2005, the vast majority of Medicare Part B drugs not paid on a cost or prospective payment basis are paid under the ASP Start Printed Page 49000methodology. The ASP methodology is based on data submitted to us quarterly by manufacturers. In addition to the payment for the drug, Medicare currently pays a furnishing fee for blood clotting factors, a dispensing fee for inhalation drugs, and a supplying fee to pharmacies for certain Part B drugs.

In January 2006, the drug coverage available to Medicare beneficiaries expanded with the implementation of Medicare Part D. The Medicare Part D program does not change Medicare Part B drug coverage.

This section of the preamble discusses proposed changes and issues related to the determination of the payment amounts for covered Part B drugs and furnishing blood clotting factor. This section also discusses proposed changes to how manufacturers calculate and report ASP data to us.

1. ASP Issues

Section 303(c) of the MMA amended Title XVIII of the Act by adding new section 1847A. This new section revised the payment methodology for the vast majority of drugs and biologicals not paid on a cost or prospective payment basis furnished on or after January 1, 2005. The ASP reporting requirements are set forth in section 1927(b) of the Act. Manufacturers must submit ASP data for each 11-digit National Drug Code (NDC) to us quarterly. The manufacturers' submissions are due to us not later than 30 days after the last day of each calendar quarter. The methodology for developing Medicare drug payment allowances based on the manufacturers' submitted ASP data is specified in the regulations in part 414, subpart K. We update the Part B drug payment amounts quarterly based on the data we receive.

In this section of the preamble, we discuss our intent to issue a final rule to implement the provisions in the MMA related to the calculation and submission of manufacturers’ ASP data, and seek further comments on specific issues related to price concessions and certain fees.

On April 6, 2004, we published the Manufacturer's Submission of Average Sales Price Data for Medicare Part B Drugs and Biologicals (ASP) interim final rule with comment period (IFC) (69 FR 17935) to implement the ASP calculation and reporting requirements. Manufacturers were required to submit their initial quarterly ASP data to us shortly thereafter, beginning April 30, 2004. We received comments from drug manufacturers, pharmacies, physicians, national associations of the pharmaceutical industry, national associations of physicians, and consultants. These comments addressed a variety of aspects of calculating and reporting ASPs. On September 16, 2004, we published the Manufacturer's Submission of Average Sales Price Data for Medicare Part B Drugs and Biologicals (ASP) final rule (69 FR 55763) addressing only the comments pertaining to the methodology for estimating lagged price concessions. We have also addressed ASP calculation and reporting requirements in other proposed and final rules and information collection notices, including rulemaking to implement the Competitive Acquisition Program for Part B Drugs and Biologicals (CAP). (See 70 FR 39069, 70 FR 45842, 70 FR 70215, and 70 FR 70477.) In addition, we posted official agency guidance, including responses to frequently asked questions, on our Web site to implement the ASP provisions in accordance with section 1847A(c)(5)(C) of the Act.

We intend to publish a final rule addressing comments on the April 6, 2004 IFC in the near future. We may publish the final rule as part of this rulemaking, or we may publish a separate final rule, in either case after the close of the comment period for this proposed rule. Because the comments received during the comment period in response to the April 6, 2004 IFC were made during the initial months of manufacturers’ experience with calculating and reporting ASPs and prior to publication of payment amounts based on the ASP methodology, we believe there is good reason to provide the public with the opportunity for additional comments based on what is now more than a year and a half of experience with the ASP reporting requirements. Therefore, we seek comments on the ASP reporting provisions in the April 6, 2004 IFC. In particular, we seek comments on the issues discussed in the sections below.

We note that we received many comments in response to the April 6, 2004 interim final rule on the use and potential impacts of the ASP payment methodology. As noted above, we are reopening the comment period on the issue of ASP reporting. Thus, comments about the use or appropriateness of the ASP payment methodology are outside the scope of this rulemaking and the ASP reporting rule (CMS-1380-IFC). Therefore, comments about the appropriateness and use of 106 percent of ASP as the basis for the Medicare Part B drug payment rates will be outside the scope of the comments considered for the final ASP reporting rule we are preparing to publish.

a. Fees Not Considered Price Concessions

Section 1847A(c)(5)(A) of the Act states that the ASP is to be calculated by the manufacturer on a quarterly basis. As a part of that calculation, manufacturers are to take into account price concessions such as—

  • Volume discounts;
  • Prompt pay discounts;
  • Cash discounts;
  • Free goods that are contingent on any purchase requirement;
  • Chargebacks; and
  • Rebates (other than rebates under the Medicaid drug rebate programs).

If the data on these price concessions are lagged, then the manufacturer is required to estimate costs attributable to these price concessions using the required ratio methodology as specified in 42 CFR part 414, subpart J, § 414.804(a)(3).

Among the comments from drug manufacturers and national associations representing wholesalers and distributors, we received requests for clarification and detailed guidance on the treatment of administrative fees, service fees and fees paid to pharmacy benefit managers (PBMs) in the ASP calculation. We posted guidance on our Web site (http://questions.cms.hhs.gov/​cgi-bin/​cmshhs.cfg/​php/​enduser/​std_​adp.php?​p_​faqid=​3323&​p_​created=​1095344721&​p_​sid=​Ghuscgci&​p_​accessibility=​0&​p_​lva=​&​p_​sp=​cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9MzEmcF9wcm9kcz04LDU2LDYwNCZwX2NhdHM9JnBfcHY9My42MDQmcF9jdj0mcF9zZWFyY2hfdHlwZT1hbnN3ZXJzLnNlYXJjaF9ubCZwX3BhZ2U9MQ**&​p_​li=​&​p_​topview=​1) to clarify that in the absence of specific guidance in the Social Security Act or Federal regulations, the manufacturer may make reasonable assumptions in its calculations of ASP, consistent with the general requirements and intent of the Social Security Act, Federal regulations, and its customary business practices. These assumptions should be submitted along with the ASP data. In December 2004, we posted further guidance on our website addressing service fees and administrative fees paid to buyers (http://questions.cms.hhs.gov/​cgi-bin/​cmshhs.cfg/​php/​enduser/​std_​adp.php?​p_​faqid=​3318&​p_​created=​1095343992&​p_​sid=​a2qUcgci&​p_​accessibility=​0&​p_​lva=​&​p_​sp=​cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9MzEmcF9wcm9kcz04LDU2LDYwNCZwX2NhdHM9Start Printed Page 49001JnBfcHY9My42MDQmcF9jdj0mcF9zZWFyY2hfdHlwZT1hbnN3ZXJzLnNlYXJjaF9ubCZwX3BhZ2U9MQ**&​p_​li=​&​p_​topview=​1 and http://questions.cms.hhs.gov/​cgi-bin/​cmshhs.cfg/​php/​enduser/​std_​adp.php?​p_​faqid=​4136&​p_​created=​1109786814&​p_​sid=​bxw-cgci&​p_​accessibility=​0&​p_​lva=​&​p_​sp=​cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9MzEmcF9wcm9kcz04LDU2LDYwNCZwX2NhdHM9JnBfcHY9My42MDQmcF9jdj0mcF9zZWFyY2hfdHlwZT1hbnN3ZXJzLnNlYXJjaF9ubCZwX3BhZ2U9MQ**&​p_​li=​&​p_​topview=​1).

On July 6, 2005, we restated our guidance on service fees in the preamble of the Competitive Acquisition of Outpatient Drugs and Biologicals Under Part B (CAP) interim final rule with comment (70 FR 39069). Subsequently, we have received requests for clarification on how fees paid to entities such as group purchasing organizations (GPOs) or PBMs must be treated for purposes of the ASP calculation.

We propose to further clarify in the final ASP reporting rule that, beginning with the ASP reporting for sales during the first calendar quarter of 2007, bona fide service fees that are paid by a manufacturer to an entity, whether or not the entity takes title to the drug, are not considered price concessions under § 414.804(a)(2) insofar as, and to the extent that, they satisfy the definition of a bona fide service fee that we are proposing at § 414.802. In § 414.802, we propose to define bona fide service fees as fees paid by a manufacturer to an entity that represent fair market value for a bona fide, itemized service actually performed on behalf of the manufacturer that the manufacturer would otherwise perform (or contract for) in the absence of the service arrangement, and that are not passed on, in whole or in part, to a client or customer of an entity, whether or not the entity takes title to the drug. Our current guidance, which provides that bona fide service fees means expenses that would have generally been paid for by the manufacturer at the same rate had these services been performed by other entities, would continue unless we provide an alternative approach as discussed below. Further, we propose to clarify in the final ASP reporting rule that fees, including service fees, administrative fees and other fees, paid to GPOs or PBMs are not considered price concessions under § 414.804(a)(2) insofar as, and to the extent that, they satisfy the definition of a bona fide service fee that we have proposed at § 414.802.

In comments on the April 6, 2004 IFC, groups representing wholesalers, distributors and specialty pharmacies provided some insight into the types of activities that are performed in the distribution of drugs. These commenters suggested that costs for handling, storage, inventory reporting, shipping, receiving, patient education, disease management and data should be borne by manufacturers and be excluded from the ASP calculation as bona fide services. However, these commenters did not provide detailed information about whether and how one would determine the extent to which these activities are bona fide services actually performed on behalf of the manufacturer or otherwise.

Because the scope of appropriate services may vary across categories of drugs, we are considering providing guidance on the types of services that may qualify as bona fide services for purposes of the ASP calculation. We are also considering providing further guidance on or revising the approach or methodology manufacturers must use to determine the fair market value of bona fide services performed on their behalf and whether the service fee paid was passed on in whole or in part. In either case, we may implement our policy through rulemaking or through program instruction or other guidance (consistent with our authority under section 1847A(c)(5)(C) of the Act).

We seek comments on the specific types of services entities perform on behalf of manufacturers that a manufacturer would otherwise perform (or contract for) and the necessity of those services in the efficient distribution of drugs. We also seek comments on activities that should not be considered bona fide services performed on behalf of manufacturers. To better understand which services may be considered bona fide services performed on behalf of the manufacturer that the manufacturer would otherwise perform (or contract for), we seek to understand the bona fide services that may be appropriate for all or specific types of products, as well as the specific services that may be applicable to unique products or circumstances. We also seek to understand the costs and relative costs of services performed on behalf of manufacturers.

To exclude a bona fide service fee from the ASP calculation, a manufacturer must determine whether the fee paid to an entity represents fair market value for a bona fide service actually performed on behalf of the manufacturer that the manufacturer would otherwise perform (or contract for), and that the fee is not passed on, in whole or in part, to a client or customer of the entity. Our current guidance provides that bona fide service fees means expenses that would have generally been paid for by the manufacturer at the same rate had these services been performed by other entities. We seek comments on appropriate additional guidance or alternative methods for determining fair market value for purposes of identifying bona fide service fees that are excluded from the calculation of ASP, as well as comments on whether, and the extent to which, fees tied to performance of a service, fixed fee, revenue generated by product sales, or other basis may represent fair market prices for purposes of identifying bona fide service fees that are excluded from the calculation of ASP. In addition, we seek comments on the appropriate methods for determining whether a fee is passed on in whole or in part. We also seek comments on how Medicare's guidance on the treatment of service fees for ASP calculation purposes may differ with the treatment of service fees for financial accounting or other purposes, and any implications that this may have for manufacturers.

b. Estimation Methodology for Lagged Exempted Sales

Section 1847A(c)(2) of the Act requires manufacturers to exclude from the calculation of ASP those sales that are exempt from the Medicaid best price (BP) calculation (for example, Federal sales, sales to State pharmacy assistance programs, sales to a prescription drug plan for use under Medicare Part D). In the comments on the April 6, 2004 IFC, commenters requested more guidance on the method manufacturers should use to exclude exempted sales that are known on a lagged basis. Manufacturers identify exempted sales based on direct sales and through chargeback and rebate data that may not be sufficiently available at the time the ASP is calculated. In the absence of specific guidance on how to account for lagged exempted sales (that is, exempted sales identified through chargeback or rebate processes), manufacturers have relied upon assumptions in accordance with their customary business practices to develop their approach for excluding these sales from the ASP calculation. In our work with manufacturers that submit ASP data, we understand that some manufacturers have used a ratio methodology for estimating exempted sales known on a lagged basis which is similar to the ratio methodology manufacturers must use to estimate Start Printed Page 49002price concessions known on a lagged basis.

To establish a uniform approach, in § 414.804(a)(4), we propose to require, in the final ASP reporting rule, that all manufacturers use a 12-month (or less, if applicable) rolling average ratio methodology to estimate exempted sales known on a lagged basis (through chargebacks or rebates) in order to more accurately exclude these sales from the ASP calculation. Specifically, for exempted sales known on a lagged basis, the manufacturer sums the lagged exempted sales for the most recent 12-month period available (or the number of months the NDC has been sold for NDCs with less than 12 months of sales, except for redesignated NDCs as described in section d below). The manufacturer then calculates a percentage using this summed amount as the numerator and the sales (the number of units after non-lagged exempted sales have been subtracted from total sales) for the same period (12 months or less, if applicable) as the denominator. The result is a rolling average percentage estimate for lagged exempted sales that is applied to the sales (the number of units after non-lagged exempted sales have been subtracted from total sales) for the quarter being reported. The product that results from multiplying the rolling average percentage estimate of lagged exempted sales and sales (the number of units after non-lagged exempted sales have been subtracted from total sales) determines the number of lagged exempted sales (in units) to be excluded from the denominator of the ASP calculation. Manufacturers must make a corresponding adjustment to the numerator of the ASP calculation to ensure that the total in dollars for the reporting quarter does not include revenue related to lagged exempted sales excluded from the denominator using the proposed estimation methodology. Further, manufacturers must remove the dollar value of lagged exempted sales from their estimates of lagged price concessions by subtracting the dollar value of estimated lagged exempted sales from the denominator as specified in § 414.804(a)(3)(i).

Our proposed methodology for excluding lagged exempted sales is similar to the methodology manufacturers are required to use to estimate price concessions known on a lagged basis, and was recommended by manufacturers. We believe requiring similar methods to estimate both lagged exempted sales and lagged price concessions is reasonable and reduces potential errors in the manufacturers’ ASP calculations, while ensuring that exempted sales are appropriately removed from the ASP calculation. In addition, using an estimation methodology to remove lagged exempted sales reduces the likelihood of quarter to quarter variations in the ASP.

We seek comments on the proposed methodology for excluding exempted sales known on a lagged basis from the ASP calculation and estimate of lagged price concessions. We also solicit suggestions on appropriate alternative methodologies that may be less complex.

c. Nominal Sales

Section 1847A(c)(2)(B) of the Act requires manufacturers to exclude from the ASP calculation sales that are merely nominal in amount, as applied for purposes of section 1927(c)(1)(C)(ii)(III) of the Act, except as the Secretary may otherwise provide. Effective January 1, 2007, the DRA (Pub. L. 109-171) modifies section 1927(c)(1)(C)(ii)(III) of the Act. Limitations on nominal sales have been added in new section 1927(c)(1)(D) of the Act. The DRA also modified the average manufacturer price (AMP) calculation and frequency of AMP reporting. Therefore, we are proposing to clarify the method manufacturers must follow, beginning in 2007, to identify nominal sales for ASP reporting purposes and to exclude nominal sales from the calculation of the ASP. We also are seeking comments on whether we should establish an alternative definition of nominal sales for ASP purposes.

In the preamble to the ASP reporting interim final rule, we stated sales to an entity that are nominal in amount are defined in the Medicaid drug rebate agreement (see sample agreement at http://www.cms.hhs.gov/​MedicaidDrugRebateProgram/​downloads/​rebateagreement.pdf). That is, for ASP purposes, a nominal sale is a sale at a price less than 10 percent of the AMP in the same quarter for which the AMP is computed. Effective January 1, 2007, the DRA revises the AMP calculation (to omit customary prompt pay discounts extended to wholesalers), added a monthly AMP reporting requirement, and established limitations on nominal sales (only sales to certain entities may qualify as nominal sales). Section 1927(c)(1)(D) of the Act limits the nominal sales exclusion to nominal sales made to the following entities:

  • 340B covered entities as described in section 340B(a)(4) of the Public Health Services Act (PHS Act).
  • Intermediate care facilities for the mentally retarded (ICFs/MR).
  • State-owned or operated nursing facilities.
  • Any other facility or entity that the Secretary determines is a safety net provider to which sales of such drugs at a nominal price would be appropriate based on the factors described in section 1927(c)(1)(D)(ii) of the Act.

Because section 1847A(c)(2)(B) of the Act requires manufacturers to exclude from the ASP calculation sales that are merely nominal in amount, as applied for purposes of section 1927(c)(1)(C)(ii)(III) of the Act, except as the Secretary may otherwise provide, the DRA changes will have implications for ASP reporting beginning January 1, 2007 (unless we provide an alternative policy for determining nominal sales as permitted under section 1847A(c)(2)(B) of the Act). One implication is that the limitations set forth in section 1927(c)(1)(D) of the Act will continue the exclusion of nominal sales to certain entities while requiring that sales to entities not identified under section 1927(c)(1)(D) of the Act are included in the ASP calculation, even if such sales are at very low prices. Another implication is the AMP calculation will exclude customary prompt pay discounts extended to wholesalers, yet prompt pay discounts will continue to be a type of price concession that manufacturers must include in their ASP calculations. The change in treatment of customary prompt pay discounts extended to wholesalers in the AMP calculation may result in a higher number of sales that are at less than 10 percent of the AMP than in past ASP reporting periods (notwithstanding the new limitation on what is considered a nominal sale under section 1927(c)(1)(D) of the Act). Still another implication is that the frequency of AMP reporting will include monthly reporting; thus, for ASP purposes, there is further need to clarify how nominal sales are to be identified in 2007. Separate Medicaid rulemaking will address the DRA provisions related to AMP reporting.

We believe the DRA modifications to section 1927 of the Act noted above will have minimal effect on reported ASPs. We would expect that the exclusion of customary prompt pay discounts extended to wholesalers from AMP would lead to a modest increase in AMP, and as a result a modest increase in the number of sales that would qualify as nominal under the current ASP reporting regulations. At the same time, we anticipate that the limitation on nominal sales in section 1927(c)(1)(D) of the Act will result in a modest reduction in the number of sales that qualify as nominal sales for Start Printed Page 49003purposes of ASP reporting because we believe that the entities outlined in section 1927(c)(1)(D) of the Act generally represent the types of entities to which manufacturers may offer sales at a nominal amount. Consequently, we would expect these two countervailing changes would have a minimal overall impact on nominal sales that would be excluded from the ASP calculation. For 2007 and beyond, we propose to revise § 414.804(a)(4) to clarify that manufacturers must continue to use the Medicaid threshold (less than 10 percent of AMP) to determine nominal sales that are excluded (subject to the limitations in section 1927(c)(1)(D) of the Act) from the ASP calculation. Further, we propose that, in identifying nominal sales, manufacturers must use the AMP for the calendar quarter that is the same calendar quarter for the ASP reporting period. For these reasons, we are proposing to continue the current methodology for identifying and excluding nominal sales (that is, sales that are exempt from the Medicaid best price calculation under section 1927(c)(1)(C)(ii)(III) of the Act) from the manufacturer's calculation of the ASP. We believe this approach helps maintain continuity in the ASP calculation and minimizes manufacturers' reporting burden, as Medicare continues to follow the Medicaid approach for identifying nominal sales and manufacturers can use a single method for identifying nominal sales for both ASP and AMP purposes.

We seek comments on our proposal to continue use of the AMP as the basis for identifying nominal sales excluded from the ASP calculation and on whether an alternative threshold for identifying nominal sales for ASP calculation purposes is necessary or desirable to ensure the accuracy of the ASP payment methodology. Specifically, we seek comments on whether sales at less than 10 percent of the ASP (instead of the AMP) should be used to identify nominal sales for ASP purposes (with the new requirement in section 1927(c)(1)(D) of the Act allowing only sales to certain entities to be considered nominal sales still being applicable). We also seek comments on our belief that the new limitations on nominal sales and change to the AMP calculation will have minimal impact on reported ASPs.

Subsequent to the April 6, 2004 IFC, we received requests for clarification on a technical aspect related to the identification of nominal sales. Specifically, some manufacturers have asked whether nominal sales are identified by performing a series of calculations once or whether the manufacturer repeats the series of calculations until no remaining ASP eligible sales are below the nominal threshold. Consistent with current Medicaid reporting, for 2005 and 2006, manufacturers must identify nominal sales by performing the following steps once:

  • The manufacturer calculates the AMP for the reporting quarter to identify the dollar amount that represents 10 percent of the AMP for that reporting period.
  • The manufacturer then identifies sales below this amount and excludes these sales from the ASP calculation.
  • Beginning in 2007, the limitations in section 1927(c)(1)(D) of the Act must also be met to exclude the sale.

d. Other Price Concession Issues

In our ongoing work with manufacturers that submit ASP data, some manufacturers have posed questions or raised concerns about how the estimate of lagged price concessions is done prior to having 12 months of data for a NDC and, when a product is redesignated with a new NDC, whether price concessions from the prior NDC must be included in calculating the ASP for the new NDC. Manufacturers and other stakeholders have also asked us about how Medicare's ASP guidance concerning price concessions is to be applied when drugs are sold under bundling arrangements.

In response, we are proposing clarifications and seeking comment on these issues.

(1) Price Concessions for NDCs With Less Than 12 Months of Sales

To address situations when a NDC with price concessions known on a lagged basis has not been sold for a full 12 months, we propose to revise § 414.804(a)(3) to specify that the period used to estimate lagged price concessions is the total number of months the NDC has been sold. We propose to require that manufacturers use less than 12 months of data in the estimation methodology for lagged price concessions for NDCs with less than 12 months of sales (except when the manufacturer has redesignated the product's NDC, as discussed below). Manufacturers may include the current ASP reporting quarter in the most recent 12 month period (or less for NDCs with less than 12 months of sales) so long as the manufacturer follows this approach in calculating the ASP for all of its reported NDCs. Using less than 12 months in the estimation methodology for lagged price concessions is consistent with our proposal for estimating lagged excluded sales described in section b. above.

(2) Redesignated NDCs

From time to time, a manufacturer may change the NDC assigned to a specific product and package size while continuing or offering price concessions that span across sales of the product under its prior and redesignated NDCs. For example, an NDC may be changed to reflect a change in the labeler code while lagged price concessions in place under the prior NDC remain in effect and carry over to the redesignated NDC. Another example would be a manufacturer that modifies its package design or other non-drug feature of the NDC and assigns a new NDC to reflect the revised packaging.

We propose to clarify in the final ASP reporting rule that, when an NDC is changed (except when a product is repackaged or relabeled by a different manufacturer or relabeler or is privately labeled) and lagged price concessions offered for the prior NDC remain in effect, the manufacturer must use 12 months (or the total number of months of sales of the prior and redesignated NDCs if the total number of months of sales is less than 12 months) of sales and price concession data from the prior and redesignated NDCs to estimate lagged price concessions applicable to the redesignated NDC. In establishing this methodology, we are relying on our authority under section 1847A(c)(5)(A) of the Act.

We seek comments on our proposed refinements to the estimation of lagged price concessions for NDCs with less than 12 months of sales and when a manufacturer redesignates the NDC assigned to a product. We also solicit suggestions for potentially clarifying these policies further.

(3) Bundled Price Concessions

We have heard a few concerns about how Medicare's ASP guidance concerning price concessions is to be applied when drugs are sold under bundling arrangements (for example, when a purchaser's price for one or more drugs is contingent upon the purchase of other drugs or items). We would like to better understand how bundling affects sales of Part B drugs and the ASP calculation, and any concerns stakeholders may have on this issue. Therefore, we are soliciting comments on a number of these issues. We note that we expect manufacturers of drugs reimbursed by Medicare Part B to comply with all applicable laws, regulations, and legal decisions including, but not limited to the Stark law, other relevant anti-kickback laws, Start Printed Page 49004antitrust laws, and laws governing fair trade practices. Our discussion of this issue in this proposed rule should not be construed as an endorsement or authorization of any pricing practices that contravene any laws, legal decisions, or regulations.

Thus far, we have not provided specific guidance in the ASP context on the issue of apportioning price concessions across drugs that are sold under bundling arrangements. In the absence of specific guidance, the manufacturer may make reasonable assumptions in its calculations of ASP, consistent with the general requirements and the intent of the Social Security Act, Federal regulations, and its customary business practices. Manufacturers must include assumptions in their ASP submissions. We are now considering providing guidance, through rulemaking or through program instruction or other guidance (consistent with our authority under section 1847A(c)(5)(C) of the Act) on the methodology manufacturers must use for apportioning price concessions across Part B drugs sold under bundling arrangements for purposes of the calculation of ASP. As we consider this issue, our goal is to ensure that the ASP is an accurate reflection of market prices for Part B drugs and that the treatment of bundled price concessions in the ASP calculation does not create inappropriate financial incentives.

We are soliciting comments on a number of issues, including how frequently Part B drugs are sold under bundling arrangements, the different structures of bundling arrangements that may exist (for example, the number of products included in a bundling arrangement; whether the price concessions are contingent on the purchase of only one product, the purchase of multiple products, or the inclusion of one or more products on a formulary; and the timing of the price concessions), and the extent to which sales of Part B drugs are bundled with sales of non-Part B drugs or non-drug products. We also seek comment on what effect bundling arrangements may have on the ASP calculation, on beneficiary access to high quality, appropriate care (including access to drugs that may not have clinical alternatives), and on costs to the Medicare program and beneficiaries. In addition, we seek comments on whether additional guidance on apportioning bundled price concessions for purposes of the calculation of ASP is needed and potential methodologies that Medicare could consider requiring. Furthermore, we seek comment on how variation in the structure of bundling arrangements may affect the impact of potential apportionment methodologies on the ASP calculation.

2. Clotting Factor Furnishing Fee

Section 303(e)(1) of the MMA added section 1842(o)(5) of the Act which requires the Secretary, beginning in CY 2005, to pay a furnishing fee, in an amount the Secretary determines to be appropriate, to hemophilia treatment centers and homecare companies for the items and services associated with the furnishing of blood clotting factor. Section 1842(o)(5)(C) of the Act specifies that the furnishing fee for clotting factor for years after CY 2006 and subsequent years will be equal to the fee for the previous year increased by the percentage increase in the consumer price index (CPI) for medical care for the 12 month period ending with June of the previous year. In the CY 2006 PFS final rule, we announced that, based on the percentage increase in the CPI of 4.2 percent for the 12-month period ending June 2005, the furnishing fee is $0.146 per unit clotting factor for CY 2006.

The CPI data for the 12-month period ending in June 2006 is not yet available. In the FY 2007 PFS final rule, we will include the actual figure for the percent change in the CPI for medical care for the 12-month period ending June 2006, and the updated furnishing fee for CY 2007 calculated based on that figure.

3. Widely Available Market Prices (WAMP) and AMP Threshold

Section 1847A(d)(1) of the Act states that “the Inspector General of HHS shall conduct studies, which may include surveys to determine the widely available market prices (WAMP) of drugs and biologicals to which this section applies, as the Inspector General, in consultation with the Secretary, determines to be appropriate.” Section 1847A(d)(2) of the Act states that, “Based upon such studies and other data for drugs and biologicals, the Inspector General shall compare the ASP under this section for drugs and biologicals with—

  • The widely available market price (WAMP) for these drugs and biologicals (if any); and
  • The average manufacturer price (AMP) (as determined under section 1927(k)(1) of the Act for such drugs and biologicals.”

Section 1847A(d)(3)(A) of the Act states that, “The Secretary may disregard the ASP for a drug or biological that exceeds the WAMP or the AMP for such drug or biological by the applicable threshold percentage (as defined in subparagraph (B)).” The applicable threshold is specified as 5 percent for CY 2005. For CY 2006 and subsequent years, section 1847A(d)(3)(B) of the Act establishes that the applicable threshold is “the percentage applied under this subparagraph subject to such adjustment as the Secretary may specify for the WAMP or the AMP, or both.” In CY 2006, we specified an applicable threshold percentage of 5 percent for both the WAMP and AMP. We based this decision on the limited data available to support a change in the current threshold percentage.

For CY 2007, we propose to specify an applicable threshold percentage of 5 percent for the WAMP and the AMP. At present, the OIG is continuing its comparison of both the WAMP and the AMP. Since, at this time we do not have data that suggest another level is more appropriate, we believe that continuing the 5 percent applicable threshold percentage for both the WAMP and AMP is appropriate.

There are a number of operational issues associated with Medicare's authority to substitute a lower payment amount for a drug if the OIG finds and informs the Secretary, at such times as the Secretary may specify, that the ASP exceeds the WAMP or AMP by more than the established threshold (currently 5 percent). We would welcome public comment on operational issues such as the timing and frequency of the ASP, AMP, and WAMP comparisons and effective date and duration of the rate substitution.

4. Payment for Drugs Furnished During CY 2006 and Subsequent Years in Connection With the Furnishing of Renal Dialysis Services if Separately Billed by Renal Dialysis Facilities

In the November 21, 2005 PFS final rule (70 FR 70116), we stated that payment for a drug furnished during CY 2006 in connection with renal dialysis services and separately billed by freestanding renal dialysis facilities and hospital-based facilities would be based on section 1847A of the Act. We intended this to mean CY 2006 and subsequent years. Therefore, in this proposed rule, we are not proposing a policy change, but rather, we are clarifying that this policy will apply to CY 2006 and subsequent years until otherwise specified.

G. Proposed Provisions Related To Payment for Renal Dialysis Services Furnished by End-Stage Renal Disease (ESRD) Facilities

[If you choose to comment on issues in this section, please include the Start Printed Page 49005caption “ESRD PROVISIONS” at the beginning of your comments.]

Since August 1, 1983, payment for dialysis services furnished by ESRD facilities has been based on a composite rate payment system that provides a fixed, prospectively determined amount per dialysis treatment, adjusted for geographic differences in area wage levels. In accordance with section 1881(b)(7) of the Act, separate composite rates have been established for hospital-based and independent ESRD facilities. The composite rate is designed to cover a package of goods and services needed to furnish dialysis treatments that include certain routinely provided drugs, laboratory tests, supplies, and equipment. Unless specifically included in the composite rate, other injectable drugs and laboratory tests medically necessary for the care of the dialysis patient are separately billable. The base composite rates per treatment, effective on August 1, 1983, were $123 for independent ESRD facilities and $127 for hospital-based ESRD facilities. The Congress has enacted a number of adjustments to the composite rate since that time. The current 2006 base composite rates are $130.40 for independent ESRD facilities and $134.53 for hospital-based ESRD facilities.

Section 623 of the MMA amended section 1881 of the Act to require changes to the composite rate payment methodology, as well as to the pricing methodology for separately billable drugs and biologicals furnished by ESRD facilities.

Section 1881(b)(12) of the Act, as added by MMA, required the establishment of a basic case-mix adjusted prospective payment system (PPS) that would include the services comprising the composite rate and an add-on to the composite rate component for the difference between current payments for separately billed drugs and the revised drug pricing specified in the statute. In addition, section 1881(b)(12) of the Act required that the composite rate be adjusted for a limited number of patient characteristics (case-mix) and section 1881(b)(12)(D) of the Act gave the Secretary discretion to revise the wage indices and the urban and rural definitions used to develop them. Finally, section 1881(b)(12)(E) of the Act imposed a budget neutrality requirement, so that aggregate payments under the basic case-mix adjusted composite payment system for 2005 would equal the aggregate payments that would have been made for the same period if section 1881(b)(12) of the Act did not apply.

Before January 1, 2005, payment to both independent and hospital-based facilities for the anti-anemia drug, Erythropoietin (EPO) was established pursuant to section 1881(b)(11) of the Act at $10.00 per 1,000 units. For independent ESRD facilities, payment for all other separately billable drugs and biologicals was based on the lower of actual charges or 95 percent of the average wholesale price (AWP). Hospital-based ESRD facilities were paid based on the reasonable cost methodology for separately billed drugs and biologicals (other than EPO) furnished to dialysis patients. Changes to the payment methodology for separately billed ESRD drugs and biologicals that were established by the MMA and were effective January 1, 2005 are described in sections G.1. and G.2. below. These changes affected payments in both CYs 2005 and 2006.

1. CY 2005 Revisions

On November 15, 2004, we published the CY 2005 PFS final rule with comment period (69 FR 66319 through 66334), that revised payments to ESRD facilities based on changes enacted by the MMA. The November 15, 2004 final rule with comment period implemented section 1881(b) of the Act, as amended by section 623 of the MMA. Changes effective January 1, 2005, included implementation of a case-mix adjusted payment system that incorporates services that comprise the composite rate; an update of 1.6 percent to the composite rate component of the payment system; and a drug add-on of 8.7 percent to the composite rate for the difference between current payments for separately billable drugs and payments based on the revised drug pricing for 2005 which used acquisition costs. The final rule also implemented case-mix adjustments to the composite rate for a limited number of patient characteristics (age, low body mass index (BMI), and body surface area (BSA)), effective April 1, 2005.

In addition, to implement section 1881(b)(13) of the Act, we revised payments for drugs billed separately by independent ESRD facilities, paying for the top 10 ESRD drugs based on acquisition costs (as determined by the OIG) and for other separately billed drugs at the average sales price +6 percent (hereafter referred to as ASP+6 percent). Hospital-based ESRD facilities continued to receive cost-based payments for all separately billable drugs and biologicals except for EPO which was paid based on average acquisition costs.

2. CY 2006 Revisions

In the November 21, 2005 Federal Register (70 FR 70161), we published the CY 2006 PFS final rule with comment period (70 FR 70161) implementing additional revisions to payments to ESRD facilities under section 623 of the MMA. For CY 2006, we further revised the drug payment methodology applicable to drugs furnished by ESRD facilities. All separately billed drugs and biologicals furnished by both hospital-based and independent ESRD facilities are now paid based on ASP+6 percent.

We recalculated the 2005 drug add-on adjustment to reflect the difference in payments between the pre-MMA AWP pricing and the revised pricing based on ASP+6 percent. The recalculation did not affect the actual add-on adjustment applied to payments in 2005, but provided an estimate of what the adjustment would have been had the 2006 payment methodology been in effect in 2005. The drug add-on adjustment was then updated to reflect the expected growth in expenditures for separately billable drugs in CY 2006.

As of January 1, 2006, we also implemented a revised geographic adjustment authorized by section 1881(b)(12) of the Act. As part of that change, we—

  • Revised the labor market areas to incorporate the new CBSA designations established by the Office of Management and Budget (OMB);
  • Eliminated the wage index ceiling and reduced the floor to .8500; and
  • Revised the labor portion of the composite rate to which the geographic adjustment is applied.

We also provided a 4-year transition from the previous wage-adjusted composite rates to the current wage-adjusted rates. For CY 2006, only 25 percent of the payment is based on the revised geographic adjustments, and the remaining 75 percent of payment is based on the old Metropolitan Statistical Area-based (MSA-based) payments.

In addition, section 5106 of the DRA (Pub. L. 109-171), provided for a 1.6 percent update to the composite rate component of the basic case-mix adjusted payment system, effective January 1, 2006. As a result, the current base composite rate is $130.40 for independent ESRD facilities and $134.53 for hospital-based facilities. The drug add-on adjustment (including the growth update) for 2006 is 14.5 percent.

3. Provisions of the Proposed Rule

For CY 2007, we are proposing the following provisions which are described in more detail below: Start Printed Page 49006

  • A method to annually calculate the growth update to the drug add-on adjustment required by section 1881(b)(12) of the Act, as well as an estimated growth update adjustment to the add-on amount of 0.6 percent for CY 2007.
  • An update to the wage index adjustments to reflect the latest hospital wage data, including a budget neutrality adjustment of 1.053069 to the wage index for CY 2007.

4. Proposed Growth Update to the Drug Add-On Adjustment to the Composite Rates

Section 623(d) of the MMA added section 1881(b)(12)(B)(ii) of the Act which required the establishment of an add-on to the composite rate to account for changes in the drug payment methodology stemming from enactment of the MMA. Section 1881(b)(12)(C) of the Act provides that the drug add-on must reflect the difference in aggregate payments between the revised drug payment methodology for separately billable ESRD drugs (acquisition costs in CY 2005; ASP+6 percent in CY 2006) and the AWP payment methodology in effect in CY 2004.

In addition, section 1881(b)(12)(F) of the Act requires that, beginning in CY 2006, we establish an annual update to the drug add-on to reflect estimated growth in expenditures for separately billable drugs and biologicals furnished by ESRD facilities. This growth update applies only to the drug add-on portion of the case-mix adjusted payment system.

The CY 2006 drug add-on adjustment to the composite rate is 14.5 percent. The drug add-on adjustment for CY 2006 incorporates an inflation adjustment of 1.4 percent. This computation is explained in detail in the CY 2006 PFS final rule with comment period (70 FR 70162). We note that the drug add-on adjustment of 14.7 percent that was published in November 21, 2005 PFS final rule with comment period did not account for the 1.6 percent update to the composite rate portion of the basic case-mix adjustment payment system that was subsequently enacted by the DRA, effective January 1, 2006. Since we compute the drug add-on adjustment as a percentage of the weighted average base composite rate, the drug add-on percentage was decreased to account for the higher composite payment rate resulting in a 14.5 percent add-on adjustment for CY 2006. This adjustment was necessary to ensure that the total drug add-on dollars remained constant.

a. Estimating Growth in Expenditures for Drugs and Biologicals for CY 2007

In developing the growth update to the drug add-on for CY 2006 we conducted a trend analysis of prior years’ ESRD drug expenditure data (2001 through 2004). All 4 years of data used for the trend analysis reflected expenditures associated with payment for separately billed drugs and biologicals under the AWP methodology. We could, therefore, develop growth estimates for CY 2006 using comparable historical expenditure data. To extend the trend analysis for CY 2007, we would need to include drug expenditure data from CY 2005. However, in CY 2005, section 1881(b)(13)(A)(ii) of the Act required that we use a different drug payment methodology, based on average acquisition costs, rather than the AWP methodology used in prior years. Therefore, ESRD drug expenditure data for CY 2005 are not comparable to expenditure data for CY 2001 through CY 2004 for trend analysis purposes. This data issue will extend to subsequent years’ data as well, as we are now paying for separately billable drugs using ASP+6 percent. Because we do not have comparable data on which to base continuing trend analysis, we believe it is necessary to re-evaluate our methodology for updating the drug add-on adjustment.

In order to address the issue of data comparability described above, we considered using available drug proxy measures to predict growth in ESRD drug expenditures for CY 2007. We note that section 1881(b)(12)(F) of the Act specifies that the drug update must reflect “the estimated growth in expenditures for drugs and biologicals that are separately billable * * *.” By referring to “expenditures”, we believe the statute contemplates that the update would account for both increases in drug prices as well as increases in utilization of those drugs.

One available proxy measure that reflects both price and utilization is the national health expenditure projection for prescription drugs that is developed by CMS. However, because of uncertainties regarding the impact of the Medicare Part D prescription drug program on expenditures, we are concerned that the current estimates for CY 2007 will likely change, as actual Part D expenditure data become available. Therefore, we do not believe this measure would be an appropriate proxy measure for this purpose.

Another widely recognized proxy measure is the producer price index (PPI) for prescription drugs. The PPI is a good measure of drug pricing growth, but does not capture the growth in per patient drug utilization that must also be part of an accurate estimate of growth in ESRD drug expenditures. However, if the PPI is used in conjunction with an estimate of per patient growth in drug utilization, we believe this measure would provide a simple and accurate approach to updating the drug add-on that could be readily used in subsequent years. Moreover, using the PPI would significantly reduce any data bias that is inherent in using historical drug expenditure data that do not reflect current drug payment methodologies. As discussed in detail below, we are proposing to estimate growth in per patient utilization of drugs by using historical data from 2004 and 2005.

Another approach to estimating the growth in ESRD drug expenditures is to continue using historical trend analysis by making adjustments to the available data to permit year to year comparisons. This would be accomplished by making an adjustment to the CY 2005 data based on average acquisition price (AAP) using the weighted average difference between AWP prices and AAP prices. We would use trend analysis to project the growth in drug expenditures for CY 2007.

While we believe this approach is reasonably accurate for developing the CY 2007 growth estimates, since only one year of data would require adjustment, we are concerned about applying this methodology to future updates. Future year updates would require multiple year to year adjustments in prices. Moreover, historical AWP data does not provide an accurate measure of price changes for EPO under the revised drug payment methodology, since EPO pricing was held constant during that historical period.

In addition, our estimate of the weighted average difference between AAP prices and AWP prices (and ASP versus AWP prices in CY 2006) was based on a projection of price levels. It is likely that the weighted average difference would change based on actual pricing data for each of those years. To be consistent with the statute, we expect to update the established adjustment to reflect estimated growth in drug expenditures, but we do not anticipate re-computing the drug add-on adjustment annually. Adjusting our assumptions to estimate projected growth without changing the underlying assumptions in the add-on adjustment would create inconsistencies between the two elements. Therefore, we are proposing to discontinue use of older historical drug spending data to Start Printed Page 49007estimate the growth update to the drug add-on adjustment. We will reconsider our methodology when we have sufficient historical data reflecting the revised drug payment methodology using ASP pricing.

For the reasons discussed above, we are proposing to develop an estimate of the growth in expenditures for ESRD drugs and biologicals using the PPI for prescription drugs as a measure of price increases in conjunction with two years of historical data from 2004 and 2005 as a basis for estimating utilization growth at the per patient level. We believe that this approach will best reflect the estimated growth in expenditures for ESRD drugs and biologicals.

b. Estimating Growth in Per Patient Drug Utilization

To isolate and project the growth in per patient utilization of ESRD drugs for CY 2007, we need to remove the enrollment and price growth components from historical drug expenditure data and consider the residual utilization growth. We propose to use total drug expenditure data from CYs 2004 and 2005 to estimate per patient utilization growth for CY 2007.

We first needed to estimate total drug expenditures. For this proposed rule, we used the final CY 2004 ESRD claims data and the latest available CY 2005 ESRD facility claims, updated through December 31, 2005, that is, claims with dates of service from January 1 through December 31, 2005, that were received, processed, paid, and passed to the National Claims History File as of December 31, 2005. For the final rule, we will use more updated CY 2005 claims with dates of service for the same time period. This updated CY 2005 data file will include claims that are received, processed, paid, and passed to the National Claims History File as of June 30, 2006.

While the December 2005 update of CY 2005 claims used in this proposed rule is the most recently available claims data, we recognize that it is not a fully complete year as claims with dates of service towards the end of the year have not all been processed. To more accurately estimate the update to the drug add-on, we need aggregate drug expenditures. Based on an analysis of the 2004 claims data, we inflated the CY 2005 drug expenditures to estimate the June 30, 2006 update of the 2005 claims file. We used the relationship between the December 2004 and the June 2005 versions of 2004 claims to estimate the more complete 2005 claims that will be available in June 2006. We applied that ratio to the 2005 claims data from the December 2005 claims file. We did this for drug expenditures in aggregate, for each of top ten separately billable drugs, and within each for independent and hospital-based ESRD facilities. All components were then combined to estimate aggregate CY 2005 ESRD drug expenditures. The net adjustment to the CY 2005 claims data was an increase of 13 percent to the 2005 expenditure data. This adjustment allows us to more accurately compare the 2004 and 2005 data, to estimate utilization growth.

The next step is to remove the enrollment and price growth components from that total. As discussed earlier in this section, in developing the per patient utilization growth for this proposed rule, we limited our analysis to the latest 2 years of available ESRD drug data, that is, 2004 and 2005. We believe that per patient utilization growth between these years would be a better proxy for future growth, as it best represents current utilization trends. Furthermore, because of the implementation of the new EPO utilization monitoring policy that took effect on April 1, 2006 (Medicare Claims Processing Manual, Chapter 8, section 60-4ff, p. 51-53), we believe that per patient utilization of ESRD drugs will remain relatively stable or decline slightly in future years. We note that EPO accounts for nearly 70 percent of ESRD drug expenditures.

To calculate the per patient utilization growth, we removed the enrollment component by using the growth in enrollment data between 2004 and 2005. This was approximately 3 percent. To remove the price effect we used a two-step process. First we calculated a weighted average between EPO and non-EPO price growth factors to account for the growth in pre-MMA pricing between 2004 and 2005. Since EPO was priced at $10 per thousand units prior to the enactment of the MMA, there is no growth for EPO. For the non-EPO drugs, we used the PPI as a proxy for the growth between the 2 years to maintain consistency with the established methodology for calculating the drug add-on adjustment which used the PPI to estimate the price growth in separately billable drugs (November 15, 2004, CY 2005 PFS final rule with comment period, 69 FR 66321). Next, we incorporated the estimated negative 13 percent weighted price difference between 2005 AWP and 2005 AAP pricing as was published in the CY 2005 PFS final rule with comment period (69 FR 66319 through 66334). This two-step process to account for the price effect from 2004 to 2005 led to an overall 12 percent reduction in price between 2004 and 2005.

After removing the enrollment and price effects from the expenditure data, we believe the residual growth would reflect the per patient utilization growth. To do this, we divided the product of the enrollment growth of 3 percent (1.03) and the price reduction of 12 percent (1.00 − .12 = .88) into the total drug expenditure decrease between 2004 and 2005 of 9 percent (1.00−.09 = .91). The result is a utilization factor equal to 1.00 (.91/(1.03 * .88) = 1.00).

As we observed no growth in per patient utilization of drugs between 2004 and 2005, we are, therefore, projecting no growth in per patient utilization for CY 2007.

1. Applying the Proposed Growth Update to the Drug Add-on Adjustment

In CY 2006, we estimated the growth update by trending drug expenditures forward based on four years of AWP payment data (CY 2001 through CY 2004). We then applied the estimated growth update percentage to the total amount of drug add-on dollars established for CY 2005 to come up with a dollar amount for the CY 2006 growth update. In addition, we projected the growth in dialysis treatments for CY 2006 based on the projected growth in ESRD enrollment. We divided the projected total dialysis treatments for CY 2006 into the projected dollar amount of the CY 2006 growth to develop the per treatment growth update amount. This growth update amount, combined with the CY 2005 per treatment drug add-on amount, resulted in an average drug add-on amount per treatment of $18.88 (or a 14.5 percent adjustment to the composite rate) for CY 2006.

Beginning in CY 2007, we are proposing to annually update the per treatment drug add-on amount of $18.88 established in CY 2006 and convert the update to an adjustment factor as stipulated in section 1881(b)(12)(F) of the Act. As explained above, we believe this approach is more accurate than recalculating the per treatment add-on adjustment each year using an estimate of growth in treatments. We note that we had received comments that our projections of treatment growth used to calculate the CY 2006 adjustment may have been overstated, however, we believe that the use of enrollment data was and remains the best measure available to predict treatment growth. By proposing to apply the update to the CY 2006 per treatment add-on amount, this estimation component is eliminated for CY 2007 and future years. Start Printed Page 49008

2. Proposed Update to the Drug Add-On Adjustment

As discussed above, we estimate no growth in per patient utilization of ESRD drugs for CY 2007. Using the projected CY 2007 PPI for prescription drugs of 4.9 percent, we are projecting that the combined growth in per patient utilization and pricing for CY 2007 would result in an update equal to the PPI or 4.9 percent (1.0*1.049 = 1.049). This update factor would be applied to the CY 2006 average per treatment drug add-on amount of $18.88 (reflecting a 14.5 percent adjustment in CY 2006), resulting in a proposed weighted average increase to the composite rate of $.93 for CY 2007 or a 0.6 percent increase in the CY 2006 drug add-on percentage. Thus, the total proposed drug add-on adjustment to the composite rate for CY 2007, including the growth update, would be 15.2 percent (1.145*1.006 = 1.152).

In addition, we are proposing to continue to use this method to estimate the growth update to the drug add-on component of the case-mix adjusted payment system until we have at least three years worth of ASP-based historical drug expenditure data that could be used to conduct a trend analysis to estimate the growth in drug expenditures. Given the time lag in the availability of ASP drug expenditure data, we expect that the earliest we could consider using trend analysis to update the drug add-on adjustment would be 2010. We propose to reevaluate our methodology for estimating the growth update at that time.

c. OIG Report on New Drug Codes

Section 623(c)(1) of the MMA mandated that the OIG conduct two studies to determine the difference between the Medicare payment amount for separately billable ESRD drugs and the facilities” acquisition costs for these drugs, as well as estimating the growth rate of expenditures for these drugs. The initial study, “Medicare Reimbursement for Existing End Stage Renal Disease Drugs” (OEI-03-04-00120) was completed in May 2004, and reported on existing ESRD drugs. This report was used to set the CY 2005 reimbursement rates for ESRD drugs billed by independent dialysis facilities (69 FR 66322). The second study (“Medicare Reimbursement for New ESRD Drugs” (OEI-03-06-00200)) focused on new drugs. New drugs for the purpose of this study were defined as an ESRD drug that did not have a BILLING CODE prior to January 1, 2004.

One drug, darbepoetin alfa (Aranesp) accounted for the majority of all payments for new drugs. Therefore, this was the only new ESRD drug studied. The OIG report found that use of this drug was limited to a small number of facilities (only 157 facilities reported using this drug with concentrated use in approximately 55 of these facilities). Because of the recent changes we made to the drug payment methodology and the lack of comparable historical data, the OIG report made no estimate of an expenditure growth rate for this drug.

Darbepoetin alfa (Aranesp) is currently paid as a separately billable drug at ASP+6 percent. Because of the recent (CY 2006) implementation of the ASP+6 percent drug reimbursement methodology, the small number of facilities using this drug for ESRD patients, and the lack of historical data for trending purposes, we have no data to indicate that any difference in payment methods for Aranesp (between 2004 and 2006) would affect our calculation of the drug add-on or of the growth update. Moreover, since Aranesp was approved in 2001 for use in ESRD patients, we believe that expenditures for Aranesp were reflected in the historical data used to establish the 2005 drug add-on under a generic drug code. Therefore, we are proposing to make no additional changes to the drug add-on adjustment for CY 2007.

5. Proposed Update to the Geographic Adjustments to the Composite Rates

Section 1881(b)(12)(D) of the Act, as amended by section 623(d) of the MMA, gave the Secretary the authority to revise the wage indexes previously applied to the ESRD composite rates. The wage indexes are calculated for each urban and rural area. The purpose of the wage index is to adjust the composite rates for differing wage levels covering the areas in which ESRD facilities are located.

a. Updates to CBSA Definitions

In the CY 2006 PFS final rule with comment period (70 FR 70167), we announced our adoption of the OMB's CBSA-based geographic area designations to develop revised urban/rural definitions and corresponding wage index values for purposes of calculating ESRD composite rates. OMB's CBSA-based geographic area designations were described in Bulletin 03-04 originally issued June 6, 2003. On February 22, 2005 and December 5, 2005, OMB released Bulletins 05-02 and 06-01, respectively. Those bulletins contained updates to the metropolitan and micropolitan statistical area designations initially announced in Bulletin 03-04. OMB's revisions had no effect on the classification of counties which comprise the urban and rural areas used to develop the ESRD wage index values. However, Bulletins 05-02 and 06-01 changed the titles of several of the MSAs and Metropolitan Divisions used in connection with the ESRD urban wage index. Table 5 below, which contains the proposed wage index values for the ESRD urban areas, includes all of the changes announced by OMB in the February 22, 2005 and December 5, 2005 bulletins.

b. Updated Wage Index Values

In the CY 2006 PFS final rule with comment period, we stated that we intended to update the wage index values annually (70 FR 70167). Current ESRD wage index values for CY 2006 were developed from FY 2002 wage and employment data obtained from the Medicare hospital cost reports. The values are calculated without regard to geographic reclassifications authorized under sections 1886(d)(8) and (d)(10) of the Act and utilize pre-floor hospital data that is unadjusted for occupational mix.

The methodology for calculating the CY 2006 wage index values was described in the CY 2006 PFS final rule with comment period (70 FR 70168). We propose to use the same methodology for CY 2007, with the exception that FY 2003 hospital data will be used to develop the CY 2007 ESRD wage index values. For a detailed description of the development of the proposed CY 2007 ESRD wage index values based on FY 2003 hospital data, see the FY 2007 IPPS proposed rule entitled, “Proposed Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates,” (April 25, 2006, 71 FR 24080). Section III F. (Computation of the Proposed FY 2007 Unadjusted Wage Index) of the preamble to that proposed rule describes the cost report schedules, line items, data elements, adjustments, and wage index computations. The wage index data affecting ESRD composite rates for each urban and rural locale may also be accessed on the CMS website at: http://www.cms.hhs.gov/​AcuteInpatientPPS/​WIFN/​list.asp.

The wage data are located in the section entitled, “FY 2007 Proposed Rule Occupational Mix Adjusted and Unadjusted Average Hourly Wage and Pre-reclassified Wage Index by CBSA”.

(1) Wage Index Values for Areas With No Hospital Data

In CY 2006, while adopting the CBSA designations, we identified a small number of ESRD facilities in both urban and rural geographic areas where there Start Printed Page 49009is no hospital wage data on which to base the calculations of the CY 2006 ESRD wage index values. Our CY 2005 policy and CY 2006 proposal for each area are discussed separately below.

The first situation was rural Massachusetts. Because there were no reasonable proxies for rural data within Massachusetts, we used the prior year's acute care hospital wage index value for rural Massachusetts. For CY 2007, we propose to continue to use this value and request public input on an alternative methodology.

Since there may be additional rural areas in the future similarly impacted by a lack of hospital wage data on which to derive a hospital wage index, we are considering alternative methodologies for imputing a rural wage index for areas in States where no hospital wage data are available. We believe that an evaluation of alternative methodologies for imputing a rural wage index in these areas should adhere to four basic policy criteria. First, an alternative methodology should retain our current longstanding policy to use pre-floor, pre-reclassified hospital wage data to compute wage index values for post acute care facilities, including ESRD facilities. Second, any methodology to impute a rural wage index should use rural wage data to derive the rural wage index value. Third, any methodology to impute a rural wage index should be easy to evaluate. Fourth, any methodology to impute a rural wage index would be able to update wage data from year-to-year.

We arrived at one alternative that meets all of the above policy criteria. Under this alternative, we would impute a rural wage index value by using a simple average CBSA-based rural wage index value at the Census Division level. Census Divisions are defined by the U.S. Census Bureau and may be found at (www.census.gov/​geo/​www/​us_​regdiv.pdf). As stated above, for CY 2007, hospital wage data are not available to compute a rural wage index for ESRD facilities in rural Massachusetts, and this alternative methodology could be applied in this case. Massachusetts is located in Census Division I (New England). The States in this Census Division, and their respective rural wage index values (using hospital cost report wage data for FY 2003) include—

  • Connecticut (1.1753);
  • Maine (0.8410);
  • New Hampshire (1.0800);
  • Vermont (0.9944)
  • Rhode Island (all five counties classified as urban); and
  • Massachusetts.

Under this alternative methodology, the States in Census Division I for which rural wage index values are available, as shown above, would be used; this would result in a simple average rural wage index value of 1.0227 (1.0770 after applying budget neutrality factor (BNF)). Although this methodology would result in a rural Massachusetts wage index that is currently greater than the value under the current proposed policy (1.0216, 1.0758 after applying BNF), we believe this methodology may be able to accurately reflect future increases or decreases of wage data for the States within the applicable Census Division.

Rural Puerto Rico is similar to rural Massachusetts in that there are ESRD facilities where there are no acute care hospitals and, therefore, no hospital data. However, the situation for facilities in rural Puerto Rico is different in that the floor would be applied to rural Puerto Rico ESRD facilities. All areas in Puerto Rico that have an index are eligible for the floor because they have wage-index values that are below .8000. For CY 2007, we propose to apply the floor to rural Puerto Rico.

The third situation involves an urban area in Hinesville, GA (CBSA 25980). For CY 2006, we used a wage index value based on wage index values in all of the other urban areas within the same State to serve as a reasonable proxy for the urban areas without hospital wage index data. Specifically, we used the average wage index value for all urban areas within the State of Georgia as the urban wage index for purposes of calculating the value for Hinesville for CY 2006. For CY 2007, we are proposing to continue using this method for Hinesville, GA (CBSA 25980).

We solicit comments on maintaining our current policy for establishing wage index values for rural and urban areas without hospitals, the alternative approach outlined above in developing wage index values for rural areas without hospitals for CY 2007 and subsequent years, and other methods that meet the policy criteria for imputing wage index values. We will also continue to evaluate existing hospital wage data and, possibly, wage data from other sources, such as the Bureau of Labor Statistics, to determine if other methodologies of imputing a wage index value where hospital wage data are not available may be feasible.

(2) Second Year of the Transition

In the CY 2006 PFS final rule with comment period, we indicated that we would apply a 4-year transition period to mitigate the impact on composite rates resulting from our adoption of CBSA-based geographic designations (70 FR 70169). Beginning January 1, 2006, during each year of the transition, an ESRD facility's wage-adjusted composite rate (that is, without regard to any case-mix adjustments) will be a blend of its old MSA-based wage-adjusted payment rate and its new CBSA-based wage adjusted payment rate for the transition year involved. For each transition year, the share of the blended wage-adjusted base payment rate that is derived from the MSA-based and CBSA-based wage index values is shown in Table 4 below. In CY 2006, the first year of the transition, we implemented a 75/25 blend. CY 2007 is the second year of the 4-year transition period. Consistent with the transition blends announced in the November 21, 2005 PFS final rule with comment period (70 FR 70170), we are proposing a 50/50 blend between an ESRD facility's MSA-based composite rate, and its CY 2007 CBSA-based rate reflecting its revised wage index values.

In CY 2006, we also eliminated the wage index cap of 1.30, and stated that we would implement a gradual reduction in the wage index floor of .90. Prior to January 1, 2006, the wage indexes were restricted to values no less than .90 and no greater than 1.30, meaning that payments to facilities in areas where labor costs fell below 90 percent of the national average, or exceeded 130 percent of that average, were not adjusted beyond the 90 percent or 130 percent level. Although we stated that the ESRD wage index values should not be constrained by the application of floors and ceilings, we also expressed concern that the immediate elimination of the floor could adversely affect ESRD beneficiary access to care. Therefore, we reduced the floor to .85 in CY 2006.

For CY 2007, we are proposing to reduce the wage index floor to .80. As we stated in the CY 2006 PFS final rule with comment period, we intend to reassess the continuing need for a wage index floor in CY 2008 and CY 2009 (CY 2006 PFS final rule with comment period, November 21, 2005, 70 FR 70169 through 70170). The proposed wage index floors, caps, and blended shares of the composite rates applicable to all ESRD facilities during CYs 2007 through 2009 are shown in Table 4 below. They are identical to the values shown in Table 20 of the CY 2006 PFS final rule with comment period (70 FR 70170) for the applicable years. Start Printed Page 49010

Table 4.—Wage Index Transition Blend

CY paymentFloorCeilingOld MSA (percent)New CBSA (percent)
2007.80 *None5050
2008ReassessNone2575
2009ReassessNone0100
* Each wage index floor is multiplied by a budget neutrality adjustment factor. For CY 2007 the budget neutrality adjustment is 1.053069 resulting in an actual wage index floor of 0.8425.

An example of how the wage-adjusted composite rates would be blended during CY 2007 and the two subsequent transition years follows.

Example:

An ESRD facility has a wage-adjusted composite rate (without regard to any case-mix adjustments) of $135.00 per treatment in CY 2006. Using CBSA-based geographic area designations, the facility's CY 2007 wage-adjusted composite rate, reflecting its wage index value as shown in Table 5 below, would be $145.00. During the remaining 3 years of the four-year transition period to the new CBSA-based wage index values, this facility's blended rate through 2009 would be calculated as follows:

CY 2007 .50 × $135.00 + .50 × $145.00 = $140.00

CY 2008 .25 × $135.00 + .75 × $145.00 = $142.50

CY 2009 0 × $135.00 + 1.0 × $145.00 = $145.00

We note that this hypothetical example assumes that the calculated wage-adjusted composite rate of $145.00 for CY 2007 does not change in CYs 2008 and 2009. In actuality, the wage-adjusted composite rate would change because of annual revisions to the wage index. However, the example serves only to demonstrate the effect on the composite rate of the CBSA-based wage index values which will be phased-in during the remaining 3 years of the transition period.

c. Budget Neutrality Adjustment

Section 1881(b)(12)(E)(i) of the Act, as added by section 623(d) of the MMA, requires that any revisions to the ESRD composite rate payment system as a result of the MMA provision (including the geographic adjustment) be made in a budget neutral manner. This means that aggregate payments to ESRD facilities in CY 2007 should be the same as aggregate payments that would have been made if we had not made any changes to the geographic adjusters. We note that this budget neutrality adjustment only addresses the impact of changes in the geographic adjustments. A separate budget neutrality adjustment was developed for the case-mix adjustments, currently in effect. Since we are not proposing any changes to the case-mix measures for CY 2007, the current case-mix budget neutrality will remain in effect for CY 2007. For CY 2007, we again propose to apply a BNF directly to the ESRD wage index values, as we did in CY 2006. As we explained in the CY 2006 PFS final rule with comment period (70 FR 70170 through 70171), we believe this is the simplest approach because it allows us to maintain our base composite rates during the transition from the current wage adjustments to the revised wage adjustments described earlier in this section. Because the ESRD wage index is only applied to the labor-related portion of the composite rate, we computed the BNF adjustment based on that proportion (53.711 percent).

In order to compute the proposed CY 2007 wage index BNF, we used the wage index values in Tables 5 and 6 below, 2005 outpatient claims (paid and processed as of December 31, 2005), and geographic location information for each facility which may be found through Dialysis Facility Compare. Dialysis Facility Compare can be found by going to the following Web site: http://www.cms.hhs.gov/​DialysisFacilityCompare/​.

Using treatment counts from the 2005 claims and facility-specific CY 2006 composite rates, we computed the estimated total dollar amount each ESRD provider would have received in CY 2006 (the first year of the 4-year transition). The total of these payments became the target amount of expenditures for all ESRD facilities for CY 2007. Next, we computed the estimated dollar amount that would have been paid to the same ESRD facilities using the proposed ESRD wage index for CY 2007 (the second year of the 4-year transition). The total of these payments became the second year new amount of wage-adjusted composite rate expenditures for all ESRD facilities.

After comparing these two dollar amounts (target amount divided by second year new amount), we calculated an adjustment factor that, when multiplied by the applicable CY 2007 ESRD wage index shown in Tables 5 and 6 below, will result in payments to each facility that will remain within the target amount of composite rate expenditures when totaled for all ESRD facilities. The proposed budget neutrality adjustment factor for the CY 2007 wage index is 1.053069.

To ensure budget neutrality we also must apply the BNF to the wage index floor of 0.8000 which results in a proposed adjusted wage index floor of 0.8425 for CY 2007.

d. ESRD Wage Index Tables

The following two tables show the proposed CY 2007 ESRD wage index, including the BNF adjustment, for urban areas (Table 5) and rural areas (Table 6).

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Table 6.—Proposed CY 2007 ESRD Wage Index for Rural Areas Based on CBSA Labor Market Areas

CBSA codeNonurban areaWage index
1Alabama0.8425
2Alaska1.1247
3Arizona0.9398
4Arkansas0.8425
5California1.1902
6Colorado0.9838
7Connecticut1.2377
8Delaware1.0239
10Florida0.9051
11Georgia0.8425
12Hawaii1.1022
13Idaho0.8566
14Illinois0.8769
15Indiana0.8927
16Iowa0.9159
17Kansas0.8425
18Kentucky0.8425
19Louisiana0.8425
20Maine0.8856
21Maryland0.9417
22Massachusetts1.0758
23Michigan0.9532
24Minnesota0.9653
25Mississippi0.8425
26Missouri0.8425
27Montana0.9062
28Nebraska0.9154
29Nevada0.9435
30New Hampshire1.1373
311 New Jersey
32New Mexico0.8790
33New York0.8688
34North Carolina0.9055
35North Dakota0.8425
36Ohio0.9134
37Oklahoma0.8425
38Oregon1.0288
39Pennsylvania0.8774
411 Rhode Island
42South Carolina0.8425
43South Dakota0.9038
44Tennessee0.8425
45Texas0.8425
46Utah0.8587
47Vermont1.0472
48Virgin Islands0.8425
49Virginia0.8425
50Washington1.0827
51West Virginia0.8425
52Wisconsin0.9970
53Wyoming0.9805
1 All counties in the States of New Jersey and Rhode Island are urban.

H. Private Contracts and Opt-Out Provision—Practitioner Definition

[If you choose to comment on issues in this section, please include the caption “PRIVATE CONTRACTS AND OPT-OUT” at the beginning of your comments.]

Section 4507 of the BBA of 1997 amended section 1802 of the Act to permit certain physicians and practitioners to opt-out of Medicare if certain conditions were met, and to provide through private contracts services that would otherwise be covered by Medicare. Before enactment of BIPA (Pub.L. 106-554), section 1802(b)(5)(C) of the Act, which refers to the definition of “practitioner” at section 1842(b)(18)(C) of the Act, did not include registered dietitians or nutrition professionals among the practitioners who may choose to opt-out of Medicare. Section 105(d) of BIPA amended the definition of practitioner located at section 1842(b)(18)(c) of the Act to include registered dietitians or nutrition professionals. Because section 1802(b)(5)(C) of the Act references section 1842(b)(18)(c) of the Act in order to define the term practitioner for purposes of opting out of Medicare, current law permits registered dietitians or nutrition professionals to opt-out of Medicare. Because the definition of practitioner located in the current regulations at § 405.400 does not include registered dietitians or nutrition professionals, we are proposing to amend that section so that it is consistent with section 1802(b)(5)(C) of the Act. Start Printed Page 49054

I. Proposed Changes to Reassignment and Physician Self-Referral Rules Relating to Diagnostic Tests

[If you choose to comment on issues in this section, please include the caption “REASSIGNMENT AND PHYSICIAN SELF-REFERRAL” at the beginning of your comments.]

Historically, Medicare rules have prohibited the markup of the TC of certain diagnostic tests that are performed by outside suppliers and billed to Medicare by a different individual or entity. In addition, Medicare rules restrict who may bill Medicare for the PC (hereafter, also referred to as the “interpretation”) of diagnostic tests. Recent changes to our rules on reassignment of the right to receive Medicare payment may have led to some confusion as to whether the anti-markup and purchased interpretation requirements apply to certain situations where a reassignment has occurred pursuant to a contractual arrangement.

Likewise, we are concerned about the existence of certain arrangements that are not within the intended purpose of our physician self-referral rules, which allow physician group practices to bill for services furnished by a contractor physician in a “centralized building.” We are concerned that allowing physician group practices or other suppliers to purchase or otherwise contract for the provision of diagnostic tests and then to realize a profit when billing Medicare may lead to patient and program abuse in the form of overutilization of services and result in higher costs to the Medicare program.

Therefore, we are proposing to amend our reassignment regulations to clarify how the purchased test and purchased test interpretation rules apply in the case of a reassignment made under the contractual arrangement exception set forth at § 424.80(d)(2). Specifically, in our reassignment regulations, we propose to incorporate provisions similar to those that currently appear in § 414.50 of our regulations on purchased tests, and we are considering incorporating provisions on purchased test interpretations that currently appear in our manual instructions. In addition, we are proposing to change the definition of “centralized building” at § 411.351 of the physician self-referral regulations to place certain restrictions on what types of space ownership or leasing arrangements will qualify for purposes of the physician self-referral in-office ancillary services exception and physician services exception.

Our proposals regarding the reassignment regulations are based on existing requirements for purchased tests and purchased test interpretations. Section 1842(n) of the Act contains certain limitations on billing for the TC of diagnostic tests described in section 1861(s)(3) of the Act (other than clinical diagnostic laboratory tests paid under section 1833(a)(2)(D) of the Act, which are subject to the special rules set forth in section 1833(h)(5)(A) of the Act). Section 1842(n)(1)(A) of the Act provides that if the test was not performed by the billing physician and also was not performed or supervised by a physician with whom the billing physician shares a practice, Medicare payment is the lower of the costs (net of any discount) charged by the performing supplier to the billing physician, or the performing supplier's reasonable charge (or other applicable limit). This is commonly known as the anti-markup provision. Section 1842(n)(2) of the Act further provides that a physician may not bill a beneficiary any amount other than the amount specified in section 1842(n)(1)(A) of the Act and any applicable deductible and coinsurance. Under section 1842(n)(3) of the Act, if a physician knowingly, willfully, and repeatedly bills a Medicare beneficiary for more than the amount allowed under section 1842(n)(2) of the Act, he or she is subject to civil monetary penalties and assessments, and exclusion from Medicare and Medicaid for up to 5 years. Our regulations implementing section 1842(n) of the Act appear at § 414.50 and § 402.1(c)(15).

In addition, our Claims Processing Manual (Pub. 100-4) outlines certain conditions regarding who can submit a claim for purchased diagnostic test intepretations. As set forth in Chapter 1, Section 30.2.9.1 of the Claims Processing Manual, the following requirements must be satisfied in order to submit a claim for a purchased diagnostic test interpretation:

  • The test must be ordered by a physician or medical group that is independent of the person or entity performing the TC of the test, and also must be independent of the physician or medical group performing the interpretations.
  • The physician or medical group performing the interpretations does not see the patient.
  • The purchaser (or employee, partner, or owner of the purchaser) performs the TC of the test, and the interpreting physician must be enrolled in the Medicare program.

Section 1842(b)(6) of the Act generally prohibits Medicare payment to anyone other than the Medicare beneficiary or the physician or other person who performed the service for the beneficiary. However, section 1842(b)(6) of the Act, also provides exceptions, known as the reassignment exceptions, to this general rule. These exceptions allow us to make payment to an individual or an entity other than the beneficiary or the physician or other person who performed the service for the beneficiary. For example, the reassignment exceptions allow us to make payment to an employer of a physician, such as a group practice or a hospital, to which the physician employee has reassigned his or her right to payment.

Prior to the MMA, a physician or other individual supplier could reassign his or her right to bill and receive payment under a contractual arrangement, rather than an employee-employer relationship, only if the services being paid for were performed on the premises of the contracting hospital, critical access hospital, clinic, or other facility. Section 952 of the MMA, however, amended section 1842(b)(6)(A)(ii) of the Act to extend the reassignment exception to contractual arrangements regardless of whether the services are performed on the premises of the billing entity. Section 952 of the MMA permits us to recognize this type of reassignment to the extent that the contractual arrangement between the physician or other individual supplier and the billing entity (excluding a billing agent, which cannot receive reassigned benefits) meets program integrity and other safeguards as the Secretary may determine to be appropriate. A motivating factor behind the passage of section 952 of the MMA appears to have been the desire by the Congress to permit us to allow hospital emergency department staffing companies that employ physicians on a contract basis to bill Medicare (if the staffing companies enroll in Medicare).

Our proposed implementation of section 952 of the MMA appeared in the Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2005 proposed rule, 69 FR 47488, 47524 through 47525 (August 5, 2004). We proposed program safeguards, whereby the parties to the contractual arrangement would have joint and several liability for any Medicare overpayments, and the physician or other individual supplier would have unrestricted access to billings submitted on his or her behalf by the entity receiving reassigned payments. In that proposed rule, we stated our awareness that the changes to the reassignment rules authorized by section 952 of the MMA may create new fraud and abuse vulnerabilities, which may not become apparent until the program has Start Printed Page 49055experience with new contractual arrangements. We solicited comments on these potential program vulnerabilities and on possible additional safeguards to protect against such vulnerabilities.

Comments submitted in response to the CY 2005 PFS proposed rule expressed concern over the recent growth of “pod” or “condo” laboratories (hereinafter “pod labs”). In a typical pod lab arrangement involving pathology services, an entity leases space in a medical building and then subdivides the space into separate areas or cubicles, which are equipped with microscopes and a minimal amount of other laboratory equipment. The entity subleases each space to a physician group practice, even though the space may be located many miles away from any medical office of the group practice and is often located in a different state. The entity hires a histologist who performs the TC of the pathology service, by preparing a microscopic slide of each specimen for review by a pathologist. The entity also makes arrangements with a pathologist, who performs the PC of the pathology service and who also supervises the pod lab.

In one type of arrangement, the pathologist and histologist perform their services for the different group practices by moving from cubicle to cubicle. Each group practice pays the pathologist a fee for every slide reviewed and pays the entity a management fee, which covers the rental of the pod lab and the histologist's salary. The group practice then bills Medicare for the entire pathology service, typically at a markup from what the group practice paid the pathologist for the professional service and the entity for its services. In another common arrangement, the histologist performs the TC of the pathology service for the entity and the entity bills Medicare for that service, while the group practice bills for the interpretation that was performed by its independent contractor pathologist, who has reassigned to the group practice his or her right to receive Medicare payment.

The commenters stated that pod lab arrangements are subject to fraud, waste and abuse, including, but not limited to the following:

  • Generation of medically unnecessary biopsies.
  • Kickbacks.
  • Fee-splitting.
  • Referrals that would otherwise be prohibited under the physician self-referral statute.

The commenters provided several suggestions. One commenter suggested that we prohibit a physician from reassigning benefits to another physician if the physicians do not practice in substantially the same medical specialty. Some commenters also stated that our regulations need to state more clearly that all requirements of the purchased diagnostic test rules and purchased test interpretation rules need to be met.

In the CY 2005 PFS final rule, we responded that we shared the commenters concerns, although we declined to incorporate the suggested revisions at that time. We said that we would be paying close attention to this issue, and that we might initiate future rulemaking to address arrangements that are fraudulent or abusive. (See 69 FR 66316, November 15, 2004.) In that final rule, we amended our reassignment regulation at § 424.80(a) to state that nothing in § 424.80 alters an individual's or entity's obligations under other Medicare statutes or rules, including, but not limited to, the physician self-referral law (section 1877 of the Act), the anti-kickback statute (section 1128B(b)(1) of the Act), the regulations regarding purchased diagnostic tests, and the regulations regarding services and supplies provided incident to a physician's service.

At about the same time as we published our proposed rule for implementing section 952 of the MMA, we published an IFC concerning exceptions to the physician self-referral law in section 1877 of the Act (69 FR 16054). Section 1877 of the Act prohibits a physician from making referrals for DHS, as defined in section 1877(h)(6) of the Act, payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership or compensation), and it prohibits the entity from billing Medicare, another payor, or the beneficiary for those referred services, unless an exception applies. The statute establishes a number of specific exceptions to these prohibitions and grants the Secretary the authority to create regulatory exceptions for financial relationships that pose no risk of fraud or abuse.

One significant exception is at § 411.355(a) for the provision of “physician services” as defined in § 410.20(a). Under this exception, professional physician services that are DHS must be furnished personally by another physician who is a member of the referring physician's group practice, or by a physician in the same group practice as the referring physician, or by someone under the supervision of one of these physicians. A “member” of a group practice is a physician owner, a physician employee, a locum tenens physician, or an on-call physician while the physician is providing on-call services for members of the group practice. “Physician in the group practice” means a member of the group practice, as well as an independent contractor physician during the time the independent contractor is furnishing patient care services for the group practice to the group practice's patients in the group practice's facilities. (See § 411.351.)

Another significant exception, at § 411.355(b), is for the provision of in-office ancillary services. This exception allows group practice physicians to refer patients for DHS to other members of their group or to nonphysician staff, provided that certain supervision, location, and billing requirements are satisfied. Specifically, the DHS must be furnished personally by the referring physician, a member of the group practice, or an individual who is supervised by the referring physician or by a physician in the group practice. In addition, the DHS must be furnished in—(1) the “same building” where group physicians perform a certain amount of physician services (as set forth in § 411.355(b)(2)), including physician services unrelated to the provision of DHS; or (2) in a “centralized building.” We define “centralized building,” in pertinent part, as all or part of building that is owned or leased on a full-time basis 24 hours per day, 7 days per week. In the “Phase II” physician self-referral IFC, we reaffirmed our earlier position, set forth in the “Phase I” final rule with comment period that, a group practice may have more than one centralized building (69 FR at 16075).

In response to the Phase II IFC, several commenters strongly criticized the centralized building prong of the in-office ancillary services exception. They requested that the rule be changed to require full-time use of the facility and the addition of a commercially reasonable test. According to the commenters, the Phase II IFC encourages numerous abusive arrangements that are designed solely to permit medical groups to bill in circumvention of the prohibition in section 1877 of the Act. Commenters objected to medical groups establishing satellite DHS facilities, sometimes in different States, specifically to capture ancillary income. Several commenters identified pod labs that rent space to urology groups as among the types of abusive arrangements that are proliferating. Several other commenters requested clarification that the in-office ancillary services exception did not Start Printed Page 49056override our policies on reassignment and purchased diagnostic tests. According to the comments, some of the arrangements do not satisfy the rules regarding purchased diagnostic tests. On the other hand, a professional association complained that the requirement that the centralized building be occupied exclusively by the medical group is too restrictive.

As noted above, we stated, in response to the comments on the proposed rule implementing section 952 of the MMA, that we might address suspect arrangements in a future rulemaking. After additional consideration, including consideration of the comments we received in response to the Phase II IFC, we are now proposing to amend our regulations on reassignment and physician self-referral in this proposed rule.

We are proposing to amend § 424.80 of our regulations to clarify that any reassignment pursuant to the contractual arrangement exception is subject to program integrity safeguards that relate to the right to payment for diagnostic tests. First, we would amend § 424.80 of our regulations to provide that if the TC of a diagnostic test (other than clinical diagnostic laboratory tests paid under section 1833(a)(2)(D) of the Act, which are subject to the special rules set forth in section 1833(h)(5)(A) of the Act) is billed by a physician or medical group (the “billing entity”) under a reassignment involving a contractual arrangement with a physician or other supplier who performs the service, the amount billed to Medicare by the billing entity, less the applicable deductibles and coinsurance, may not exceed the lowest of the following amounts:

  • The physician or other supplier's net charge to the billing physician or medical group.
  • The billing physician's or medical group's actual charge.
  • The fee schedule amount for the service that would be allowed if the physician or other supplier billed directly.

Second, we would also require that, in order to bill for the TC, the billing entity would be required to perform the interpretation. Third, we are considering further amendments to § 424.80(d) that would impose certain conditions on when a physician or medical group can bill for a reassigned PC of a diagnostic test. We are considering the following conditions:

  • The test must be ordered by a physician that is financially independent of the person or entity performing the test and also of the physician or medical group performing the interpretation.
  • The physician or medical group performing the interpretation does not see the patient.
  • The physician or medical group billing for the interpretation must have performed the TC of the test.

We believe that we are comfortably within our authority to place the proposed restrictions on reassignments made before a contractual arrangement, in order to guard against patient and program abuse, and we also believe that we would be within our authority to adopt the conditions on billing for a reassigned PC before a contractual arrangement that we continue to consider.

We note that there is no right to effect a reassignment under section 1842(b)(6) of the Act (rather, this section allows, but does not require us to make payment to someone other than the beneficiary or the physician or other person who performed the service), and that section 952 of the MMA permits us to recognize reassignments under the contractual arrangement exception only to the extent that the arrangement meets program integrity and other safeguards as the Secretary may determine to be appropriate. Moreover, we believe that our current rules on purchased diagnostic tests generally should be applicable to both situations in which the billing entity is purchasing the test without a formal reassignment as well as situations in which the physician performing the test has reassigned his or her right to Medicare payment to the billing physician or medical group.

Although we welcome comments on all aspects of our proposals, we are particularly interested in soliciting comments on the amendments we have proposed, as well as those we are still considering involving reassigned interpretations, to § 424.80(d). In particular, we are soliciting comments as to whether diagnostic tests in the DHS category of radiology and certain other imaging services should be excepted from any those provisions; whether the proposal in whole or in part should apply only to pathology services; whether any of these provisions should apply to services performed on the premises of the billing entity and if so, how to define the premises appropriately. We are also soliciting suggested regulatory text for the proposal under consideration involving purchased test interpretations, as well as any other comments regarding the appropriate scope of the provisions under consideration.

In addition, we are soliciting comments on whether an anti-markup provision should apply to the reassignment of the PC of diagnostic tests performed under a contractual arrangement, and if so, how to determine the correct amount that should be billed to the Medicare program.

In addition to our proposed changes to the reassignment rules, we are proposing to change the definition of “centralized building” in § 411.351 for purposes of our physician self-referral regulations. We are persuaded by the commenters who responded to the Phase II IFC that our present definition may encourage the unnecessary ordering of ancillary services. Section 1877(b)(1) of the Act, in conjunction with section 1877(h)(4)(vi) of the Act, states that the Secretary may define by regulation what constitutes a “group practice” for purposes of the physician services exception. Similarly, section 1877(b)(2) of the Act authorizes the Secretary to determine additional terms and conditions relating to the supervision and location requirements of the in-office ancillary services exception as may be necessary to prevent a risk of program or patient abuse. Accordingly, we propose to modify the definition of “centralized building” to include a minimum square footage requirement of 350 square feet. Our modified definition would be relevant to both the physician services exception and the in-office ancillary services exception. That is because, under § 411.351, a “physician in the group practice” includes an independent contractor physician during the time he or she is providing services to the group's patients in the group's facilities. Thus, to the extent that an independent contractor physician would qualify as a “physician in the group” on the basis of furnishing services to a group's patients in a centralized building, the space owned or leased by the group would need to comply with the proposed modification to the definition of “centralized building” in order for the group to rely on the physician services exception or the in-office ancillary services exception when billing Medicare for services furnished by the independent contractor physician.

Although we believe that the arrangements we seek to address through our proposed change to the definition of “centralized building” primarily involves independent contractor physicians, the proposed definition would also apply to services performed by physicians who are employees of a group practice.

The proposed minimum square footage requirement would not apply to Start Printed Page 49057space owned or rented in a building in which no more than three group practices own or lease space in the “same building,” as defined in § 411.351 (that is, in a building with the same street address) and share the same “physician in the group practice” (as defined in § 411.351). The purpose of the square foot minimum and the exception is to prevent abusive arrangements such as pod labs, while not disqualifying legitimate, stand-alone physician offices that are unusually small. The following examples are intended to illustrate how the proposed exception might apply:

+ Example 1—A space of 200 square feet located in a building in which only two other group practices lease space could qualify as a centralized building, irrespective of whether all three group practices contract with the same individual as a “physician in the group practice.”

+ Example 2—A space of 200 square feet is located in a building in which seven other group practices lease space. Dr. Jones has a contractual relationship with three group practices as a “physician in the group practice.” Dr. Smith also has a contractual relationship with three group practices. No physician has a contractual relationship as a “physician in the group practice” with four or more group practices that are located in that building. The space could qualify as a “centralized building.”

We would also require the space to contain, on a permanent basis, the necessary equipment to perform substantially all of the DHS that are performed in this space, in order to meet the definition of a “centralized building.” That is, we wish to prevent the situation in which an entity would routinely move equipment as needed from one group's space to another group's space (for example, from cubicle to cubicle). We believe these situations are abusive and contrary to the purpose of concept of the “centralized building” concept, but we recognize that there may be an occasional need to bring specialized equipment into the space on a temporary basis.

We believe that the proposed clarification to our reassignment rules, in tandem with our proposed changes to the definition of “centralized building” for purposes of our physician self-referral rules would prevent abusive arrangements while preserving legitimate small physician offices. In particular, we anticipate that restrictions on marking up the TC of diagnostic tests as well as the limits we are considering for who can bill for the PC of diagnostic tests, combined with square footage limits and requirements of having necessary equipment on site would make it not financially feasible for pod labs to exist.

With respect to our proposed change to the definition of “centralized building,” we seek comments on whether there should be a minimum square foot requirement, and if so, whether the minimum should be 350 square feet or an amount more or less than that. In addition, we seek comments regarding whether there should be an exception to any minimum square foot requirement, and if so, the circumstances under which an exception should apply.

With respect to our proposal that the “centralized building” permanently contain the necessary equipment to perform substantially all of the DHS that is furnished in the “centralized building,” we seek comments on whether this test should be imposed, and whether at least 90 percent or some other minimum percentage or measurement is appropriate. We are also considering whether to require that, for space to qualify as a “centralized building,” the group practice must employ, in that space, a nonphysician employee or independent contractor who will perform services exclusively for the group for at least 35 hours per week. We seek comments on whether we should have this requirement or similar requirement, or whether this requirement would be unduly burdensome on a small group practice, and whether this requirement would be likely to reduce the number of existing pod labs and to discourage the development of new pod labs. Finally, we seek comments on whether a group practice should be allowed to maintain a “centralized building” in a State different from the State(s) in which it has an office that meets the criteria of § 411.355(b)(2)(i), and if so, whether space that is located in a different State must be within a certain number of miles from an office of the group practice that meets the criteria of § 411.355(b)(2)(i), in order to qualify as a “centralized building.”

J. Supplier Access to Claims Billed on Reassignment

Section 1833(e) of the Act provides that, “no payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period.” Section 1842(b)(6) of the Act generally provides that payment may not be made to anyone other than the beneficiary or the physician or other person who provided the service. There are certain exceptions to this prohibition whereby payment may be made to others. These are commonly referred to as the reassignment exceptions and are found at section 1842(b)(6)(A) of the Act.

Taking these two statutory provisions together, we are permitted, but not required, to make payment to someone other than the beneficiary, or the physician or other person who furnished the service, but only if we have determined that Medicare has received all necessary information to determine the amounts due the provider. Where Medicare makes payment to an entity rather than to the physician or other person who furnished the service, there is a heightened concern that payment may not be correct. By allowing physicians and other individual suppliers who reassign benefits to an entity such as a group practice to have access to the billing information concerning the services they allegedly furnish, we believe we will reduce the risk of inappropriate billing.

Moreover, as noted in section I.2. of this proposed rule, section 952 of the MMA amended section 1842(b)(6)(A)(ii) of the Act to allow a physician or other person who was in a contractual arrangement rather than in an employee-employer relationship to reassign his or her right to bill and receive payment, irrespective of whether the services were performed on the premises of the entity. Section 952 of the MMA permits reassignment to the extent that the contractual arrangement between the physician or other individual supplier and the billing entity meets program integrity and other safeguards that the Secretary may determine to be appropriate.

In the FY 2005 Physician Fee Schedule proposed rule, published August 5, 2005 (69 FR 47488, 47524 through 47525), we stated our awareness that changes in the reassignment rules based on section 952 of the MMA may create new fraud and abuse vulnerabilities, which may not become apparent until the program has experience with new contractual arrangements. We proposed program safeguards, whereby the parties to the contractual arrangement would have joint and several liability for any Medicare overpayments, and the physician or other individual supplier would have unrestricted access to billings submitted on their behalf by the entity receiving reassigned payments. In response to the August 5, 2005 proposed Start Printed Page 49058rule, we received a comment that questioned the need for the two program integrity safeguards (joint and several liability and unrestricted access to billing records) as a requirement for a reassignment of claims involving a contractual arrangement. The commenter believed that it was premature for CMS to implement these program safeguards, that CMS already imposes joint and several liability through Medicare participation agreements and the signing of the enrollment form for billing reassigned claims (the CMS-855-R form), and questioned why the program safeguards applied only to independent contractors and not to employees. (69 FR 66316 through 66317 (November 15, 2004).)

In response to the commenter, we stated that those program integrity safeguards were necessary to monitor the billings of entities with which we have had billing problems (for example, billing for services never furnished and upcoding resulting in Medicare overpayments) in the past, and that the reason the safeguards applied to independent contractors and not to employees, was that the billing problems identified thus far involved certain entities (which, for the most part, contracted with, rather than employed, emergency room (ER) physicians). We also stated that we would study whether the same program integrity safeguards applicable to independent contractors should also apply to employees.

Prior to January 1, 2005, the effective date of the program integrity safeguards for the contractual arrangement reassignment exception, we received public inquiries asking why employees do not have unrestricted access to billing records. Since the January 1, 2005 effective date of the program integrity safeguards, we have received an inquiry from an ER physician employee of a medium-sized ER physician staffing company, who was denied access to billing records for services that he claims to have furnished, and who had his employment terminated. We also note that the MMA Conference Report, in its discussion of section 952 of the MMA, states that the Conference Committee supports appropriate program integrity efforts for any entities billing the Medicare program, including entities with independent contractors as well as employees. Having reconsidered the issue, we find no valid reason why an employee should not have access to records on billings for services furnished by that employee. Therefore, we are proposing to change the title of § 424.80(d) and amend § 424.80(d)(2) of our regulations to state that the supplier who reassigns his or her right to bill and receive Medicare payment to an entity has unrestricted access to claims information submitted by that entity for services supposedly furnished by the individual supplier, irrespective of whether the supplier is an employee or independent contractor of the entity. If adopted, our proposal would also mean that if an entity receiving the reassigned benefits were to refuse to provide the billing information to the employee supplier requesting the information, the entity's right to receive reassigned benefits may be revoked under 42 CFR 424.82(c)(3) (which is currently the case with respect to an entity's refusal to provide billing information to an independent contractor supplier).

K. Coverage of Bone Mass Measurement (BMM) Tests

[If you choose to comment on issues in this section, please include the caption “BONE MASS MEASUREMENT TESTS” at the beginning of your comments.]

In an IFC entitled “Medicare Coverage of and Payment for Bone Mass Measurements” published in the Federal Register on June 24, 1998 (63 FR 34320), we implemented section 4106 of the BBA by establishing a new regulatory section, 42 CFR 410.31 (Bone Mass Measurement: Conditions for Coverage and Frequency Standards). Section 4106 of the BBA statutorily defined BMM and individuals that are qualified to receive a BMM. The June 24, 1998 IFC, under the “reasonable and necessary” provisions of 1862(a)(1)(A) of the Act, also established conditions for coverage of the tests that must be ordered by physicians or nonphysician practitioners. Lastly, as directed by section 4106 of the BBA, we established frequency standards governing the time period when qualified individuals would be eligible to receive covered BMMs.

1. Provisions of the June 24, 1998 IFC

As stated earlier in this section, the June 24, 1998 IFC implemented section 4106 of the BBA by establishing conditions for coverage and frequency standards for BMMs to ensure that they are paid for uniformly throughout the Medicare program and that they are reasonable and necessary for Medicare beneficiaries who are eligible to receive these measurements. This section summarizes the provisions discussed in the June 24, 1998 IFC.

a. Coverage Conditions and Frequency Standards

We established conditions for coverage and frequency standards for medically necessary BMMs for five categories of Medicare beneficiaries in § 410.31.

In § 410.31(a), we defined “bone mass measurement” based on the statutory definition in section 4106 of the BBA. In accordance with the “reasonable and necessary” provisions of section 1862(a)(1)(A) of the Act, we established the conditions for coverage of BMMs in § 410.31(b) of the regulations. Consistent with § 410.32 (Diagnostic x-ray tests, diagnostic laboratory tests, and diagnostic tests: Conditions), we provided that coverage be available for the BMM only if it is ordered by the physician or a qualified nonphysician practitioner (as defined in § 410.32(a)) treating the beneficiary following an evaluation of the beneficiary's need for the test, including a determination as to the medically appropriate procedure to be used for the beneficiary. We believed that BMMs were not demonstrably reasonable and necessary unless (among other things) they are ordered by the physician treating the beneficiary following a careful evaluation of the beneficiary's medical need, and they are employed to manage the beneficiary's care.

To ensure that the BMM is performed as accurately and consistently in accordance with appropriate quality assurance guidelines as possible, we required that it be performed under the appropriate supervision of a physician as defined in § 410.32(b)(3). To ensure that the BMM is medically appropriate for the five categories specified in the law, we provided that it be reasonable and necessary for diagnosing, treating, or monitoring the condition of the beneficiary who meets the coverage requirements specified in § 410.31(d).

Furthermore, in § 410.31(c), we set forth limitations on the frequency for covering a BMM. Generally, we cover a BMM for a beneficiary if at least 23 months have passed since the month the last BMM was performed. However, we allow for coverage of follow-up BMMs performed more frequently than once every 23 months when medically necessary. We listed the following examples of situations where more frequent BMMs procedures may be medically necessary to include:

  • Monitoring beneficiaries on long-term glucocorticoid (steroid) therapy of more than 3 months.
  • Allowing for a confirmatory baseline bone mass measurement (either central or peripheral) to permit Start Printed Page 49059monitoring of beneficiaries in the future if the initial test was performed with a technique that is different from the proposed monitoring method.

b. Beneficiaries Who May Be Covered

In § 410.31(d), we amended our regulations to conform to the statutory requirement that the following categories of beneficiaries may receive Medicare coverage for a medically necessary BMM:

  • A woman who has been determined by the physician or a qualified nonphysician practitioner treating her to be estrogen-deficient and at clinical risk for osteoporosis, based on her medical history and other findings.
  • An individual with vertebral abnormalities as demonstrated by an x-ray to be indicative of osteoporosis, osteopenia, or vertebral fracture.
  • An individual receiving (or expecting to receive) glucocorticoid (steroid) therapy equivalent to 7.5 mg of prednisone, or greater, per day, for more than 3 months.
  • An individual with primary hyperparathyroidism.
  • An individual being monitored to assess the response to or efficacy of an FDA-approved osteoporosis drug therapy.

c. Waiver of Liability

Section 410.31(e) provides that Medicare payment would be denied for a BMM in accordance with section 1862(a)(1)(A) of the Act if the regulatory standards are not satisfied. Existing regulations concerning limitation on liability are set forth in §§ 411.400 through 411.406 and are applicable to denial of BMMs under § 410.31.

d. Payments for BMMs

Medicare payments for covered BMMs are paid for under the PFS (42 CFR part 414) as required by statute. In the June 24, 1998 IFC, we revised the definition of “physician services” in § 414.2 to include bone mass measurements. When BMM procedures are furnished to hospital inpatients and outpatients, the TCs of these procedures are payable under existing payment methods for hospital services. These methods include payments under the prospective payment system, on a reasonable cost basis, or under a special provision for determining payment rates for hospital outpatient radiology services.

In the June 24, 1998 IFC, we revised § 414.50(a), regarding physician billing for purchased diagnostic tests, to clarify that the section does not apply to payment for BMMs.

e. Conforming Changes

In the June 24, 1998 IFC, to allow for appropriate placement in the CFR of the BMM coverage requirements, we redesignated § 410.31 (Prescription drugs used in immunosuppressive therapy) as § 410.30.

2. Additional Scientific Evidence

In 2004, the Surgeon General issued a report, Bone Health and Osteoporosis (U.S. Department of Health and Human Services, Bone Health and Osteoporosis: A Report of the Surgeon General. Rockville, MD: U.S. Department of Health and Human Services, Office of the Surgeon General, 2004). This report provides scientific evidence related to the prevention, assessment, diagnosis, and treatment of bone disease. The report states that identification of those at risk of bone disease and fracture is important so that appropriate interventions can be implemented. However, as the report states, “Assessing the risk of bone disease and fracture remains a challenge. Not all of the risk factors have been identified, and the relative importance of those that are known remains unclear.”

As bone strength is not measured directly, bone mineral density (BMD) remains the single best predictor of fracture risk, with the most widely accepted method for measuring BMD being the dual energy x-ray absorptiometry (DXA) for a bone density study at the axial skeleton (for example, hips and spine). As there are many sources of variability in the measurement of BMD, a quality control system related to both the methodology and reporting of test results is important to ensure the validity of DXA analysis.

In addition to DXA of the axial skeleton, bone mass can also be measured using other techniques. These other techniques include DXA bone density study for the appendicular skeleton (for example, radius, wrist, heel); quantitative computerized tomography (QCT), bone mineral density study for the axial skeleton or appendicular skeleton; radiographic absorptiometry (photodensitometry, radiogrammetry); single-photon absorptiometry (SPA); single energy x-ray absorptiometry (SXA) for the appendicular skeleton; and ultrasound bone mineral density study for the appendicular skeleton. With regard to these techniques (except for SPA which was not discussed), the 2004 Surgeon General report states, “While these methods do assess bone density and may provide an indication of fracture risk, it is important to note that the WHO [World Health Organization] recommendations and other guidelines for using BMD and interpreting BMD results for diagnosis are based on DXA measurements of the hip or spine.” The report further states, “Incorporating these techniques for bone assessment into future clinical trials and observational studies will help in better understanding their appropriate use as a means of predicting the risk of bone disease and fracture.”

3. Proposed Changes to the June 24, 1998 IFC

We received 18 public comments on the June 24, 1998 IFC. The majority of the comments had specific recommendations for changes to the IFC. In addition to responding to comments that we may receive on our proposed revisions to § 410.31, it is our intent to address all these previous comments in the CY 2007 PFS final rule.

Based on the comments received on the IFC, the Surgeon General's report, and other evidence, we are proposing changes to § 410.31. We encourage comments on these proposals.

a. Proposed “BMM” Definition (§ 410.31(a))

We are proposing to revise the definition of “bone mass measurement” at § 410.31(a)(2) to remove coverage for the use of SPA, which uses isotope sources to measure BMD. Many medical experts indicate that SPA has largely been replaced by the newer techniques of DXA, which are believed to be superior in accuracy and precision. Medicare claims data in recent years continue to show a steady decline in the use of the SPA procedure by the beneficiary population. Further, there is a lack of evidence to support continued use of SPA, an older procedure where the metrics have not been correlated with fracture rate.

We are proposing to revise the definition of a “bone mass measurement” to read, “Is performed with either a bone densitometer (other than a single-photon or dual-photon absorptiometry) or with a bone sonometer system that has been cleared for marketing for this use by the FDA under 21 CFR part 807, or approved for marketing by the FDA for this use under 21 CFR part 814.”

We are specifically requesting comments on this proposal regarding the evidence of benefit for SPA, particularly in comparison with other alternatives.

b. Conditions for Coverage (§ 410.31(b))

We are proposing to revise the conditions for coverage for BMMs in Start Printed Page 49060§ 410.31(b) by requiring that for a medically necessary BMM to be covered for an individual being monitored to assess the response to or efficacy of an FDA-approved osteoporosis drug therapy (§ 410.31(d)(5)) the individual would be required to meet the present conditions for coverage under § 410.31(b), and the monitoring would have to be performed by the use of an dual energy x-ray absorptiometry system (axial system).

We recognize that in the June 24, 1998 IFC, we allowed the physician or qualified nonphysician practitioner treating the beneficiary more flexibility in ordering those diagnostic measurements, but we are proposing to limit that flexibility with respect to the type of BMM that is used for monitoring individuals receiving osteoporosis drug therapy and other purposes (as discussed later in this section) because of new evidence and other information received since publication of the June 24, 1998 IFC that supports the need for requiring the use of the DXA measurement (axial skeleton) in those circumstances. In addition to the 2004 Surgeon General's Report that recognized the superiority of the DXA (axial skeleton) for measuring bone mass over time, the International Society for Clinical Densitometry currently recommends that if an individual has a low bone mass using a peripheral measurement (appendicular skeleton) he or she should have a DXA (axial skeleton) performed for monitoring or confirmatory diagnostic purposes.

Therefore, we are also proposing to revise § 410.31(b) by adding a requirement that in the case of any individual who qualifies for a bone mass measurement as provided for in § 410.31(d) and who receives a confirmatory baseline BMM to permit monitoring in the future, Medicare may cover a medically necessary BMM for that individual, if the present conditions for coverage under § 410.31(b) are met, and the BMM is performed by a dual energy x-ray absorptiometry system (axial skeleton) (if the initial measurement was not performed by this system).

As indicated previously, the most widely accepted method for measuring bone mineral density (BMD) is the use of DXA (Surgeons General's Report 2004) at axial skeletal sites. DXA (axial skeleton) measures BMD at the hip and spine (sites likely to fracture in patients who have osteoporosis). DXA is precise, safe, and low in radiation exposure, and permits more accurate and reliable monitoring of individuals over time. DXA of the femoral neck is the best validated test to predict hip fracture and is comparable to forearm measurements for predicting fractures at other sites (Evidence Report/Technology Assessment No 28, Agency for Healthcare Research and Quality (AHRQ), January 2001).

c. Bone Mass Measurement: Standards on Frequency of Coverage (§ 410.31(c))

To conform the examples of a BMM exception to the standards on frequency of coverage in § 410.31(c)(2) to the regulation change we are proposing in § 410.31(b)(3), we are proposing to revise the confirmatory baseline test example in § 410.31(c)(2)(ii) to read, “Allowing for a confirmatory baseline measurement to permit monitoring of beneficiaries in the future if the requirements of paragraph (b)(3) of this section are met.”

d. Bone Mass Measurement: Beneficiaries Who May Be Covered (§ 410.31(d))

The Congress has recognized that individuals receiving long-term glucocorticoid steroid therapy are qualified individuals for purposes of section 1861(rr)(1) of the Act. Therapy to prevent bone loss in most patients beginning long-term therapy has been recommended at a prednisone equivalent of ≥ 5 mg/day for at least 3 months (McIlwain, 2003). Based on our review of the current evidence, we are proposing to reduce the dosage equivalent in § 410.31(d)(3) from an average of 7.5 mg/day of prednisone for at least 3 months to an average of 5.0 mg/day of prednisone for the same period.

e. Use of the NCD Process (§ 410.31(f))

To facilitate future consideration of coverage of additional BMM systems for purposes of proposed paragraphs § 410.31(b)(2) and (b)(3), which would limit coverage of BMMs for monitoring individuals receiving osteoporosis drug therapy and for performing confirmatory baseline measurements, we are proposing to allow CMS, through the NCD process, to identify additional BMM systems for those purposes. By using the NCD process, we could conduct a timely assessment of FDA-approved BMMs. Use of an NCD to add coverage of effective BMM systems for these purposes is authorized by the reasonable and necessary provision of sections 1862(a)(1)(A) and 1871(a)(2) of the Act.

In summary, in view of the 18 comments and our review of the post-1998 medical literature, we have decided to propose several revisions to § 410.31 relative to the definition of the term “Bone Mass Measurement” (§ 410.31(a)(2)), the conditions for coverage (§ 410.31(b)), the examples of exceptions to the standards on frequency of coverage (§ 410.31(c)(2)), the category of individuals receiving (or expecting to receive) glucocorticoid (steroid) therapy (§ 410.31(d)(3)), and the addition of a new subparagraph (§ 410.31(f)) on use of the NCD process.

L. Independent Diagnostic Testing Facility (IDTF) Issues

[If you choose to comment on issues in this section, please include the caption “IDTF ISSUES” at the beginning of your comments.]

1. Proposed IDTF Changes in the Physician Fee Schedule Proposed Rule

During the course of a national review in 2003-2004, the Office of Inspector General (OIG) found a potential $71 million in improper payments made to IDTFs (Review of Claims Billed by Independent Diagnostic Testing Facilities for Services Provided to Medicare Beneficiaries During Calendar Year 2001 (A-03-03-00002)). The OIG found that erroneous payments were made as the result of poor or missing documentation or the lack of medical necessity. Moreover, in recent years, CMS and its contractors have determined that a number of IDTFs in California and other States are perpetrating schemes to defraud the Medicare program.

Since 2000, the number of IDTFs in California has increased by 40 percent, which is a far greater percentage increase than the Medicare population in that State. The number of IDTFs billing Medicare in California alone increased more than 400 percent from 2000 to 2005. The increased use of IDTF services has not lowered the use of diagnostic testing within other settings. The increased rates of utilization within IDTFs is likely to be unrealistic due to an increase in the need of diagnostic testing within California's Medicare population. Also, these IDTFs are growing at a rate faster than CMS can survey these facilities. The actual growth of IDTFs is not a problem, however, the results of the OIG audit make it clear that we need to closely monitor IDTFs and establish standards to ensure quality care for Medicare beneficiaries. To address the erroneous payments identified by the OIG above, we are proposing to establish IDTF supplier standards similar to those we adopted for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Suppliers on October 11, 2000 (see 42 CFR 424.57).

We are proposing that each IDTF be required to be in compliance with the Start Printed Page 49061proposed fourteen suppler standards discussed in section L.2. below in order to obtain or retain enrollment in the Medicare program. Accordingly, at proposed § 410.33(h), we are proposing that if an IDTF fails to meet one or more of the proposed standards at the time of enrollment or at the time of re-enrollment, then its enrollment application would be denied. Also, if at any time we determine that an enrolled IDTF no longer meets the proposed supplier standards, its billing privileges would be revoked.

We believe that these supplier standards are needed to ensure that minimum quality standards are met to protect beneficiaries as well as the Medicare Trust Fund. These standards are merely good business practices which will help to ensure that suppliers are providing a quality care to Medicare beneficiaries. Examples of the kind of standards are a primary business phone number and address. Another example is a posting of standards for review by patients and the public.

We are proposing to adopt, for IDTFs, a number of standards we adopted for DMEPOS suppliers, including supplier standard number 6 which requires a supplier to maintain a comprehensive liability insurance policy of $300,000 or 20 percent of its average annual Medicare billings, whichever amount is greater, that covers both the place of business and all customers and employees of the IDTF.

Furthermore, we are proposing in the new performance standard number 7 that an IDTF agrees not to directly solicit patients. This provision does not preclude the IDTF from public advertisement or marketing its services to physicians and other suppliers, however it does prohibit recruitment of beneficiaries through direct solicitation.

Additionally, the IDTF would be required to grant CMS, or its designated fee-for-service contractors, including our agents, to have access to the IDTF physical location, all equipment, and beneficiary medical records during normal business hours. For portable equipment, an IDTF would be required to maintain a catalog of portable equipment and be able to produce the cataloged equipment within two business days. If the IDTF denies this access, the IDTF's Medicare enrollment would be immediately revoked.

To ensure that equipment used by an IDTF is maintained and operates properly, we are seeking public comment regarding IDTF supplier standard number 11, which would require that an IDTF must have its testing equipment calibrated per equipment instructions or in compliance with applicable industry standards. Specifically, we are seeking public comment regarding the organizations or entities that may currently establish testing specifications for diagnostics equipment. Further, if these organizations or entities do not exist, we invite public comment regarding establishment of a supplier standard that relies on the manufacturer's maintenance and calibration standards.

While we understand that these proposed additional standards could lead certain IDTFs to withdraw from the Medicare program rather than comply with the new standards, we believe that legitimate businesses would not oppose these changes. Moreover, we emphasize that services provided by an IDTF are also readily available to beneficiaries through other avenues such as physicians' offices, outpatient laboratories, outpatient radiology facilities, and outpatient clinics. We believe that the implementation of these proposed standards would improve the quality of services provided to Medicare beneficiaries by IDTFs without any associated access concerns.

2. Proposed Performance Standards for IDTFs

The IDTF would be required to meet the following standards as of January 1, 2007 and any newly or reenrolling IDTF would be required to certify in its enrollment application that it meets and would continue to meet the standards. At § 410.33, we are proposing to revise the regulation to specify that the IDTF would be required to—

  • Operate its business in compliance with all applicable Federal, State, and local licensure and regulatory requirements with regard to the health and safety of patients;
  • Provide complete and accurate information on its enrollment application as stated in the “Requirements for Providers and Suppliers to Establish and Maintain Enrollment final rule” (April 21, 2006 (42 FR 20754)). Any change in enrollment information would be required to be reported to the designated fee-for-service contractor on the Medicare enrollment application within 30 calendar days;
  • Maintain a physical facility on an appropriate site. For the purposes of this proposed standard, a post office box or commercial mailbox would not be considered a physical facility. The physical facility would be required to contain space for equipment appropriate to the services designated on the enrollment application, facilities for hand washing, adequate patient privacy accommodations, and the storage of both business records and current medical records;
  • Have all applicable testing equipment available at the physical site, excluding portable equipment. A catalog of portable equipment, including equipment serial numbers, would be maintained at the physical site. In addition, portable equipment would be made available for inspection within two business days of our inspection request. The IDTF would be required to maintain a current inventory of the equipment (including serial/registration numbers), provide this information to the designated fee-for-service contractor and notify the contractor of any changes in equipment;
  • Maintain a primary business phone under the name of the business. The business phone would be located at the designated site of the business. The telephone number or toll free numbers would be available in a local directory and through directory assistance;
  • Have a comprehensive liability insurance policy of at least $300,000 or 20 percent of its average annual Medicare billings, whichever amount is greater, that covers both the place of business and all customers and employees of the IDTF. The insurance policy would be carried by a non-relative owned company. The policy would be required to list the serial numbers of any and all equipment used by the IDTF;
  • Agree not to directly solicit patients, which includes, but is not limited to, a prohibition on telephone, computer, or in-person contracts. The IDTF would accept only those patients referred for diagnostic testing by an attending physician, who is furnishing a consultation or treating a beneficiary for a specific medical problem and who uses the results in the management of the beneficiary's specific medical problem. Nonphysician practictioners may order tests as set forth in § 410.32(a)(3);
  • Answer beneficiaries' questions and respond to their complaints. Documentation of those contacts would be maintained at the physical site;
  • Openly post these standards for review by patients and the public;
  • Disclose to the government, any person having ownership, financial or control interest, or any other legal interest in the supplier at the time of enrollment or within 30 days of a change;
  • Have its testing equipment calibrated per equipment instructions and in compliance with applicable national standards; Start Printed Page 49062
  • Have technical staff on duty with the appropriate credentials to perform tests. The IDTF would be required to produce the applicable Federal or State licenses and/or certifications of the individuals performing these services;
  • Have proper medical record storage and be able to retrieve medical records upon request from CMS or its designated fee-for-service contractor within 2 business days; and
  • Permit CMS, including its agents or its designated fee-for-service contractors, to conduct unannounced, on-site inspections to confirm the IDTF's compliance with these proposed standards. The IDTF would be required to provide access, during regular business hours, to CMS and beneficiaries, as well as maintain a visible sign posting the normal business hours of the IDTF.

3. Supervision

To ensure quality care is provided to Medicare beneficiaries, we are proposing to revise § 410.33(b)(1) to read that physicians will be limited to providing supervision to “no more than three (3) IDTF sites.”

4. Place of Service

In addition to proposing the establishment of specific supplier standards for IDTFs, at proposed § 410.33(i), we are proposing to define the “point of the actual delivery of service” as the correct “Place of Service” for the claim form in the case of diagnostic testing performed outside the IDTF's physical location. For example, when an IDTF performs a diagnostic test at a beneficiary's residence, we believe that it is reasonable to establish the beneficiary's residence as the “Place of Service.” Previously, there has been no set procedure, so therefore, we believe that the information is gathered at the collection point from the beneficiary, and this is the point service. While most diagnostic tests are performed in an office setting, we are seeking public comment regarding the types of services that can be safely and appropriately used in a residential setting.

M. Independent Laboratory Billing for the TC of Physician Pathology Services to Hospital Patients

[If you choose to comment on issues in this section, please include the caption “INDEPENDENT LAB BILLING” at the beginning of your comments.]

The TC of physician pathology services refers to the preparation of the slide involving tissue or cells that a pathologist will interpret. (In contrast, the pathologist's interpretation of the slide is the PC service. If this service is furnished by the hospital pathologist for a hospital patient, it is separately billable. If the independent laboratory's pathologist furnishes the PC service, it is usually billed with the TC service as a combined service.)

In the “Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2000” final rule published in the Federal Register on November 2, 1999 (64 FR 59380 and 59408 through 59409), we stated that we would implement a policy to pay only the hospital for the TC of physician pathology services furnished to hospital patients. Before that proposal, any independent laboratory could bill the carrier under the PFS for the TC of physician pathology services for hospital patients. As pointed out in the November 2, 1999 final rule, this policy has contributed to the Medicare program paying twice for the TC service, first through the inpatient prospective payment rate to the hospital where the patient is an inpatient and again to the independent laboratory that bills the carrier, instead of the hospital, for the TC service.

Therefore, in that final rule at § 415.130, we provided that, for services furnished on or after January 11, 2001, the carriers would no longer pay claims to the independent laboratory under the physician fee schedule for the TC of physician pathology services for hospital patients.

Ordinarily, the provisions in the final PFS are implemented in the following year. However, in this case, the change to § 415.130 was delayed one year (until January 1, 2001), at the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements. Moreover, our full implementation of § 415.130 was further delayed through CY 2006.

We continue to believe, however, that hospital prospective payment amounts already compensate hospitals for the TC of physician pathology tests and that additional payment under the PFS is inappropriate. Therefore, we are proposing to amend § 415.130 to provide that, for services furnished after December 31, 2006, an independent laboratory may not bill the carrier for physician pathology services furnished to a hospital inpatient or outpatient. Under proposed § 415.130(d), we would pay under the PFS for the TC of a physician pathology service furnished by an independent laboratory for services provided to an inpatient or outpatient of a “covered hospital” on or before December 31, 2006. A “covered hospital” is defined in § 415.130(a)(1).

N. Public Consultation for Medicare Payment for New Outpatient Clinical Diagnostic Laboratory Tests

[If you choose to comment on issues in this section, please include the caption “CLINICAL DIAGNOSTIC LAB TESTS” at the beginning of your comments.]

Section 1833(h) of the Act requires the Secretary to establish fee schedules for clinical laboratory tests under Medicare Part B. In this section of the preamble, we are proposing to implement section 942(b) of the MMA which specifies annual procedures for consulting the public on how to establish payment for new clinical laboratory test codes to be included in the annual update of the clinical laboratory fee schedule.

1. BIPA (Pub. L. 106-554)

Section 531(b) of BIPA mandated that we establish, no later than 1 year after the date of enactment, procedures that permit public consultation for payment determinations for new clinical diagnostic laboratory tests under Medicare Part B in a manner consistent with the procedures established for implementing ICD-9-CM coding modifications. In the November 23, 2001 Federal Register (66 FR 58743), we specified the procedures to implement section 531(b) of BIPA.

These procedures were most recently used to determine the payments for new 2006 clinical laboratory fee schedule codes. First, we convened a public meeting to solicit expert input on the nature of the new tests before rate determinations were made. We have held these meetings each year since 2002 to receive this expert input on the next year's codes. Our most recent meeting was announced in the Federal Register on May 27, 2005 (70 FR 30734) and occurred on July 18, 2005. In that meeting, we requested that presenters address the new test codes, each test's purpose, method, cost, and a recommendation for one of two methods (crosswalking or gapfilling) for determining payment for the new clinical laboratory codes. Crosswalking and gapfilling are discussed below in section N.2.d.

Following the public meeting, we posted, on our Website, a summary of the new codes and the payment recommendations that were presented during the public meeting. The summary also displayed our tentative payment determinations and indicated a comment period for interested parties to submit written comments. After reviewing the comments received, we issued Medicare Transmittal 750, 2006 Annual Update for Clinical Laboratory Start Printed Page 49063Fee Schedule, which provided all instructions and final rate determinations for the 2006 clinical laboratory fee schedule including the new codes and fees, on November 18, 2005.

2. Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173)

Further legislation affecting public consultation for new clinical laboratory tests was enacted at section 942(b) of the MMA (Pub. L. 108-173), which added section 1833(h)(8) to the Act. Section 1833(h)(8)(A) of the Act requires the Secretary to establish by regulation procedures for determining the basis for and amount of payment for a clinical diagnostic laboratory test that is assigned a new or substantially revised Healthcare Common Procedure Coding System (HCPCS) code on or after January 1, 2005. We refer to these tests as “new tests.”

Section 1833(h)(8)(B) of the Act provides that determinations of payment amounts for new tests shall be made only after the Secretary—

  • Makes available to the public (through an Internet Web site and other appropriate mechanisms) a list that includes codes for which establishment of a payment amount is being considered for the next calendar year;
  • On the same day the list of codes is made available, publishes a Federal Register notice of a meeting to receive public comments and recommendations (and data on which recommendations are based) on the appropriate basis for establishing payment amounts for the list of codes made available to the public;
  • Not less than 30 days after publication of the notice in the Federal Register, convenes a meeting that includes representatives of CMS officials involved in determining payment amounts, to receive public comments and recommendations (and data on which the recommendations are based); and
  • Taking into account the comments and recommendations (and accompanying data) received at the public meeting, develops and makes available to the public (through an Internet Web site and other appropriate mechanisms)—

+ A list of proposed determinations with respect to the appropriate basis for establishing a payment amount for each code, together with an explanation of the reasons for each determination, the data on which the determinations are based, and a request for public written comments on the proposed determination; and

+ A list of final determinations of the payment amounts for tests, together with the rationale for each determination, the data on which the determinations are based, and responses to comments and suggestions from the public.

We believe that our current process for providing for public consultation on the establishment of payment amounts for new clinical laboratory tests is consistent with the requirements of section 1833(h)(8)(B) of the Act. We currently make available to the public through a posting on the CMS Web site a list of new laboratory test codes for the next calendar year. We publish a Federal Register notice of a meeting to receive public comments and recommendations and convene the meeting with appropriate CMS officials in attendance. We take into account the input received at the public meeting and we make available to the public on the CMS Web site a list of the proposed determinations and seek comment. We then make available to the public our final determinations in the instructions that we provide to our claims processing contractors to implement the Medicare Part B clinical laboratory fee schedule each year.

The most significant change required by section 1886(h)(8)(A) of the Act with respect to our procedures for public consultation is that we codify this process in regulations. Therefore, in this proposed rule, we are proposing to codify our current process for public consultation for new clinical diagnostic laboratory tests paid under the Medicare Part B clinical laboratory fee schedule at proposed new Subpart F—Payment for New Clinical Diagnostic Laboratory Tests (§ 414.402 through § 414.406).

a. Proposed Basis and Scope (§ 414.400)

This proposed new subpart would implement provisions of section 1833(h)(8) of the Act—procedures for determining the basis for, and amount of, payment for a new clinical diagnostic laboratory test with respect to which a new or substantially revised Healthcare Common Procedure Coding System code is assigned on or after January 1, 2005.

b. Proposed Definition (§ 414.402)

As specified in section 942(b) of the MMA, we propose to define the term “Substantially Revised Healthcare Common Procedure Coding System Code” to mean a code for which there has been a substantive change to the definition of the test or procedure to which the code applies (such as a new analyte or a new methodology for measuring an existing analyte specific test).

c. Proposed Procedures for Public Consultation for Payment for a New Clinical Diagnostic Laboratory Test (§ 414.406)

For a clinical laboratory test that is assigned a new or substantially revised code on or after January 1, 2005, we would establish a local fee schedule amount only after the following:

  • We make available to the public (through an Internet Web site and other appropriate mechanisms) a list that includes codes for which establishment of a payment amount is being considered for the next calendar year.
  • We publish a Federal Register notice of a meeting to receive public comments and recommendations (and data on which recommendations are based) on the appropriate basis, as specified in proposed new § 414.408, for establishing payment amounts for the list of codes made available to the public.
  • Not less than 30 days after publication of the notice in the Federal Register, we convene a meeting, that includes representatives of CMS officials involved in determining payment amounts, to receive public comments and recommendations (and data on which the recommendations are based).
  • Taking into account the comments and recommendations (and accompanying data) received at the public meeting, we develop and make available to the public (through an Internet Web site and other appropriate mechanisms)—

+ A list of proposed determinations with respect to the appropriate basis for establishing a payment amount for each code, together with an explanation of the reasons for each determination, the data on which the determinations are based, and a request for public written comments on the proposed determination within a specified time period; and

+ A list of final determinations of the payment amounts for tests, together with the rationale for each determination, the data on which the determinations are based, and responses to comments and suggestions from the public.

d. Proposed Payment for a New Clinical Diagnostic Laboratory Test—Crosswalking and Gapfilling (§ 414.408)

We are proposing to add a new § 414.408 to indicate when, in establishing the payment amount for a new clinical laboratory test, one of two payment methods can be utilized. The Start Printed Page 49064first payment method, called “crosswalking,” is used if a new test is determined to be comparable to an existing test, multiple existing test codes, or a portion of an existing test code. We propose that a new test code would be assigned the related existing local fee schedule amounts and national limitation amount.

In new § 414.408, we propose to use the second method, called “gapfilling,” when no comparable, existing test is available. Currently when using this method, manual instructions are provided to each Medicare carrier to determine a payment amount for its geographic area(s) for use in the first year, and the carrier-specific amounts are used to establish a national limitation amount for following years. Consistent with our current process, the sources of information carriers examine in determining gapfill amounts, if available, include—

  • Charges for the test and routine discounts to charges;
  • Resources required to perform the test;
  • Payment amounts determined by other payers; and
  • Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant.

Currently, our manual instructions allow carriers to consider other sources of information as appropriate, including clinical studies and information provided by clinicians practicing in the area, manufacturers, or other interested parties. Carriers are also instructed to establish carrier specific amounts on or before March 31 of the year and to revise their carrier specific amount, if necessary, on or before September 1 of the year. In this manner, a carrier may revise its carrier specific amount based on additional information, but there is also a specific time frame to perform this revision so that we have adequate time to receive and use the carrier specific amounts for the calculation of the next year's clinical laboratory fee schedule.

Currently for new gapfilled laboratory tests, the payment amount beginning in the second year is based on the lower of the carrier specific amount determined in the first year or the national limitation amount. In accordance with section 1833(h) of the Act, the national limitation amount is set at the median of the carrier-specific amounts.

In light of new MMA provisions, however, we are proposing, in new § 414.408, to prospectively eliminate payment of new gapfilled tests at a carrier specific amount after the first year. Section 1833(h)(8)(A) of the Act gives the Secretary authority to establish procedures for determining the payment amount for laboratory tests for which new or substantially revised HCPCS codes were established on or after January 1, 2005. Under this authority, we propose, in new § 414.408(b), to pay for a new gapfilled laboratory test under our existing methodology for the first year (the carrier would establish a gapfill amount.) Beginning in the second year, the test would be paid at the national limitation amount. This would result in consistent payment in geographic areas for a new test using the median of the carrier gapfill amounts.

3. Other Laboratory Issues

This section discusses other laboratory issues related to quality and glucose monitoring in SNFs.

a. Quality

In addition to providing payments, Medicare's clinical laboratory fee schedule for both new and existing tests should foster the provision of quality care and the prevention of avoidable health care costs. We are exploring the development of measures related to the quality and efficiency of care, including those involving clinical laboratory fee schedule services. Physicians' decisions are central to the health care their patients receive and are informed by appropriate clinical laboratory testing. We want to work with physicians, providers and the clinical laboratory community to identify ways to promote utilization decisions that clearly increase the quality of care while avoiding unnecessary costs for beneficiaries and the Medicare program.

As part of its strategies to improve quality of care, CMS could require those who perform laboratory tests to submit laboratory values using common vocabulary standards, such as those found in the Logical Observation Identifiers Names and Codes (LOINC®) database.

The LOINC® database currently contains about 41,000 observational terms, of which nearly 31,000 are observational terms related to laboratory testing. The laboratory subset of the LOINC® database provides universal names and codes for identifying the results of clinical laboratory tests and it facilitates the exchange and pooling of clinical laboratory results for clinical care, outcomes management and research. Note that LOINC® describes the test result, but does not provide it. It is, therefore, only one possible component of a comprehensive system of collecting clinical laboratory fee test results. Each LOINC® record corresponds to a single test result or panel. The following are some examples of LOINC records:

LOINC code LOINC name (component: property: timing: specimen: scale)

2951-2 SODIUM:SCNC:PT:SER/PLAS:QN

2955-2 SODIUM:SCNC:PT:UR:QN

2956-1 SODIUM:SRAT:24H:UR:QN

2164-2 CREATININE RENAL CLEARANCE:VRAT:24H:UR:QN

1514-9 GLUCOSE 2H POST 100 G GLUCOSE

PO:MCNC:PT:SER/PLAS:QN

3665-7 GENTAMICIN TROUGH:MCNC:PT:SER/PLAS:QN

17863-2 CALCIUM.IONIZED:MCNC:PT:SER/PLAS:QN

2863-9 ALBUMIN:MCNC:PT:SNV:QN:ELECTROPHORESIS

The parts of the LOINC® name refer to different aspects of the test result. The component is the analyte (for example, sodium). The property is the characteristic of the analyte that is measured, evaluated or observed (for example SCNC = substance concentration). Timing indicates whether the measurement is an observation at a moment of time, or an observation integrated over an extended duration of time (for example, PT = point in time). The specimen is the type of sample (for example, SER/PLAS = serum or plasma). The scale is the type of scale (for example QN = quantitative). For further detail, please see the LOINC® Web site at http://www.loinc.org.

On September 23, 2005 (70 FR 55900-56025), we published the proposed rule “HIPAA Administrative Simplification: Standards for Electronic Health Care Claims Attachments.” This rule proposed standards for electronically requesting and supplying particular types of additional health care information in the form of an electronic attachment to support submitted health care claims data. The proposed rule specified a standard attachment form for reporting laboratory results (among other standards) and proposed adoption of LOINC® as the standard code set for reporting such results.

While the laboratory claims attachment standard and use of LOINC® could provide a means for reporting test result data, we recognize that there are significant operational and other challenges that would need to be addressed before Medicare could begin to collect laboratory values in a comprehensive fashion using common vocabulary standards and that these challenges need to be met in partnership with the clinical laboratory community. We look forward to working Start Printed Page 49065collaboratively with the clinical laboratory community on these issues.

b. Blood Glucose Monitoring in SNFs

In response to inquiries regarding our policy on blood glucose monitoring in SNFs, we are taking this opportunity to restate our long-standing policy on coverage of blood glucose monitoring services and to propose to codify physician certification requirements for blood glucose monitoring in SNFs.

Generally, section 1862(a)(1)(A) of the Act requires that a service be reasonable and necessary for diagnosis and treatment in order to be eligible for coverage by Medicare. Our regulations at § 410.32(a) already require that, for any diagnostic test, including a clinical diagnostic laboratory test, to be considered reasonable and necessary, it must be both ordered by the physician and the ordering physician must use the result in the management of the beneficiary's specific medical problem. Tests not ordered by the physician who is treating the beneficiary are not reasonable and necessary.

In the context of blood glucose monitoring, we most recently stated this policy in Transmittal AB-00-108, “Glucose Monitoring”, which is available on our Web site at http://www.cms.hhs.gov/​transmittals/​downloads/​ab00108.pdf. This interpretation of § 410.32 is also the basis for our policy in Chapter 7 of the Medicare Claims Processing Manual (“Skilled Nursing Facility Part B Billing” available on our Web site at http://www.cms.hhs.gov/​manuals/​downloads/​clm104c07.pdf.)

In addition, section 1835(a)(2)(B) of the Act provides that, in the case of certain “medical and other health services” (including clinical diagnostic laboratory services), payment may be made for Part B services that are furnished by a provider of services only if a physician certifies—and recertifies where those services are furnished over a period of time, with such frequency, and accompanied by such supporting material, as may be provided by regulation—that those services were medically necessary. The regulations currently implementing this provision at § 424.24 do not specifically address the issue of blood glucose monitoring in SNFs. Therefore, we are proposing to amend § 424.24 to provide that, for each blood glucose test furnished to a resident of a SNF, the physician must certify that the test is medically necessary. We are also proposing to amend § 424.24 to clarify that a physician's standing order is not sufficient to order routine blood glucose monitoring.

c. Other Lab Issues—Proposed Clinical Diagnostic Laboratory Date of Service (DOS) for Stored Specimens

We are proposing to add a new § 414.410 to address concerns that have been raised regarding the date of service of a clinical diagnostic laboratory test that use a stored (or “archived”) specimen. In the final rule of coverage and administrative policies for clinical diagnostic laboratory services that we published on November 23, 2001 (66 FR 58792), we adopted a policy under which the date of service for clinical diagnostic laboratory services generally is the date the specimen is collected. For laboratory tests that use an archived specimen, however, the date of service is the date the specimen was obtained from the storage. In 2002, we issued Program Memorandum AB-02-134 which permitted contractors discretion in making determinations regarding the length of time a specimen must be stored to be considered archived. In response to comments requesting that we issue a national standard to clarify when a stored specimen can be considered “archived,” in the Procedures for Maintaining Code Lists in the Negotiated National Coverage Determinations for Clinical Diagnostic Laboratory Services final notice, published in the Federal Register on February 25, 2005 (70 FR 9355), we defined an “archived” specimen as a specimen that is stored for more than 30 calendar days before testing. The date of service for these archived specimens is the date the specimen was obtained from storage. Specimens stored 30 days or less have a date of service of the date the specimen was collected. The February 25, 2005 final notice also clarified that the date of service for tests when the collection spanned more than two calendar days is the date the collection ended. Instructions that implemented these policies were added to Chapter 16, section 40.8 of the Medicare Claims Processing Manual (Pub. 100-04) with the issuance of Transmittal 800 (CR 4156), on December 30, 2005.

Recently, we have received correspondence that expressed concern that our policies have created some unintended consequences, especially in situations in which a specimen is taken in a hospital setting, but then later used for a test after the patient has left the hospital. Under the current manual instructions, if the specimen used for a test ordered subsequent to the beneficiary's discharge is obtained less than 31 calendar days following the date the specimen was collected, the date of service of the test is the date of collection. The date of service of a test may affect payment because, if the date of service falls during an inpatient stay or on a day on which the beneficiary had an outpatient procedure, payment for the laboratory test usually is bundled with the hospital service. To address these concerns, we are proposing to change our current policy so that the date of service would be the date the specimen is obtained from storage, even if the specimen is obtained less than 31 days from the date it was collected, without violating the unbundling rules as long as the following conditions are met:

  • The test is ordered by the patient's physician at least 14 days following the date of the patient's discharge from the hospital.
  • The test could not reasonably have been ordered while the patient was hospitalized.
  • The procedure performed while the beneficiary is a patient of the hospital is for purposes other than collection of the specimen needed for the test.
  • The test is reasonable and medically necessary.

These conditions are consistent with the guidance in Chapter 16, sec 40.3 of the Claims Processing Manual, which states that “When the hospital obtains laboratory tests for outpatients under arrangements with clinical laboratories or other hospital laboratories, only the hospital can bill for the arranged services.”

In addition, Chapter 3 of the Program Integrity Manual contains instructions for additional documentation if further development of laboratory claims for pre-or postpay are required. Although we believe these changes will help to maintain beneficiary access to care, we are concerned about the potential for these policy changes creating inappropriate incentives in the development of technology and the implications for the unbundling of services. We solicit comment on the proposed changes and these concerns.

O. Proposal to Establish Criteria for National Certifying Bodies That Certify Advanced Practice Nurses

[If you choose to comment on issues in this section, please include the caption “Criteria for National Certifying Bodies-Advanced Practice Nurses” at the beginning of your comments.]

Federal regulatory qualifications for nurse practitioners (NPs) at 42 CFR 410.75 require that an individual be certified as an NP by a recognized national certifying body that has established standards for NPs. Similarly, Federal regulatory qualifications for clinical nurse specialists (CNSs) at 42 Start Printed Page 49066CFR 410.76 require that an individual be certified as a CNS by a national certifying body that has established standards for CNSs and that is approved by the Secretary.

Currently, there is not a list of recognized or approved national certifying bodies for NPs and CNSs in regulations. However, Chapter 15, section 200 of the Benefit Policy Manual, Pub. 100-02 contains a list of national certifying bodies that are recognized by Medicare as being appropriate for certification of NPs. Although the manual provision regarding CNS services at Chapter 15, section 210 of the Benefit Policy Manual lists only the American Nurses Credentialing Center as an approved national certifying body for CNSs, we indicated that the list of recognized certifying bodies in the manual provision for NP services would also apply for CNSs in the “Revisions to Payment Policies Under the CY 2003 Physician Fee Schedule and Inclusion of Registered Nurses in the Personnel Provision of the Critical Access Hospital Emergency Services Requirement for Frontier Areas and Remote Locations; Payment Policies final rule (December 31, 2002, 67 FR 79987). The national certifying bodies that are listed under the manual instruction at section 200, and that currently apply for both NPs and CNSs (collectively, advanced practice nurses) are as follows:

  • American Academy of Nurse Practitioners;
  • American Nurses Credentialing Center;
  • National Certification Corporation for Obstetric, Gynecologic and Neonatal Nursing Specialties;
  • National Certification Board of Pediatric Nurse Practitioners and Nurses;
  • Oncology Nurses Certification Corporation;
  • Critical Care Certification Corporation.

In the December 31, 2002 final rule, in response to a public comment, we stated, “it is not the agency's intention to be overly restrictive in our program requirements and consequently prevent qualified CNSs who specialize in areas of medicine other than those certified by the American Nurses Credentialing Center (ANCC) from participating under the CNS benefit and from rendering care to patients in need of specialized services. Furthermore, the intent of the revision to the certification requirement for CNSs is to recognize all appropriate national certifying bodies for CNSs as the program does for NPs.” Accordingly, in an effort to recognize all appropriate national certifying bodies for CNSs and NPs, we added, at that time, the Oncology Nurses Certification Corporation (ONCC) and the Critical Care Certification Corporation (CCCC) to the list of recognized national certifying bodies for advanced practice nurses.

The National Board on Certification of Hospice and Palliative Care Nurses (NBCHPN) has requested that we now follow the same course of action as we did for the ONCC and the CCCC by adding its name to the list of recognized national certifying bodies. That is, NBCHPN believes that it is an appropriate national certifying body based on its certification experience, principles, services, and the certification exam that it administers to advanced practice nurses who specialize in palliative care for hospice patients.

The NBCHPN stated in information it sent to the agency that its organization is a well-established certification body with more than 12-years history of certification and that it has been certifying advanced practice hospice and palliative nurses since 2003 in partnership with the ANCC. Starting in 2005, the NBCHPN became sole proprietor of the Advanced Certified Hospice and Palliative Nurse (ACHPN) examination. Master's level nurse practitioners and clinical nurse specialists sit for this ACHPN examination that is based on a role delineation study for the advanced practice level of hospice and palliative nursing. Additionally, the NBCHPN stated that it has met the requirements of the American Board of Nursing Specialties and is an active member of the Board of Specialties, as is the ANCC. The Executive Director of the NBCHPN stated that she believes that the absence of the NBCHPN from the current list of recognized national certifying bodies presents a barrier for advanced practice nurses in the hospice palliative care specialty because they are denied enrollment on the basis that they do not meet the certification qualification requirement. The Web site for the NBCHPN can be found at www.nbchpn.com.

We are soliciting public comments on whether it would be appropriate to include the NBCHPN under the list of recognized and approved national certifying bodies for NPs and CNSs under manual instructions for both NPs and CNSs. We are also soliciting public comments on criteria or standards that we could use to determine whether an organization is an appropriate national certifying body for advanced practice nurses. CMS realizes that the agency may receive other requests in the future from organizations that wish to be to be added to the list of recognized or approved national certifying bodies. In anticipation of those requests, the agency is interested in developing certification standards that would facilitate the process for making these decisions.

P. Chiropractic Services Demonstration

[If you choose to comment on issues in this section, please include the caption “Chiropractic Services Demonstration” at the beginning of your comments.]

In the FY 2006 PFS final rule (November 21, 2005), we included a discussion of the 2-year demonstration authorized by section 651 of the MMA to evaluate the feasibility and advisability of covering chiropractic services under Medicare. These services extend beyond the current coverage for manipulation to care for neuromusculoskeletal conditions typical among eligible beneficiaries, and cover diagnostic and other services that a chiropractor is legally authorized to perform by the State or jurisdiction in which the treatment is provided. The demonstration is being conducted in four sites, two rural and two urban. The demonstration must be budget neutral as the statute requires the Secretary to ensure that the aggregate payment made under the Medicare program does not exceed the amount which would be paid in the absence of the demonstration.

Ensuring budget neutrality requires that the Secretary develop a strategy for recouping funds should the demonstration result in costs higher than those that would occur in the absence of the demonstration. As we stated in the FY 2006 PFS, we would make adjustments in the national chiropractor fee schedule to recover the costs of the demonstration in excess of the amount estimated to yield budget neutrality. We will assess budget neutrality by determining the change in costs based on a pre/post comparison of costs and the rate of change for specific diagnoses that are treated by chiropractors and physicians in the demonstration sites and control sites. We will not limit our analysis to reviewing only chiropractor claims, because the costs of the expanded chiropractor services may have an impact on other Medicare costs.

Any needed reduction would be made in the 2010 and 2011 physician fee schedules as it will take approximately 2 years to complete the claims analysis. If we determine that the adjustment for budget neutrality is greater than 2 percent of spending for the chiropractor fee schedule codes (comprised of the 3 Start Printed Page 49067currently covered CPT codes 98940, 98941, and 98942), we would implement the adjustment over a 2-year period. However, if the adjustment is less than 2 percent of spending under the chiropractor fee schedule codes, we would implement the adjustment over a 1-year period. We will include the detailed analysis of budget neutrality and the proposed offset during the 2009 rulemaking process. PT services performed by chiropractors under the demonstration are subject to the PT therapy cap. These services are included under the cap because chiropractors are subject to the same rules as medical doctors for therapy services under the demonstration.

Q. Promoting Effective Use of Health Information Technology (HIT)

(If you choose to comment on issues in this section, please include the caption “Promoting Effective Use of HIT” at the beginning of your comment.)

We recognize the potential for health information technology (HIT) to facilitate improvements in the quality and efficiency of health care services. One recent RAND study found that broad adoption of electronic health records could save more than $81 billion annually and, at the same time, improve quality of care.[1] The largest potential savings that the study identified was in the hospital setting because of shorter hospital stays promoted by better coordinated care; less nursing time spent on administrative tasks; better use of medications in hospitals; and better utilization of drugs, laboratory services, and radiology services in hospital outpatient settings. The study also identified potential quality gains through enhanced patient safety, decision support tools for evidence-based medicine, and reminder mechanisms for screening and preventive care. Despite these large potential benefits, the study found that only about 20 to 25 percent of hospitals have adopted HIT systems.

It is important to note the caveats to the RAND study. The projected savings are across the health care sector, and any Federal savings would be a reduced percentage. In addition, there are significant assumptions made in the RAND study. National savings are projected in some cases based on one or two small studies. Also, the study assumes patient compliance, in the form of participation in disease management programs and following medical advice. For these reasons, extreme caution should be used in interpreting these results.

In summary, there are mixed signals about the potential of HIT to reduce costs. Some studies have indicated that HIT adoption does not necessarily lead to lower costs and improved quality. In addition, some industry experts have stated that factors such as an aging population, medical advances, and increasing provider expenses would make any projected savings impossible.

In his 2004 State of the Union Address, the President announced a plan to ensure that most Americans have electronic health records within 10 years.[2] One part of this plan involves developing voluntary standards and promoting the adoption of interoperable HIT systems that use these standards. The 2007 Budget states that “The Administration supports the adoption of health information technology (IT) as a normal cost of doing business to ensure patients receive high quality care.”

Over the past several years, we have undertaken several activities to promote the adoption and effective use of HIT in coordination with other Federal agencies and with the Office of the National Coordinator for Health Information Technology. One of those activities is promotion of data standards for clinical information, as well as for claims and administrative data.

As noted above, the Administration supports the adoption of HIT as a normal cost of doing business. The adoption and use of HIT may contribute to improved processes and outcomes of care, including shortened illnesses and the avoidance of adverse drug reactions.

R. Health Care Information Transparency Initiative

(If you choose to comment on issues in this section, please include the caption “Health Care Information Transparency Initiative” at the beginning of your comment.)

The United States (U.S.) faces a dilemma in health care. Although the rate of increase in health care spending slowed last year, costs are still growing at an unsustainable rate. The U.S. spends $1.9 trillion on health care, or 16 percent of the gross domestic product (GDP). By 2015, projections are that health care will consume 20 percent of GDP. As indicated in the 2006 Annual Report of the Boards of Trustees, the Medicare program alone consumes 3.2 percent of the GDP and by 2040, it will consume 8.0 percent of the GDP.

Part of the reason health care costs are rising so quickly is that most consumers of health care—the patients—are frequently not aware of the actual cost of their care. Health insurance shields them from the full cost of services, and they have only limited information about the quality and costs of their care. Consequently, consumers do not have the incentive or means to carefully shop for providers offering the best value. Thus, providers of care are not subject to the competitive pressures that exist in other markets for offering quality services at the best possible price. Reducing the rate of increase in health care prices and avoiding health services of little value could help to stem the growth in health care spending, and potentially reduce the number of individuals who are unable to afford health insurance. Part of the President's health care agenda is to expand Health Savings Accounts (HSAs), which would provide consumers with greater financial incentives to compare providers in terms of price and quality, and choose those that offer the best value.

In order to exercise those choices, consumers must have accessible and useful information on the price and quality of health care items and services. Typically, health care providers do not publicly quote or publish their prices. Moreover, list prices, or charges, generally differ from the actual prices negotiated and paid by different health plans. Thus, even if consumers were financially motivated to shop for the best price, it would be very difficult at the current time for them to access usable information.

For these reasons, DHHS is launching a major health care information transparency initiative in 2006. This effort builds on steps taken by CMS to make quality and price information available. For example, Medicare has provided unprecedented information about drug prices in the Medicare drug benefit, and is now adding to these efforts in other areas. Medicare payment information for common elective procedures and other common admissions for all hospitals by county has been posted on our Web site at: http://www.cms.hhs.gov/​HealthCareConInit/​01 Overview.asp#TopOfP.

We will post geographically-based Medicare payment information for common elective procedures for ambulatory surgery centers this summer and for common hospital outpatient and physician services this fall. Start Printed Page 49068

In addition, a number of tools providing usable healthcare information are already available to Medicare beneficiaries. Supported by the public-private quality alliances, consumers can access “Compare” Web sites through www.medicare.gov where they can evaluate important aspects of their health care options for care at a hospital, nursing home, home health agency, and dialysis facility, as well as compare their costs and coverage when choosing a prescription drug plan.

We are developing a project with the goals of providing more comprehensive information on quality and costs, including more complete measures of health outcomes, satisfaction, and volume of services that matter to consumers, and more comprehensive measures of costs for entire episodes of care, not just payments for particular services and admissions. We intend for the project to combine public and private health care data to measure cost and quality of care information at the physician and hospital levels. Quality, cost, pricing, and patient information will be reported to consumers and purchasers of health care in a meaningful and transparent way.

III. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues:

  • The need for the information collection and its usefulness in carrying out the proper functions of our agency.
  • The accuracy of our estimate of the information collection burden.
  • The quality, utility, and clarity of the information to be collected.
  • Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.

We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements:

Section 410.33 Independent Diagnostic Testing Facility

Section 410.33(e)(1) imposes a recordkeeping requirement on multi-state entities. Specifically, an independent diagnostic testing facility (IDTF) that operates across State boundaries must maintain documentation that its supervising physicians and technicians are licensed and certified in each of the States in which it operates. The burden associated with this requirement is the time and effort it takes the IDTF to collect and maintain the aforementioned information.

While subject to the PRA, we believe this information collection requirement is exempt as defined in 5 CFR 1320.3(b)(2), because the time, effort, and financial resources necessary to comply with the requirement would be incurred by persons in the normal course of their activities (for example, in compiling and maintaining business records) and is considered to be usual and customary.

Section 410.33(g) discusses the application certification standards that an IDTF must meet. An IDTF must complete an enrollment application and certify the information contained in the application. The certification is part of an application that is subject to the PRA. The burden associated with this requirement is the time and effort necessary to complete the application. This requirement is currently approved in OMB No. 0938-0685, with a current expiration date of April 30, 2009.

If you comment on these information collection and recordkeeping requirements, please mail copies directly to the following:

Centers for Medicare & Medicaid Services, Office of Strategic Operations and Regulatory Affairs, Regulations Development Group, Attn: William N. Parham, III, [CMS-1321-P], Room C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850; and

Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Carolyn Lovett, CMS Desk Officer, [CMS-1321-P], carolyn_lovett@omb.eop.gov. Fax (202) 395-6974.

IV. Response to Comments

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

V. Regulatory Impact Analysis

[If you choose to comment on issues in this section, please include the caption “IMPACT” at the beginning of your comments.]

We have examined the impact of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980 Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.

Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibilities of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis must be prepared for proposed rules with economically significant effects (that is, a proposed rule that would have an annual effect on the economy of $100 million or more in any one year, or would adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities). As indicated in more detail below, we estimate that the PFS provisions included in this proposed rule will redistribute more than $100 million in one year. We are considering this proposed rule to be economically significant because its provisions are estimated to result in an increase, decrease or aggregate redistribution of Medicare spending that will exceed $100 million. Therefore, this proposed rule is a major rule and we have prepared a regulatory impact analysis.

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 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.

Section 1102(b) of the Act requires us to prepare a regulatory impact analysis for any proposed rule that may have a significant impact on the operations of Start Printed Page 49069a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside a Metropolitan Statistical Area and has fewer than 100 beds. We have determined that this proposed rule would have minimal impact on small hospitals located in rural areas. Of the 222 hospital-based ESRD facilities located in rural areas, only 40 are affiliated with hospitals with fewer than 100 beds.

For purposes of the RFA, physicians, nonphysician practitioners, and suppliers are considered small businesses if they generate revenues of $6 million or less. Approximately 95 percent of physicians are considered to be small entities. There are about 980,000 physicians, other practitioners and medical suppliers that receive Medicare payment under the PFS.

For purposes of the RFA, approximately 80 percent of clinical diagnostic laboratories are considered small businesses according to the Small Business Administration's size standards.

In addition, most ESRD facilities are considered small entities, either based on nonprofit status or by having revenues of $29 million or less in any year. We consider a substantial number of entities to be affected if the proposed rule is estimated to impact more than 5 percent of the total number of small entities. Based on our analysis of the 927 nonprofit ESRD facilities considered small entities in accordance with the above definitions, we estimate that the combined impact of the proposed changes to payment for renal dialysis services included in this proposed rule would have a 0.9 percent increase in overall payments relative to current overall payments.

IDTFs are suppliers under the Medicare program. For purposes of the RFA, suppliers with annual sales of $6 million or less are considered to be small entities. (Individuals and States are not included in the definition of a small entity.) We believe that our proposed standards for IDTFs will help bar fraudulent suppliers from participating in the Medicare program and provide an added level of protection to Medicare beneficiaries. Therefore, we expect to have an impact on an unknown number of persons and entities who will effectively be prevented from practicing their aberrant billing activities. The vast majority of suppliers would not be significantly affected by this proposed rule. The reduction in program overpayments and the added level of protection to beneficiaries that we expect to achieve as a result of this proposed rule justifies the relatively small burden this proposed rule would impose on all small entities.

The analysis and discussion provided in this section, as well as elsewhere in this proposed rule, complies with the RFA requirements.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule that may result in expenditures in any year by State, local, or tribal governments, in the aggregate, or by the private sector, of $120 million. Medicare beneficiaries are considered to be part of the private sector for this purpose.

We have examined this proposed rule in accordance with Executive Order 13132 and have determined that this regulation would not have any significant impact on the rights, roles, or responsibilities of State, local, or tribal governments. A discussion concerning the impact of this rule on beneficiaries is found later in this section.

We have prepared the following analysis, which, together with the information provided in the rest of this preamble, meets all assessment requirements. The analysis explains the rationale for and purposes of this proposed rule; details the costs and benefits of the rule; analyzes alternatives; and presents the measures we propose to use to minimize the burden on small entities. As indicated elsewhere in this proposed rule, we propose to change our methodology for calculating resource-based PE RVUs and make a variety of other changes to our regulations, payments, or payment policies to ensure that our payment systems reflect changes in medical practice and the relative value of services. We provide information for each of the policy changes in the relevant sections of this proposed rule. We are unaware of any relevant Federal rules that duplicate, overlap or conflict with this proposed rule. The relevant sections of this proposed rule contain a description of significant alternatives if applicable.

A. Resource Based PE RVU Proposals for CY 2007 and Section 5102 of the DRA-Proposed Adjustments for Payments for Imaging Services

As required by section 5102(a) of the DRA and described earlier in section II.E.1. of this proposed rule, we are removing, from the PE RVUs under the PFS the 0.3 percent increase made to the PE RVUs in the CY 2006 PFS final rule with comment period to ensure the budget neutrality of the impact of the multiple imaging policy adopted for CY 2006. Section 5102(a) of the DRA exempts the CY 2006 and 2007 impact of the multiple imaging policy from budget neutrality. Because we are proposing to maintain the current 25 percent payment reduction for multiple imaging procedures in CY 2007, there is no additional impact resulting from our proposals for CY 2007. Section 5102 of the DRA also exempts the estimated savings from the application of the OPPS-based payment limitation on PFS imaging services from the PFS budget neutrality requirement. We estimate that the combined impact of the budget neutrality exemptions in section 5102 of the DRA would reduce PFS expenditures by approximately 1.3 percent in CY 2007.

Table 7 below shows the specialty-level impact of section 5102 of the DRA and our most recent estimate (−5.1 percent) of the CY 2007 Medicare PFS update. For reference purposes, we have also included the specialty-level impacts using the methodology from the separate June 29, 2006 proposed notice (71 FR 37170), which solicited comments on proposed changes to the PE methodology as well as changes to work RVUs for certain services based on the agency's completion of a five-year review of work RVUs. The CY 2007 impact of the PE input changes described in section II.A. of this proposed rule that were not included in the June 29, 2006 proposed notice are minimal at the specialty level. Additionally, the impacts in this proposed rule reflect the use of updated physician time data from the AMA-RUC.

Our estimates of changes in Medicare revenues for PFS services compare payment rates for CY 2006 with proposed payment rates for CY 2007 using CY 2005 Medicare utilization for all years. We are using CY 2005 Medicare claims processed and paid through March 30, 2005, that we estimate are 98 percent complete. To the extent that there are year-to-year changes in the volume and mix of services provided by physicians, the actual impact on total Medicare revenues will be different than those shown here. The payment impacts reflect averages for each specialty based on Medicare utilization. The payment impact for an individual physician would be different from the average, based on the mix of services the physician provides. The average change in total revenues would be less than the impact displayed here because physicians furnish services to both Medicare and non-Medicare patients Start Printed Page 49070and specialties may receive substantial Medicare revenues for services that are not paid under the PFS. For instance, independent laboratories receive approximately 80 percent of their Medicare revenues from clinical laboratory services that are not paid under the PFS.

Table 7 shows only the payment impact on PFS services. The following is an explanation of the information represented in Table 7:

  • Specialty—The physician specialty or type of practitioner/supplier.
  • Allowed Charges—Allowed charges are the Medicare Fee Schedule amounts for covered services and include copayments and deductibles (which are the financial responsibility of the beneficiary.) These amounts have been summed across all services provided by physicians, practitioners, or suppliers with a specialty to arrive at the total allowed charges for the specialty.
  • Impact of Work and PE RVU Changes using the June 29, 2006 proposed notice methodology—For references purposes, the combined CY 2007 percentage increase or decrease in allowed charges attributed to changes in the work and PE RVUs described in and republished from the June 29, 2006 proposed notice methodology.
  • Impact of section 5102 of the DRA—The CY 2007 percentage decrease in allowed charges attributed to section 5102 of the DRA.
  • Combined impact of the June 29, 2006 proposed notice methodology and section 5102 of the DRA.
  • CY 2007 Update—The percentage decrease in allowed charges attributed to the most recent estimate of the CY 2007 PFS conversion factor update (−5.1 percent).
  • Combined impact with CY 2007 update—The CY 2007 percentage decrease in allowed charges attributed to the June 29, 2006 proposed notice methodology, section 5102 of the DRA, and the CY 2007 update.

Start Printed Page 49071

Table 8 below shows the impact on total payments for selected high-volume procedures of all of the changes previously discussed. We selected these procedures because they are the most commonly provided by a broad Start Printed Page 49072spectrum of physician specialties. There are separate columns that show the change in the facility rates and the nonfacility rates. For an explanation of facility and nonfacility PE refer to Addendum A of this proposed rule. If we change any of the proposed provisions following the consideration of public comments, these figures may change.

Start Printed Page 49073

B. Geographic Practice Cost Indices (GPCI)—Payment Localities

As discussed in section II.B. of the preamble to this proposed rule, we are proposing new GPCIs for 2007. In the November 15, 2004 PFS final rule, we published 2005 and 2006 GPCI and GAF values reflecting the 2 year phase-in of updated GPCI data. In 2007, the proposed GPCI and GAF values will reflect new budget neutrality scalers (developed by the Office of the Actuary) and the removal of the 1.000 MMA floor from the physician work GPCI. The negative impact of these changes on a number of payment localities is shown in 4 of section II.B. in this proposed rule.

C. Global Period for Remote Afterloading High Intensity Brachytherapy Procedures

As discussed in section II.D.1. of this proposed rule, we are proposing changes to the global period for these Start Printed Page 49074services. We do not anticipate this proposed change will have a significant impact on Medicare expenditures.

D. DRA 5112—Proposed Addition of the Ultrasound Screening for Abdominal Aortic Aneurysm to Welcome to Medicare Benefit

As discussed earlier in section II.E.3. of this preamble, section 5112 of the DRA authorizes coverage of an ultrasound screening for abdominal aortic aneurysms effective January 1, 2007, subject to certain eligibility and other limitations. We estimate that this new benefit would result in an increase in Medicare expenditures to physicians and other practitioners and suppliers of ultrasound services and related follow-up tests and treatment that may be required as a result of the coverage of these screening examinations. However, this is not expected to have a significant cost impact on the Medicare program.

E. DRA 5113—Proposed Colorectal Screening Exemption From Part B Deductible

As discussed earlier in section II.E.4. of this preamble, beginning January 1, 2007, colorectal cancer screening services as described in section 1861(pp)(1) of the Act are no longer subject to the Part B deductible. While waiver of this deductible will be beneficial to Medicare beneficiaries, we do not anticipate that this change will have a significant cost impact on the Medicare program.

F. Section 5114—Proposed Addition of Diabetes Outpatient Self-Management Training Services (DSMT) and Medical Nutrition Therapy (MNT) for the FQHC Program

As discussed earlier in section E.4. of this preamble, section 5114 of the DRA amended section 1861(aa)(3) the Act to add DSMT and MNT to the list of Medicare covered and reimbursed services under the Medicare FQHC benefit, effective for services provided on or after January 1, 2006. Although this statutory change has already been implemented in administrative instructions, we are proposing to conform the regulations to meet the new statutory requirement. FQHCs certified as DSMT and MNT providers have been allowed to bundle the cost of those services into their FQHC payment rates. But before the enactment of the DRA, the provision of these services would not generate a separate FQHC visit payment. Effective for services furnished on or after January 1, 2006, FQHCs that are certified providers of DSMT and MNT services can receive per visit payments for covered services furnished by registered dietitians or nutrition professionals. In light of the fact there are a limited number of qualified centers for DSMT and MNT services, the increase in Medicare expenditures should be negligible.

G. Proposed Payment for Covered Outpatient Drugs and Biologicals (ASP Issues)

The proposed changes discussed in section II.F. of this proposed rule, with respect to payment for covered outpatient drugs and biologicals, are estimated to have no impact on Medicare expenditures. However, we believe the changes will assist in clarifying existing policy with respect to ASP payment.

H. Proposed Provisions Related to Payment for Renal Dialysis Services Furnished by End State Renal Disease (ESRD) Facilities

The ESRD related provisions in this proposed rule are discussed in section II.G. of this preamble. In order to understand the impact of the proposed changes affecting payments to different categories of ESRD facilities, it is necessary to compare estimated payments under the current year (current 2006 payments) to estimated payments under the proposed revisions to the composite rate payment system as discussed in II.G. of this proposed rule (proposed 2007 payments). To estimate the impact among various classes of ESRD facilities, it is imperative that the estimates of current payments and proposed payments contain similar inputs. Therefore, we simulated payments only for those ESRD facilities that we are able to calculate both current 2006 payments and proposed 2007 payments.

Due to data limitations, we are unable to estimate current and proposed payments for 226 facilities that bill for ESRD dialysis treatments. ESRD providers were grouped into the categories based on characteristics provided in the Online Survey and Certification and Reporting (OSCAR) file and the most recent cost report data from the Healthcare Cost Report Information System (HCRIS). We also used the December 2005 update of CY 2005 National Claims History file as a basis for Medicare dialysis treatments and separately billable drugs and biologicals. While the December 2005 update of the 2005 claims file is not complete, we wanted to use the most recent data available, and plan to use an updated version of the 2005 claims file for the final rule.

Start Printed Page 49075

Table 9 above shows the impact of this year's proposed changes to CY 2007 payments to hospital-based and independent ESRD facilities. The first column of Table 9 identifies the type of ESRD provider, the second column Start Printed Page 49076indicates the number of ESRD facilities for each type, and the third column indicates the number of dialysis treatments.

The fourth column shows the effect of CY 2007 proposed changes to the ESRD wage index as it affects the composite rate payments to ESRD facilities. The fourth column compares aggregate ESRD wage adjusted composite rate payments in the second year of the transition (CY 2007) to aggregate ESRD wage adjusted composite rate payments in first year of the transition (CY 2006). In the second year of the transition (CY 2007), ESRD facilities receive 50 percent of the CBSA wage adjusted composite rate and 50 percent of the MSA adjusted composite rate. In the first year of the transition, ESRD facilities receive 25 percent of the CBSA wage adjusted composite rate and 75 percent of the MSA adjusted composite rate. The overall effect to all ESRD providers in aggregate is zero because the proposed CY 2007 ESRD wage index has been multiplied by a budget neutrality factor to comply with the statutory requirement that any wage index revisions be done in a manner that results in the same aggregate amount of expenditures as would have been made without any changes in the wage index. The decreases shown among census regions is primarily due to reducing the wage index floor, as there were areas in these areas with wage index values below the proposed floor.

The fifth column shows the overall effect of the proposed changes in composite rate payments to ESRD providers. The overall effect is measured as the difference between CY 2007 proposed payment with all changes as proposed in this rule and CY 2006 current payment. This amount is computed by multiplying the wage adjusted composite rate with the drug add-on for each provider times dialysis treatments from 2005 claims. The CY 2007 proposed payment is transition year two wage adjusted composite rate for each provider (with the proposed 15.2 percent drug add-on) times dialysis treatments from 2005 claims. The CY 2006 current payment is transition year one wage adjusted composite rate for each provider (with the current 14.5 percent drug add on) times dialysis treatments from 2005 claims.

The overall impact to ESRD providers in aggregate is 0.6 percent. This increase corresponds to the proposed 0.6 percent increase to the drug add-on. The variation seen in column 5 is due to variation in change in the wage index (column 4). All provider types receive the same 0.6 percent increase to the drug add on.

I. Private Contracts and Opt-Out Provision

The changes discussed in this proposed rule, with respect to private contracts and the opt-out provision, are currently estimated to have no significant impact on Medicare expenditures.

J. Proposals Related to Physician Self Referral Prohibitions

As discussed in section II.I of this proposed rule, we would clarify in regulations at § 424.80(d) under the contractual arrangement reassignment exception that, if a physician or other individual supplier reassigns his or her right to bill for the TC of a diagnostic test, the entity to which the reassignment is made may not be paid more than the physician or other individual supplier would have been paid for the TC. In addition, in order to bill for the TC of the diagnostic test, the entity to which the reassignment is made must perform the PC. We also propose that, in order to bill for the PC of a diagnostic test following a reassignment, the billing entity must meet current requirements in our manual instructions.

In addition, as discussed in section II.I., we also propose to revise §§ 424.80(b) and (d) to provide that a physician or other individual supplier who reassigns his or her right to benefits has a right to review the bills for his or her services, irrespective of whether the individual is an employee or an independent contractor of the entity to which the reassignment is made.

We also propose the following changes to the physician self-referral provisions:

  • A “centralized building” for purposes of the physician services exception and the in-office ancillary services exception at §§ 411.355(a) and (b), respectively, would have to measure at least 350 square feet and include permanent placement of the equipment used in the provision of substantially all of the designated health services. We believe that these changes would have little effect on Medicare expenditures.

K. Supplier Access to Claims Billed on Reassignment

The reassignment provisions discussed in section II.J.2. of this preamble are currently estimated to have no significant impact on Medicare expenditures.

L. Proposed Coverage of Bone Mass Measurement

As discussed in section II.K. of this preamble, we have decided to propose several revisions to § 410.31 relative to the definition of the term “Bone Mass Measurement” (§ 410.31(a)(2)), the conditions for coverage (§ 410.31(b)), the examples of exceptions to the standards on frequency of coverage (§ 410.31(c)(2)), and the category of individuals receiving glucocorticoid (steroid) therapy (§ 410.31(d)(3)). We are also proposing the addition of a new paragraph (f) that would allow CMS, through the NCD process, to identify additional BMM systems for monitoring individuals receiving osteoporosis drug therapy and for performing confirmatory baseline measurements. We do not expect that this addition would have a significant cost impact on the Medicare program in the next several years.

Based on the projected impact of the first three changes that would place greater reliance on the use of the more expensive DXA (axial skeleton) devices, we estimate that this revised benefit would result in an increase in Medicare payments for providers who use the DXA (axial skeleton) devices and a somewhat smaller decrease in payments to providers who use QCT (axial skeleton) and peripheral devices. However, we do not expect that these changes would have a significant cost impact on the Medicare program due to the fact that at present a very small percentage of our total Medicare payments for bone mass measurements are being made to providers who use QCT or peripheral devices. In addition, we estimate that lowering the eligibility standard for coverage of individuals on steroid therapy from 7.5 mg/day to 5.0 mg/day of prednisone (the fourth change) would result in an increase in Medicare payment for testing of additional patients, but this modest lowering of the steroid standard is not expected to have a significant cost impact on the program.

M. Proposed IDTF Changes

The costs associated with these proposed changes would be as follows:

1. Liability Insurance Requirement (§ 424.57(c)(10))

We estimate that only 10 percent of IDTFs do not already have liability insurance that meets this requirement. Based on Medicare data as of June 2005, 10 percent of the total number of IDTFs is approximately 559 suppliers. Using the previously highest estimate received ($1,800 annually), results in an approximate additional liability insurance cost of $1 million annually (559 times $1,800) to the IDTF industry due to this proposed rule. Start Printed Page 49077

2. Primary Business Telephone Listed Under the Name of the Business Locally or Toll-free for Beneficiaries Proposed Requirement (§ 424.57(c)(9))

We estimate that only 1 percent of IDTFs do not already meet this requirement. Based on Medicare data as of June 2005, we determined that 1 percent of IDTFs is approximately 56 suppliers. Therefore, 56 times the approximate $600 annual cost of telephone service results in an additional cost of $33,600 annually. Total Cost = $1 Million + $33,600 = approximately $1.04 million annually.

N. Independent Lab Billing for TC Component of Physician Pathology Services for Hospital Patients

The most current information on the number of affected hospitals and the impact on laboratories and hospitals comes from a report issued by the General Accounting Office (GAO) in September 2003.

The GAO estimated that approximately 95 percent of the total of all Medicare hospitals on the prospective payment system, as well as CAHs sent the TC of physician pathology services to independent laboratories and the independent laboratories billed the carrier under the PFS.

The GAO estimated that the median number of services sent by each hospital to outside independent laboratories was small, approximately 81 services. The GAO was unable to identify the number of laboratories billing for the TC service because a single laboratory may submit claims under multiple provider numbers. In general, the impact on the individual hospital is small; however, we do not know the impact on the individual independent laboratory

If the independent laboratories had not received payments from the carriers for these TC services for hospital patients, the GAO estimates that Medicare spending would have been $42 million less in 2001 and beneficiary cost sharing obligations for inpatient and outpatient services would have been reduced by $2 million.

Based on what they learned from the hospital industry, the GAO thought that Medicare beneficiaries' access to pathology services would not likely be affected if independent laboratories could not longer bill the carrier for these services. Hospital representatives indicated that they would likely continue to use independent laboratories to provide TC pathology services.

In is unclear if the hospitals contracting with independent laboratories would pay the laboratories at the same rates that the laboratories received by billing the Medicare carriers under the physician fee schedule.

O. Public Consultation for Medicare Payment for New Outpatient Clinical Diagnostic Laboratory Tests

This codification of our process for public consultation for new clinical diagnostic laboratory tests paid under the Medicare Part B clinical laboratory fee schedule, if adopted, would not increase or decrease payment amounts for existing clinical diagnostic laboratory tests because it would not alter our current methodology for calculating payment amounts for existing clinical diagnostic laboratory tests. For new tests, this proposal would primarily codify an existing process for the determination of payment amounts. Because any new laboratory tests to be gapfilled are unknown to us at the current time, we do not have any data to estimate the impact of our proposal to pay for new gapfilled lab tests at the median of the local carrier amounts for all carriers rather than the lower of that amount and the local carrier amount.

P. Alternatives Considered

This proposed rule contains a range of policies, including some proposals related to specific MMA provisions. The preamble provides descriptions of the statutory provisions that are addressed, identifies those policies when discretion has been exercised, presents rationale for our decisions and, where relevant, alternatives that were considered.

Q. Impact on Beneficiaries

There are a number of changes made in this proposed rule that would have an effect on beneficiaries. In general, we believe these proposed changes, particularly the DRA provisions that provide for an exception to the application of the Part B deductible with respect to colorectal cancer screening tests and coverage of an ultrasound screening for the early detection of AAAs, as part of the Initial Preventive Physical Examination benefit (referred to as the Welcome to Medicare benefit) would improve beneficiary access to services that are currently covered or expand the Medicare benefit package to include new services. As explained in more detail below, the regulatory provisions may affect beneficiary liability in some cases. Any changes in aggregate beneficiary liability from a particular provision would be a function of the coinsurance (20 percent if applicable for the particular provision after the beneficiary has met the deductible) and the effect of the aggregate cost (savings) of the provision on the calculation of the Medicare Part B premium rate (generally 25 percent of the provision's cost or savings).

To illustrate this point, as shown in Table 8, the 2006 national payment amount in the nonfacility setting for CPT code 99203 (Office/outpatient visit, new), is $97.02 which means that currently a beneficiary is responsible for 20 percent of this amount, or $19.40. Based on the June 29, 2006 proposed notice (71 FR 37170) and this proposed rule, the 2007 national payment amount in the nonfacility setting for CPT code 99203, as shown in Table 8, is $91.71 which means that, in 2007, the beneficiary coinsurance for this service would be $18.34.

Very few of the changes we are proposing impact overall payments and, therefore, would affect Medicare beneficiaries' coinsurance liability. Proposals discussed above that do affect overall spending, such as DRA 5102 imaging provisions, would similarly impact beneficiaries' coinsurance.

R. Accounting Statement

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/​omb/​circulars/​a004/​a-4.pdf), in Table 10 below, we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this proposed rule. This table includes the impact of the proposed changes in this rule on providers and suppliers.

Expenditures are classified as transfers to Medicare providers/or suppliers (that is, ESRD facilities and physicians, other practitioners, clinical laboratories and medical suppliers that receive payment under the physician fee schedule or Medicare Part B). Based on the proposals contained in this proposed rule, there would be an estimated decrease in expenditures from CY 2006 to 2007. This is a result of the CY 2007 increased payment to ESRD facilities the reduction to the payments for imaging services under the PFS required by section 5102 of the DRA and the −5.1 percent Medicare PFS conversion factor update required by the statutory update formula.

Table 10.—Accounting Statement: Classification of Estimated Expenditures, From CY 2006 to the CY 2007 (in Millions)

CategoryTransfers
Annualized Monetized TransfersEstimated decrease in expenditures of $3,600
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From Whom To Whom?Federal Government To ESRD Medicare Providers; physicians, other practitioners and suppliers who receive payment under the Medicare Physician Fee Schedule; and Medicare Suppliers billing for Part B drugs.

In accordance with the provisions of Executive Order 12866, this final rule was reviewed by the Office of Management and Budget.

Start List of Subjects

List of Subjects

End List of Subjects

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:

Start Part

PART 405—FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

1. The authority citation for part 405 continues to read as follows:

Start Authority

Authority: Secs. 1102, 1861, 1862(a), 1871, 1874, 1881, and 1886(k) of the Social Security Act (42 U.S.C. 1302, 1395x, 1395y(a), 1395hh, 1395kk, 1395rr, and 1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C. 263a).

End Authority

Subpart D—Private Contracts

2. Section 405.400 is amended by revising the definition of “Practitioner” to read as follows:

Definitions.
* * * * *

Practitioner means a physician assistant, nurse practitioner, clinical nurse specialist, certified registered nurse anesthetist, certified nurse midwife, clinical psychologist, clinical social worker, registered dietitian or nutrition professional, who is currently legally authorized to practice in that capacity by each State in which he or she furnishes services to patients or clients.

* * * * *

Subpart X—Rural Health Clinic and Federally Qualified Health Center Services Payment for Rural Health Clinic and Federally Qualified Health Center Services

3. Section 405.2446 is amended by adding paragraph (b)(10) to read as follows:

Scope of services.
* * * * *

(b) * * *

(10) Medical nutrition therapy services as specified in part 410, subpart G of this chapter, and diabetes outpatient self-management training services as specified in part 410, subpart H of this chapter.

* * * * *

4. Section 405.2463 is revised to read as follows:

What constitutes a visit.

(a) Visit—(1) General. (i) For RHCs, a visit is a face-to-face encounter between a clinic or center patient and a physician, physician assistant, nurse practitioner, nurse midwife, visiting nurse, clinical psychologist, or clinical social worker.

(ii) For FQHCs, a visit means—

(A) A face-to-face encounter, as described in paragraph (a)(1)(i) of this section; or

(B) A face-to-face encounter between a patient and a qualified provider of medical nutrition therapy services as defined in part 410, subpart G of this chapter; or a qualified provider of outpatient diabetes self-management training services as defined in part 410, subpart H of this chapter.

(2) Medical visit. For purposes of this section, a medical visit is a face-to-face encounter between a clinic or center patient and a physician, physician assistant, nurse practitioner, nurse midwife, or a visiting nurse; and for FQHCs only, a medical visit also includes a separately billable medical nutrition therapy visit or a diabetes outpatient self-management training visit.

(3) Other health visit. For purposes of this section, a other health visit is a face-to-face encounter between a clinic or center patient and a clinical psychologist, clinical social worker, or other health professional for mental health services.

(b) Encounters. Encounters with more than one health professional and multiple encounters with the same health professional that take place on the same day and at a single location constitute a single visit, except when one of the following conditions exist:

(1) After the first encounter, the patient suffers illness or injury requiring additional diagnosis or treatment.

(2) The patient has a medical visit and other health visit(s), as defined in paragraph (a) of this section.

(c) Payment. Medicare pays for more than one visit per day when the conditions in paragraph (b) of this section are met or a separate visit under paragraph (a)(1)(ii)(B) of this section is made.

End Part Start Part

PART 410—SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

5. The authority citation for part 410 continues to read as follows:

Start Authority

Authority: Secs. 1102, 1834, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395m, and 1395hh).

End Authority

Subpart B—Medical and Other Health Services

6. Section 410.16 is amended in paragraph (a) by revising paragraph (7) of the definition of “Initial preventive physical examination” to read as follows:

Initial preventive physical examination: Conditions for and limitations on coverage.

(a) * * *

* * * * *
Start Printed Page 49079

Initial preventive physical examination * * *

* * * * *

(7) Education, counseling, and referral, including a written plan such as a checklist provided to the beneficiary for obtaining the appropriate screening and other preventive services that are covered as separate Medicare Part B benefits as described in section 1861(s)(10), section 1861(jj), section 1861(nn), section 1861(oo), section 1861(pp), section 1861(qq)(1), section 1861(rr), section 1861(uu), section 1861(vv), section 1861(xx)(1), section 1861(yy), and section 1861(bbb) of the Act.

* * * * *

7. A new § 410.19 is added to read as follows:

Ultrasound screening for abdominal aortic aneurysms: Condition for and limitation on coverage.

(a) Definitions: As used in this section, the following definitions apply:

Eligible beneficiary means an individual who—

(1) Has received a referral for an ultrasound screening for an abdominal aortic aneurysm as a result of an initial preventive physical examination (as defined in section 1861(ww)(1) of the Act);

(2) Has not been previously furnished an ultrasound screening for an abdominal aortic aneurysm under the Medicare program; and

(3) Is included in at least one of the following risk categories:

(i) Has a family history of an abdominal aortic aneurysm.

(ii) Is a man age 65 to 75 who has smoked at least 100 cigarettes in his lifetime.

(iii) Is an individual who manifests other risk factors in a beneficiary category recommended for screening by the United States Preventive Services Task Force regarding abdominal aortic aneurysms, as specified by the Secretary through a national coverage determination process.

Ultrasound screening for abdominal aortic aneurysms means the following services furnished to an asymptomatic individual for the early detection of an abdominal aortic aneurysm:

(1) A procedure using soundwaves (or other procedures using alternative technologies of commensurate accuracy and cost, as specified by the Secretary through a national coverage determination process) provided for the early detection of abdominal aortic aneurysms.

(2) Includes a physician's interpretation of the results of the procedure.

(b) Conditions for coverage of an ultrasound screening for abdominal aortic aneurysms. Medicare Part B pays for one ultrasound screening for an abdominal aortic aneurysm provided to eligible beneficiaries, as described in this section, after a referral from a physician or a qualified nonphysician practitioner as defined in § 410.16(a).

(c) Limitation on coverage of ultrasound screening for abdominal aortic aneurysms. Payment may not be made for an ultrasound screening for an abdominal aortic aneurysm that is performed for an individual who is not an eligible beneficiary, as described in the definition of “Eligible beneficiary” in this section.

8. Section 410.31 is revised to read as follows:

Bone mass measurement: Conditions for coverage and frequency standards.

(a) Definition. As used in this section unless specified otherwise, the following definition applies:

Bone mass measurement means a radiologic, radioisotopic, or other procedure that meets the following conditions:

(1) Is performed for the purpose of identifying bone mass, detecting bone loss, or determining bone quality.

(2) Is performed with either a bone densitometer (other than single-photon or dual-photon absorptiometry) or with a bone sonometer system that has been cleared for marketing for this use by the FDA under 21 CFR part 807, or approved for marketing by the FDA for this use under 21 CFR part 814.

(3) Includes a physician's interpretation of the results of the procedure.

(b) Conditions for coverage. (1) Medicare covers a medically necessary bone mass measurement if the following conditions are met:

(i) Following an evaluation of the beneficiary's need for the measurement, including a determination as to the medically appropriate procedure to be used for the beneficiary, it is ordered by the physician or a qualified nonphysician practitioner (as these terms are defined in § 410.32(a)) treating the beneficiary.

(ii) It is performed under the appropriate level of supervision of a physician (as set forth in § 410.32(b)).

(iii) It is reasonable and necessary for diagnosing and treating the condition of a beneficiary who meets the conditions described in paragraph (d) of this section.

(2) Medicare covers a medically necessary bone mass measurement for an individual defined under paragraph (d)(5) of this section if the conditions under paragraph (b)(1) of this section are met and the monitoring is performed by the use of a dual energy x-ray absorptiometry system (axial skeleton).

(3) Medicare covers a medically necessary confirmatory baseline bone mass measurement for an individual defined under paragraph (d) of this section, if the conditions under paragraph (b)(1) of this section are met and the confirmatory baseline bone mass measurement is performed by a dual energy x-ray absorptiometry system (axial skeleton) and the initial measurement was not performed by a dual energy x-ray absorptiometry system (axial skeleton).

(c) Standards on frequency of coverage —(1) General rule. Except as allowed under paragraph (c)(2) of this section, Medicare may cover a bone mass measurement for a beneficiary if at least 23 months have passed since the month the last bone mass measurement was performed.

(2) Exception. If medically necessary, Medicare may cover a bone mass measurement for a beneficiary more frequently than allowed under paragraph (c)(1) of this section. Examples of situations where more frequent bone mass measurement procedures may be medically necessary include, but are not limited to the following medical circumstances.

(i) Monitoring beneficiaries on long-term glucocorticoid (steroid) therapy of more than 3 months.

(ii) Allowing for a confirmatory baseline measurement to permit monitoring of beneficiaries in the future if the requirements of paragraph (b)(3) of this section are met.

(d) Beneficiaries who may be covered. The following categories of beneficiaries may receive Medicare coverage for a medically necessary bone mass measurement:

(1) A woman who has been determined by the physician (or a qualified nonphysician practitioner) treating her to be estrogen-deficient and at clinical risk for osteoporosis, based on her medical history and other findings.

(2) An individual with vertebral abnormalities as demonstrated by an x-ray to be indicative of osteoporosis, osteopenia, or vertebral fracture.

(3) An individual receiving (or expecting to receive) glucocorticoid (steroid) therapy equivalent to an average of 5.0 mg of prednisone, or greater, per day for more than 3 months.

(4) An individual with primary hyperparathyroidism.

(5) An individual being monitored to assess the response to or efficacy of an Start Printed Page 49080FDA-approved osteoporosis drug therapy.

(e) Denial as not reasonable and necessary. If CMS determines that a bone mass measurement does not meet the conditions for coverage in paragraphs (b) or (d) of this section, or the standards on frequency of coverage in paragraph (c) of this section, it is excluded from Medicare coverage as not “reasonable” and “necessary” under section 1862(a)(1)(A) of the Act and § 411.15(k) of this chapter.

(f) Use of the National Coverage Determination Process. For the purposes of paragraphs (b)(2) and (b)(3) of this section, CMS may determine through the National Coverage Determination process that additional bone mass measurement systems are reasonable and necessary under section 1862(a)(1) of the Act for monitoring and confirming baseline bone mass measurements.

* * * * *

9. Section 410.33 is amended by—

A. Revising paragraph (b)(1).

B. Revising paragraph (e).

C. Adding paragraphs (g), (h), and (i).

The revision and additions read as follows:

Independent diagnostic testing facility.
* * * * *
*

(b) Supervising physician. (1) Each supervising physician must be limited to providing supervision to no more than three (3) IDTF sites. The IDTF supervising physician is responsible for the overall operation and administration of the IDTFs, including the employment of personnel who are competent to perform test procedures, record and report test results promptly, accurately and proficiently, and for assuring compliance with the applicable regulations.

* * * * *

(e) Multi-State entities. (1) An IDTF that operates across State boundaries must—

(i) Maintain documentation that its supervising physicians and technicians are licensed and certified in each of the States in which it operates; and

(ii) Operate in compliance with all applicable Federal, State, and local licensure and regulatory requirements with regard to the health and safety of patients.

(2) The point of the actual delivery of services is the Place of Service on the claim form. When an IDTF performs a diagnostic test at the beneficiary's residence, the beneficiary's residence is the Place of Service.

* * * * *

(g) Application certification standards. The IDTF must certify in its enrollment application that it meets the following standards:

(1) Operate its business in compliance with all applicable Federal and State licensure and regulatory requirements.

(2) Provide complete and accurate information on their enrollment application. Any change in enrollment information must be reported to the designated fee-for-service contractor on the Medicare enrollment application within 30 calendar days of the change.

(3) Maintain a physical facility on an appropriate site. For the purposes of this standard, a post office box or commercial mail box is not considered a physical facility. The physical facility must contain space for equipment appropriate to the services designated on the enrollment application, facilities for hand washing, adequate patient privacy accommodations, and the storage of both business records and current medical records.

(4) Have all applicable testing equipment available at the physical site excluding portable equipment. A catalog of portable equipment, including equipment serial numbers, must be maintained at the physical site. In addition, portable equipment must be available for inspection within two business days of a CMS inspection request. The IDTF must maintain a current inventory of the equipment, including serial and registration numbers, provide this information to the designated fee-for-service contractor upon request, and notify the contractor of any changes in equipment within 90 days.

(5) Maintain a primary business phone under the name of the designated business. The business phone must be located at the designated site of the business. The telephone number or toll free numbers must be available in a local directory and through directory assistance.

(6) Have a comprehensive liability insurance policy of at least $300,000 or 20 percent of its average annual Medicare billings, whichever amount is greater, that covers both the place of business and all customers and employees of the IDTF. The policy must be carried by a non-relative owned company and list the serial numbers of any and all equipment used by the IDTF.

(7) Agree not to directly solicit patients through any means including, but not limited to, a prohibition on telephone, computer, or in-person contacts. The IDTF must accept only those patients referred for diagnostic testing by an attending physician, who is furnishing a consultation or treating a beneficiary for a specific medical problem and who uses the results in the management of the beneficiary's specific medical problem. Nonphysician practictioners may order tests as set forth in § 410.32(a)(3).

(8) Answer beneficiaries’ questions and respond to their complaints. Documentation of those contacts must be maintained at the physical site.

(9) Openly post these standards for review by patients and the public.

(10) Disclose to the government any person having ownership, financial, or control interest or any other legal interest in the supplier.

(11) Have its testing equipment calibrated per equipment instructions and in compliance with applicable national standards.

(12) Have technical staff on duty with the appropriate credentials to perform tests. The IDTF must be able to produce the applicable Federal or State licenses or certifications of the individuals performing these services.

(13) Have proper medical record storage and be able to retrieve medical records upon request from CMS or its fee-for-service contractor within 2 business days.

(14) Permit CMS, including its agents, or its designated fee-for-service contractors, to conduct unannounced, on-site inspections to confirm the IDTF's compliance with these standards. The IDTF must be accessible during regular business hours to CMS and beneficiaries and must maintain a visible sign posting the normal business hours of the IDTF.

(h) Failure to meet standards. If an IDTF fails to meet one or more of the standards in paragraph (g) of this section at the time of enrollment, its enrollment will be denied. CMS will revoke a supplier's billing privileges if and IDTF is found not to meet the standards in paragraph (g) or (b)(1) of this section.

(i) Definition. For purposes of this section, the following definition applies:

Point of actual delivery of service. The point of the actual delivery of service means the Place of Service on the claim form. When an IDTF performs a diagnostic test at the beneficiary's residence, the beneficiary's residence is the Place of Service.

Subpart I—Payment of SMI Benefits

10. Section 410.160 is amended by adding paragraphs (b)(7) and (b)(8) to read as follows:

Part B annual deductible.
* * * * *
Start Printed Page 49081

(b) * * *

(7) Beginning January 1, 2007, colorectal cancer screening tests as described in § 410.37.

(8) Beginning January 1, 2007, ultrasound screening for abdominal aortic aneurysms described in § 410.19.

* * * * *
End Part Start Part

PART 411—EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT

11. The authority citation for part 411 is amended to read as follows:

Start Authority

Authority: Secs. 1102, 1860D-1 through 1860D-42, 1871, and 1877 of the Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh, and 1395nn).

End Authority

Subpart A—General Exclusions and Exclusion of Particular Services

12. Section 411.15 is amended by—

A. Revising paragraph (a)(1).

B. Adding a new paragraph (k)(12).

C. Revising paragraph (o).

The revisions and addition read as follows:

Particular services excluded from coverage.
* * * * *

(a) * * *

(1) Examinations performed for a purpose other than treatment or diagnosis of a specific illness, symptoms, complaint, or injury, except for screening mammography, colorectal cancer screening tests, screening pelvic exams, prostate cancer screening tests, glaucoma screening exams, initial preventive physical examinations, or ultrasound screening for abdominal aortic aneurysms that meet the criteria specified in paragraphs (k)(6) through (k)(12) of this section.

* * * * *

(k) * * *

(12) In the case of ultrasound screening for abdominal aortic aneurysms, with the goal of early detection of abdominal aortic aneurysms, subject to the conditions and limitation specified in § 410.19 of this chapter.

* * * * *

(o) Experimental or investigational devices, except for certain devices—

(1) Categorized by the FDA as a Category A or B device defined in § 405.201(b) of this chapter; and

(2) Furnished in accordance with the CMS clinical research policy.

Subpart J—Financial Relationships Between Physicians and Entities Furnishing Designated Health Services

13. Section 411.351 is amended by—

A. Revising the definition “Centralized building”.

B. Revising the definition “Physician in the group practice”.

The revisions read as follows:

Definitions.
* * * * *

Centralized building means all or part of a building, including, for purposes of this subpart only, a mobile vehicle, van, or trailer that is owned or leased on a full-time basis (that is, 24 hours per day, 7 days per week, for a term of not less than 6 months) by a group practice and that is used exclusively by the group practice. Space in a building or a mobile vehicle, van, or trailer that is shared by more than one group practice, by a group practice and one or more solo practitioners, or by a group practice and another provider or supplier (for example, a diagnostic imaging facility) is not a centralized building for purposes of this subpart. This definition does not preclude a group practice from providing services to other providers or suppliers (for example, purchased diagnostic tests) in the group practice's centralized building. A group practice may have more than one centralized building. A centralized building does not include space that is owned or leased by a group practice if that space is less than 350 square feet. This limitation does not apply to space owned or rented in a building where no more than three group practices own or lease space in the “same building” (as defined in this section) and share the same “physician in the group practice” (as defined in this section). A centralized building does not include space owned or leased by a group practice if equipment needed to perform substantially all (at least 90 percent) of the designated health services furnished in that space in any given calendar year is not permanently located in that space. That is, equipment needed to perform more than 10 percent of the designated health services furnished in that space in a calendar year cannot be temporarily moved into that space from another space in the “same building” or from outside the “same building” (as defined in this section).

* * * * *

Physician in the group practice means a member of the group practice, as well as an independent contractor physician during the time the independent contractor is furnishing patient care services (as defined in this section) for the group practice under a contractual arrangement with the group practice to provide services to the group practice's patients in the group practice's facilities. The contract must contain the same restrictions on compensation that apply to members of the group practice under § 411.352(g) (or the contract must fit in the personal services exception in § 411.357(d)), and the independent contractor's arrangement with the group practice and must comply with the reassignment rules at § 424.80(d)(3) of this chapter or section 30.2.9.1 of the CMS Internet-only manual, publication 100-04, Claims Processing Manual, chapter 1 on general billing requirements (as amended or replaced from time to time). Referrals from an independent contractor who is a physician in the group practice are subject to the prohibition on referrals in § 411.353(a), and the group practice is subject to the limitation on billing for those referrals in § 411.353(b).

* * * * *
End Part Start Part

PART 414—PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

14. The authority citation for part 414 continues to read as follows:

Start Authority

Authority: Secs. 1102, 1871, and 1881(b)(1) of the Social Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(1).

End Authority

15. A new subpart F is added as follows:

Subpart F—Payment for New Clinical Diagnostic Laboratory Tests

414.400
Basis and scope.
414.402
Definitions.
414.404
[Reserved]
414.406
Procedures for public consultation for payment for a new clinical diagnostic laboratory test.
414.408
Payment for a new clinical diagnostic laboratory test.
414.410
Clinical Diagnostic Laboratory Date of Service for Specimens

Subpart F—Payment for New Clinical Diagnostic Laboratory Tests

Basis and scope.

This subpart implements provisions of 1833(h)(8) of the Act procedures for determining the basis for, and amount of, payment for a new clinical diagnostic laboratory test with respect to which a new or substantially revised Healthcare Common Procedure Coding System code is assigned on or after January 1, 2005.

Definitions.

For purposes of this subpart—

Substantially Revised Healthcare Common Procedure Coding System Code means a code for which there has been a substantive change to the definition of the test or procedure to which the code applies (such as a new Start Printed Page 49082analyte or a new methodology for measuring an existing analyte specific test).

[Reserved]
Procedures for public consultation for payment for a new clinical diagnostic laboratory test.

For a new clinical diagnostic laboratory test that is assigned a new or substantially revised code on or after January 1, 2005, CMS determines the payment after the performance of the following:

(a) CMS makes available to the public (through an Internet Web site and other appropriate mechanisms) a list that includes codes for which establishment of a payment amount is being considered for the next calendar year.

(b) CMS publishes a Federal Register notice of a meeting to receive public comments and recommendations (and data on which recommendations are based) on the appropriate basis, as specified in § 414.408, for establishing payment amounts for the list of codes made available to the public.

(c) Not fewer than 30 days after publication of the notice in the Federal Register, CMS convenes a meeting that includes representatives of CMS officials involved in determining payment amounts, to receive public comments and recommendations (and data on which the recommendations are based).

(d) Taking into account the comments and recommendations (and accompanying data) received at the public meeting, CMS develops and makes available to the public (through an Internet Web site and other appropriate mechanisms)—

(1) A list of proposed determinations with respect to the appropriate basis for establishing a payment amount for each code, with an explanation of the reasons for each determination, the data on which the determinations are based, and a request for public written comments within a specified time period on the proposed determination; and

(2) A list of final determinations of the payment amounts for tests, with the rationale for each determination, the data on which the determinations are based, and responses to comments and suggestions from the public.

Payment for a new clinical diagnostic laboratory test.

For a new clinical diagnostic laboratory test that is assigned a new or substantially revised code on or after January 1, 2005, CMS determines the payment amount based on either of the following:

(a) Crosswalking. Crosswalking is used if it is determined that a new test is comparable to an existing test, multiple existing test codes, or a portion of an existing test code.

(1) CMS assigns to the new test code, the local fee schedule amounts and national limitation amount of the existing test.

(2) Payment for the new test code is made at the lesser of the local fee schedule amount or the national limitation amount.

(b) Gapfilling. Gapfilling is used when no comparable existing test is available.

(1) Carrier-specific amounts are established for the new test code for the first year using the following sources of information to determine gapfill amounts, if available:

(i) Charges for the test and routine discounts to charges;

(ii) Resources required to perform the test;

(iii) Payment amounts determined by other payers; and

(iv) Charges, payment amounts, and resources required for other tests that may be comparable or otherwise relevant.

(2) In the second year, the test code is paid at the national limitation amount, which is the median of the carrier-specific amounts.

Clinical Diagnostic Laboratory Date of Service for Specimens.

The date of service for a laboratory test is as follows:

(a) Except as provided under paragraph (b) of this section, the date of service of the test shall be the date the specimen was collected.

(b)(1) If a specimen is collected over a period that spans two calendar days, then the date of service shall be the date the collection ended.

(2) If a specimen was stored for more than 30 calendar days before testing (otherwise known as “an archived specimen”), the date of service of the test shall be the date the specimen was obtained from storage.

(3) If a specimen was stored for less than or equal to 30 calendar days from the date it was collected, the date of service of the test must be the date the specimen was obtained from storage if—

(i) The test is ordered by the patient's physician at least 14 days following the date of the patient's discharge from the hospital.

(ii) The test could not reasonably have been ordered while the patient was hospitalized.

(iii) The procedure performed while the beneficiary is a patient of the hospital is for purposes other than collection of the specimen needed for the test.

(iv) The test is reasonable and medically necessary.

Subpart J—Submission of Manufacturer's Average Sales Price Data

16. Section 414.802 is amended by adding the definition of “Bona fide service fees” in alphabetical order to read as follows:

Definitions.
* * * * *

Bona fide service fees means fees paid by a manufacturer to an entity, that represent fair market value for a bona fide, itemized service actually performed on behalf of the manufacturer that the manufacturer would otherwise perform (or contract for) in the absence of the service arrangement, and that are not passed on in whole or in part to a client or customer of an entity, whether or not the entity takes title to the drug.

* * * * *

17. Section 414.804 is amended by revising paragraphs (a)(1), (a)(2), (a)(3), and (a)(4).

The revisions read as follows:

Basis of Payment.

(a) * * *

(1) The manufacturer's average sales price for a quarter for a drug represented by a particular 11-digit National Drug Code must be calculated as the manufacturer's sales to all purchasers in the United States for that particular 11-digit National Drug Code (after excluding sales as specified in paragraph (a)(4) of this section and then deducting price concessions as specified in paragraphs (a)(2) and (a)(3) of this section) divided by the total number of units sold by the manufacturer in that quarter (after excluding units associated with sales as specified in paragraph (a)(4) of this section).

(2) Price concessions. (i) In calculating the manufacturer's average sales price, a manufacturer must deduct price concessions. Price concessions include the following types of transactions and items:

(A) Volume discounts.

(B) Prompt pay discounts.

(C) Cash discounts.

(D) Free goods that are contingent on any purchase requirement.

(E) Chargebacks and rebates (other than rebates under the Medicaid program).

(ii) For the purposes of paragraph (a)(2)(i), bona fide services fees are not considered price concessions.

(3) To the extent that data on price concessions, as described in paragraph (a)(2) of this section, are available on a Start Printed Page 49083lagged basis, the manufacturer must estimate this amount in accordance with the methodology described in this paragraph.

(i)(A) For each National Drug Code with at least 12 months of sales (including products for which the manufacturer has redesignated the National Drug Code for the specific product and package size and has 12 months of sales across the prior and current National Drug Codes), after adjusting for exempted sales, the manufacturer calculates a percentage equal to the sum of the price concessions for the most recent 12-month period available associated with sales subject to the average sales price reporting requirement divided by the total in dollars for the sales subject to the average sales price reporting requirement for the same 12-month period.

(B) For each National Drug Code with less than 12 months of sales, the calculation described in paragraph (i)(A) of this section is performed for the time period equaling the total number of months of sales.

(ii) The manufacturer multiplies the applicable percentage described in paragraph (a)(3)(i)(A) or (a)(3)(i)(B) of this section by the total in dollars for the sales subject to the average sales price reporting requirement (after adjusting for exempted sales) for the quarter being submitted. (The manufacturer must carry a sufficient number of decimal places in the calculation of the price concessions percentage in order to round accurately the net total sales amount for the quarter to the nearest whole dollar.) The result of this multiplication is then subtracted from the total in dollars for the sales subject to the average sales price reporting requirement (after adjusting for exempted sales) for the quarter being submitted.

(iii) The manufacturer uses the result of the calculation described in paragraph (a)(3)(ii) of this section as the numerator and the number of units sold in the quarter (after adjusting for exempted sales) as the denominator to calculate the manufacturer's average sales price for the National Drug Code for the quarter being submitted.

(iv) Example. After adjusting for exempted sales, the total lagged price concessions (discounts, rebates, etc.) over the most recent 12-month period available associated with sales for National Drug Code 12345-6789-01 subject to the ASP reporting requirement equal $200,000, and the total in dollars for the sales subject to the average sales price reporting requirement for the same period equals $600,000. The lagged price concessions percentage for this period equals 200,000/600,000 = .33333. The total in dollars for the sales subject to the average sales price reporting requirement for the quarter being reported, after accounting for non-lagged price concessions, equals $50,000 for 10,000 units sold. The manufacturer's average sales price calculation for this National Drug Code for this quarter is: $50,000 − (0.33333 × 50,000) = $33,334 (net total sales amount); $33,334/10,000 = $3.33 (average sales price).

(4) Exempted sales. (i) In calculating the manufacturer's average sales price, a manufacturer must exclude sales that are exempt from the Medicaid best price calculation under sections 1927(c)(1)(C)(i) and 1927(c)(1)(C)(ii)(III) of the Act as limited by section 1927(c)(1)(D) of the Act.

(ii) In determining nominal sales exempted under section 1927(c)(1)(C)(ii)(III) of the Act, the manufacturer calculates the average manufacturer price as defined in section 1927(k) of the Act and then identifies sales that are eligible to be considered a nominal sale under section 1927(c)(1)(D) of the Act and are at less than 10 percent of the average manufacturer price. To identify nominal sales, the manufacturer must use the average manufacturer price for the calendar quarter that is the same calendar quarter as the average sales price reporting period.

(iii) For exempted sales under section 1927(c)(1)(C)(i) of the Act known on a lagged basis because of chargebacks or rebates, manufacturers must estimate such lagged exempted sales using the ratio methodology specified in this paragraph to exclude lagged exempted sales before accounting for price concessions as specified in paragraphs (a)(2) and (a)(3) of this section.

(A) For each National Drug Code with at least 12 months of sales (including products for which the manufacturer has redesignated the Nation Drug Code and has 12 months of sales across the prior and current National Drug Codes), the manufacturer calculates a percentage using the sum of lagged exempted sales (in units) for the most recent 12 month period available as the numerator and the sales (the number of units after non-lagged exempted sales have been subtracted from total sales) for the same 12 month period as the denominator. The result is a rolling average percentage estimate of lagged exempted sales that is applied to the sales (the number of units after non-lagged exempted sales have been subtracted from total sales) for the quarter being submitted. The product that results from the multiplication of the rolling average percentage estimate of lagged exempted sales and the sales for the quarter determines the estimated lagged exempted sales in units to subtract from the denominator of the average sales price calculation. Manufacturers must make a corresponding adjustment to the numerator of the average sales price calculation to ensure that the total in dollars for the reporting quarter does not include revenue related to lagged exempted sales removed from the denominator using the estimation methodology.

(B) For National Drug Codes with less than 12 months of sales, the calculation described in paragraph (4)(iii)(A) of this section is calculated based on the sales and exempted sales (lagged and non-lagged) for the period equaling the total number of months of sales.

(C) Manufacturers must exclude lagged exempted sales (as calculated using the ratio methodology in paragraph (a)(4)(iii)(A) of this section) from their estimates of lagged price concessions described in paragraph (a)(3) of this section.

* * * * *

Subpart K—Payment for Drugs and Biologicals Under Part B

18. Section 414.904 is amended by revising paragraphs (d)(2)(iii) and (d)(3) to read as follows:

Average sales price as the basis for payment.
* * * * *

(d) * * *

(2) * * *

(iii) Effective for drugs and biologicals furnished in CY 2006 and subsequent calendar years, the payment for such drugs and biologicals furnished in connection with renal dialysis services and separately billed by freestanding and hospital-based renal dialysis facilities not paid on a cost basis is 106 percent of the average sales price.

(3) Widely available market price and average manufacturer price. If the Inspector General finds that the average sales price exceeds the widely available market price or the average manufacturer price by 5 percent or more in CY 2007, the payment limit in the quarter following the transmittal of this information to the Secretary is the lesser of the widely available market price or 103 percent of the average manufacturer price.

* * * * *
End Part Start Part Start Printed Page 49084

PART 415—SERVICES FURNISHED BY PHYSICIANS IN PROVIDERS, SUPERVISING PHYSICIANS IN TEACHING SETTINGS, AND RESIDENTS IN CERTAIN SETTINGS

19. The authority citation for part 415 continues to read as follows:

Start Authority

Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).

End Authority

Subpart C—Part B Carrier Payments for Physician Services to Beneficiaries in Providers

20. Section 415.130 is amended by revising paragraph (d) to read as follows:

Conditions for payment: Physician pathology services.
* * * * *

(d) Physician pathology services furnished by an independent laboratory. The technical component of physician pathology services furnished by an independent laboratory to a hospital inpatient or outpatient on or before December 31, 2006 may be paid to the laboratory by the carrier under the physician fee schedule if the Medicare beneficiary is a patient of a covered hospital as defined in paragraph (a)(1) of this section. For services furnished after December 31, 2006, an independent laboratory may not bill the carrier for physician pathology services furnished to a hospital inpatient or outpatient.

* * * * *
End Part Start Part

PART 424—CONDITIONS FOR MEDICARE PAYMENT

21. The authority citation for part 424 continues to read as follows:

Start Authority

Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).

End Authority

Subpart B—Certification and Plan of Treatment Requirements

22. Section 424.24 is amended by—

A. Redesignating paragraph (f) as paragraph (g).

B. Adding a new paragraph (f).

The addition reads as follows:

Requirements for medical and other health services furnished by providers under Medicare Part B.
* * * * *

(f) Blood glucose monitoring in skilled nursing facilities. For each blood glucose test furnished to a resident of a skilled nursing facility, the physician must certify that the test is medically necessary. A physician's standing order is not sufficient to order a series of blood glucose tests.

* * * * *

Subpart F—Limitations on Assignment and Reassignment of Claims

23. Section 424.80 is amended by—

A. Revising the heading of paragraph (d).

B. Revising paragraph (d)(2)

C. Adding a new paragraph (d)(3).

The revisions and addition read as follows:

Prohibition of reassignment of claims by suppliers.
* * * * *

(d) Reassignment to an entity under an employer-employee relationship or under a contractual arrangement: Conditions and limitations. (1) * * *

(2) Access to records. The supplier who furnishes the service has unrestricted access to claims submitted by an entity for services provided by that supplier. This paragraph applies irrespective of whether the supplier is an employee or whether the service is provided under a contractual arrangement. If an entity refuses to provide, upon request, the billing information to the supplier performing the service, the entity's right to receive reassigned benefits may be revoked under § 424.82(c)(3).

(3) Contractual arrangements for provision of diagnostic test services. If a physician or medical group bills for the technical component of a diagnostic test covered under section 1861(s)(3) of the Act and paid for under part 414 of this chapter (other than clinical diagnostic laboratory tests paid under section 1833(a)(2)(D) of the Act, which are subject to the special rules set forth in section 1833(h)(5)(A) of the Act), following a reassignment involving a contractual arrangement with the physician or other supplier who performed the technical component, each of the following conditions must be met:

(i) The payment to the billing physician, or medical group, less the applicable deductibles and coinsurance, may not exceed the lowest of the following amounts:

(A) The physician or other supplier's net charge to the billing physician or medical group.

(B) The billing physician's or medical group's actual charge.

(C) The fee schedule amount for the service that would be allowed if the physician or other supplier billed directly.

(ii) The physician or medical group billing for the test must identify the physician or other supplier that performed the test and indicate the supplier's net charge for the test. If the physician or medical group billing for the test fails to provide this information, CMS will not make any payment to the physician or medical group billing for the test and the billing physician or medical group can not bill the beneficiary.

(iii) In order to bill for the technical component of the service, the physician or medical group must directly perform the professional component of the service.

(Catalog of Federal Domestic Assistance Program No. 93.774, Medicare—Supplementary Medical Insurance Program)

Start Signature

Dated: June 29, 2006.

Mark B. McClellan,

Administrator, Centers for Medicare & Medicaid Services.

End Signature Start Signature
Approved: August 3, 2006.

Michael O. Leavitt,

Secretary.

End Signature

Note:

These addenda will not appear in the Code of Federal Regulations.

Addendum A: Explanation and Use of Addenda B

The addenda on the following pages provide various data pertaining to the Medicare fee schedule for physicians' services furnished in 2007. Addendum B contains the RVUs for work, non-facility PE, facility PE, and malpractice expense, and other information for all services included in the PFS.

In previous years, we have listed many services in Addendum B that are not paid under the PFS. To avoid publishing as many pages of codes for these services, we are not including clinical laboratory codes or the alphanumeric codes (Healthcare Common Procedure Coding System (HCPCS) codes not included in CPT) not paid under the PFS in Addendum B.

Addendum B—2007 Relative Value Units and Related Information Used in Determining Medicare Payments for 2007

This addendum contains the following information for each CPT code and alphanumeric HCPCS code, except for: alphanumeric codes beginning with B (enteral and parenteral therapy), E (durable medical equipment), K (temporary stcodes for nonphysicians' services or items), or L (orthotics); and codes for anesthesiology. Please also note the following:

  • An “NA” in the “Non-facility PE RVUs” column of Addendum B means that CMS has not developed a PE RVU Start Printed Page 49085in the non-facility setting for the service because it is typically performed in the hospital (for example, an open heart surgery is generally performed in the hospital setting and not a physician's office). If there is an “NA” in the non-facility PE RVU column, and the contractor determines that this service can be performed in the non-facility setting, the service will be paid at the facility PE RVU rate.
  • Services that have an “NA” in the “Facility PE RVUs” column of Addendum B are typically not paid using the PFS when provided in a facility setting. These services (which include “incident to” services and the technical portion of diagnostic tests) are generally paid under either the outpatient hospital prospective payment system or bundled into the hospital inpatient prospective payment system payment.

1. CPT/HCPCS code. This is the CPT or alphanumeric HCPCS number for the service. Alphanumeric HCPCS codes are included at the end of this addendum.

2. Modifier. A modifier is shown if there is a technical component (modifier TC) and a professional component (PC) (modifier -26) for the service. If there is a PC and a TC for the service, Addendum B contains three entries for the code. A code for: the global values (both professional and technical); modifier -26 (PC); and, modifier TC. The global service is not designated by a modifier, and physicians must bill using the code without a modifier if the physician furnishes both the PC and the TC of the service.

Modifier-53 is shown for a discontinued procedure, for example, a colonoscopy that is not completed. There will be RVUs for a code with this modifier.

3. Status indicator. This indicator shows whether the CPT/HCPCS code is in the PFS and whether it is separately payable if the service is covered.

A = Active code. These codes are separately payable under the PFS if covered. There will be RVUs for codes with this status. The presence of an “A” indicator does not mean that Medicare has made a national coverage determination regarding the service. Carriers remain responsible for coverage decisions in the absence of a national Medicare policy.

B = Bundled code. Payments for covered services are always bundled into payment for other services not specified. If RVUs are shown, they are not used for Medicare payment. If these services are covered, payment for them is subsumed by the payment for the services to which they are incident (an example is a telephone call from a hospital nurse regarding care of a patient).

C = Carriers price the code. Carriers will establish RVUs and payment amounts for these services, generally on an individual case basis following review of documentation, such as an operative report.

D* = Deleted/discontinued code.

E = Excluded from the PFS by regulation. These codes are for items and services that CMS chose to exclude from the fee schedule payment by regulation. No RVUs are shown, and no payment may be made under the PFS for these codes. Payment for them, when covered, continues under reasonable charge procedures.

F = Deleted/discontinued codes. (Code not subject to a 90-day grace period.) These codes are deleted effective with the beginning of the year and are never subject to a grace period. This indicator is no longer effective beginning with the 2005 fee schedule as of January 1, 2005.

G = Code not valid for Medicare purposes. Medicare uses another code for reporting of, and payment for, these services. (Codes subject to a 90-day grace period.) This indicator is no longer effective with the 2005 PFS as of January 1, 2005.

H* = Deleted modifier. For 2000 and later years, either the TC or PC component shown for the code has been deleted and the deleted component is shown in the database with the H status indicator.

I = Not valid for Medicare purposes. Medicare uses another code for the reporting of, and the payment for these services. (Codes not subject to a 90-day grace period.)

L = Local codes. Carriers will apply this status to all local codes in effect on January 1, 1998 or subsequently approved by central office for use. Carriers will complete the RVUs and payment amounts for these codes.

M = Measurement codes, used for reporting purposes only. There are no RVUs and no payment amounts for these codes. Medicare uses them to aid with performance measurement. No separate payment is made. These codes should be billed with a zero (($0.00) charge and are denied) on the MPFSDB.

N = Non-covered service. These codes are noncovered services. Medicare payment may not be made for these codes. If RVUs are shown, they are not used for Medicare payment.

R = Restricted coverage. Special coverage instructions apply. If the service is covered and no RVUs are shown, it is carrier-priced.

T = There are RVUs for these services, but they are only paid if there are no other services payable under the PFS billed on the same date by the same provider. If any other services payable under the PFS are billed on the same date by the same provider, these services are bundled into the service(s) for which payment is made.

X = Statutory exclusion. These codes represent an item or service that is not within the statutory definition of “physicians' services” for PFS payment purposes. No RVUs are shown for these codes, and no payment may be made under the PFS. (Examples are ambulance services and clinical diagnostic laboratory services.)

4. Description of code. This is an abbreviated version of the narrative description of the code.

5. Physician work RVUs. These are the RVUs for the physician work for this service in 2007. As stated in the June 29, 2006 proposed notice, the RVUs for codes with a 10- or 90-day global period reflect the application of the RUC-recommended values for the E/M services that are included as part of the global period for the service.

Note: The separate budget neutrality adjustor is not reflected in these physician work RVUs.

6. Fully implemented non-facility practice expense RVUs. These are the fully implemented resource-based PE RVUs for non-facility settings.

7. Transitional Non-facility practice expense RVUs. These are the 2007 resource-based PE RVUs for non-facility settings.

8. Fully implemented facility practice expense RVUs. These are the fully implemented resource-based PE RVUs for facility settings.

9. Transitional facility practice expense RVUs. These are the 2007 resource-based PE RVUs for facility settings.

10. Malpractice expense RVUs. These are the RVUs for the malpractice expense for the service for 2006.

11. Non-facility total. This is the sum of the work, fully implemented non-facility PE, and malpractice expense RVUs.

12. Transitional non-facility total. This is the sum of the work, 2007 transitional non-facility PE, and malpractice expense RVUs.

13. Facility total. This is the sum of the work, fully implemented facility PE, and malpractice expense RVUs.

14. Transitional facility total. This is the sum of the work, 2007 transitional facility PE, and malpractice expense RVUs.

15. Global period. This indicator shows the number of days in the global period for the code (0, 10, or 90 days). Start Printed Page 49086An explanation of the alpha codes follows:

MMM = Code describes a service furnished in uncomplicated maternity cases including antepartum care, delivery, and postpartum care. The usual global surgical concept does not apply. See the 1999 Physicians' Current Procedural Terminology for specific definitions.

XXX = The global concept does not apply.

YYY = The global period is to be set by the carrier (for example, unlisted surgery codes).

ZZZ = Code related to another service that is always included in the global period of the other service. (Note: Physician work and PE are associated with intra service time and in some instances in the post service time.

*Codes with these indicators had a 90-day grace period before January 1, 2005. Start Printed Page 49087

Addendum B.—Relative Value Units (RVUs) and Related Information Used In Determining Medicare Payments For 2007

CPT1/HCPCS2ModStatusDescriptionPhysician Work RVUsFully Implemented Non-Facility PE RVUsYear 2007 Transitional Non-Facility PE RVUsFully Implemented Facility PE RVUsYear 2007 Transitional Facility PE RVUsMal-Practice RVUsFully Implemented Non-Facility TotalYear 2007 Transitional Non-Facility TotalFully Implemented Facility TotalYear 2007 Transitional Facility TotalGlobal
0003TCCervicography0.000.000.000.000.000.000.000.000.000.00XXX
0008TCUpper gi endoscopy w/suture0.000.000.000.000.000.000.000.000.000.00XXX
0016TCThermotx choroid vasc lesion0.000.000.000.000.000.000.000.000.000.00XXX
0017TCPhotocoagulat macular drusen0.000.000.000.000.000.000.000.000.000.00XXX
0018TCTranscranial magnetic stimul0.000.000.000.000.000.000.000.000.000.00XXX
0019TCExtracorp shock wv tx,ms nos0.000.000.000.000.000.000.000.000.000.00XXX
0021TCFetal oximetry, trnsvag/cerv0.000.000.000.000.000.000.000.000.000.00XXX
0024TCTranscath cardiac reduction0.000.000.000.000.000.000.000.000.000.00XXX
0026TCMeasure remnant lipoproteins0.000.000.000.000.000.000.000.000.000.00XXX
0027TCEndoscopic epidural lysis0.000.000.000.000.000.000.000.000.000.00XXX
0028TCDexa body composition study0.000.000.000.000.000.000.000.000.000.00XXX
0029TCMagnetic tx for incontinence0.000.000.000.000.000.000.000.000.000.00XXX
0030TCAntiprothrombin antibody0.000.000.000.000.000.000.000.000.000.00XXX
0031TCSpeculoscopy0.000.000.000.000.000.000.000.000.000.00XXX
0032TCSpeculoscopy w/direct sample0.000.000.000.000.000.000.000.000.000.00XXX
0041TCDetect ur infect agnt w/cpas0.000.000.000.000.000.000.000.000.000.00XXX
0042TCCt perfusion w/contrast, cbf0.000.000.000.000.000.000.000.000.000.00XXX
0043TCCo expired gas analysis0.000.000.000.000.000.000.000.000.000.00XXX
0044TCWhole body photography0.000.000.000.000.000.000.000.000.000.00XXX
0045TCWhole body photography0.000.000.000.000.000.000.000.000.000.00XXX
0046TCCath lavage, mammary duct(s0.000.000.000.000.000.000.000.000.000.00XXX
0047TCCath lavage, mammary duct(s)0.000.000.000.000.000.000.000.000.000.00XXX
0048TCImplant ventricular device0.000.000.000.000.000.000.000.000.000.00XXX
0049TCExternal circulation assist0.000.000.000.000.000.000.000.000.000.00XXX
0050TCRemoval circulation assist0.000.000.000.000.000.000.000.000.000.00XXX
0051TCImplant total heart system0.000.000.000.000.000.000.000.000.000.00XXX
0052TCReplace component heart syst0.000.000.000.000.000.000.000.000.000.00XXX
0053TCReplace component heart syst0.000.000.000.000.000.000.000.000.000.00XXX
0054TCBone surgery using computer0.000.000.000.000.000.000.000.000.000.00XXX
0055TCBone surgery using computer0.000.000.000.000.000.000.000.000.000.00XXX
0056TCBone surgery using computer0.000.000.000.000.000.000.000.000.000.00XXX
0058TCCryopreservation, ovary tiss0.000.000.000.000.000.000.000.000.000.00XXX
0059TCCryopreservation, oocyte0.000.000.000.000.000.000.000.000.000.00XXX
0060TCElectrical impedance scan0.000.000.000.000.000.000.000.000.000.00XXX
0061TCDestruction of tumor, breast0.000.000.000.000.000.000.000.000.000.00XXX
0062TCRep intradisc annulus;1 lev0.000.000.000.000.000.000.000.000.000.00XXX
0063TCRep intradisc annulus;>1lev0.000.000.000.000.000.000.000.000.000.00XXX
0064TCSpectroscop eval expired gas0.000.000.000.000.000.000.000.000.000.00XXX
0065TCOcular photoscreen bilat0.000.000.000.000.000.000.000.000.000.00XXX
0067TCCt colonography;dx0.000.000.000.000.000.000.000.000.000.00XXX
0067T26CCt colonography;dx0.000.000.000.000.000.000.000.000.000.00XXX
0067TTCCCt colonography;dx0.000.000.000.000.000.000.000.000.000.00XXX
0068TCInterp/rept heart sound0.000.000.000.000.000.000.000.000.000.00XXX
0069TCAnalysis only heart sound0.000.000.000.000.000.000.000.000.000.00XXX
0070TCInterp only heart sound0.000.000.000.000.000.000.000.000.000.00XXX
0071TCU/s leiomyomata ablate <2000.000.000.000.000.000.000.000.000.000.00XXX
0072TCU/s leiomyomata ablate >2000.000.000.000.000.000.000.000.000.000.00XXX
0073TADelivery, comp imrt0.0013.0216.77NANA0.1313.1516.90NANAXXX
0075TCPerq stent/chest vert art0.000.000.000.000.000.000.000.000.000.00XXX
0075T26CPerq stent/chest vert art0.000.000.000.000.000.000.000.000.000.00XXX
0075TTCCPerq stent/chest vert art0.000.000.000.000.000.000.000.000.000.00XXX
0076TCS&i stent/chest vert art0.000.000.000.000.000.000.000.000.000.00XXX
0076T26CS&i stent/chest vert art0.000.000.000.000.000.000.000.000.000.00XXX
0076TTCCS&i stent/chest vert art0.000.000.000.000.000.000.000.000.000.00XXX
0077TCCereb therm perfusion probe0.000.000.000.000.000.000.000.000.000.00XXX
0078TCEndovasc aort repr w/device0.000.000.000.000.000.000.000.000.000.00XXX
Start Printed Page 49088
0079TCEndovasc visc extnsn repr0.000.000.000.000.000.000.000.000.000.00XXX
0080TCEndovasc aort repr rad s&i0.000.000.000.000.000.000.000.000.000.00XXX
0081TCEndovasc visc extnsn s&i0.000.000.000.000.000.000.000.000.000.00XXX
0082TCStereotactic rad delivery0.000.000.000.000.000.000.000.000.000.00XXX
0083TCStereotactic rad tx mngmt0.000.000.000.000.000.000.000.000.000.00XXX
0084TCTemp prostate urethral stent0.000.000.000.000.000.000.000.000.000.00XXX
0085TCBreath test heart reject0.000.000.000.000.000.000.000.000.000.00XXX
0086TCL ventricle fill pressure0.000.000.000.000.000.000.000.000.000.00XXX
0087TCSperm eval hyaluronan0.000.000.000.000.000.000.000.000.000.00XXX
0088TCRf tongue base vol reduxn0.000.000.000.000.000.000.000.000.000.00XXX
0089TCActigraphy testing, 3-day0.000.000.000.000.000.000.000.000.000.00XXX
0090TCCervical artific disc0.000.000.000.000.000.000.000.000.000.00XXX
0091TCLumbar artific disc0.000.000.000.000.000.000.000.000.000.00XXX
0092TCArtific disc addl0.000.000.000.000.000.000.000.000.000.00XXX
0093TCCervical artific diskectomy0.000.000.000.000.000.000.000.000.000.00XXX
0094TCLumbar artific diskectomy0.000.000.000.000.000.000.000.000.000.00XXX
0095TCArtific diskectomy addl0.000.000.000.000.000.000.000.000.000.00XXX
0096TCRev cervical artific disc0.000.000.000.000.000.000.000.000.000.00XXX
0097TCRev lumbar artific disc0.000.000.000.000.000.000.000.000.000.00XXX
0098TCRev artific disc addl0.000.000.000.000.000.000.000.000.000.00XXX
0099TCImplant corneal ring0.000.000.000.000.000.000.000.000.000.00XXX
0100TCProsth retina receive&gen0.000.000.000.000.000.000.000.000.000.00XXX
0101TCExtracorp shockwv tx,hi enrg0.000.000.000.000.000.000.000.000.000.00XXX
0102TCExtracorp shockwv tx,anesth0.000.000.000.000.000.000.000.000.000.00XXX
0103TCHolotranscobalamin0.000.000.000.000.000.000.000.000.000.00XXX
0104TCAt rest cardio gas rebreathe0.000.000.000.000.000.000.000.000.000.00XXX
0105TCExerc cardio gas rebreathe0.000.000.000.000.000.000.000.000.000.00XXX
0106TCTouch quant sensory test0.000.000.000.000.000.000.000.000.000.00XXX
0107TCVibrate quant sensory test0.000.000.000.000.000.000.000.000.000.00XXX
0108TCCool quant sensory test0.000.000.000.000.000.000.000.000.000.00XXX
0109TCHeat quant sensory test0.000.000.000.000.000.000.000.000.000.00XXX
0110TCNos quant sensory test0.000.000.000.000.000.000.000.000.000.00XXX
0111TCRbc membranes fatty acids0.000.000.000.000.000.000.000.000.000.00XXX
0115TCMed tx mngmt 15 min0.000.000.000.000.000.000.000.000.000.00XXX
0116TCMed tx mngmt subsqt0.000.000.000.000.000.000.000.000.000.00XXX
0117TCMed tx mngmt addl 15 min0.000.000.000.000.000.000.000.000.000.00XXX
0120TCFibroadenoma cryoablate, ea0.000.000.000.000.000.000.000.000.000.00XXX
0123TCScleral fistulization0.000.000.000.000.000.000.000.000.000.00XXX
0124TCConjunctival drug placement0.000.000.000.000.000.000.000.000.000.00XXX
0126TCChd risk imt study0.000.000.000.000.000.000.000.000.000.00XXX
0130TCChron care drug investigatn0.000.000.000.000.000.000.000.000.000.00XXX
0133TCEsophageal implant injexn0.000.000.000.000.000.000.000.000.000.00XXX
0135TCPerq cryoablate renal tumor0.000.000.000.000.000.000.000.000.000.00XXX
0137TCProstate saturation sampling0.000.000.000.000.000.000.000.000.000.00XXX
0140TCExhaled breath condensate ph0.000.000.000.000.000.000.000.000.000.00XXX
0144TCCT heart wo dye; qual calc0.000.000.000.000.000.000.000.000.000.00XXX
0144T26CCT heart wo dye; qual calc0.000.000.000.000.000.000.000.000.000.00XXX
0144TTCCCT heart wo dye; qual calc0.000.000.000.000.000.000.000.000.000.00XXX
0145TCCT heart w/wo dye funct0.000.000.000.000.000.000.000.000.000.00XXX
0145T26CCT heart w/wo dye funct0.000.000.000.000.000.000.000.000.000.00XXX
0145TTCCCT heart w/wo dye funct0.000.000.000.000.000.000.000.000.000.00XXX
0146TCCCTA w/wo dye0.000.000.000.000.000.000.000.000.000.00XXX
0146T26CCCTA w/wo dye0.000.000.000.000.000.000.000.000.000.00XXX
0146TTCCCCTA w/wo dye0.000.000.000.000.000.000.000.000.000.00XXX
0147TCCCTA w/wo, quan calcium0.000.000.000.000.000.000.000.000.000.00XXX
0147T26CCCTA w/wo, quan calcium0.000.000.000.000.000.000.000.000.000.00XXX
Start Printed Page 49089
0147TTCCCCTA w/wo, quan calcium0.000.000.000.000.000.000.000.000.000.00XXX
0148TCCCTA w/wo, strxr0.000.000.000.000.000.000.000.000.000.00XXX
0148T26CCCTA w/wo, strxr0.000.000.000.000.000.000.000.000.000.00XXX
0148TTCCCCTA w/wo, strxr0.000.000.000.000.000.000.000.000.000.00XXX
0149TCCCTA w/wo, strxr quan calc0.000.000.000.000.000.000.000.000.000.00XXX
0149T26CCCTA w/wo, strxr quan calc0.000.000.000.000.000.000.000.000.000.00XXX
0149TTCCCCTA w/wo, strxr quan calc0.000.000.000.000.000.000.000.000.000.00XXX
0150TCCCTA w/wo, disease strxr0.000.000.000.000.000.000.000.000.000.00XXX
0150T26CCCTA w/wo, disease strxr0.000.000.000.000.000.000.000.000.000.00XXX
0150TTCCCCTA w/wo, disease strxr0.000.000.000.000.000.000.000.000.000.00XXX
0151TCCT heart funct add-on0.000.000.000.000.000.000.000.000.000.00XXX
0151T26CCT heart funct add-on0.000.000.000.000.000.000.000.000.000.00XXX
0151TTCCCT heart funct add-on0.000.000.000.000.000.000.000.000.000.00XXX
0152TCComputer chest add-on0.000.000.000.000.000.000.000.000.000.00XXX
0153TCImplant aneur sensor add-on0.000.000.000.000.000.000.000.000.000.00XXX
0154TCImplant aneur sensor study0.000.000.000.000.000.000.000.000.000.00XXX
0155TCLap ins gastr eltrd for mo0.000.000.000.000.000.000.000.000.000.00XXX
0156TCLap redo gastr eltrd for mo0.000.000.000.000.000.000.000.000.000.00XXX
0157TCOpn ins gastr eltrd for mo0.000.000.000.000.000.000.000.000.000.00XXX
0158TCOpn redo gastr eltrd for mo0.000.000.000.000.000.000.000.000.000.00XXX
0159TCComputer breast MRI add-on0.000.000.000.000.000.000.000.000.000.00ZZZ
0159T26CComputer breast MRI add-on0.000.000.000.000.000.000.000.000.000.00ZZZ
0159TTCCComputer breast MRI add-on0.000.000.000.000.000.000.000.000.000.00ZZZ
0160TCTranscran mag stim planning0.000.000.000.000.000.000.000.000.000.00XXX
0161TCTranscran mag stim delivery0.000.000.000.000.000.000.000.000.000.00XXX
10021AFna w/o image1.272.132.150.360.500.103.503.521.731.87XXX
10022AFna w/image1.272.132.440.380.410.083.483.791.731.76XXX
10040AAcne surgery1.181.261.070.930.830.052.492.302.162.06010
10060ADrainage of skin abscess1.171.501.281.080.970.122.792.572.372.26010
10061ADrainage of skin abscess2.402.071.881.511.500.264.734.544.174.16010
10080ADrainage of pilonidal cyst1.172.652.991.091.110.113.934.272.372.39010
10081ADrainage of pilonidal cyst2.453.493.931.441.490.246.186.624.134.18010
10120ARemove foreign body1.222.102.150.940.960.123.443.492.282.30010
10121ARemove foreign body2.693.523.511.651.750.336.546.534.674.77010
10140ADrainage of hematoma/fluid1.532.271.901.291.290.193.993.623.013.01010
10160APuncture drainage of lesion1.201.851.661.071.080.143.193.002.412.42010
10180AComplex drainage, wound2.253.303.061.831.940.355.905.664.434.54010
11000ADebride infected skin0.600.730.620.160.210.071.401.290.830.88000
11001ADebride infected skin add-on0.300.230.230.080.100.040.570.570.420.44ZZZ
11004ADebride genitalia & perineum10.31NANA3.043.690.67NANA14.0214.67000
11005ADebride abdom wall13.75NANA4.065.190.96NANA18.7719.90000
11006ADebride genit/per/abdom wall12.61NANA3.614.541.28NANA17.5018.43000
11008ARemove mesh from abd wall5.00NANA1.361.860.61NANA6.977.47ZZZ
11010ADebride skin, fx4.196.776.852.332.550.6611.6211.707.187.40010
11011ADebride skin/muscle, fx4.947.097.892.042.270.7412.7713.577.727.95000
11012ADebride skin/muscle/bone, fx6.879.0311.333.123.661.1617.0619.3611.1511.69000
11040ADebride skin, partial0.480.680.560.160.200.061.221.100.700.74000
11041ADebride skin, full0.600.730.680.190.300.101.431.380.891.00000
11042ADebride skin/tissue0.800.960.970.250.390.131.891.901.181.32000
11043ADebride tissue/muscle3.003.643.452.712.620.326.966.776.035.94010
11044ADebride tissue/muscle/bone4.054.964.583.673.730.439.449.068.158.21010
11055RTrim skin lesion0.430.820.630.110.160.051.301.110.590.64000
11056RTrim skin lesions, 2 to 40.610.890.700.160.210.071.571.380.840.89000
11057RTrim skin lesions, over 40.791.000.810.210.280.101.891.701.101.17000
11100ABiopsy, skin lesion0.811.831.400.370.370.032.672.241.211.21000
11101ABiopsy, skin add-on0.410.400.350.190.190.020.830.780.620.62ZZZ
11200ARemoval of skin tags0.771.201.080.880.790.042.011.891.691.60010
11201ARemove skin tags add-on0.290.160.160.110.120.020.470.470.420.43ZZZ
11300AShave skin lesion0.511.171.040.200.210.031.711.580.740.75000
11301AShave skin lesion0.851.471.200.370.380.042.362.091.261.27000
11302AShave skin lesion1.051.731.410.470.460.052.832.511.571.56000
11303AShave skin lesion1.241.971.680.530.520.073.282.991.841.83000
11305AShave skin lesion0.671.060.900.200.250.071.801.640.940.99000
11306AShave skin lesion0.991.391.170.370.410.072.452.231.431.47000
11307AShave skin lesion1.141.661.380.460.480.072.872.591.671.69000
11308AShave skin lesion1.411.711.520.500.570.133.253.062.042.11000
Start Printed Page 49090
11310AShave skin lesion0.731.351.170.300.320.042.121.941.071.09000
11311AShave skin lesion1.051.601.320.460.480.052.702.421.561.58000
11312AShave skin lesion1.201.871.530.540.550.063.132.791.801.81000
11313AShave skin lesion1.622.131.880.710.720.103.853.602.432.44000
11400AExc tr-ext b9+marg 0.5 < cm0.851.861.960.920.890.062.772.871.831.80010
11401AExc tr-ext b9+marg 0.6-1 cm1.232.142.071.121.050.103.473.402.452.38010
11402AExc tr-ext b9+marg 1.1-2 cm1.402.352.251.181.110.133.883.782.712.64010
11403AExc tr-ext b9+marg 2.1-3 cm1.792.522.421.541.380.174.484.383.503.34010
11404AExc tr-ext b9+marg 3.1-4 cm2.062.842.741.611.450.215.115.013.883.72010
11406AExc tr-ext b9+marg > 4.0 cm3.453.503.172.071.760.327.276.945.845.53010
11420AExc h-f-nk-sp b9+marg 0.5 <0.981.821.780.920.930.092.892.851.992.00010
11421AExc h-f-nk-sp b9+marg 0.6-11.422.182.091.141.120.133.733.642.692.67010
11422AExc h-f-nk-sp b9+marg 1.1-21.632.392.291.501.370.164.184.083.293.16010
11423AExc h-f-nk-sp b9+marg 2.1-32.012.622.591.621.490.204.834.803.833.70010
11424AExc h-f-nk-sp b9+marg 3.1-42.432.942.841.751.640.255.625.524.434.32010
11426AExc h-f-nk-sp b9+marg > 4 cm4.023.583.512.292.150.448.047.976.756.61010
11440AExc face-mm b9+marg 0.5 < cm1.001.992.151.301.310.083.073.232.382.39010
11441AExc face-mm b9+marg 0.6-1 cm1.482.342.331.521.500.133.953.943.133.11010
11442AExc face-mm b9+marg 1.1-2 cm1.722.592.551.621.580.164.474.433.503.46010
11443AExc face-mm b9+marg 2.1-3 cm2.292.822.891.791.810.225.335.404.304.32010
11444AExc face-mm b9+marg 3.1-4 cm3.143.233.412.042.150.306.676.855.485.59010
11446AExc face-mm b9+marg > 4 cm4.734.014.032.622.730.439.179.197.787.89010
11450ARemoval, sweat gland lesion3.115.195.072.442.130.348.648.525.895.58090
11451ARemoval, sweat gland lesion4.326.176.492.792.600.5311.0211.347.647.45090
11462ARemoval, sweat gland lesion2.895.335.172.472.130.328.548.385.685.34090
11463ARemoval, sweat gland lesion4.326.646.782.982.760.5411.5011.647.847.62090
11470ARemoval, sweat gland lesion3.635.615.202.702.370.409.649.236.736.40090
11471ARemoval, sweat gland lesion4.786.486.652.992.820.5811.8412.018.358.18090
11600AExc tr-ext mlg+marg 0.5 < cm1.562.712.651.121.010.104.374.312.782.67010
11601AExc tr-ext mlg+marg 0.6-1 cm2.003.372.871.471.280.125.494.993.593.40010
11602AExc tr-ext mlg+marg 1.1-2 cm2.203.743.051.631.350.126.065.373.953.67010
11603AExc tr-ext mlg+marg 2.1-3 cm2.753.953.291.811.450.166.866.204.724.36010
11604AExc tr-ext mlg+marg 3.1-4 cm3.104.263.591.881.510.207.566.895.184.81010
11606AExc tr-ext mlg+marg > 4 cm4.955.414.402.411.900.3610.729.717.727.21010
11620AExc h-f-nk-sp mlg+marg 0.5 <1.572.812.651.171.010.094.474.312.832.67010
11621AExc h-f-nk-sp mlg+marg 0.6-12.013.422.881.491.300.125.555.013.623.43010
11622AExc h-f-nk-sp mlg+marg 1.1-22.343.803.171.691.470.146.285.654.173.95010
11623AExc h-f-nk-sp mlg+marg 2.1-33.044.033.511.901.660.207.276.755.144.90010
11624AExc h-f-nk-sp mlg+marg 3.1-43.554.353.892.031.840.278.177.715.855.66010
11626AExc h-f-nk-sp mlg+mar > 4 cm4.544.904.702.282.360.459.899.697.277.35010
11640AExc face-mm malig+marg 0.5 <1.603.002.741.261.150.114.714.452.972.86010
11641AExc face-mm malig+marg 0.6-12.103.553.151.561.540.165.815.413.823.80010
11642AExc face-mm malig+marg 1.1-22.553.933.531.781.730.196.676.274.524.47010
11643AExc face-mm malig+marg 2.1-33.354.183.902.041.980.267.797.515.655.59010
11644AExc face-mm malig+marg 3.1-44.274.954.752.382.430.379.599.397.027.07010
11646AExc face-mm mlg+marg > 4 cm6.195.765.753.033.360.6112.5612.559.8310.16010
11719RTrim nail(s)0.170.380.280.040.060.020.570.470.230.25000
11720ADebride nail, 1-50.320.470.370.080.110.040.830.730.440.47000
11721ADebride nail, 6 or more0.540.550.470.140.190.071.161.080.750.80000
11730ARemoval of nail plate1.101.351.110.290.400.142.592.351.531.64000
11732ARemove nail plate, add-on0.570.550.470.150.200.071.191.110.790.84ZZZ
11740ADrain blood from under nail0.370.800.610.440.370.041.211.020.850.78000
11750ARemoval of nail bed2.362.982.371.891.790.225.564.954.474.37010
11752ARemove nail bed/finger tip3.424.123.272.822.950.357.897.046.596.72010
11755ABiopsy, nail unit1.312.021.680.760.770.143.473.132.212.22000
11760ARepair of nail bed1.583.452.831.441.700.215.244.623.233.49010
Start Printed Page 49091
11762AReconstruction of nail bed2.893.723.091.692.180.366.976.344.945.43010
11765AExcision of nail fold, toe0.692.692.011.010.820.083.462.781.781.59010
11770ARemoval of pilonidal lesion2.613.493.481.531.510.336.436.424.474.45010
11771ARemoval of pilonidal lesion5.916.725.913.743.420.7413.3712.5610.3910.07090
11772ARemoval of pilonidal lesion7.158.067.645.565.190.8916.1015.6813.6013.23090
11900AInjection into skin lesions0.520.890.710.240.220.021.431.250.780.76000
11901AAdded skin lesions injection0.800.980.740.380.360.031.811.571.211.19000
11920RCorrect skin color defects1.612.403.381.121.100.244.255.232.972.95000
11921RCorrect skin color defects1.932.673.641.261.270.294.895.863.483.49000
11922RCorrect skin color defects0.490.931.090.220.240.071.491.650.780.80ZZZ
11950RTherapy for contour defects0.840.861.070.350.380.061.761.971.251.28000
11951RTherapy for contour defects1.191.181.410.530.520.112.482.711.831.82000
11952RTherapy for contour defects1.691.711.820.810.710.163.563.672.662.56000
11954RTherapy for contour defects1.851.762.270.760.870.253.864.372.862.97000
11960AInsert tissue expander(s)10.85NANA10.5810.441.31NANA22.7422.60090
11970AReplace tissue expander7.80NANA6.206.151.05NANA15.0515.00090
11971ARemove tissue expander(s)3.137.428.694.013.850.3210.8712.147.467.30090
11975NInsert contraceptive cap1.481.551.450.340.510.173.203.101.992.16XXX
11976RRemoval of contraceptive cap1.781.711.720.470.630.213.703.712.462.62000
11977NRemoval/reinsert contra cap3.302.002.200.771.140.375.675.874.444.81XXX
11980AImplant hormone pellet(s)1.481.171.100.550.540.132.782.712.162.15000
11981AInsert drug implant device1.481.921.760.590.660.123.523.362.192.26XXX
11982ARemove drug implant device1.782.051.970.710.800.174.003.922.662.75XXX
11983ARemove/insert drug implant3.302.672.381.341.440.236.205.914.874.97XXX
12001ARepair superficial wound(s)1.701.731.920.720.760.153.583.772.572.61010
12002ARepair superficial wound(s)1.861.791.980.830.880.173.824.012.862.91010
12004ARepair superficial wound(s)2.242.072.260.920.990.214.524.713.373.44010
12005ARepair superficial wound(s)2.862.522.751.061.170.275.655.884.194.30010
12006ARepair superficial wound(s)3.663.033.301.301.460.357.047.315.315.47010
12007ARepair superficial wound(s)4.113.403.721.491.730.457.968.286.056.29010
12011ARepair superficial wound(s)1.761.892.070.750.770.163.813.992.672.69010
12013ARepair superficial wound(s)1.992.052.220.880.920.184.224.393.053.09010
12014ARepair superficial wound(s)2.462.282.500.971.040.234.975.193.663.73010
12015ARepair superficial wound(s)3.192.763.041.111.220.296.246.524.594.70010
12016ARepair superficial wound(s)3.923.163.451.291.460.377.457.745.585.75010
12017ARepair superficial wound(s)4.70NANA1.481.790.47NANA6.656.96010
12018ARepair superficial wound(s)5.52NANA1.962.180.64NANA8.128.34010
12020AClosure of split wound2.623.753.801.771.880.306.676.724.694.80010
12021AClosure of split wound1.841.861.831.331.390.243.943.913.413.47010
12031ALayer closure of wound(s)2.153.822.671.731.150.176.144.994.053.47010
12032ALayer closure of wound(s)2.475.084.152.211.900.167.716.784.844.53010
12034ALayer closure of wound(s)2.924.503.521.931.570.257.676.695.104.74010
12035ALayer closure of wound(s)3.425.255.212.082.130.399.069.025.895.94010
12036ALayer closure of wound(s)4.045.385.512.222.460.559.9710.106.817.05010
12037ALayer closure of wound(s)4.665.946.052.592.870.6611.2611.377.918.19010
12041ALayer closure of wound(s)2.373.772.851.721.280.196.335.414.283.84010
12042ALayer closure of wound(s)2.744.363.542.041.610.177.276.454.954.52010
12044ALayer closure of wound(s)3.145.273.731.891.670.278.687.145.305.08010
12045ALayer closure of wound(s)3.635.075.212.062.230.419.119.256.106.27010
12046ALayer closure of wound(s)4.245.646.292.272.630.5410.4211.077.057.41010
12047ALayer closure of wound(s)4.646.166.302.512.940.5811.3811.527.738.16010
12051ALayer closure of wound(s)2.474.013.461.861.550.206.686.134.534.22010
12052ALayer closure of wound(s)2.774.693.592.441.680.177.636.535.384.62010
12053ALayer closure of wound(s)3.125.233.742.051.660.238.587.095.405.01010
12054ALayer closure of wound(s)3.455.304.002.011.730.309.057.755.765.48010
12055ALayer closure of wound(s)4.426.004.862.102.120.4510.879.736.976.99010
12056ALayer closure of wound(s)5.236.216.622.382.880.5912.0312.448.208.70010
12057ALayer closure of wound(s)5.957.456.462.793.510.5613.9612.979.3010.02010
13100ARepair of wound or lesion3.124.324.122.392.320.267.707.505.775.70010
13101ARepair of wound or lesion3.915.794.942.882.730.269.969.117.056.90010
13102ARepair wound/lesion add-on1.241.341.210.520.560.132.712.581.891.93ZZZ
13120ARepair of wound or lesion3.304.464.222.502.380.268.027.786.065.94010
13121ARepair of wound or lesion4.326.475.263.462.960.2511.049.838.037.53010
13122ARepair wound/lesion add-on1.441.371.480.580.620.152.963.072.172.21ZZZ
13131ARepair of wound or lesion3.784.864.492.782.710.268.908.536.826.75010
13132ARepair of wound or lesion6.447.646.344.774.310.3214.4013.1011.5311.07010
Start Printed Page 49092
13133ARepair wound/lesion add-on2.191.821.700.941.010.184.194.073.313.38ZZZ
13150ARepair of wound or lesion3.804.594.802.642.730.348.738.946.786.87010
13151ARepair of wound or lesion4.445.354.943.113.130.3110.109.697.867.88010
13152ARepair of wound or lesion6.327.316.353.773.970.4014.0313.0710.4910.69010
13153ARepair wound/lesion add-on2.381.981.940.981.100.244.604.563.603.72ZZZ
13160ALate closure of wound11.76NANA7.077.141.54NANA20.3720.44090
14000ASkin tissue rearrangement6.768.788.085.925.580.5916.1315.4313.2712.93090
14001ASkin tissue rearrangement9.5210.909.787.407.150.8221.2420.1217.7417.49090
14020ASkin tissue rearrangement7.589.798.916.706.570.6418.0117.1314.9214.79090
14021ASkin tissue rearrangement11.1012.1310.528.408.310.8124.0422.4320.3120.22090
14040ASkin tissue rearrangement8.369.929.086.777.090.6218.9018.0615.7516.07090
14041ASkin tissue rearrangement12.5913.1711.249.038.760.7326.4924.5622.3522.08090
14060ASkin tissue rearrangement8.999.408.946.947.310.6819.0718.6116.6116.98090
14061ASkin tissue rearrangement13.5814.4112.309.849.590.7628.7526.6424.1823.93090
14300ASkin tissue rearrangement13.1713.2611.669.249.191.1627.5925.9923.5723.52090
14350ASkin tissue rearrangement10.73NANA6.927.091.34NANA18.9919.16090
15000AWound prep, 1st 100 sq cm3.994.243.901.732.070.548.778.436.266.60000
15001AWound prep, addl 100 sq cm1.000.561.150.350.400.141.702.291.491.54ZZZ
15040AHarvest cultured skin graft2.003.864.391.031.110.246.106.633.273.35000
15050ASkin pinch graft5.297.657.105.025.090.5713.5112.9610.8810.95090
15100ASkin splt grft, trnk/arm/leg9.669.8411.906.737.551.2820.7822.8417.6718.49090
15101ASkin splt grft t/a/l, add-on1.722.513.430.871.100.244.475.392.833.06ZZZ
15110AEpidrm autogrft trnk/arm/leg10.828.9210.236.506.881.3121.0522.3618.6319.01090
15111AEpidrm autogrft t/a/l add-on1.850.891.190.640.750.263.003.302.752.86ZZZ
15115AEpidrm a-grft face/nck/hf/g11.139.169.216.687.181.1521.4421.4918.9619.46090
15116AEpidrm a-grft f/n/hf/g addl2.501.221.490.891.060.334.054.323.723.89ZZZ
15120ASkn splt a-grft fac/nck/hf/g10.8811.1810.847.327.671.1623.2222.8819.3619.71090
15121ASkn splt a-grft f/n/hf/g add2.673.474.241.331.710.366.507.274.364.74ZZZ
15130ADerm autograft, trnk/arm/leg7.338.039.405.646.170.9716.3317.7013.9414.47090
15131ADerm autograft t/a/l add-on1.500.700.980.520.610.212.412.692.232.32ZZZ
15135ADerm autograft face/nck/hf/g10.839.419.766.987.841.2321.4721.8219.0419.90090
15136ADerm autograft, f/n/hf/g add1.500.680.840.530.640.202.382.542.232.34ZZZ
15150ACult epiderm grft t/arm/leg9.247.228.155.926.311.1417.6018.5316.3016.69090
15151ACult epiderm grft t/a/l addl2.000.901.210.700.810.283.183.492.983.09ZZZ
15152ACult epiderm graft t/a/l +%2.501.081.440.871.010.353.934.293.723.86ZZZ
15155ACult epiderm graft, f/n/hf/g9.997.607.776.256.781.0518.6418.8117.2917.82090
15156ACult epidrm grft f/n/hfg add2.751.181.470.981.180.364.294.584.094.29ZZZ
15157ACult epiderm grft f/n/hfg +%3.001.371.671.071.280.394.765.064.464.67ZZZ
15170AAcell graft trunk/arms/legs5.993.653.792.362.360.5510.1910.338.908.90090
15171AAcell graft t/arm/leg add-on1.550.650.670.510.590.192.392.412.252.33ZZZ
15175AAcellular graft, f/n/hf/g7.995.245.383.753.940.8214.0514.1912.5612.75090
15176AAcell graft, f/n/hf/g add-on2.451.071.100.810.950.293.813.843.553.69ZZZ
15200ASkin full graft, trunk8.909.859.516.296.220.9819.7319.3916.1716.10090
15201ASkin full graft trunk add-on1.322.112.450.560.610.193.623.962.072.12ZZZ
15220ASkin full graft sclp/arm/leg7.8610.219.446.516.640.8418.9118.1415.2115.34090
15221ASkin full graft add-on1.192.012.240.500.550.163.363.591.851.90ZZZ
15240ASkin full grft face/genit/hf10.0311.7310.588.648.120.9222.6821.5319.5919.07090
15241ASkin full graft add-on1.862.512.460.790.880.234.604.552.882.97ZZZ
15260ASkin full graft een & lips11.2912.6310.829.028.690.6924.6122.8021.0020.67090
15261ASkin full graft add-on2.232.912.751.121.330.215.355.193.563.77ZZZ
15300AApply skinallogrft, t/arm/lg4.653.363.242.102.200.498.508.387.247.34090
15301AApply sknallogrft t/a/l addl1.000.470.470.340.390.141.611.611.481.53ZZZ
15320AApply skin allogrft f/n/hf/g5.363.753.652.322.480.589.699.598.268.42090
15321AAply sknallogrft f/n/hfg add1.500.680.690.500.570.212.392.402.212.28ZZZ
15330AAply acell alogrft t/arm/leg3.993.143.181.902.140.497.627.666.386.62090
15331AAply acell grft t/a/l add-on1.000.460.460.340.390.141.601.601.481.53ZZZ
Start Printed Page 49093
15335AApply acell graft, f/n/hf/g4.503.403.452.062.350.558.458.507.117.40090
15336AAply acell grft f/n/hf/g add1.430.720.700.480.550.202.352.332.112.18ZZZ
15340AApply cult skin substitute3.723.793.952.722.740.417.928.086.856.87010
15341AApply cult skin sub add-on0.500.720.640.170.190.061.281.200.730.75ZZZ
15360AApply cult derm sub, t/a/l3.874.314.433.113.090.438.618.737.417.39090
15361AAply cult derm sub t/a/l add1.150.570.580.380.440.141.861.871.671.73ZZZ
15365AApply cult derm sub f/n/hf/g4.154.354.503.193.190.468.969.117.807.80090
15366AApply cult derm f/hf/g add1.450.690.700.480.560.172.312.322.102.18ZZZ
15400AApply skin xenograft, t/a/l4.324.914.243.693.930.479.709.038.488.72090
15401AApply skn xenogrft t/a/l add1.001.021.670.350.420.142.162.811.491.56ZZZ
15420AApply skin xgraft, f/n/hf/g4.835.044.853.863.810.5210.3910.209.219.16090
15421AApply skn xgrft f/n/hf/g add1.501.201.290.520.600.212.913.002.232.31ZZZ
15430AApply acellular xenograft5.757.016.936.446.570.6613.4213.3412.8512.98090
15431CApply acellular xgraft add0.000.000.000.000.000.000.000.000.000.00ZZZ
15570AForm skin pedicle flap9.9410.3611.076.466.691.3421.6422.3517.7417.97090
15572AForm skin pedicle flap9.889.749.556.626.491.2020.8220.6317.7017.57090
15574AForm skin pedicle flap10.4810.3610.606.897.571.2022.0422.2818.5719.25090
15576AForm skin pedicle flap9.189.509.696.396.760.8719.5519.7416.4416.81090
15600ASkin graft1.915.287.022.712.970.277.469.204.895.15090
15610ASkin graft2.425.554.913.033.320.358.327.685.806.09090
15620ASkin graft3.576.337.423.803.860.3510.2511.347.727.78090
15630ASkin graft3.906.897.004.184.160.3411.1311.248.428.40090
15650ATransfer skin pedicle flap4.597.027.114.204.210.4212.0312.129.219.22090
15732AMuscle-skin graft, head/neck19.6214.7117.2111.1311.941.9936.3238.8232.7433.55090
15734AMuscle-skin graft, trunk19.5215.7517.5211.8912.252.6137.8839.6534.0234.38090
15736AMuscle-skin graft, arm16.8613.7717.129.9510.902.4533.0836.4329.2630.21090
15738AMuscle-skin graft, leg18.8614.0316.9910.4111.392.6535.5438.5031.9232.90090
15740AIsland pedicle flap graft11.4813.1010.879.058.460.6325.2122.9821.1620.57090
15750ANeurovascular pedicle graft12.64NANA8.808.981.42NANA22.8623.04090
15756AFree myo/skin flap microvasc36.64NANA18.3820.024.61NANA59.6361.27090
15757AFree skin flap, microvasc36.85NANA16.6320.353.89NANA57.3761.09090
15758AFree fascial flap, microvasc36.60NANA16.4720.304.23NANA57.3061.13090