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Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2018; Medicare Shared Savings Program Requirements; and Medicare Diabetes Prevention Program

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Start Preamble Start Printed Page 52976

AGENCY:

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

ACTION:

Final rule.

SUMMARY:

This major final rule addresses changes to the Medicare physician fee schedule (PFS) and other Medicare Part B payment policies such as changes to the Medicare Shared Savings Program, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. In addition, this final rule includes policies necessary to begin offering the expanded Medicare Diabetes Prevention Program model.

DATES:

These regulations are effective on January 1, 2018.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Jessica Bruton, (410) 786-5991, for any physician payment issues not identified below.

Lindsey Baldwin, (410) 786-1694, and Emily Yoder, (410) 786-1804, for issues related to telehealth services and primary care.

Roberta Epps, (410) 786-4503, for issues related to PAMA section 218(a) policy and transition from traditional X-ray imaging to digital radiography.

Isadora Gil, (410) 786-4532, for issues related to the valuation of cardiovascular services, bone marrow services, surgical respiratory services, dermatological procedures, and payment rates for nonexcepted items and services furnished by nonexcepted off-campus provider-based departments of a hospital.

Donta Henson, (410) 786-1947, for issues related to ophthalmology services.

Jamie Hermansen, (410) 786-2064, for issues related to the valuation of anesthesia services.

Tourette Jackson, (410) 786-4735, for issues related to the valuation of musculoskeletal services, allergy and clinical immunology services, endocrinology services, genital surgical services, nervous system services, INR monitoring services, injections and infusions, and chemotherapy services.

Ann Marshall, (410) 786-3059, for issues related to primary care, chronic care management (CCM), and evaluation and management (E/M) services.

Geri Mondowney, (410) 786-1172, for issues related to malpractice RVUs.

Patrick Sartini, (410) 786-9252, for issues related to the valuation of imaging services and malpractice RVUs.

Michael Soracoe, (410) 786-6312, for issues related to the practice expense methodology, impacts, conversion factor, and valuation of pathology and surgical procedures.

Pamela West, (410) 786-2302, for issues related to therapy services.

Corinne Axelrod, (410) 786-5620, for issues related to rural health clinics or federally qualified health centers.

Felicia Eggleston, (410) 786-9287, for issues related to DME infusion drugs.

Rasheeda Johnson, (410) 786-3434, for issues related to initial data collection and reporting periods for the clinical laboratory fee schedule.

Edmund Kasaitis, (410) 786-0477, for issues related to biosimilars.

JoAnna Baldwin, (410) 786-7205, or Sarah Fulton, (410) 786-2749, for issues related to appropriate use criteria for advanced diagnostic imaging services.

Crystal Kellam, (410) 786-7970, for issues related to physician quality reporting system.

Alesia Hovatter, (410) 786-6861, for issues related to Physician Compare.

Alexandra Mugge, (410) 786-4457, for issues related to the EHR incentive program.

Kari Vandegrift, (410) 786-4008, or ACO@cms.hhs.gov, for issues related to the Medicare Shared Savings Program.

Kimberly Spalding Bush, (410) 786-3232, or Fiona Larbi, (410) 786-7224, for issues related to Value-based Payment Modifier and Physician Feedback Program.

Wilfred Agbenyikey, (410) 786-4399, for issues related to MACRA patient relationship categories and codes.

Carlye Burd, (410) 786-1972, or Albert Wesley, (410) 786-4204, for issues related to the Medicare Diabetes Prevention Program expanded model.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

II. Provisions of the Proposed Rule and Analysis of and Responses to Public Comments

A. Background

B. Determination of Practice Expense (PE) Relative Value Units (RVUs)

C. Determination of Malpractice Relative Value Units (RVUs)

D. Medicare Telehealth Services

E. Potentially Misvalued Services Under the PFS

F. Payment Incentive for the Transition from Traditional X-Ray Imaging to Digital Radiography and Other Imaging Services

G. Establishment of Payment Rates Under the Medicare PFS for Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus Provider-Based Departments of a Hospital

H. Valuation of Specific Codes

I. Evaluation & Management (E/M) Guidelines and Care Management Services

J. Therapy Caps

III. Other Provisions of the Proposed Rule

A. New Care Coordination Services and Payment for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)

B. Part B Drug Payment: Infusion Drugs Furnished Through an Item of Durable Medical Equipment (DME)

C. Solicitation of Public Comments on Initial Data Collection and Reporting Periods for Clinical Laboratory Fee Schedule

D. Payment for Biosimilar Biological Products Under Section 1847A of the Act

E. Appropriate Use Criteria for Advanced Diagnostic Imaging Services

F. Physician Quality Reporting System Criteria for Satisfactory Reporting for Individual EPs and Group Practices for the 2018 PQRS Payment Adjustment

G. Clinical Quality Measurement for Eligible Professionals Participating in the Electronic Health Record (EHR) Incentive Program for 2016

H. Medicare Shared Savings Program

I. Value-Based Payment Modifier and Physician Feedback Program

J. MACRA Patient Relationship Categories and Codes

K. Changes to the Medicare Diabetes Prevention Program (MDPP) Expanded Model

L. Physician Self-Referral Law: Annual Update to the List of CPT/HCPCS Codes

IV. Collection of Information Requirements

V. Regulatory Impact Analysis

Regulations Text

Acronyms

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

A1c Hemoglobin A1c

AAA Abdominal aortic aneurysms

ABLE Achieving a Better Life Experience Act of 2014 (Pub. L. 113-295)

ACI Advancing Care Information

ACO Accountable care organization

AMA American Medical Association

APM Alternative Payment Model

ASC Ambulatory surgical center

ATA American Telehealth Association

ATRA American Taxpayer Relief Act (Pub. L. 112-240)

AUC Appropriate Use CriteriaStart Printed Page 52977

AWV Annual wellness visit

BBA Balanced Budget Act of 1997 (Pub. L. 105-33)

BBRA [Medicare, Medicaid and State Child Health Insurance Program] Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)

BHI Behavioral health integration

BLS Bureau of Labor Statistics

CAD Coronary artery disease

CAH Critical access hospital

CBSA Core-Based Statistical Area

CCM Chronic care management

CDSM Clinical Decision Support Mechanism

CEHRT Certified EHR technology

CF Conversion factor

CG-CAHPS Clinician and Group Consumer Assessment of Healthcare Providers and Systems

CLFS Clinical Laboratory Fee Schedule

CoA Certificate of Accreditation

CoC Certificate of Compliance

CoCM Collaborative care model

CoR Certificate of Registration

CNM Certified nurse-midwife

CP Clinical psychologist

CPC Comprehensive Primary Care

CPEP Clinical Practice Expert Panel

CPT [Physicians] Current Procedural Terminology (CPT codes, descriptions and other data only are copyright 2015 American Medical Association. All rights reserved.)

CQM Clinical quality measure

CSW Clinical social worker

CT Computed tomography

CW Certificate of Waiver

CY Calendar year

DFAR Defense Federal Acquisition Regulations

DHS Designated health services

DM Diabetes mellitus

DSMT Diabetes self-management training

eCQM Electronic clinical quality measures

ED Emergency Department

EHR Electronic health record

E/M Evaluation and management

EMT Emergency Medical Technician

EP Eligible professional

eRx Electronic prescribing

ESRD End-stage renal disease

FAR Federal Acquisition Regulations

FDA Food and Drug Administration

FFS Fee-for-service

FQHC Federally qualified health center

FR Federal Register

FSHCAA Federally Supported Health Centers Assistance Act

GAF Geographic adjustment factor

GAO Government Accountability Office

GPCI Geographic practice cost index

GPO Group purchasing organization

GPRO Group practice reporting option

GTR Genetic Testing Registry

HCPCS Healthcare Common Procedure Coding System

HHS [Department of] Health and Human Services

HOPD Hospital outpatient department

HPSA Health professional shortage area

IDTF Independent diagnostic testing facility

IPPE Initial preventive physical exam

IPPS Inpatient Prospective Payment System

IQR Inpatient Quality Reporting

ISO Insurance service office

IT Information technology

IWPUT Intensity of work per unit of time

LCD Local coverage determination

MA Medicare Advantage

MAC Medicare Administrative Contractor

MACRA Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10)

MAP Measure Applications Partnership

MAPCP Multi-payer Advanced Primary Care Practice

MAV Measure application validity [process]

MCP Monthly capitation payment

MedPAC Medicare Payment Advisory Commission

MEI Medicare Economic Index

MFP Multi-Factor Productivity

MIPPA Medicare Improvements for Patients and Providers Act (Pub. L. 110-275)

MIPS Merit-based Incentive Payment System

MMA Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Pub. L. 108-173, enacted on December 8, 2003)

MP Malpractice

MPPR Multiple procedure payment reduction

MRA Magnetic resonance angiography

MRI Magnetic resonance imaging

MSA Metropolitan Statistical Areas

MSPB Medicare Spending per Beneficiary

MU Meaningful use

NCD National coverage determination

NCQDIS National Coalition of Quality Diagnostic Imaging Services

NP Nurse practitioner

NPI National Provider Identifier

NPP Nonphysician practitioner

NQS National Quality Strategy

OACT CMS's Office of the Actuary

OBRA ’89 Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239)

OBRA ’90 Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508)

OES Occupational Employment Statistics

OMB Office of Management and Budget

OPPS Outpatient prospective payment system

OT Occupational therapy

PA Physician assistant

PAMA Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)

PAMPA Patient Access and Medicare Protection Act (Pub. L. 114-115)

PC Professional component

PCIP Primary Care Incentive Payment

PE Practice expense

PE/HR Practice expense per hour

PEAC Practice Expense Advisory Committee

PECOS Provider Enrollment, Chain, and Ownership System

PFS Physician Fee Schedule

PLE Provider-led Entity

PLI Professional Liability Insurance

PMA Premarket approval

PMH-NP Psychiatric mental health nurse practitioner

PPM Provider-Performed Microscopy

PQRS Physician Quality Reporting System

PPIS Physician Practice Expense Information Survey

PPS Prospective Payment System

PT Physical therapy

PT Proficiency Testing

PT/INR Prothrombin Time/International Normalized Ratio

PY Performance year

QA Quality Assessment

QC Quality Control

QCDR Qualified clinical data registry

QRUR Quality and Resources Use Report

RBRVS Resource-based relative value scale

RFA Regulatory Flexibility Act

RHC Rural health clinic

RIA Regulatory impact analysis

RUC American Medical Association/Specialty Society Relative Value Scale Update Committee

RUCA Rural Urban Commuting Area

RVU Relative value unit

SBA Small Business Administration

SGR Sustainable growth rate

SIM State Innovation Model

SLP Speech-language pathology

SMS Socioeconomic Monitoring System

SNF Skilled nursing facility

TAP Technical Advisory Panel

TC Technical component

TIN Tax identification number

TCM Transitional Care Management

UAF Update adjustment factor

UPIN Unique Physician Identification Number

USPSTF United States Preventive Services Task Force

VBP Value-based purchasing

VM Value-Based Payment Modifier

Addenda Available Only Through the Internet on the CMS Web Site

The PFS Addenda along with other supporting documents and tables referenced in this final rule are available on the CMS Web site at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html. Click on the link on the left side of the screen titled, “PFS Federal Regulations Notices” for a chronological list of PFS Federal Register and other related documents. For the CY 2018 PFS Final Rule, refer to item CMS-1676-F. Readers with questions related to accessing any of the Addenda or other supporting documents referenced in this final rule and posted on the CMS Web site identified above should contact Jessica Bruton at (410) 786-5991.

CPT (Current Procedural Terminology) Copyright Notice

Throughout this final rule, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2016 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply.Start Printed Page 52978

I. Executive Summary

A. Purpose

This final rule makes payment and policy changes under the Medicare Physician Fee Schedule (PFS) and implements required statutory changes under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10), Achieving a Better Life Experience Act of 2014 (ABLE) (Pub. L. 113-295), Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93), and the Consolidated Appropriations Act of 2016 (Pub. L. 114-113). This final rule also makes changes to payment policy and other related policies for Medicare Part B, Part D, and Medicare Advantage.

1. Summary of the Major Provisions

Section 1848 of the Social Security Act (the Act) requires us to establish payments under the PFS based on national uniform relative value units (RVUs) that account for the relative resources used in furnishing a service. The statute requires that RVUs be established for three categories of resources: Work, practice expense (PE); and malpractice (MP) expense; and, that we establish by regulation each year's payment amounts for all physicians' services paid under the PFS, incorporating geographic adjustments to reflect the variations in the costs of furnishing services in different geographic areas. In this major final rule, we establish RVUs for CY 2018 for the PFS, and other Medicare Part B payment policies, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. In addition, this final rule includes discussions and finalized policies regarding:

  • Potentially Misvalued Codes.
  • Telehealth Services.
  • Establishing Values for New, Revised, and Misvalued Codes.
  • Establishing Payment Rates under the PFS for Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus Provider-Based Departments of a Hospital.
  • Evaluation & Management (E/M) Guidelines and Care Management Services.
  • Care Coordination Services and Payment for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs).
  • Part B Drug Payment: Infusion Drugs Furnished Through an Item of Durable Medical Equipment (DME).
  • Solicitation of Public Comments on Initial Data Collection and Reporting Periods for Clinical Laboratory Fee Schedule.
  • Payment for Biosimilar Biological Products under Section 1847A of the Act.
  • Appropriate Use Criteria for Advanced Diagnostic Imaging Services.
  • PQRS Criteria for Satisfactory Reporting for Individual EPs and Group Practices for the 2018 PQRS Payment Adjustment.
  • Clinical Quality Measurement for Eligible Professionals Participating in the Electronic Health Record (EHR) Incentive Program for 2016.
  • Medicare Shared Savings Program.
  • Value-Based Payment Modifier and the Physician Feedback Program.
  • MACRA Patient Relationship Categories and Codes.
  • Changes to the Medicare Diabetes Prevention Program (MDPP) Expanded Model.
  • Physician Self Referral Law: Annual Update to the List of CPT/HCPCS Codes.
  • Therapy Caps.

2. Summary of Costs and Benefits

The statute requires that annual adjustments to PFS RVUs may not cause annual estimated expenditures to differ by more than $20 million from what they would have been had the adjustments not been made. If adjustments to RVUs would cause expenditures to change by more than $20 million, we must make adjustments to preserve budget neutrality. These adjustments can affect the distribution of Medicare expenditures across specialties. We have determined that this major final rule is economically significant. For a detailed discussion of the economic impacts, see section V. of this final rule.

II. Provisions of the Final Rule, and Analysis of and Responses to Public Comments for PFS

A. Background

Since January 1, 1992, Medicare has paid for physicians' services under section 1848 of the Act, “Payment for Physicians' Services.” The PFS relies on national relative values that are established for work, PE, and MP, which are adjusted for geographic cost variations. These values are multiplied by a conversion factor (CF) to convert the RVUs into payment rates. The concepts and methodology underlying the PFS were enacted as part of the Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239, enacted on December 19, 1989) (OBRA ’89), and the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508, enacted on November 5, 1990) (OBRA ’90). The final rule published on November 25, 1991 (56 FR 59502) set forth the first fee schedule used for payment for physicians' services.

We note that throughout this major final rule, unless otherwise noted, the term “practitioner” is used to describe both physicians and nonphysician practitioners (NPPs) who are permitted to bill Medicare under the PFS for services furnished to Medicare beneficiaries.

1. Development of the Relative Values

a. Work RVUs

The work RVUs established for the initial fee schedule, which was implemented on January 1, 1992, were developed with extensive input from the physician community. A research team at the Harvard School of Public Health developed the original work RVUs for most codes under a cooperative agreement with the Department of Health and Human Services (HHS). In constructing the code-specific vignettes used in determining 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.

As specified in section 1848(c)(1)(A) of the Act, the work component of physicians' services means the portion of the resources used in furnishing the service that reflects physician time and intensity. We establish work RVUs for new, revised and potentially misvalued codes based on our review of information that generally includes, but is not limited to, recommendations received from the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC), the Health Care Professionals Advisory Committee (HCPAC), the Medicare Payment Advisory Commission (MedPAC), and other public commenters; medical literature and comparative databases; as well as a comparison of the work for other codes within the Medicare PFS, and consultation with other physicians and health care professionals within CMS and the federal government. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters, and the rationale for their recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, including survey data, building blocks, crosswalk to key reference or Start Printed Page 52979similar codes, and magnitude estimation. More information on these issues is available in that rule.

b. Practice Expense RVUs

Initially, only the work RVUs were resource-based, and the PE and MP RVUs were based on average allowable charges. 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 physicians' service beginning in 1998. We were required to consider general categories of expenses (such as office rent and wages of personnel, but excluding malpractice expenses) comprising PEs. The PE RVUs continue to represent the portion of these resources involved in furnishing PFS services.

Originally, the resource-based method was to be used beginning in 1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L. 105-33, enacted on August 5, 1997) (BBA) delayed 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 the charge-based PE RVUs to the resource-based PE RVUs.

We established the resource-based PE RVUs for each physicians' service in a final rule, published on November 2, 1998 (63 FR 58814), effective for services furnished in CY 1999. Based on the requirement to transition to a resource-based system for PE over a 4-year period, payment rates were not fully based upon resource-based PE RVUs until CY 2002. 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. These data sources are described in greater detail in the CY 2012 final rule with comment period (76 FR 73033).

Separate PE RVUs are established for services furnished in facility settings, such as a hospital outpatient department (HOPD) or an ambulatory surgical center (ASC), and in nonfacility settings, such as a physician's office. The nonfacility RVUs reflect all of the direct and indirect PEs involved in furnishing a service described by a particular HCPCS code. The difference, if any, in these PE RVUs generally results in a higher payment in the nonfacility setting because in the facility settings some costs are borne by the facility. Medicare's payment to the facility (such as the outpatient prospective payment system (OPPS) payment to the HOPD) would reflect costs typically incurred by the facility. Thus, payment associated with those facility resources is not made under the PFS.

Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L. 106-113, enacted on November 29, 1999) (BBRA) 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 through March 1, 2005.

In the CY 2007 PFS final rule with comment period (71 FR 69624), we revised the methodology for calculating direct PE RVUs from the top-down to the bottom-up methodology beginning in CY 2007. We adopted a 4-year transition to the new PE RVUs. This transition was completed for CY 2010. In the CY 2010 PFS final rule with comment period, we updated the practice expense per hour (PE/HR) data that are used in the calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010, we began a 4-year transition to the new PE RVUs using the updated PE/HR data, which was completed for CY 2013.

c. Malpractice RVUs

Section 4505(f) of the BBA amended section 1848(c) of the Act to require that we implement resource-based MP RVUs for services furnished on or after CY 2000. The resource-based MP RVUs were implemented in the PFS final rule with comment period published November 2, 1999 (64 FR 59380). The MP RVUs are based on commercial and physician-owned insurers' malpractice insurance premium data from all the states, the District of Columbia, and Puerto Rico. For more information on MP RVUs, see section II.C. of this final rule.

d. Refinements to the RVUs

Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no less often than every 5 years. Prior to CY 2013, we conducted periodic reviews of work RVUs and PE RVUs independently. We completed 5-year reviews of work RVUs that were effective for calendar years 1997, 2002, 2007, and 2012.

Although refinements to the direct PE inputs initially relied heavily on input from the RUC Practice Expense Advisory Committee (PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to the use of the updated PE/HR data in CY 2010 have resulted in significant refinements to the PE RVUs in recent years.

In the CY 2012 PFS final rule with comment period (76 FR 73057), we finalized a proposal to consolidate reviews of work and PE RVUs under section 1848(c)(2)(B) of the Act and reviews of potentially misvalued codes under section 1848(c)(2)(K) of the Act into one annual process.

In addition to the 5-year reviews, beginning for CY 2009, CMS and the RUC have identified and reviewed a number of potentially misvalued codes on an annual basis based on various identification screens. This annual review of work and PE RVUs for potentially misvalued codes was supplemented by the amendments to section 1848 of the Act, as enacted by section 3134 of the Affordable Care Act, that require the agency to periodically identify, review and adjust values for potentially misvalued codes.

e. Application of Budget Neutrality to Adjustments of RVUs

As described in section V.C. of this final rule, in accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the RVUs cause expenditures for the year to change by more than $20 million, we make adjustments to ensure that expenditures do not increase or decrease by more than $20 million.

2. Calculation of Payments Based on RVUs

To calculate the payment for each service, the components of the fee schedule (work, PE, and MP RVUs) are adjusted by geographic practice cost indices (GPCIs) to reflect the variations in the costs of furnishing the services. The GPCIs reflect the relative costs of work, PE, and MP in an area compared to the national average costs for each component.

RVUs are converted to dollar amounts through the application of a CF, which Start Printed Page 52980is calculated based on a statutory formula by CMS's Office of the Actuary (OACT). The formula for calculating the Medicare PFS payment amount for a given service and fee schedule area can be expressed as:

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

3. Separate Fee Schedule Methodology for Anesthesia Services

Section 1848(b)(2)(B) of the Act specifies that the fee schedule amounts for anesthesia services are to be based on a uniform relative value guide, with appropriate adjustment of an anesthesia CF, in a manner to ensure that fee schedule amounts for anesthesia services are consistent with those for other services of comparable value. Therefore, there is a separate fee schedule methodology for anesthesia services. Specifically, we establish a separate CF for anesthesia services and we utilize the uniform relative value guide, or base units, as well as time units, to calculate the fee schedule amounts for anesthesia services. Since anesthesia services are not valued using RVUs, a separate methodology for locality adjustments is also necessary. This involves an adjustment to the national anesthesia CF for each payment locality.

B. Determination of Practice Expense (PE) Relative Value Units (RVUs)

1. Overview

Practice expense (PE) is the portion of the resources used in furnishing a service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages, but excluding malpractice expenses, as specified in section 1848(c)(1)(B) of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use a resource-based system for determining PE RVUs for each physicians' service. We develop PE RVUs by considering the direct and indirect practice resources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies, and medical equipment. Indirect expenses include administrative labor, office expense, and all other expenses. The sections that follow provide more detailed information about the methodology for translating the resources involved in furnishing each service into service-specific PE RVUs. We refer readers to the CY 2010 PFS final rule with comment period (74 FR 61743 through 61748) for a more detailed explanation of the PE methodology.

2. Practice Expense Methodology

a. Direct Practice Expense

We determine the direct PE for a specific service by adding the costs of the direct resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing that service. The costs of the resources are calculated using the refined direct PE inputs assigned to each CPT code in our PE database, which are generally based on our review of recommendations received from the RUC and those provided in response to public comment periods. For a detailed explanation of the direct PE methodology, including examples, we refer readers to the 5 Year Review of Work Relative Value Units under the PFS and Proposed Changes to the Practice Expense Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629).

b. Indirect Practice Expense per Hour Data

We use survey data on indirect PEs incurred per hour worked in developing the indirect portion of the PE RVUs. Prior to CY 2010, we primarily used the PE/HR by specialty that was obtained from the AMA's SMS. The AMA administered a new survey in CY 2007 and CY 2008, the Physician Practice Expense Information Survey (PPIS). The PPIS is a multispecialty, nationally representative, PE survey of both physicians and NPPs paid under the PFS using a survey instrument and methods highly consistent with those used for the SMS and the supplemental surveys. The PPIS gathered information from 3,656 respondents across 51 physician specialty and health care professional groups. We believe the PPIS is the most comprehensive source of PE survey information available. We used the PPIS data to update the PE/HR data for the CY 2010 PFS for almost all of the Medicare-recognized specialties that participated in the survey.

When we began using the PPIS data in CY 2010, we did not change the PE RVU methodology itself or the manner in which the PE/HR data are used in that methodology. We only updated the PE/HR data based on the new survey. Furthermore, as we explained in the CY 2010 PFS final rule with comment period (74 FR 61751), because of the magnitude of payment reductions for some specialties resulting from the use of the PPIS data, we transitioned its use over a 4-year period from the previous PE RVUs to the PE RVUs developed using the new PPIS data. As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), the transition to the PPIS data was complete for CY 2013. Therefore, PE RVUs from CY 2013 forward are developed based entirely on the PPIS data, except as noted in this section.

Section 1848(c)(2)(H)(i) of the Act requires us to use the medical oncology supplemental survey data submitted in 2003 for oncology drug administration services. Therefore, the PE/HR for medical oncology, hematology, and hematology/oncology reflects the continued use of these supplemental survey data.

Supplemental survey data on independent labs from the College of American Pathologists were implemented for payments beginning in CY 2005. Supplemental survey data from the National Coalition of Quality Diagnostic Imaging Services (NCQDIS), representing independent diagnostic testing facilities (IDTFs), were blended with supplementary survey data from the American College of Radiology (ACR) and implemented for payments beginning in CY 2007. Neither IDTFs, nor independent labs, participated in the PPIS. Therefore, we continue to use the PE/HR that was developed from their supplemental survey data. Consistent with our past practice, the previous indirect PE/HR values from the supplemental surveys for these specialties were updated to CY 2006 using the Medicare Economic Index (MEI) to put them on a comparable basis with the PPIS data.

We also do not use the PPIS data for reproductive endocrinology and spine surgery since these specialties currently are not separately recognized by Medicare, nor do we have a method to blend the PPIS data with Medicare-recognized specialty data.

Previously, we established PE/HR values for various specialties without SMS or supplemental survey data by crosswalking them to other similar specialties to estimate a proxy PE/HR. For specialties that were part of the PPIS for which we previously used a crosswalked PE/HR, we instead used the PPIS-based PE/HR. We use crosswalks for specialties that did not participate in the PPIS. These crosswalks have been generally established through notice and comment rulemaking and are available in the file called “CY 2018 PFS Final Rule PE/HR” on the CMS Web site under downloads for the CY 2018 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

Comment: Several commenters recommended that it was time to consider a new nationwide all specialty Start Printed Page 52981PE/HR survey, given the amount of time that has passed since the last survey was conducted. The commenters stated that the practice of medicine has significantly and substantially evolved in the past decade and that many specialties have had extensive changes in physician employment models during that time. The commenters stated that continued use of the outdated PPIS survey leads to an inappropriate and inaccurate distortion of the PE RVUs for current practice.

Response: We have previously identified several concerns regarding the underlying data used in determining PE RVUs in the CY 2014 PFS final rule (78 FR 74246 through 74247). Even when we first incorporated the survey data into the PE methodology beginning in CY 1999 (63 FR 58814), many commenters expressed serious concerns over the accuracy of this or other PE surveys as a way of gathering data on PE inputs from the diversity of providers paid under the PFS. However, we currently lack another source of comprehensive data regarding PE costs, and as a result, we continue to believe that the PPIS survey data is the best data currently available. We continue to seek the best broad-based, auditable, routinely-updated source of information regarding PE costs.

c. Allocation of PE to Services

To establish PE RVUs for specific services, it is necessary to establish the direct and indirect PE associated with each service.

(1) Direct Costs

The relative relationship between the direct cost portions of the PE RVUs for any two services is determined by the relative relationship between the sum of the direct cost resources (that is, the clinical staff, medical supplies, and medical equipment) typically involved with furnishing each of the services. The costs of these resources are calculated from the refined direct PE inputs in our PE database. For example, if one service has a direct cost sum of $400 from our PE database and another service has a direct cost sum of $200, the direct portion of the PE RVUs of the first service would be twice as much as the direct portion of the PE RVUs for the second service.

(2) Indirect Costs

We allocate the indirect costs to the code level on the basis of the direct costs specifically associated with a code and the greater of either the clinical labor costs or the work RVUs. We also incorporate the survey data described earlier in the PE/HR discussion (see section II.B.2.b of this final rule). The general approach to developing the indirect portion of the PE RVUs is as follows:

  • For a given service, we use the direct portion of the PE RVUs calculated as previously described and the average percentage that direct costs represent of total costs (based on survey data) across the specialties that furnish the service to determine an initial indirect allocator. That is, the initial indirect allocator is calculated so that the direct costs equal the average percentage of direct costs of those specialties furnishing the service. For example, if the direct portion of the PE RVUs for a given service is 2.00 and direct costs, on average, represent 25 percent of total costs for the specialties that furnish the service, the initial indirect allocator would be calculated so that it equals 75 percent of the total PE RVUs. Thus, in this example, the initial indirect allocator would equal 6.00, resulting in a total PE RVU of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 percent of 8.00).
  • Next, we add the greater of the work RVUs or clinical labor portion of the direct portion of the PE RVUs to this initial indirect allocator. In our example, if this service had a work RVU of 4.00 and the clinical labor portion of the direct PE RVU was 1.50, we would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 clinical labor portion) to the initial indirect allocator of 6.00 to get an indirect allocator of 10.00. In the absence of any further use of the survey data, the relative relationship between the indirect cost portions of the PE RVUs for any two services would be determined by the relative relationship between these indirect cost allocators. For example, if one service had an indirect cost allocator of 10.00 and another service had an indirect cost allocator of 5.00, the indirect portion of the PE RVUs of the first service would be twice as great as the indirect portion of the PE RVUs for the second service.
  • Next, we incorporated the specialty-specific indirect PE/HR data into the calculation. In our example, if, based on the survey data, the average indirect cost of the specialties furnishing the first service with an allocator of 10.00 was half of the average indirect cost of the specialties furnishing the second service with an indirect allocator of 5.00, the indirect portion of the PE RVUs of the first service would be equal to that of the second service.

(3) Facility and Nonfacility Costs

For procedures that can be furnished in a physician's office, as well as in a facility setting, where Medicare makes a separate payment to the facility for its costs in furnishing a service, we establish two PE RVUs: Facility and nonfacility. The methodology for calculating PE RVUs is the same for both the facility and nonfacility RVUs, but is applied independently to yield two separate PE RVUs. In calculating the PE RVUs for services furnished in a facility, we do not include resources that would generally not be provided by physicians when furnishing the service. For this reason, the facility PE RVUs are generally lower than the nonfacility PE RVUs.

Comment: One commenter requested that CMS develop nonfacility PE RVUs for CPT code 31255 (Nasal/sinus endoscopy, surgical; with ethmoidectomy, total (anterior and posterior)), stating that this would be consistent with the migration of many sinus surgery procedures to the office setting. The commenter indicated that the availability of new technology has transformed these services to become minimally invasive, and as a result, they can be safely and effectively performed in the office setting for many patients.

Response: We appreciate the information provided by the commenter. However, we note that CPT code 31255 was reviewed by the RUC for the current CY 2018 rule cycle, and the RUC did not recommend any direct PE inputs for this code in the nonfacility setting. We welcome an ongoing dialogue with stakeholders regarding the direct PE inputs for this code, which we will take under consideration for future rulemaking. We also note that pricing in a particular setting does not constitute a coverage determination.

(4) Services With Technical Components and Professional Components

Diagnostic services are generally comprised of two components: A professional component (PC) and a technical component (TC). The PC and TC may be furnished independently or by different providers, or they may be furnished together as a global service. When services have separately billable PC and TC components, the payment for the global service equals the sum of the payment for the TC and PC. To achieve this, we use a weighted average of the ratio of indirect to direct costs across all the specialties that furnish the global service, TCs, and PCs; that is, we apply the same weighted average indirect percentage factor to allocate indirect expenses to the global service, PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum to the global.)Start Printed Page 52982

(5) PE RVU Methodology

For a more detailed description of the PE RVU methodology, we refer readers to the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746). We also direct interested readers to the file called “Calculation of PE RVUs under Methodology for Selected Codes” which is available on our Web site under downloads for the CY 2018 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html. This file contains a table that illustrates the calculation of PE RVUs as described in this final rule for individual codes.

(a) Setup File

First, we create a setup file for the PE methodology. The setup file contains the direct cost inputs, the utilization for each procedure code at the specialty and facility/nonfacility place of service level, and the specialty-specific PE/HR data calculated from the surveys.

(b) Calculate the Direct Cost PE RVUs

Sum the costs of each direct input.

Step 1: Sum the direct costs of the inputs for each service.

Step 2: Calculate the aggregate pool of direct PE costs for the current year. We set the aggregate pool of PE costs equal to the product of the ratio of the current aggregate PE RVUs to current aggregate work RVUs and the proposed aggregate work RVUs.

Step 3: Calculate the aggregate pool of direct PE costs for use in ratesetting. This is the product of the aggregate direct costs for all services from Step 1 and the utilization data for that service.

Step 4: Using the results of Step 2 and Step 3, use the CF to calculate a direct PE scaling adjustment to ensure that the aggregate pool of direct PE costs calculated in Step 3 does not vary from the aggregate pool of direct PE costs for the current year. Apply the scaling adjustment to the direct costs for each service (as calculated in Step 1).

Step 5: Convert the results of Step 4 to a RVU scale for each service. To do this, divide the results of Step 4 by the CF. Note that the actual value of the CF used in this calculation does not influence the final direct cost PE RVUs as long as the same CF is used in Step 4 and Step 5. Different CFs would result in different direct PE scaling adjustments, but this has no effect on the final direct cost PE RVUs since changes in the CFs and changes in the associated direct scaling adjustments offset one another.

(c) Create the Indirect Cost PE RVUs

Create indirect allocators.

Step 6: Based on the survey data, calculate direct and indirect PE percentages for each physician specialty.

Step 7: Calculate direct and indirect PE percentages at the service level by taking a weighted average of the results of Step 6 for the specialties that furnish the service. Note that for services with TCs and PCs, the direct and indirect percentages for a given service do not vary by the PC, TC, and global service.

We generally use an average of the 3 most recent years of available Medicare claims data to determine the specialty mix assigned to each code. Prior to implementing that policy, we used the most recent year of available claims data to determine the specialty mix assigned to each code.

Under either of these approaches, codes with low Medicare service volume require special attention since billing or enrollment irregularities for a given year can result in significant changes in specialty mix assignment. Prior to adopting the 3-year average of data, for low-volume services (fewer than 100 Medicare allowed services), we assigned the values associated with the specialty that most frequently reported the service in the most recent claims data (dominant specialty). For some time, stakeholders, including the RUC, have requested that we use a recommended “expected” specialty for all low volume services instead of the information contained in the claims data. Currently, in the development of PE RVUs we use “expected specialty” overrides for only several dozen services based on several code-specific policies we established in prior rulemaking. As we stated in the CY 2016 final rule with comment period (80 FR 70894), we hoped that the 3-year average would mitigate the need to use dominant or expected specialty instead of the specialty identified using claims data. Because we incorporated CY 2015 claims data for use in the CY 2017 proposed rates, we believe that the finalized PE RVUs associated with the CY 2017 PFS final rule provided a first opportunity to determine whether service-level overrides of claims data are necessary.

Although we believe that the use of the 3-year average of claims data to determine specialty mix has led to an improvement in the stability of PE and MP RVUs from year to year, after reviewing the RVUs for low volume services, we continue to see possible distortions and wide variability from year to year in PE and MP RVUs for low volume services. Several stakeholders have suggested that CMS implement service-level overrides based on the expected specialty in order to determine the specialty mix for these low volume procedures. The RUC previously supplied us with a list of nearly 2,000 lower volume codes and their suggested specialty overrides. After reviewing the finalized PE RVUs for the CY 2017 PFS final rule, we agree that the use of service-level overrides for low volume services would help mitigate annual fluctuations and provide greater stability in the valuation of these services. While the use of the 3-year average of claims data to determine specialty mix has helped to mitigate some of the year to year variability for low volume services, it has not fully mitigated what appear to be anomalies for many of these lower volume codes.

Therefore, we proposed to use the most recent year of claims data to determine which codes are low volume for the coming year (those that have fewer than 100 allowed services in the Medicare claims data). For codes that fall into this category, instead of assigning specialty mix based on the specialties of the practitioners reporting the services in the claims data, we proposed to instead use the expected specialty that we identify on a list. For CY 2018, we proposed to use a list that was developed based on our medical review of the list most recently recommended by the RUC, in addition to our own proposed expected specialty for certain other low-volume codes for which we have historically used expected specialty assignments. We would display this list as part of the annual set of data files we make available as part of notice and comment rulemaking. We proposed to consider recommendations from the RUC and other stakeholders on changes to this list on an annual basis.

We also proposed to apply these service-level overrides for both PE and MP, rather than one or the other category. We believe that this would simplify the implementation of service-level overrides for PE and MP, and would also address stakeholder concerns about the year-to-year variability for low volume services. We solicited public comment on the proposal to use service-level overrides to determine the specialty mix for low volume procedures, as well as on the proposed list of expected specialty overrides itself, which is largely based on the recommendations submitted by the RUC last year. The proposed list of expected specialty assignments for individual low volume services is available on our Web site under downloads for the CY 2018 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Start Printed Page 52983Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html. Services for which the specialty is automatically assigned based on previously finalized policies under our established methodology (for example, “always therapy” services) would be unaffected by this proposal.

The following is a summary of the public comments received on our proposal to use service-level overrides to determine the specialty mix for low volume procedures and our responses:

Comment: Many commenters supported the use of the expected specialty assignments and urged CMS to finalize the proposal. Commenters stated that the proposal was consistent with a longstanding RUC recommendation and the use of the expected specialty assignments would help mitigate some of the year to year variability for low volume services. Commenters supported the creation of a list of these service-level overrides and its maintenance on an annual basis, with several commenters stating that the RUC should review updated claims data each year to determine if any new codes fall below 100 claims and submit an expected specialty recommendation for these additional codes.

Response: We appreciate the comments in support of the proposal. As we stated in the proposed rule, we will consider recommendations from the RUC and other stakeholders on changes to the list of expected specialty assignments on an annual basis.

Comment: Several commenters made specific recommendations about the proposed list of expected specialty assignments for individual low volume services. One commenter recommended that the following CPT codes should be added to the list of expected specialty assignments: Cardiology: 33477; Cardiac surgery: 33238, 33514, 33548, 33951, 33953, 33955, 33957, 33958, 33959, 33962, 33963, 33964, 33965, 33969, 33973, 33985, 33987, 33988, 33989, 33991, 35271; General Surgery: 35251, 43325; Thoracic Surgery: 32672, 33025, 33215, 43135. The same commenter recommended the following changes to the indicated codes on the low volume override list:

  • CPT codes 33363 and 33364: The commenter recommended changing the override specialty from cardiology to cardiac surgery.
  • CPT codes 33516, 33976 and 35812: The commenter recommended changing the override specialty from thoracic surgery to cardiac surgery.
  • CPT codes 35311 and 35526: The commenter recommended changing the override specialty from vascular surgery to cardiac surgery.
  • CPT codes 38382, 43108, 43118, 43123, 43360, 43405 and 43425: The commenter recommended changing the override specialty from general surgery to thoracic surgery.

In addition, a different commenter recommended changing the proposed expected specialty for CPT code 43754 from gastroenterology to emergency medicine.

Response: We appreciate the submission of specific recommendations to the proposed list of expected specialty assignments. These recommendations from the commenter included newer information about the typical practice of these CPT codes than what we possessed when initially proposing the low volume services list, which was based, in part, upon a review that took place in CY 2016. After reviewing the recommendations provided by the commenters, and in light of the additional information supplied by the commenter about these codes, we are finalizing the addition of these updated recommendations to the list.

Comment: Several commenters expressed concern regarding the treatment of existing codes with no Medicare volume (as distinct from low volume) reported for any given year. Under the methodology used in the proposed rule, these codes with no utilization data received the average risk factor for all physician specialties rather than the expected specialty assignments on the list of service-level overrides. The commenters recommended that the proposed list of expected specialty overrides be utilized for both low volume and no volume codes.

Response: We agree with the commenters that the RVUs for services with no Medicare volume should be calculated in a manner that is consistent with services with low Medicare volume because our proposal was for fewer than 100 allowed services, and no-volume services would fit within that standard. Therefore, we are finalizing the recommendation from the commenters to use the proposed list of expected specialty overrides for both low volume and no volume codes.

Comment: A commenter agreed with the CMS proposal that there would no longer be a need to apply service-level MP RVU crosswalks for new or revised codes in order to assign a specialty-mix risk factor. The commenter stated that CMS would be able to derive the specialty mix assumption in the first year for a new or revised code from the specialty mix used for purposes of ratesetting. The commenter indicated their support for this change to calculating MP RVUs for new or revised codes.

Response: We are finalizing our proposal to remove service-level MP RVU crosswalks for new or revised codes, and we will instead derive the specialty mix assumption for the first year for a new or revised code from the specialty mix used for purposes of ratesetting.

Comment: One commenter supported the CMS proposal and requested the use of the phrase “Family Medicine” for the list of expected specialty assignments rather than the phrase “Family Practice”, which the commenter stated was a more outdated term.

Response: Regarding the requested update to the name assigned to a specialty, we would direct the commenter to the standard process for updating specialty designations. This change would have to be made to the Medicare enrollment specialty and lies outside the scope of the proposal.

After consideration of comments received, we are finalizing our proposal to use service-level overrides to determine the specialty mix for low volume procedures, with the modifications as discussed in this section. Based on comments, we are also finalizing the use of service-level overrides to determine the specialty mix for no volume procedures. In addition, we are finalizing the proposed list of expected specialty overrides with modifications. We are finalizing the addition of certain CPT codes to the list and updated specialty assignments for certain CPT codes.

Step 8: Calculate the service level allocators for the indirect PEs based on the percentages calculated in Step 7. The indirect PEs are allocated based on the three components: The direct PE RVUs; the clinical labor PE RVUs; and the work RVUs.

For most services the indirect allocator is: Indirect PE percentage * (direct PE RVUs/direct percentage) + work RVUs.

There are two situations where this formula is modified:

  • If the service is a global service (that is, a service with global, professional, and technical components), then the indirect PE allocator is: Indirect percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs + work RVUs.
  • If the clinical labor PE RVUs exceed the work RVUs (and the service is not a global service), then the indirect allocator is: Indirect PE percentage (direct PE RVUs/direct percentage) + clinical labor PE RVUs.

(Note: For global services, the indirect PE allocator is based on both the work Start Printed Page 52984RVUs and the clinical labor PE RVUs. We do this to recognize that, for the PC service, indirect PEs would be allocated using the work RVUs, and for the TC service, indirect PEs would be allocated using the direct PE RVUs and the clinical labor PE RVUs. This also allows the global component RVUs to equal the sum of the PC and TC RVUs.)

For presentation purposes, in the examples in the download file called “Calculation of PE RVUs under Methodology for Selected Codes”, the formulas were divided into two parts for each service.

  • The first part does not vary by service and is the indirect percentage (direct PE RVUs/direct percentage).
  • The second part is either the work RVU, clinical labor PE RVU, or both depending on whether the service is a global service and whether the clinical PE RVUs exceed the work RVUs (as described earlier in this step).

Apply a scaling adjustment to the indirect allocators.

Step 9: Calculate the current aggregate pool of indirect PE RVUs by multiplying the result of step 8 by the average indirect PE percentage from the survey data.

Step 10: Calculate an aggregate pool of indirect PE RVUs for all PFS services by adding the product of the indirect PE allocators for a service from Step 8 and the utilization data for that service.

Step 11: Using the results of Step 9 and Step 10, calculate an indirect PE adjustment so that the aggregate indirect allocation does not exceed the available aggregate indirect PE RVUs and apply it to indirect allocators calculated in Step 8.

Calculate the indirect practice cost index.

Step 12: Using the results of Step 11, calculate aggregate pools of specialty-specific adjusted indirect PE allocators for all PFS services for a specialty by adding the product of the adjusted indirect PE allocator for each service and the utilization data for that service.

Step 13: Using the specialty-specific indirect PE/HR data, calculate specialty-specific aggregate pools of indirect PE for all PFS services for that specialty by adding the product of the indirect PE/HR for the specialty, the work time for the service, and the specialty's utilization for the service across all services furnished by the specialty.

Step 14: Using the results of Step 12 and Step 13, calculate the specialty-specific indirect PE scaling factors.

Step 15: Using the results of Step 14, calculate an indirect practice cost index at the specialty level by dividing each specialty-specific indirect scaling factor by the average indirect scaling factor for the entire PFS.

Step 16: Calculate the indirect practice cost index at the service level to ensure the capture of all indirect costs. Calculate a weighted average of the practice cost index values for the specialties that furnish the service. (Note: For services with TCs and PCs, we calculate the indirect practice cost index across the global service, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by the PC, TC, and global service.)

Step 17: Apply the service level indirect practice cost index calculated in Step 16 to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE RVUs.

(d) Calculate the Final PE RVUs

Step 18: Add the direct PE RVUs from Step 5 to the indirect PE RVUs from Step 17 and apply the final PE budget neutrality (BN) adjustment. The final PE BN adjustment is calculated by comparing the sum of steps 5 and 17 to the proposed aggregate work RVUs scaled by the ratio of current aggregate PE and work RVUs. This adjustment ensures that all PE RVUs in the PFS account for the fact that certain specialties are excluded from the calculation of PE RVUs but included in maintaining overall PFS budget neutrality. (See “Specialties excluded from ratesetting calculation” later in this final rule.)

Step 19: Apply the phase-in of significant RVU reductions and its associated adjustment. Section 1848(c)(7) of the Act specifies that for services that are not new or revised codes, if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments in work, PE, and MP RVUs shall be phased in over a 2-year period. In implementing the phase-in, we consider a 19 percent reduction as the maximum 1-year reduction for any service not described by a new or revised code. This approach limits the year one reduction for the service to the maximum allowed amount (that is, 19 percent), and then phases in the remainder of the reduction. To comply with section 1848(c)(7) of the Act, we adjust the PE RVUs to ensure that the total RVUs for all services that are not new or revised codes decrease by no more than 19 percent, and then apply a relativity adjustment to ensure that the total pool of aggregate PE RVUs remains relative to the pool of work and MP RVUs. For a more detailed description of the methodology for the phase-in of significant RVU changes, we refer readers to the CY 2016 PFS final rule with comment period (80 FR 70927 through 70931).

Comment: One commenter stated that CMS should take a phased in approach to avoid any beneficiary access issues presented by the significant payment decreases caused by PE decreases for imaging services. These decreases could affect the viability of many practices providing these critical services as the new payment rates might create economic hardships for continuation of these services. The commenter stated that CMS should implement the RUC-recommended practice expenses over a phased in period to reduce the financial impact of the PE changes, particularly for codes with a proposed decrease of more than 10 percent.

Response: We agree with the commenter that there is a need to ensure access to patient care and mitigate the potential for economic hardship on the part of providers facing decreases in the valuation of services. We note in response to the commenter that section 1848(c)(7) of the Act already stipulates 19 percent as the maximum 1-year reduction for any service not described by a new or revised code. This phase-in methodology has been in use for PFS ratesetting since CY 2016.

(e) Setup File Information

  • Specialties excluded from ratesetting calculation: For the purposes of calculating the PE RVUs, we exclude certain specialties, such as certain NPPs paid at a percentage of the PFS and low-volume specialties, from the calculation. These specialties are included for the purposes of calculating the BN adjustment. They are displayed in Table 1.

Table 1—Specialties Excluded From Ratesetting Calculation

Specialty codeSpecialty description
49Ambulatory surgical center.
50Nurse practitioner.
Start Printed Page 52985
51Medical supply company with certified orthotist.
52Medical supply company with certified prosthetist.
53Medical supply company with certified prosthetist-orthotist.
54Medical supply company not included in 51, 52, or 53.
55Individual certified orthotist.
56Individual certified prosthetist.
57Individual certified prosthetist-orthotist.
58Medical supply company with registered pharmacist.
59Ambulance service supplier, e.g., private ambulance companies, funeral homes, etc.
60Public health or welfare agencies.
61Voluntary health or charitable agencies.
73Mass immunization roster biller.
74Radiation therapy centers.
87All other suppliers (e.g., drug and department stores).
88Unknown supplier/provider specialty.
89Certified clinical nurse specialist.
96Optician.
97Physician assistant.
A0Hospital.
A1SNF.
A2Intermediate care nursing facility.
A3Nursing facility, other.
A4HHA.
A5Pharmacy.
A6Medical supply company with respiratory therapist.
A7Department store.
B2Pedorthic personnel.
B3Medical supply company with pedorthic personnel.
  • Crosswalk certain low volume physician specialties: Crosswalk the utilization of certain specialties with relatively low PFS utilization to the associated specialties.
  • Physical therapy utilization: Crosswalk the utilization associated with all physical therapy services to the specialty of physical therapy.
  • Identify professional and technical services not identified under the usual TC and 26 modifiers: Flag the services that are PC and TC services but do not use TC and 26 modifiers (for example, electrocardiograms). This flag associates the PC and TC with the associated global code for use in creating the indirect PE RVUs. For example, the professional service, CPT code 93010 (Electrocardiogram, routine ECG with at least 12 leads; interpretation and report only), is associated with the global service, CPT code 93000 (Electrocardiogram, routine ECG with at least 12 leads; with interpretation and report).
  • Payment modifiers: Payment modifiers are accounted for in the creation of the file consistent with current payment policy as implemented in claims processing. For example, services billed with the assistant at surgery modifier are paid 16 percent of the PFS amount for that service; therefore, the utilization file is modified to only account for 16 percent of any service that contains the assistant at surgery modifier. Similarly, for those services to which volume adjustments are made to account for the payment modifiers, time adjustments are applied as well. For time adjustments to surgical services, the intraoperative portion in the work time file is used; where it is not present, the intraoperative percentage from the payment files used by contractors to process Medicare claims is used instead. Where neither is available, we use the payment adjustment ratio to adjust the time accordingly. Table 2 details the manner in which the modifiers are applied.

Table 2—Application of Payment Modifiers to Utilization Files

ModifierDescriptionVolume adjustmentTime adjustment
80,81,82Assistant at Surgery16%Intraoperative portion.
ASAssistant at Surgery—Physician Assistant14% (85% * 16%)Intraoperative portion.
50 or LT and RTBilateral Surgery150%150% of work time.
51Multiple Procedure50%Intraoperative portion.
52Reduced Services50%50%.
53Discontinued Procedure50%50%.
54Intraoperative Care onlyPreoperative + Intraoperative Percentages on the payment files used by Medicare contractors to process Medicare claimsPreoperative + Intraoperative portion.
55Postoperative Care onlyPostoperative Percentage on the payment files used by Medicare contractors to process Medicare claimsPostoperative portion.
62Co-surgeons62.5%50%.
66Team Surgeons33%33%.
Start Printed Page 52986

We also make adjustments to volume and time that correspond to other payment rules, including special multiple procedure endoscopy rules and multiple procedure payment reductions (MPPRs). We note that section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments for multiple imaging procedures and multiple therapy services from the BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These MPPRs are not included in the development of the RVUs.

For anesthesia services, we do not apply adjustments to volume since we use the average allowed charge when simulating RVUs; therefore, the RVUs as calculated already reflect the payments as adjusted by modifiers, and no volume adjustments are necessary. However, a time adjustment of 33 percent is made only for medical direction of two to four cases since that is the only situation where a single practitioner is involved with multiple beneficiaries concurrently, so that counting each service without regard to the overlap with other services would overstate the amount of time spent by the practitioner furnishing these services.

  • Work RVUs: The setup file contains the work RVUs from this final rule.

(6) Equipment Cost per Minute

The equipment cost per minute is calculated as:

(1/(minutes per year * usage)) * price * ((interest rate/(1−(1/((1 + interest rate) ⁁ life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous (that is, usage = 1); generally 150,000 minutes.

usage = variable, see discussion in this final rule.

price = price of the particular piece of equipment.

life of equipment = useful life of the particular piece of equipment.

maintenance = factor for maintenance; 0.05.

interest rate = variable, see discussion in this final rule.

Usage: We currently use an equipment utilization rate assumption of 50 percent for most equipment, with the exception of expensive diagnostic imaging equipment, for which we use a 90 percent assumption as required by section 1848(b)(4)(C) of the Act.

Stakeholders have often suggested that particular equipment items are used less frequently than 50 percent of the time in the typical setting and that CMS should reduce the equipment utilization rate based on these recommendations. We appreciate and share stakeholders' interest in using the most accurate assumption regarding the equipment utilization rate for particular equipment items. However, we believe that absent robust, objective, auditable data regarding the use of particular items, the 50 percent assumption is the most appropriate within the relative value system. We welcome the submission of data that illustrates an alternative rate.

Comment: One commenter stated that most ophthalmology diagnostic equipment is in use far less than 50 percent of the time. The commenter indicated that they had developed a survey instrument that asked ophthalmic technicians to provide time usage estimates for the 16 most-utilized pieces of diagnostic testing equipment. The commenter stated that their preliminary survey results produced a utilization rate of 22 percent, much lower than the 50 percent assumption currently used by CMS. The commenter suggested that CMS should work with the RUC to do a robust survey to help determine a more valid utilization rate, including the possibility of specialty-specific equipment utilization rates.

Response: We are always looking for more accurate information to improve our PE methodology. We appreciate and share stakeholders' interest in using the most accurate assumption regarding the equipment utilization rate for particular equipment items, and we will review any information that the RUC's PE Subcommittee or other stakeholders are willing to submit through the public comment process. We concur with the commenter that a wide-ranging survey or similar study designed to address the subject of equipment utilization rates would be an appropriate tool to investigate this subject in further detail. At the moment, we believe that absent robust, objective, auditable data regarding the use of particular items, the 50 percent assumption is the most appropriate within the relative value system. We welcome the further submission of data that illustrates an alternative rate.

Maintenance: This factor for maintenance was finalized in the CY 1998 PFS final rule with comment period (62 FR 33164).

Comment: Several commenters addressed the issue of equipment maintenance costs. One commenter stated that the current maintenance percentage of 5 percent across all types of medical equipment does not adequately address the maintenance costs of imaging equipment in general and particularly not for advanced imaging modalities like CT and MRI. This commenter stated that a CT scanner would have an estimated annual maintenance cost of 7.2 percent. Another commenter supported our willingness to investigate potential avenues for determining variable equipment maintenance costs across a broad range of equipment items. The commenter stated that the standard equipment rate assumption fails to appreciate the significant costs associated with the maintenance of highly technical and particularly complex equipment items, and indicated that that CMS should not persist in an inaccurate approach while it collects additional data.

Response: We appreciate the additional information regarding equipment maintenance rates from the commenters. As we previously stated in the CY 2016 final rule with comment period (80 FR 70897), we agree with the commenters that we do not believe the annual maintenance factor for all equipment is precisely 5 percent, and we concur that the current rate likely understates the true cost of maintaining some equipment. We also believe it likely overstates the maintenance costs for other equipment. When we solicited comments regarding sources of data containing equipment maintenance rates, commenters were unable to identify an auditable, robust data source that could be used by CMS on a wide scale. We do not believe that voluntary submissions regarding the maintenance costs of individual equipment items would be an appropriate methodology for determining costs. As a result, in the absence of publicly available datasets regarding equipment maintenance costs or another systematic data collection methodology for determining maintenance factor, we do not believe that we have sufficient information at present to adopt a variable maintenance factor for equipment cost per minute pricing. We continue to investigate potential avenues for determining equipment maintenance costs across a broad range of equipment items.

Interest Rate: In the CY 2013 PFS final rule with comment period (77 FR 68902), we updated the interest rates used in developing an equipment cost per minute calculation (see 77 FR 68902 for a thorough discussion of this issue). The interest rate was based on the Small Business Administration (SBA) maximum interest rates for different categories of loan size (equipment cost) and maturity (useful life). We did not propose any changes to these interest rates for CY 2018. The interest rates are listed in Table 3.Start Printed Page 52987

Table 3—SBA Maximum Interest Rates

PriceUseful life (years)Interest rate (%)
<$25K<77.50
$25K to $50K<76.50
>$50K<75.50
<$25K7+8.00
$25K to $50K7+7.00
>$50K7+6.00

3. Changes to Direct PE Inputs for Specific Services

This section focuses on specific PE inputs. The direct PE inputs are included in the CY 2018 direct PE input database, which is available on the CMS Web site under downloads for the CY 2018 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

(a) PE Inputs for Digital Imaging Services

In the CY 2017 PFS final rule (81 FR 80179 through 80184), we finalized our proposal to add a professional PACS workstation (ED053) used for interpretation of digital images to a series of CPT codes and to address costs related to the use of film that had previously been incorporated as direct PE inputs for these services. We finalized the following criteria for the inclusion of a professional PACS workstation:

  • We did not add the professional PACS workstation to any code that currently lacks a technical PACS workstation (ED050) or lacks a work RVU. We continue to believe that procedures that do not include a technical workstation, or do not have physician work, would not require a professional workstation.
  • We did not add the professional PACS workstation to add-on codes. Because the base codes include equipment minutes for the professional PACS workstation, we continue to believe it would be duplicative to add additional equipment time for the professional PACS workstation in the add-on code.
  • We also did not add the professional PACS workstation to image guidance codes where the dominant provider is not a radiologist according to the most recent year of claims data, because we believe a single technical PACS workstation would be more typical in those cases.
  • We agreed with commenters that because the clinical utility of the PACS workstation is not necessarily limited to diagnostic services, there may be therapeutic codes where it would be reasonable to assume its use to be typical. Based on information provided by commenters and our own medical review, we stated that we believe that the use of the professional PACS workstation is typical for many of the specific codes that were identified. We added the workstation to many of the therapeutic codes requested by commenters, specifically CPT codes listed outside the 70000 series, where we agreed that use of the professional PACS workstation was typical.
  • For CPT codes in the 80000 and 90000 series, we expressed our concerns about whether it is appropriate to include the technical PACS workstation in many of these services. PACS workstations were created for imaging purposes, but many of these services that include a technical PACS workstation do not appear to make use of imaging. Although we did not remove the technical PACS workstation from these codes at that time, we did not believe that a professional PACS workstation should be added to these procedures.

Prior to the publication of this CY 2018 PFS proposed rule, a stakeholder expressed concern about our decision not to include the professional PACS workstation in a series of vascular ultrasound codes that use technical PACS workstations. The stakeholder indicated that the vascular ultrasound codes in question do make use of a professional PACS workstation, and that the dominant specialty provider requirement (that is, that the code's dominant specialty provider be diagnostic radiology) would exclude codes for which the professional PACS workstation is typical based on a mistaken assumption. The stakeholder stated that to furnish vascular ultrasound services following the transition from film to digital imaging, both a technical and a professional PACS workstation are required, regardless of whether the practitioner furnishing the service is a radiologist, cardiologist, neurologist, or vascular surgeon.

We appreciate the submission of this additional information regarding the use of the professional PACS workstation in vascular ultrasound codes. Therefore, we solicited comments regarding whether or not the use of the professional PACS workstation would be typical in the following list of CPT and HCPCS codes. The codes brought to our attention by the stakeholder are CPT codes 93880, 93882, 93886, 93888, 93890, 93892, 93893, 93922, 93923, 93924, 93925, 93926, 93930, 93931, 93965, 93970, 93971, 93975, 93976, 93978, 93979, 93980, 93981, 93990, and 76706, and HCPCS code G0365. We considered information submitted in comments to determine whether the professional PACS workstation should be included as a direct PE input for these codes.

The following is a summary of the public comments received regarding whether or not the use of the professional PACS workstation would be typical in the previous list of CPT and HCPCS codes and our responses:

Comment: Several commenters stated that the finalized policy in CY 2017 that did not add the professional PACS workstation to image guidance codes where the dominant practitioner is not a radiologist was an arbitrary decision. The commenters stated that CMS did not provide any rationale for this policy, and that for many services, both a technical and a professional PACS workstation would be typically used regardless of whether the practitioner performing the service is a radiologist or in another specialty. These commenters urged CMS to add a professional PACS workstation in services where its use would be typical without concern for whether diagnostic radiology is the dominant provider.

Response: We agree with the commenters that equipment allocated to each code should be determined based on the resources typically required to furnish the service. In general, we believe that examining Medicare claims data for dominant specialty is a useful and data-driven approach to making educated assumptions regarding typical resources involved in furnishing particular procedures. However, in this case, we are persuaded by commenters who stated that other specialties, outside of diagnostic radiology, utilize the professional PACS workstation. After reviewing the information supplied by the commenters, we agree the use of both a technical and a professional PACS workstation may be typical in some services where diagnostic radiology is not the dominant provider. We welcome feedback from stakeholders in identifying additional services where the use of a professional PACS workstation would be typical.

Comment: One commenter disagreed with the exclusion of add-on codes from the list of codes that included a professional PACS workstation. The commenter stated that the add-on codes require additional time to perform and therefore more time with the technical PACS workstation for the technician, as well as additional time for the review and interpretation performed by the Start Printed Page 52988physician using the professional PACS workstation.

Response: We disagree with the commenter. We continue to believe it would be duplicative to add additional equipment time for the professional PACS workstation in the add-on code, as the base codes already include equipment time for the practitioner's use following the service.

Comment: Many commenters stated that the use of a professional PACS workstation would be typical in the 26 CPT codes detailed previously. Commenters stated that in the wake of the transition from film to digital imaging, use of both a technical and a professional PACS workstations has become typical for many diagnostic imaging services, including vascular ultrasound and digital pathology services. One commenter indicated that the use of the professional PACS workstation served a vital part in coordination of care for their treatment of vascular access issues related to ESRD patients. Another commenter stated that HCPCS code G0365 may have been mistakenly included on this list, as it already includes a professional PACS workstation added in CY 2017, while CPT code 93965 should not be considered for the professional PACS workstation as the code was previously deleted.

Response: We agree with the commenters that the use of the professional PACS workstation would be typical in 21 of the 26 codes listed in the proposed rule. As mentioned by one commenter, CPT code 93965 has been deleted while code G0365 already includes a professional PACS workstation. We disagree with adding a professional PACS workstation to CPT codes 93922, 93923, and 93924 because these codes do not include a technical PACS workstation and we continue to believe that procedures that do not include a technical workstation would not require a professional workstation. We will assign equipment time for the professional PACS workstation in the nonfacility setting according to the equipment time formula finalized in CY 2017. For diagnostic codes, we are assigning equipment minutes equal to half the preservice physician work time plus the full intraservice physician work time, consistent with the previously finalized policy. For the relatively smaller group of diagnostic codes with no service period time breakdown, we are assigning equipment time equal to half of the total physician work time, consistent with the previously finalized policy. The equipment time to be added is shown in Table 4.

Table 4—Additional Codes With Professional PACS Workstation

HCPCSProcedure typeED053 minutes
93880Diagnostic18
93882Diagnostic13
93886Diagnostic20
93888Diagnostic13
93890Diagnostic20
93892Diagnostic25
93893Diagnostic25
93925Diagnostic18
93926Diagnostic13
93930Diagnostic18
93931Diagnostic13
93970Diagnostic17
93971Diagnostic12
93975Diagnostic23
93976Diagnostic18
93978Diagnostic18
93979Diagnostic13
93980Diagnostic21
93981Diagnostic10
93990Diagnostic14
76706Diagnostic13

Comment: One commenter stated that the costs associated with storing digital images should be included as a direct PE. The commenter noted that CMS treated film as a supply item for purposes of direct cost determination and cited an MRI study in the 2010 direct PE database with 12 pieces of 14 x 17 film at a price of $1.17 each or $14.04. The commenter stated that this film was not replaced and that digital imaging studies need to be recorded and then archived. The commenter suggested that storage costs for digital images should be added as a maintenance percentage for digital imaging services.

Response: We disagree with the commenter that the costs associated with storing digital images are excluded from digital imaging services, as these costs are incorporated into the indirect PE methodology that cover administrative costs and office rent. We do not pay separately for the storage of digital images as these expenses are not allocable to individual services, just as we do not explicitly incorporate the storage costs of electronic health records (EHRs) as direct PE inputs for the range of practitioners that use EHRs. We understand and agree that we previously treated film itself as direct PE input. However, the film was allocable to an individual patient. We believe that the better analog for the storage of images under the previous assumptions would be the office cabinets and office space in which the film was stored. These items were clearly considered to be indirect PE expenses and, therefore, such costs are included in the specialty-specific data that is used to allocate indirect PE RVUs. We previously replaced the direct PE components of imaging services during the film-to-digital transition that took place in CY 2015 (79 FR 67561).

Comment: One commenter recommended that CMS revisit its definition of room time for imaging procedures. Under the current policy, room time for imaging studies is defined as the time it takes to acquire the images plus any additional time that the piece of equipment is not available for use for another patient due to its use during the designated procedure. The commenter stated that this definition was inconsistent with how imaging centers actually function, as most patient-related activities take place in the imaging room with the involvement of multiple technologists. The commenter suggested that CMS should return to the previous definition, in which equipment time for highly technical equipment was based on total technologist time.

Response: We disagree with the commenter regarding the current standard equipment time formula for highly technical equipment. As we wrote in the CY 2011 final rule with comment period (75 FR 73350), certain highly technical pieces of equipment and equipment rooms are less likely to be used by a clinician over the full course of a procedure and are typically available for other patients during time that may still be in the intraservice portion of the service. When we identify these services, we adjust those equipment times accordingly. For example, CPT code 74178 (Computed tomography, abdomen and pelvis; without contrast material in more than one body region) includes 3 minutes of intra-service clinical labor time associated with obtaining the patient's consent for the procedure. Since we believe that it would be atypical for this activity to occur within the CT room, we believe these 3 minutes should not be attributed to the CT room. We agree with the commenter that the standard formula used to determine equipment time for highly technical equipment may not be typical for all services, which is why we evaluate equipment time on a case-by-case basis as services are reviewed. We appreciate the information submitted by the commenter, and we will take these comments under consideration as we evaluate codes on an individual basis.

After consideration of comments received, we are finalizing the addition of a professional PACS workstation to the codes listed in Table 4 with the equipment time detailed.Start Printed Page 52989

(2) Standardization of Clinical Labor Tasks

As we noted in the CY 2015 PFS final rule with comment period (79 FR 67640-67641), we continue to make improvements to the direct PE input database to provide the number of clinical labor minutes assigned for each task for every code in the database instead of only including the number of clinical labor minutes for the preservice, service, and postservice periods for each code. In addition to increasing the transparency of the information used to set PE RVUs, this improvement would allow us to compare clinical labor times for activities associated with services across the PFS, which we believe is important to maintaining the relativity of the direct PE inputs. This information would facilitate the identification of the usual numbers of minutes for clinical labor tasks and the identification of exceptions to the usual values. It would also allow for greater transparency and consistency in the assignment of equipment minutes based on clinical labor times. Finally, we believe that the information can be useful in maintaining standard times for particular clinical labor tasks that can be applied consistently to many codes as they are valued over several years, similar in principle to the use of physician preservice time packages. We believe such standards would provide greater consistency among codes that share the same clinical labor tasks and could improve relativity of values among codes. For example, as medical practice and technologies change over time, changes in the standards could be updated simultaneously for all codes with the applicable clinical labor tasks, instead of waiting for individual codes to be reviewed.

The following is a summary of the public comments received regarding the standardization of clinical labor tasks and our responses:

Comment: One commenter supported the efforts of the AMA RUC to standardize clinical labor activities in the new PE worksheet and urged CMS to accept these standards.

Response: We appreciate the efforts to establish greater organizational consistency through the RUC's use of the new PE worksheet and new clinical labor activity codes in developing and making recommendations to CMS.

Comment: Several commenters stated that, while they supported the revisions to the direct PE database providing the number of clinical labor minutes assigned for each clinical labor activity for each code, they had concerns regarding the over-standardization of clinical labor activities. These commenters indicated that each service requires different clinical labor resources and creating standard times is not possible for all clinical labor activities. Commenters stated that the RUC's PE Subcommittee is the entity best suited to make service-level determinations for clinical labor, and that blanket changes to standardize clinical labor activities outside of RUC review would lead to misvaluation of codes.

Response: We agree with the commenters that there are often important differences between services and that no two services are necessarily identical. We also acknowledge that there is a balance between establishing standards for clinical labor activities and the need for individual review of each code. We concur with the commenters that some services require greater or less time than the clinical labor standards, and we have frequently finalized clinical labor times outside the standard values. The standard times for clinical labor activities are a starting point for our clinical review of individual services, not necessarily an ending point. As we have written in past rulemaking, we believe that the establishment of standard times helps to facilitate greater transparency of information and maintain consistency in review patterns over time. Our goal is to maintain relativity among services, and we believe that the creation of clinical labor standards helps to facilitate that goal.

Comment: One commenter stated that the proposed standardized clinical labor times for CT and MRI codes required additional time due to a need to assess patients for any special needs, review screening sheets with patients, and obtain a clinical history from the patient.

Response: When reviewing clinical labor times for individual codes, we typically work closely with the recommendations provided by the RUC, which did not include additional clinical labor time for these specific activities in these services. While we appreciate the additional information from the commenter, we do not agree that it would serve overall PFS relativity to include additional clinical labor time for these services based on this rationale.

In the following paragraphs, we address a series of issues related to clinical labor tasks, particularly relevant to services currently being reviewed under the misvalued code initiative.

a. Preservice Clinical Labor for 0-Day and 10-Day Global Services

Several years ago, the RUC's PE Subcommittee reviewed the preservice clinical labor times for CPT codes with 0-day and 10-day global periods. The RUC concluded that these codes are assumed to have no preservice clinical staff time (standard time of 0 minutes) unless the specialty can provide evidence that the preservice time is appropriate. In other words, for minor procedures, it is assumed that there is no clinical staff time typically spent preparing for the specific procedure prior to the patient's arrival. However, we note that for CY 2018, 41 of the 53 reviewed codes with 0-day or 10-day global periods include preservice clinical labor of some kind, suggesting that it is typical for clinical staff to prepare for the procedure prior to the patient's arrival. As we review misvalued codes, we believe that the general adherence to values that we have established as standards supports relativity within the PFS. Because 77 percent of the reviewed codes for the current calendar year deviate from the “standard,” we sought comment on the value and appropriate application of the standard in our review of RUC recommendations in future rulemaking. In reviewing the inputs included in the direct PE inputs database, we found that for the 1,142 total 0-day global codes, 741 of them had preservice clinical labor of some kind (65 percent). We also noticed a general correlation between preservice clinical labor time and the recent review. We sought comment specifically on whether the standard preservice clinical labor time of 0 minutes should be consistently applied for 0-day and 10-day global codes in future rulemaking.

The following is a summary of the public comments received regarding whether the standard preservice clinical labor time of 0 minutes should be consistently applied for 0-day and 10-day global codes in future rulemaking and our responses:

Comment: Many commenters opposed eliminating clinical staff preservice time from all 0-day and 10-day global procedures in future rulemaking. Several commenters stated that although it is accurate to assume that no clinical staff time is necessary for minor procedures, it is no longer true that all 0-day and 10-day globals can be classified as minor procedures, as increasingly complex services are now performed using this global period. For example, there are several cardiothoracic surgery procedures that in the past would have been valued as Start Printed Page 5299090-day global services but instead were implemented as 0-day global procedures to allow additional flexibility in the delivery of patient care. One commenter stated that the “trend” identified in the proposed rule occurred only because of the significant number of 0-day endoscopy and interventional codes that have recently been reviewed. Other commenters stated that the standard preservice clinical labor time of 0 minutes is only applicable if specialties cannot provide evidence of the need for preservice clinical labor, and that the rise in preservice clinical labor time indicated the growing recognition that the use of clinical staff is typical for these services. Many commenters stated that the RUC's PE Subcommittee should review the evidence on a case-by-case basis to determine if individual services justify preservice clinical labor time. Commenters urged CMS to work with the RUC to identify circumstances where deviations from the standard clinical labor times would be appropriate and develop clear definitions and criteria that support compelling reasons for clinical staff time that deviates from the standard for 0-day and 10-day global procedures. A few commenters, including the RUC, acknowledged that the high number of preservice clinical labor exceptions raised the question of the utility of the standard given this high number of exemptions.

Response: We appreciate the responses from the commenters. We note that several commenters also acknowledged the problematic nature of having so many exceptions to the established standard for preservice clinical labor. We appreciate in particular the additional information regarding the increasing use of the 0-day and 10-day global periods for procedures that are not minor in nature. In light of this information, we agree with the commenters who suggested that there is a need to identify circumstances where deviations from the standard clinical labor times would be appropriate and develop clear definitions and criteria for these situations. If an increasingly large number of major procedures are performed using the 0-day and 10-day global periods, we believe that there will be a need for the establishment of new guidelines for the typical allotment of preservice clinical labor. We agree with the commenters that preservice clinical labor must be determined on an individual basis based on the resources typically required to furnish the service. However, the need for individual review of services does not preclude the development of standards which, as we stated above, helps to facilitate greater transparency of information and maintain consistency in review patterns over time.

After consideration of comments received, we do not believe that the standard preservice clinical labor time of 0 minutes should be consistently applied for 0-day and 10-day global codes in future rulemaking. We look forward to working with stakeholders and seeing their recommendations for preservice clinical labor that maintain relativity among the different kind of procedures classified as 0-day and 10-day globals.

b. Obtain Vital Signs Clinical Labor

The direct PE inputs for each CPT code paid under the PFS include minutes assigned to a series of standard clinical labor tasks assumed to be typical for the service in question. The minutes assigned to each of these tasks for each CPT code have been developed over several decades, and what was previously considered to be a standard value in the review of the codes has changed over time. Because each year we perform a detailed review of all of the inputs for only several hundred of the over 7,000 CPT codes paid under the PFS, valuation for individual services can be influenced by shifts in review standards over time rather than purely based on changes in practice.

For example, we traditionally assigned a clinical labor time of 3 minutes for the “Obtain vital signs” clinical labor activity, based on the amount of time typically required to check a patient's vitals. Over time, that number of minutes has increased as codes are reviewed. For example, many of the reviewed codes for the current CY 2018 rulemaking cycle have a recommended clinical labor time of 5 minutes for “Obtain vital signs,” based on the understanding that these services are measuring two additional vital signs: the patient's height and weight. We do not have any reason to believe that measuring a patient's height and weight is only typical for services described by recently reviewed codes. Instead, we believe that the review standards have changed, perhaps in conjunction with changes in medical practice, and that the change in the minutes assigned for the “Obtain vital signs” task for newer-reviewed services is detrimental to relativity among PFS services.

Therefore, to preserve relativity among the PFS codes, we proposed to assign 5 minutes of clinical labor time for all codes that include the “Obtain vital signs” task, regardless of the date of last review. We proposed to assign this 5 minutes of clinical labor time for all codes that include at least 1 minute previously assigned to this task. We also proposed to update the equipment times of the codes with this clinical labor task accordingly to match the changes in clinical labor time. For codes that were not recently reviewed and for which we lacked a breakdown of how the equipment time was derived from the clinical labor tasks, we could not determine if the equipment time included time assigned for the “Obtain vital signs” task. In these cases, we proposed to adjust the equipment time of any equipment item that matched the clinical labor time of the full service period to match the change in the “Obtain vital signs” clinical labor time. The list of all codes affected by these proposed vital signs changes to direct PE inputs is available on the CMS Web site under downloads for the CY 2018 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

The following is a summary of the public comments received on the list of all codes affected by these proposed vital signs changes to direct PE inputs proposals and our responses:

Comment: Many commenters supported the CMS proposal. Commenters agreed that these differences in the minutes assigned to the “Obtain vital signs” clinical labor task appeared to be attributed to variances in review standards over time rather than reflecting actual variations in practice. One commenter stated that medical practice typically requires measurement of height and weight when vital signs are measured, while another commenter stated that the new standard time would be an administrative simplification for stakeholders and help streamline reviews. These commenters urged CMS to finalize the proposal to help preserve relativity between PFS codes.

Response: We appreciate the support from the commenters for the proposal.

Comment: Other commenters disagreed with the proposal to establish 5 minutes as the new clinical labor standard for the “Obtain vital signs” task. These commenters stated that the RUC PE Subcommittee's standard for vital signs clinical labor, based on the number of vital signs being taken, remained accurate and was the best way to make sure that individual codes are allocated the correct amount of time. These commenters were opposed to changing the clinical labor time of a large number of codes at once, and stressed the need for individual review Start Printed Page 52991of each service. Commenters urged CMS not to finalize this proposal and suggested the issue should be referred to the RUC and its Practice Expense Advisory Committee for further review and input.

Response: We generally agree with commenters that the determinations for individual clinical labor activities are typically made at the code level, such as those recommended by the RUC's PE subcommittee. Therefore, we are not finalizing our proposal to use 5 minutes as the universal input for this clinical labor task. However, since even the comments opposing the proposal did not suggest that the clinical labor associated with taking vital signs has changed over time, only the review standards associated with them, we will assign 5 minutes as the input for all codes that include the “Obtain vital signs” task for CY 2018, as proposed. For future rulemaking we will consider code-level recommendations that will help distinguish services that may require fewer or greater than 5 minutes for this activity. We believe that finalizing 5 minutes for the codes as proposed will serve to mitigate the detrimental impact of review standards shifting over time while preserving the principle that the number of minutes involved in obtaining vital signs may vary for different services.

Comment: One commenter asked if CMS would accept vital sign data from fitness wearable devices such as an Apple watch, Garmin, or Fitbit.

Response: Our proposal concerns the number of minutes assumed to be involved in obtaining vital signs for purposes of PFS ratesetting and is not intended to establish requirements regarding how vital signs are obtained.

After consideration of comments received, we are not finalizing our proposal to establish 5 minutes as the new standard for the “Obtain vital signs” clinical labor task. However, since we continue to believe that the review standards associated with the clinical labor time for obtaining vital signs have changed over time, we will assign 5 minutes as the input for all codes that include the “Obtain vital signs” task for CY 2018, as proposed.

c. Establishment of Clinical Labor Activity Codes

Historically, the RUC has submitted a “PE worksheet” that details the recommended direct PE inputs for our use in developing PE RVUs. The format of the PE worksheet has varied over time and among the medical specialties developing the recommendations. These variations have made it difficult for both the RUC's development and our review of code values for individual codes. Beginning for the CY 2019 PFS rulemaking cycle, we understand that the RUC intends to mandate the use of a new PE worksheet for purposes of their recommendation development process that standardizes the clinical labor tasks and assigns them a clinical labor activity code. We believe the RUC's use of the new PE worksheet in developing and submitting recommendations to us would, in turn, help us to simplify and standardize the hundreds of different clinical labor tasks currently listed in our direct PE database.

To help facilitate this transition to the new clinical labor activity codes, we developed a crosswalk to link the old clinical labor tasks to the new clinical labor activity codes. Our crosswalk is for informational purposes only, and would not change either the direct PE input values or the PE RVUs for codes. Instead, we hope that the crosswalk would help us to translate the sprawling, existing data set into a condensed version that would significantly improve the standardization of clinical labor recommendations and improve the ability of commenters to identify concerns with our proposed valuation. For CY 2018 rulemaking, we are displaying two versions of the Labor Task Detail public use file: One version with the old listing of clinical labor tasks, and one with the same tasks as described by the new listing of clinical labor activity codes. These lists are available on the CMS Web site under downloads for the CY 2018 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

(3) Equipment Recommendations for Scope Systems

During our routine reviews of direct PE input recommendations, we have regularly found unexplained inconsistencies involving the use of scopes and the video systems associated with them. Some of the scopes include video systems bundled into the equipment item, some of them include scope accessories as part of their price, and some of them are standalone scopes with no other equipment included. It is not always clear which equipment items related to scopes fall into which of these categories. We have also frequently found anomalies in the equipment recommendations, with equipment items that consist of a scope and video system bundle recommended, along with a separate scope video system. Based on our review, the variations do not appear to be consistent with the different code descriptions.

To promote appropriate relativity among the services and facilitate the transparency of our review process, during review of recommended direct PE inputs for the CY 2017 PFS proposed rule, we developed a structure that separates the scope and the associated video system as distinct equipment items for each code. Under this approach, we proposed standalone prices for each scope, and separate prices for the video systems that are used with scopes. We proposed to define the scope video system as including: (1) A monitor; (2) a processor; (3) a form of digital capture; (4) a cart; and (5) a printer. We believe that these equipment components represent the typical case for a scope video system. Our model for this system was the “video system, endoscopy (processor, digital capture, monitor, printer, cart)” equipment item (ES031), which we proposed to re-price as part of this separate pricing approach. We obtained current pricing invoices for the endoscopy video system as part of our investigation of these issues involving scopes, which we proposed to use for this re-pricing. We understand that there may be other accessories associated with the use of scopes; we proposed to separately price any scope accessories, and individually evaluate their inclusion or exclusion as direct PE inputs for particular codes as usual under our current policy based on whether they are typically used in furnishing the services described by the particular codes.

We also proposed standardizing refinements to the way scopes have been defined in the direct PE input database. We believe that there are four general types of scopes: Non-video scopes; flexible scopes; semi-rigid scopes, and rigid scopes. Flexible scopes, semi-rigid scopes, and rigid scopes would typically be paired with one of the scope video systems, while the non-video scopes would not. The flexible scopes can be further divided into diagnostic (or non-channeled) and therapeutic (or channeled) scopes. We proposed to identify for each anatomical application: (1) A rigid scope; (2) a semi-rigid scope; (3) a non-video flexible scope; (4) a non-channeled flexible video scope; and (5) a channeled flexible video scope. We proposed to classify the existing scopes in our direct PE database under this classification system, to improve the transparency of our review process and improve appropriate relativity among the services. We planned to propose Start Printed Page 52992input prices for these equipment items through future rulemaking.

We proposed these changes only for the reviewed codes for CY 2017 that made use of scopes, along with updated prices for the equipment items related to scopes utilized by these services. But, we did not propose to apply these policies to codes with inputs reviewed prior to CY 2017. We also solicited comment on this separate pricing structure for scopes, scope video systems, and scope accessories, which we could consider proposing to apply to other codes in future rulemaking. In response to comments, we finalized the addition of a digital capture device to the endoscopy video system (ES031) in the CY 2017 PFS final rule. We finalized our proposal to price the system at $33,391, based on component prices of $9,000 for the processor, $18,346 for the digital capture device, $2,000 for the monitor, $2,295 for the printer, and $1,750 for the cart. We also finalized a price of $16,843.87 for the stroboscopy system scope accessory (ES065). We did not finalize price increases for a series of other scopes and scope accessories, as the invoices submitted for these components indicated that they are different forms of equipment with different product IDs and different prices. We did not receive any data to indicate that the equipment on the newly submitted invoices was more typical in its use than the equipment that we were currently using for pricing.

We did not make further changes to existing scope equipment in CY 2017 in order to allow the RUC's PE Subcommittee the opportunity to provide feedback. However, we believed there was some miscommunication on this point, as the RUC's PE Subcommittee workgroup that was created to address scope systems stated that no further action was required following the finalization of our proposal. Therefore, we made further proposals to continue clarifying scope equipment inputs, and sought comments regarding the new set of scope proposals. We welcomed feedback from all stakeholders, including practitioners with direct experience in the use of scope equipment.

We sought comment on several potential categories of scope system PE inputs. We are considering creating a single scope equipment code for each of the five categories detailed in this rule: (1) A rigid scope; (2) a semi-rigid scope; (3) a non-video flexible scope; (4) a non-channeled flexible video scope; and (5) a channeled flexible video scope. Under the current classification system, there are many different scopes in each category depending on the medical specialty furnishing the service and the part of the body affected. We believe that the variation between these scopes is not significant enough to warrant maintaining these distinctions, and we believe that creating and pricing a single scope equipment code for each category would help provide additional clarity. We sought public comment on the merits of this potential scope organization, as well as any pricing information regarding these five new scope categories.

For CY 2018, we proposed two minor changes to PE inputs related to scopes. We proposed to add an LED light source into the cost of the scope video system (ES031), which would remove the need for a separate light source in these procedures. If this proposal were to be finalized, we would remove the equipment time for the separate light source from CPT codes that include the scope video system. We also proposed an increase to the price of the scope video system of $1,000.00 to cover the expense of miscellaneous small equipment associated with the system that falls below the threshold of individual equipment pricing as scope accessories (such as cables, microphones, foot pedals, etc.) We sought comments on the inclusion of the LED light in the scope video system, and the appropriate pricing of the system with the inclusion of these additional equipment items.

We anticipate adopting detailed changes to scope systems at the code level through rulemaking for CY 2019, because we believe that additional feedback from expert stakeholders will improve the details of the proposed changes. We did not propose any additional pricing changes to scope equipment for CY 2018 due to the proposed reorganization into a single type of scope equipment for each of the five scope categories. However, we would consider updating prices for these equipment items through the public request process for price updates, or based on information submitted as part of RUC recommendations.

The following is a summary of the public comments received on the continued organization of scope equipment and our responses:

Comment: Many commenters disagreed with the CMS proposal to create and price a single scope equipment code for each category. Commenters stated that there were significant differences in the scopes used by different specialties, and the proposal to establish a single scope for each category would not sufficiently capture variations across specialties in terms of typical scopes and typical costs. As an example, one commenter stated that the price difference between scopes could be as large as $10,000. Many commenters suggested that CMS should create packages on a per-specialty basis for these five categories of scopes, as applicable.

Response: In light of the information supplied by commenters regarding the significant differences in price and usage across specialties, we will not finalize our proposal to create and price a single scope equipment code for each of the five categories previously identified.

Comment: Commenters supported the CMS proposal to add an LED light source and miscellaneous costs into the price of the scope video system (ES031). Commenters indicated that the addition of the light and $1,000.00 for small various small items like foot pedals and microphones would more accurately describe the resource costs of the scope video system.

Response: We appreciate the comments supporting the proposal. However, we are not finalizing the proposal to add an LED light source and an increase of $1,000 for miscellaneous small equipment to the price of scope video systems for CY 2018. We intend to update the price of the scope video system with these changes for CY 2019 as part of the scope reorganization project.

Comment: Many commenters agreed with the proposal to delay implementation of these proposed changes until CY 2019 and encouraged CMS to request that the RUC review this issue and provide guidance on the correct pricing.

Response: We agree that the anticipated delay on implementation until CY 2019 will allow additional time for stakeholders to provide recommendations on the proper organization and pricing of scope equipment.

Comment: One commenter disagreed with the five categories of scope equipment that CMS identified and finalized in CY 2017. This commenter stated that these five categories did not represent all scope equipment categories and recommended adding a sixth category, a multi-channeled flexible video scope.

Response: We will take the recommendation from the commenter into consideration. We look forward to receiving additional feedback from stakeholders regarding whether adding a sixth category for multi-channeled flexible video scopes would be appropriate as part of the project to organize scope equipment.Start Printed Page 52993

Comment: Several commenters stated that some of the scope equipment currently in use was inaccurately priced, and appeared to reflect older technology that has become outdated. One commenter submitted an extensive list of invoices related to the pricing of scope equipment.

Response: We appreciate the submission of additional information related to scope pricing from the commenters. We stated in the proposed rule that we anticipated adopting detailed changes to scope systems at the code level for CY 2019 in order to incorporate additional feedback from expert stakeholders. Since we did not propose any additional pricing changes to scope equipment for CY 2018 due to this proposed reorganization, we believe that it would be more appropriate to delay any price updates until the following year rather than make changes for CY 2018 and, again, shortly thereafter. The general reorganization of scopes taking place in CY 2019 will include updates to scope pricing.

After consideration of comments received, we will not finalize our proposal to create and price a single scope equipment code for each of the five categories previously identified. Instead, we are supportive of the recommendation from the commenters to create scope equipment codes on a per-specialty basis for these five, or potentially six, categories of scopes as applicable. Our goal is to create an administratively simple scheme that will be easier to maintain and helps to reduce administrative burden. We look forward to receiving detailed recommendations from expert stakeholders regarding the number of these scope equipment items that would be typically required for each scope category as well as the proper pricing for each scope.

We are not finalizing our proposal to add an LED light source and an increase to the price of the scope video system of $1,000.00 to cover the expense of miscellaneous small equipment associated. We intend to address these changes for CY 2019 in order to incorporate the aforementioned feedback from expert stakeholders.

(4) Clarivein Kit for Mechanochemical Vein Ablation

In the CY 2017 PFS final rule, we finalized work RVUs and direct PE inputs for two new codes related to mechanochemical vein ablation, CPT codes 36473 (Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, mechanochemical; first vein treated) and 36474 (Endovenous ablation therapy of incompetent vein, extremity, inclusive of all imaging guidance and monitoring, percutaneous, mechanochemical; subsequent vein(s) treated in a single extremity, each through separate access sites). Following the publication of the final rule, stakeholders contacted CMS and requested that a Clarivein kit supply item (SA122) be added to the direct PE inputs for CPT code 36474, the add-on code for ablation of subsequent veins. They stated that the Clarivein kit was accidentally omitted from the RUC recommendations, and that an additional kit is necessary to perform the service described by the add-on procedure. We solicited comment regarding the use of multiple kits during procedures described by the base and add-on codes to determine whether or not this supply should be included as a direct PE input for CPT code 36474 for CY 2018.

The following is a summary of the public comments received regarding the use of the Clarivein kit supply in CPT code 36474 for CY 2018 and our responses:

Comment: A device manufacturer wrote to explain the proper assembly and use of the Clarivein kit in great detail. The commenter stated that the kit is used to treat a single vein and a separate Clarivein kit is necessary for each vein treated to ensure functionality and safety. The commenter cited an informal survey of their customers which suggested that more than 50 percent of mechanochemical vein ablation procedures require treatment of a subsequent vein. The commenter urged that CMS include the Clarivein kit as a supply input for CPT code 36474.

Response: We appreciate the additional information from the commenter regarding the use of the Clarivein kit supply.

Comment: Several commenters disagreed with the proposed inclusion of the Clarivein kit as a supply input for CPT code 36474. A commenter indicated that a second Clarivein kit might be needed for CPT code 36474 in some cases, but noted that the mechanochemical vein ablation codes have been flagged as new technology and will be reviewed by the RUC during the next two years. This commenter recommended that the number of Clarivein kits necessary for CPT code 36474 should be reviewed at that time.

Response: We agree with the commenter that the decision on whether to include a Clarivein kit in CPT code 36474 should be made as part of a broader review of the direct PE inputs that are typically required to furnish the procedure. We also note that if physicians do not typically use the kit when furnishing services described by the add-on codes, then including the kit as part of the direct PE inputs for the add-on code would represent a significant misvaluation. After consideration of comments received, we are not finalizing the addition of the Clarivein kit to CPT code 36474 at this time, though we will review any recommendations received for consideration in future rulemaking.

(5) Removal of Oxygen From Non-Moderate Sedation Post-Procedure Monitoring

After finalizing the creation of separately billable codes for moderate sedation during the CY 2017 PFS final rule, we received additional recommendations to remove the oxygen gas supply item (SD084) from a series of CPT codes that were previously valued with moderate sedation as an inherent part of the procedure. Because oxygen gas is included in the moderate sedation pack contained within the separately billed moderate sedation codes, we believe that the continued inclusion of the oxygen gas in these codes is a duplicative supply. Therefore, we proposed to remove the oxygen gas from the codes in Table 5.

Table 5—CY 2018 Proposed Removal of Oxygen (SD084) From Non-Moderate Sedation Post-Procedure Monitoring

HCPCSNF/FCurrent (liters)Cost
31622NF90−0.27
31625NF105−0.32
31626NF135−0.41
31627NF150−0.45
Start Printed Page 52994
31628NF120−0.36
31629NF105−0.32
31632NF54−0.16
31633NF60−0.18
31652NF180−0.54
31653NF225−0.68
31654NF90−0.27
52647NF10−0.03
52648NF10−0.03
90870NF198−0.59

Comment: Several commenters supported our proposal to remove the oxygen gas for this list of codes.

Response: We appreciate the support for our proposal. After consideration of the comments, we are finalizing our proposal to remove the oxygen gas from the codes listed in Table 5.

(6) Technical Corrections to Direct PE Input Database and Supporting Files

Subsequent to the publication of the CY 2017 PFS final rule, stakeholders alerted us to several clerical inconsistencies in the direct PE database. We proposed to correct these inconsistencies as described in the proposed rule and reflected in the CY 2018 proposed direct PE input database displayed on the CMS Web site under downloads for the CY 2018 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

For CY 2018, we proposed to address the following inconsistencies:

  • For CY 2018, we proposed to make direct PE changes for CPT code 96416 (Chemotherapy administration, intravenous infusion technique; initiation of prolonged chemotherapy infusion (more than 8 hours), requiring use of a portable or implantable pump) to improve payment accuracy, in response to a stakeholder inquiry regarding the use of the ambulatory IV pump equipment for this service. We proposed to add 6 additional minutes of RN/OCN clinical labor (L056A), 4 minutes for the “Review charts by chemo nurse regarding course of treatment & obtain chemotherapy-related medical hx” task, and 2 minutes for the “Greet patient and provide gowning” task. We proposed to add 1 quantity of the IV infusion set supply (SC018) and proposed to lower the quantity from 2 to 1 of the 20 ml syringe supply (SC053). We proposed to add 1800 minutes for the new ambulatory IV pump equipment, and we proposed to increase the equipment time of the medical recliner chair (EF009) from 83 minutes to 89 minutes to match the increase in RN/OCN clinical labor. For CY 2018, these proposed direct PE changes would be used to calculate the PE RVU for CPT code 96416. We sought comments on these proposed direct PE refinements.
  • We proposed to correct an anomaly in the postservice work time for CPT code 91200 (Liver elastography, mechanically induced shear wave (e.g., vibration), without imaging, with interpretation and report) by changing it from 5 minutes to 3 minutes, which also results in a refinement in the total work time for the code from 18 minutes to 16 minutes.
  • In the process of making updates to our direct PE database, we discovered a series of discrepancies between the finalized direct PE inputs and the values entered into the database from previous calendar years. To reconcile these discrepancies, we proposed the following direct PE refinements:

Table 6—Direct PE Database Data Discrepancies and Proposed Changes

HCPCSInput codeInput code descriptionNF/FOldNewCost
11307SF033scalpel with blade, surgical (#10-20)NF120.69
11311SG056gauze, sterile 4in x 4in (10 pack uou)NF120.80
11311SH046lidocaine 1% w-epi inj (Xylocaine w-epi)NF104−0.38
11719L037DGreet patient, provide gowning, ensure appropriate medical records are availableNF130.74
11719L037DProvide pre-service education/obtain consentNF120.37
11719L037DPrepare room, equipment, suppliesNF120.37
11719L037DClean room/equipment by physician staffNF130.74
17312SL097OCT Tissue-TekNF86−0.12
17313SF004blade, microtomeNF10−1.72
17313SF044blade, surgical, super-sharpNF014.17
17313SG056gauze, sterile 4in x 4in (10 pack uou)NF30−2.39
17313SG088tape, foam, elastic, 2in (Microfoam)NF108−0.01
17314SG056gauze, sterile 4in x 4in (10 pack uou)NF20−1.60
17314SL097OCT Tissue-TekNF86−0.12
17315SL078histology freezing spray (Freeze-It)NF00.20.29
19283L043AService total costsNF5554−0.43
19286L051BService total costsNF30310.51
19286EL015room, ultrasound, generalNF19201.40
19286EQ168light, examNF19200.00
23333L037DPost service total costsF63909.99
28045SC029needle, 18-27gNF21−0.09
Start Printed Page 52995
32405L041BService total costsNF52572.05
37765L037DService total costsNF91941.11
37766L037DService total costsNF1211241.11
45171SJ052swab, procto 16inF230.12
45172L037DService total costsF6122.22
45172SJ052swab, procto 16inF230.12
52214SH047lidocaine 1%-2% inj (Xylocaine)NF1501.72
72120EL012room, basic radiologyNF16170.48
72148L047AService total costsNF47490.84
74230L041BTechnologist QC's images in PACS, checking for all images, reformats, and dose pageNF020.82
91013EF023table, examNF090.03
91013EF015mayo standNF090.01
91013EQ235suction machine (Gomco)NF090.02
91013EQ181manometry system (computer, transducers, catheter)NF091.15
91013EQ339manometry accessory cableNF090.05
91013ED050PACS Workstation ProxyNF090.20
91132EQ019EGG monitoring systemNF22300.83
92227EL006lane, screening (oph)NF120−1.07
92227EL005lane, exam (oph)NF0121.15
93017L051APreservice total costsNF155−5.10
95819SG079tape, surgical paper 1in (Micropore)NF6420.07

The proposed PE RVUs displayed in Addendum B on our Web site were calculated with the inputs displayed in the CY 2018 proposed direct PE input database.

The following is a summary of the public comments received on these proposed direct PE refinements and our responses:

Comment: Several commenters indicated their support for the proposed direct PE changes for CPT code 96416. Commenters stated that the proposed changes accurately reflected provider time and intensity in providing this service and would help to ensure that cancer care and treatment are appropriately valued and reimbursed. There were no comments opposed to the proposed changes.

Response: We appreciate the support for our proposal from the commenters. We are finalizing the direct PE changes to CPT code 96416 as proposed.

Comment: One commenter was uncertain how CMS arrived at the conclusion that there were discrepancies of the direct PE inputs for the identified codes in Table 5 of the proposed rule. The commenter disagreed with several of the proposed changes to the data discrepancies and requested that CMS clarify the method used to determine these discrepancies in the direct PE inputs.

Response: Prior to the publication of the CY 2018 proposed rule, we identified a series of anomalies in our direct PE database where the entered data did not match the values that had been finalized through rulemaking. For example, in CY 2013 we finalized the RUC recommendation to include 1 surgical super-sharp blade (SF044) in CPT code 17313. However, the direct PE database for CPT code 17313 instead included 1 microtome blade (SF004), which was not included in the finalized PE inputs at all. This discrepancy was due to a technical issue that occurred while inputting the values into the database during the CY 2013 rule cycle. The same pattern applies to the other discrepancies in the data that we identified for the codes on the table above: the information in the database was discrepant with the direct PE inputs that had been finalized in previous calendar years. We proposed this series of changes in order to ensure that the PE inputs in our database matched the inputs that have been finalized through rulemaking. We did not propose to make changes in the direct PE inputs of these codes based on clinical judgment or new recommendations, only to correct the technical anomalies that had crept into the direct PE database via user error. As a result, after consideration of comments received, we are finalizing the proposed changes to the direct PE database detailed in the previous table.

Comment: One commenter alerted CMS to a series of similar technical corrections in the Physician Work Time file. The commenter stated that there was an issue with 108 codes that had incorrect immediate postservice times and total times that had been identified in the CY 2014 final rule as due to an inadvertent error. The commenter also stated that in the CY 2014 PFS final rule with comment period physician work time file, CMS implemented the correct number and level of postoperative visits and correct total times, though inadvertently kept erroneously inflated immediate postservice times for these codes. In addition, the commenter stated that for CY 2015 up to the present, this erroneous immediate postservice time was added back into the total time, resulting in the total times being again incorrect for these 100+ services. The commenter submitted additional data for these codes and requested that CMS implement a technical correction.

Response: After reviewing the data supplied by the commenter, we agree that these 108 codes contained an erroneous amount of total time. As the commenter mentioned, we previously addressed these codes in the CY 2014 PFS final rule with comment period (78 FR 74259) with a technical correction. We believe this correction will populate the physician time file with data that, absent the inadvertent error, would have been present in the time file. We are finalizing a technical correction to the physician work time of these codes as noted in Table 7.

Table 7—Technical Correction to Physician Work Total Time

CPT codeCY 2017 total timeCY 2018 total time
19368830770
19369755690
20100296266
20816809697
20822685590
20824784690
20827728625
Start Printed Page 52996
208381085986
209551095957
2096912161048
209701156988
209731156988
21139458466
21151715686
21154857853
21155972939
21188570572
22100475372
22101490387
22110595479
22112675530
22114685530
22210763609
22212788640
22214763624
22220733585
22222818651
22224808666
22315315252
22325652528
22326600480
22327723604
22548800673
22556693557
22590630501
22595650521
22600595490
22610656549
22630599487
22800695571
22802670538
22804768595
22808691530
22810751595
22812854700
32650400290
32656517377
32658420330
32659492357
32661400300
32664420330
328201054854
33236376346
33237516456
33238517472
33243642537
33321949754
334171003750
33502973688
335031213838
335041043789
33600958628
33602928628
336061058728
33608938668
33690883636
33702956751
33722908608
33732848578
337351073770
33736848548
33750968722
337641023750
33767938608
337741348998
337881033736
33802751556
33803811586
33820558414
33824811615
33840831639
33845978726
33851891700
33852951719
33853998668
33917878608
33920958658
33922756546
33974464314
34502951741
35091995790
35694546456
35901602482
35903506416
49422212182
49429407317
50320598524
50845823613
566321013683
60520624474
60521595445
60522703533
61557627510
63700497401
63702567463
63704732609
63706800679
64712245294

We note that the technical correction to the total work time of these codes will not have a direct effect on the calculation of their individual RVUs, as changes to work time affect code valuation at the specialty level, not the service level, in the ratesetting methodology. For additional information, please see section II.B.2.c. of this final rule regarding the allocation of PE to services.

Comment: In addition to these 108 codes detailed above, the same commenter identified seven additional codes with a need for potential technical corrections in their physician work times. Listed in order, the commenter identified these issues:

  • For CPT code 28122 (Partial excision (craterization, saucerization, sequestrectomy, or diaphysectomy) bone (e.g., osteomyelitis or bossing); tarsal or metatarsal bone, except talus or calcaneus), in the CY2012 Final Rule CMS finalized 0.5 99238 discharge visits. The commenter stated that the CY 2018 Physician Work Time file incorrectly still listed this service as having one 99238 visit.
  • For CPT code 46900 (Destruction of lesion(s), anus (e.g., condyloma, papilloma, molluscum contagiosum, herpetic vesicle), simple; chemical), the commenter stated that the CY 2018 Physician Work Time file inadvertently omitted one 99213 post-operative visit for this 10-day global service. When this service was last reviewed by the PEAC in March 2004, the PEAC recommended and CMS finalized 36 minutes of RN/LPN/MTA post-service period time, which corresponds with one 99213 office visit bundled into the 10-day global period. Therefore, the commenter stated that the CY 2018 direct PE inputs and the physician work time file for this service did not match.
  • For CPT code 47562 (Laparoscopy, surgical; cholecystectomy), the CY 2013 final rule only detailed refining the preservice work time and made no mention of not accepting the RUC recommended postoperative visits. The commenter stated that the work time file should have two 99213 post-operative visits instead of one.
  • For CPT code 76948 (Ultrasonic guidance for aspiration of ova, imaging supervision and interpretation), the commenter stated that the CY 2014 final rule did not mention any refinements to the RUC-recommended times for the interim final valuation of this service. For the CY 2015 final rule, the preamble text discussed removing preservice and postservice work times for a different service in this family of codes, CPT code 76945. The commenter stated that it appeared that this refinement was inadvertently applied to both CPT codes 76948 and 76945 in the work time file.
  • For CPT code 77767 (Remote afterloading high dose rate radionuclide skin surface brachytherapy, includes basic dosimetry, when performed; lesion diameter up to 2.0 cm or 1 channel), the commenter stated that the CY 2016 NPRM work time file included the RUC-recommended preservice, intraservice and postservice work times but incorrectly summed the total time (listed as CPT dummy code number 7778A). The commenter stated that this error appeared to have been carried forward to the present, since there was no mention of any work time refinements for this code in the CY 2016 final rule.
  • For CPT codes (93668 Peripheral arterial disease (PAD) rehabilitation, per session) and 96904 (Whole body integumentary photography, for monitoring of high risk patients with dysplastic nevus syndrome or a history of dysplastic nevi, or patients with a personal or familial history of melanoma), the RUC had recommended and CMS had agreed that these services do not include physician work. However, the commenter stated that the CY 2018 physician work time file Start Printed Page 52997erroneously listed physician time for these services.

The commenter requested for the work time for these services to be corrected in the CY 2018 Physician Work Time file for the CY 2018 final rule.

Response: After reviewing the data supplied by the commenter, we agree that six of the seven codes identified by the commenter contained an erroneous amount of work time. We do not agree with the commenter regarding CPT code 76948, as the refinements to work time that took place were finalized as intended, and were not due to confusion with CPT code 76945 (80 FR 70970-70971). For the other six codes, we are finalizing technical corrections to the work time file as described by the commenter.

After consideration of comments received, we are finalizing the direct PE changes to CPT code 96416 as proposed, the correction to an anomaly in the postservice work time for CPT code 91200 as proposed, and the proposed changes to the direct PE database detailed in Table 6. We are also finalizing technical corrections in physician work times as detailed above in the preceding paragraphs.

(7) Updates to Prices for Existing Direct PE Inputs

In the CY 2011 PFS final rule with comment period (75 FR 73205), we finalized a process to act on public requests to update equipment and supply price and equipment useful life inputs through annual rulemaking, beginning with the CY 2012 PFS proposed rule. For CY 2018, we proposed the following price updates for existing direct PE inputs.

We proposed to update the price of thirteen supplies and one equipment item in response to the public submission of invoices. For the details of these proposed price updates, please refer to section II.H, of this final rule, Table 16: Invoices Received for Existing Direct PE Inputs.

We did not propose to update the price of the blood warmer (EQ072), the cell separator system (EQ084), or the photopheresor system (EQ206) equipment items. The only pricing information that we received for these three equipment items was an invoice that included a hand-written price over redacted information. We were unable to verify the accuracy of this invoice. We are also not proposing to update the price of the DNA image analyzer (ACIS) (EP001) equipment item, due to the inclusion of many components on the submitted invoice that are not part of the price of the DNA image analyzer. We were unable to determine which of these components were included in the cost of the DNA image analyzer, and which of these components were unrelated types of equipment. To price these equipment items accurately, we believe that we need additional information. We continued to use the current price for these equipment items pending the submission of additional pricing information. We welcomed the submission of updated pricing information regarding these equipment items through valid invoices from commenters and other stakeholders.

We also proposed to change the name of the ED050 equipment from the “PACS Workstation Proxy” to the “Technologist PACS workstation.” In the CY 2017 final rule (81 FR 80180-80182), we finalized a policy to add a professional PACS workstation (ED053) to the list of approved equipment items, and we believe that renaming ED050 to the technologist PACS workstation would help to alleviate potential confusion between the two PACS workstations.

We routinely accept public submission of invoices as part of our process for developing payment rates for new, revised, and potentially misvalued codes. Often these invoices are submitted in conjunction with the RUC-recommended values for the codes. For CY 2018, we note that some stakeholders have submitted invoices for new, revised, or potentially misvalued codes after the February 10th deadline established for code valuation recommendations. To be included in a given year's proposed rule, we generally need to receive invoices by the same February 10th deadline. However, we would consider invoices submitted as public comments during the comment period following the publication of the proposed rule, and would consider any invoices received after February or outside of the public comment process as part of our established annual process for requests to update supply and equipment prices.

The following is a summary of the public comments received on updates to prices for new and existing direct PE inputs and our responses:

Comment: Several commenters supported the price changes that CMS proposed in response to the submission of invoices.

Response: We appreciate the response from the commenters, as well as the timely submission of these invoices prior to the February 10th deadline.

Comment: One commenter, in response to the CMS request for additional updated pricing information for the blood warmer (EQ072), the cell separator system (EQ084), the photopheresor system (EQ206), and the DNA image analyzer (EP001) equipment items, submitted an attachment with current valid invoices. The commenter urged CMS to use these invoices to update the price of these equipment items.

Response: We appreciate the additional invoices from the commenter in response to our request for more information in the proposed rule. We are finalizing updated prices for all four of these equipment items as detailed in Table 16: Invoices Received for Existing Direct PE Inputs. For the first three equipment items, we are finalizing the price indicated on their respective invoices. For the DNA image analyzer (EP001), we are finalizing a price of $248,946.30, based on the submitted price of $258,042.30 minus the price of the user training ($6,800.00), the instructor-led online training ($646.00) and the shipping and handling costs ($1,650.00). These costs are allocated through the indirect allocation under the established PE methodology. We are also finalizing a change in the name of the EP001 equipment from “DNA image analyzer” to “DNA/digital image analyzer” as requested by commenters.

Comment: Several commenters disagreed with the proposed price of $4.10 for the UV goggles (SJ027) supply and the proposal to treat the patient and clinician goggles used for photodynamic therapy as the same SJ027 supply item rather than create a new supply code. One commenter stated they were concerned with the blended price methodology used by CMS to calculate the proposed price, and indicated that the current market price was higher than the proposed price for the SJ027 supply. Another commenter stated that the goggles used for photodynamic therapy are proprietary to the company that produces aminolevulinic acid and are not available through other sources, which made the use of the proposed blended price inappropriate. Commenters submitted several additional invoices for the price of both the UV goggles and the patient/clinician goggles used for photodynamic therapy.

Response: We appreciate the additional information supplied by the commenters regarding these different types of goggles, especially the additional pricing information included in the invoices. After consideration of the comments, we agree that these are two separate supply items and that it would not be appropriate to blend their prices together. We are finalizing a price of $7.95 for the UV goggles (SJ027) and a price of $6.00 for the new patient/clinician goggles (SD326). Regarding the Start Printed Page 52998new SD326 supply, since these very similar goggles were produced by the same company and sold for the same price, we did not agree that each of them should be described by a separate supply code and will instead group them together as “patient/clinician goggles” under a single supply code.

Comment: Several commenters disagreed with the price update to the LMX 4% anesthetic cream (SH092) supply and the use of an online price quote found by CMS. A commenter stated that physicians' only purchased drugs from reputable medical suppliers in order to ensure the safety of their patients and that the current price of the SH092 supply was accurate. The commenters also submitted three additional invoices for the SH092 supply.

Response: We disagree with the commenters that the use of prices obtained online carries an elevated risk of patient complications due to false or improperly prepared medication. We have no reason to believe that healthcare providers will typically purchase medical supplies and equipment at higher than rates generally available on the market, and LMX 4% anesthetic cream is a widely available non-prescription supply item that can be commonly found both online and in pharmaceutical stores. We have no reason to believe the price quote that we obtained online is atypical of market rates or reflects an inferior product that represents a danger to patients. However, given commenters' suggestions that some physicians purchase the item at prices higher than the best market price, we will average together our online price quote together with the three invoices submitted by the commenters. We are therefore finalizing a price of $1.357 for the SH092 supply based on the use of this methodology.

Comment: One commenter addressed the proposed update to the price of the INR test strips (SJ055) supply. The commenter stated that the price change would lead to substantial reductions for HCPCS codes G0248 and G0249, and while the commenter agreed that the market price for INR test strips had changed since the item was priced initially 15 years ago, the current direct PE inputs for these codes did not reflect the resources typically required to furnish the services.

Response: We appreciate the additional information submitted by the commenter. Although we are finalizing the price of the INR test strip (SJ055) at the proposed rate of $5.66, we agree that the current direct PE inputs for these services may not reflect the typical resources that they require. For additional details regarding the INR Monitoring codes and refinements to their direct PE inputs, please refer to the code valuation section (II.H) of this final rule.

Comment: One commenter requested that the cytology, preservative and vial, (cytospin) 88108—30ml (SL501) supply should be deleted from the CMS supply database. The commenter stated that this supply is redundant with the cytology, preservative and vial (Preserv-cyt) (SL040) supply and that the quantity of SL040 for CPT code 88108 should be 1 item. The commenter stated that this was an error made in 2014 and in 2015 when CPT code 88108 code was reviewed and urged CMS to correct this error.

Response: After reviewing the supply inputs for CPT code 88108, we agree with the commenter. The SL501 supply appeared in no other CPT codes and did not have a price. We agree that the resources typically required to furnish CPT code 88108 are more accurately described by including 1 quantity of the SL040 supply. We are finalizing this addition to CPT code 88108 and the removal of the SL501 supply from our database.

Comment: One commenter called attention to the fact that there are a number of supply and equipment items that currently do not have a price. The commenter stated that the lack of a price adversely affects the specialties when they use these supply and equipment items since the cost of the item is not being factored into the formula used to determine the PE RVU. The commenter stated that CMS should ensure that all supplies and equipment have a price included in the database in order to facilitate payment for all the resources associated with a service.

Response: We appreciate the extra attention drawn by the commenter to the supply and equipment items currently present in our database that lack a price. We encourage commenters to submit invoices to update the pricing of these supplies and equipment items through the process detailed above.

Comment: One commenter stated that CMS provides no additional payments for drug-coated balloons and bundles those payments within the payments of existing procedures for office-based procedures. The commenter indicated that CMS proposed to package the device costs of drug coated balloons into the costs of the procedures with which the device is utilized, which meant that angioplasty procedures with drug coated balloons and plain balloons will receive the same payment amount. The commenter detailed the clinical benefits of drug coated balloons in angioplasty and requested an alternate payment structure to avoid patient access barriers to this technology.

Response: We appreciate the additional information supplied by the commenter regarding the use of drug coated balloons. We encourage stakeholders to submit comments with additional information when practice patterns for services may change over time, which may lead to the nomination of individual services as potentially misvalued. However, the commenter did not provide specific CPT codes in which these new treatments would be utilized, nor did the commenter supply evidence to indicate that the use of these drug coated balloons would be typical. We also did not receive recommendations from the RUC or other medical specialty groups requesting the addition of drug coated balloons as a new supply item. As a result, we will retain the current direct PE inputs for angioplasty services unless otherwise mentioned in this final rule.

Comment: One commenter stated concerns regarding the need for more accurate pricing of expensive equipment and disposable supplies. The commenter noted that the current pricing of supplies and equipment, based on the voluntary submission of small numbers of invoices, creates the potential for highly biased, non-representative invoices, and makes these cost inputs relatively unreliable. This potential overestimation of resource costs augments the reimbursement disparities between proceduralists and primary care physicians, inappropriately rewards physicians who perform procedures, and provides an improper incentive for overuse of these services. The commenter suggested addressing this issue through subjecting expensive equipment and supplies to fixed discounting of their costs over time.

Response: We agree with the commenter that the methodology used for price updates to new and existing supplies and equipment has the potential to create disparities in resource cost. As we have stated in past rulemaking, such as in the CY 2016 final rule with comment period (80 FR 70896), we do not believe that very small numbers of voluntarily submitted invoices are likely to reflect typical resource costs and create the potential for overestimation of supply and equipment costs. As part of our authority under section 1848(c)(2)(M) of the Act to collect and use information on physicians' services in the determination of relative values under the PFS, which was added to the statute by section 220(a)(1) of the PAMA, we Start Printed Page 52999have initiated a contract to collect data that we hope will facilitate more accurate prices for supplies and equipment. Based on the data collected and additional stakeholder feedback, we may make proposals to update supply and equipment pricing in future rulemaking. We will also consider other suggestions to address the issues involving high cost supplies and equipment, such as the fixed discounting recommended by the commenter.

After consideration of comments received, we are finalizing the updated supply and equipment prices as detailed in Table 16: Invoices Received for Existing Direct PE Inputs.

4. Adjustment to Allocation of Indirect PE for Some Office-Based Services

As we explain in section II.B.2.c.(2) of this final rule, we allocate indirect costs for each code on the basis of the direct costs specifically associated with a code and the greater of either the clinical labor costs or the work RVUs. Indirect expenses include administrative labor, office expense, and all other expenses. For PFS services priced in both the facility and non-facility settings, the difference in indirect PE RVUs between the settings is driven by differences in direct PE inputs for those settings since the other allocator of indirect PE, the work RVU, does not differ between settings. For most services, the direct PE input costs are higher in the nonfacility setting than in the facility setting. As a result, indirect PE RVUs allocated to these services are higher in the nonfacility setting than in the facility setting. When direct PE inputs for a service are very low, however, the allocation of indirect PE RVUs is almost exclusively based on work RVUs, which results in a very small (or no) site of service differential between the total PE RVUs in the facility and nonfacility setting.

Some stakeholders have suggested that for codes in which direct PE inputs for a service are very low, this allocation methodology does not allow for a site of service differential that accurately reflects the relative indirect costs involved in furnishing services in nonfacility settings. Among the services most affected by this anomaly are the primary therapy and counseling services available to Medicare beneficiaries for treatment of behavioral health conditions, including substance use disorders. For example, for the most commonly reported psychotherapy service (CPT code 90834), the difference between the nonfacility and facility PE RVUs is only 0.02 RVUs, which seems unlikely to represent the difference in relative resource costs in terms of administrative labor, office expense, and all other expenses incurred by the billing practitioner for 45 minutes of psychotherapy services when furnished in the office setting versus the facility setting.

We agree with these stakeholders that the site of service differential for these services that is produced by our PE methodology seems unlikely to reflect the relative resource costs for the practitioners furnishing these services in nonfacility settings. For example, we believe the 0.02 RVUs, which translates to approximately $0.72, would be unlikely to reflect the relative administrative labor, office rent, and other overhead involved in furnishing the 45 minute psychotherapy service in a nonfacility setting. Consequently, we believe it would be appropriate to modify the existing methodology for allocating indirect PE RVUs in order to better reflect the relative indirect PE resources involved in furnishing these kinds of services in the nonfacility setting.

In examining the range of services furnished in the nonfacility setting that are most affected by this circumstance, we identified HCPCS codes that describe face-to-face services, have work RVUs greater than zero, and are priced in both the facility and nonfacility setting. From among these codes, we further selected those with the lowest ratio between nonfacility PE RVUs and work RVUs. We selected 0.4 as an appropriate threshold based on several factors, including the range of nonfacility PE RVU to work RVU ratios among the codes identified. Based on these criteria, there were fewer than 50 codes that we identified with a ratio of less than 0.4 nonfacility PE RVUs for each work RVU, most of which are primarily furnished by behavioral health professionals, for a potential modification to our indirect PE allocation methodology.

In considering how to address the anomaly and ensure that an appropriate number of indirect PE RVUs are allocated to these services in the nonfacility setting, we looked at the indirect, nonfacility PE RVU for the most commonly billed physician office visit, CPT code 99213, which is billed by a wide range of physicians and non-physician practitioners under the PFS. We believe that the indirect PE costs allocated to services reported with CPT code 99213, including administrative labor and office rent, would be common for a broad range of physicians and non-physician practitioners across the PFS. We recognize that the services we seek to address are primarily furnished by behavioral health professionals who may be unlikely to incur some of the costs incurred by other practitioners furnishing a broader range of medical services. For instance, a practitioner furnishing a broader range of primary care services likely requires separate office and examination room space, and storage for disposable medical supplies and equipment. Some costs, however, such as those for office staff and records maintenance, would be analogous.

We looked at the relationship between indirect PE and work RVUs for CPT code 99213 as a marker because that is the most commonly and broadly reported PFS code that describes face-to-face office-based services. We compared the relationship between indirect PE and work RVUs for the set of HCPCS codes that we identified using the criteria discussed above and found that for the significant majority of codes, that ratio was at least 0.4 nonfacility PE RVUs for each work RVU. We believe the 0.4 nonfacility PE RVUs can serve as an appropriate marker that appropriately reflects the relative resources involved in furnishing these services.

For the fewer than 50 outlier codes identified using the criteria above, we believe it would be appropriate to establish a minimum nonfacility indirect PE RVU that would be a better reflection the resources involved in furnishing these services. We propose to set the nonfacility indirect PE RVUs for these codes using the indirect PE RVU to work RVU ratio for the most commonly furnished office-based, face-to-face service (CPT 99213) as a marker. Specifically, for each of these outlier codes, we propose to compare the ratio between indirect PE RVUs and work RVUs that result from the preliminary application of the standard methodology to the ratio for the marker code, CPT code 99213. Our proposed change in the methodology would then increase the allocation of indirect PE RVUs to the outlier codes to at least one quarter of the difference between the two ratios. We believe this approach reflects a reasonable minimum allocation of indirect PE RVUs, but we do not currently have empirical data that would be useful in establishing a more precise number.

In developing the proposed PE RVUs for CY 2018, we proposed to implement only one quarter of this proposed minimum value for nonfacility indirect PE for the outlier codes. We recognize that this change in the PE methodology could have a significant impact on the allocation of indirect PE RVUs across all PFS services. In making significant changes to the PE methodology in Start Printed Page 53000previous years, we have implemented such changes using 4 year transitions, based largely on concerns that some specialties experience significant payment reductions with changes in PE relativity, and a transition period allows for a more gradual adjustment for affected practitioners. Under the approach we proposed, we estimate that approximately $40 million, or approximately 0.04 percent of total PFS allowed charges, would shift within the PE methodology for each year of the proposed 4-year transition, including for CY 2018. We also note that we proposed to exclude the codes directly subject to this proposed change from the misvalued code target calculation because the proposed change is a methodological change to address an anomaly produced by our indirect PE allocation process as opposed to a change to address misvalued codes. The PE RVUs displayed in Addendum B on our Web site were calculated with the one quarter of the indirect PE adjustment factor implemented.

The following is a summary of the public comments received on our proposed change to the indirect PE methodology for some office-based services.

Comment: Several commenters supported the CMS proposal. Commenters stated that the proposal would more accurately reflect the resource costs incurred by psychiatrists providing services for patients with mental health and substance use disorders in nonfacility settings. One commenter indicated their support for the commitment of greater resources toward behavioral and mental health services given the ongoing opioid crisis. Commenters were also supportive of the proposal to exclude the codes directly impacted by this change in methodology from the misvalued code target.

Response: We appreciate the support from the commenters for our proposal.

Comment: One commenter disagreed with the CMS proposal. The commenter stated that this change to PE methodology could have a significant impact on the allocation of indirect PE RVUs across all PFS services, with approximately 0.04 percent of the total PFS allowed charges shifting within the PE methodology. The commenter recommended that the proposal should not be finalized until it was discussed through the RUC process, and that the codes in question should be placed on the misvalued code list.

Response: We appreciate the feedback from the commenter on our proposal. We note that the RUC has generally provided recommendations on a routine basis regarding work, work time, and direct PE inputs. We do not believe that placing these codes on the misvalued code list for additional RUC review would serve to address the issues identified in our proposal, as we do not have reason to believe that the work or direct PE inputs assigned to these services are inaccurate. However, we welcome recommendations from the RUC or other interested stakeholders on any aspects of the PFS ratesetting methodology, including elements that have not traditionally been provided such as indirect PE allocation. We believe that CMS receiving public input on potential changes to the methodology is critical and that notice and comment rulemaking is the best way to obtain such input. We do not agree that changes in the methodology need to be developed or discussed as part of the RUC process prior to being implemented through notice and comment rulemaking.

After consideration of comments received, we are finalizing our proposed change to the indirect PE methodology for some office-based services.

C. Determination of Malpractice Relative Value Units (RVUs)

1. Overview

Section 1848(c) of the Act requires that each service paid under the PFS be composed of three components: Work, PE, and malpractice (MP) expense. As required by section 1848(c)(2)(C)(iii) of the Act, beginning in CY 2000, MP RVUs are resource based. Section 1848(c)(2)(B)(i) of the Act also requires that we review, and if necessary adjust, RVUs no less often than every 5 years. In the CY 2015 PFS final rule with comment period, we implemented the third review and update of MP RVUs. For a comprehensive discussion of the third review and update of MP RVUs see the CY 2015 proposed rule (79 FR 40349 through 40355) and final rule with comment period (79 FR 67591 through 67596).

To determine MP RVUs for individual PFS services, our MP methodology is composed of three factors: (1) Specialty-level risk factors derived from data on specialty-specific MP premiums incurred by practitioners, (2) service level risk factors derived from Medicare claims data of the weighted average risk factors of the specialties that furnish each service, and (3) an intensity/complexity of service adjustment to the service level risk factor based on either the higher of the work RVU or clinical labor RVU. Prior to CY 2016, MP RVUs were only updated once every 5 years, except in the case of new and revised codes.

As explained in the CY 2011 PFS final rule with comment period (75 FR 73208), MP RVUs for new and revised codes effective before the next 5-year review of MP RVUs were determined either by a direct crosswalk from a similar source code or by a modified crosswalk to account for differences in work RVUs between the new/revised code and the source code. For the modified crosswalk approach, we adjusted (or scaled) the MP RVU for the new/revised code to reflect the difference in work RVU between the source code and the new/revised work RVU (or, if greater, the difference in the clinical labor portion of the fully implemented PE RVU) for the new code. For example, if the proposed work RVU for a revised code was 10 percent higher than the work RVU for its source code, the MP RVU for the revised code would be increased by 10 percent over the source code MP RVU. Under this approach, the same risk factor was applied for the new/revised code and source code, but the work RVU for the new/revised code was used to adjust the MP RVUs for risk.

In the CY 2016 PFS final rule with comment period (80 FR 70906 through 70910), we finalized a policy to begin conducting annual MP RVU updates to reflect changes in the mix of practitioners providing services (using Medicare claims data), and to adjust MP RVUs for risk, intensity and complexity (using the work RVU or clinical labor RVU). We also finalized a policy to modify the specialty mix assignment methodology (for both MP and PE RVU calculations) to use an average of the 3 most recent years of data instead of a single year of data. Under this approach, for new and revised codes, we generally assign a specialty risk factor to individual codes based on the same utilization assumptions we make regarding the specialty mix we use for calculating PE RVUs and for PFS budget neutrality. We continue to use the work RVU or clinical labor RVU to adjust the MP RVU for each code for intensity and complexity. In finalizing this policy, we stated that the specialty-specific risk factors would continue to be updated through notice and comment rulemaking every 5 years using updated premium data, but would remain unchanged between the 5-year reviews.

In CY 2017, we finalized the eighth GPCI update, which reflected updated MP premium data. We did not propose to use the updated MP premium data to propose updates for CY 2017 to the specialty risk factors used in the calculation of MP RVUs because it was inconsistent with the policy we previously finalized in the CY 2016 PFS Start Printed Page 53001final rule with comment period, whereby we indicated that the specialty-specific risk factors would continue to be updated through notice and comment rulemaking every 5 years using updated premium data, but would remain unchanged between the 5-year reviews. However, we solicited comment on whether we should consider doing so, perhaps as early as for CY 2018, prior to the fourth review and update of MP RVUs that must occur no later than CY 2020. After consideration of the comments received, we stated that we would consider the possibility of using the updated MP data to update the specialty risk factors used in the calculation of the MP RVUs prior to the next 5-year update in future rulemaking (81 FR 80191 through 80192). Since MP premium data are used to update both the MP GPCIs and the MP RVUs, going forward we believe it would be logical to align the update of MP premium data used to determine the MP RVUs with the update of the MP GPCI. Section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust the GPCIs at least every 3 years. The next review of the GPCIs must occur by CY 2020.

In the CY 2018 PFS proposed rule, we proposed to use the most recent data for the MP RVUs for CY 2018 and to align the update of MP premium data and MP GPCIs to once every 3 years. We sought comment on these proposals, and we also sought comment on methodologies and sources that we might use to improve the next update of MP premium data.

2. Methodology for the Revision of Resource Based Malpractice RVUs

a. General Discussion

The proposed MP RVUs were calculated based on updated malpractice premium data obtained from state insurance rate filings by a CMS contractor. The methodology used in calculating the proposed CY 2018 review and update of resource based MP RVUs largely paralleled the process used in the CY 2015 update. The calculation requires using information on specialty-specific malpractice premiums linked to specific services based upon the relative risk factors of the various specialties that furnish a particular service. Because malpractice premiums vary by state and specialty, the malpractice premium information must be weighted geographically and by specialty. Accordingly, the proposed MP RVUs were based upon four data sources: CY 2014 and CY 2015 malpractice premium data; CY 2016 and 2017 Medicare payment and utilization data; CY 2017 GPCIs, and CY 2018 proposed work and clinical labor RVUs.

Similar to the previous update, we calculated the proposed MP RVUs using specialty-specific malpractice premium data because they represent the actual expense incurred by practitioners to obtain malpractice insurance. We obtained malpractice premium data exclusively from the most recently available data published in the 2014 and 2015 Market Share Reports accessed from the National Association of Insurance Commissioners (NAIC) Web site. We used information obtained from malpractice insurance rate filings with effective dates in 2014 and 2015. These were the most current data available during our data collection process.

We collected malpractice insurance premium data from all 50 States, the District of Columbia, and Puerto Rico. Rate filings were not available in American Samoa, Guam or the Virgin Islands. Premiums were for $1 million/$3 million, mature, claims-made policies (policies covering claims made, rather than those covering services furnished, during the policy term). A $1 million/$3 million liability limit policy means that the most that would be paid on any claim is $1 million and the most that the policy would pay for claims over the timeframe of the policy is $3 million. We made adjustments to the premium data to reflect mandatory surcharges for patient compensation funds (funds to pay for any claim beyond the statutory amount, thereby limiting an individual physician's liability in cases of a large suit) in states where participation in such funds is mandatory.

We included premium information for all physician and NPP specialties, and all risk classifications available in the collected rate filings. Although we collected premium data from all states, the District of Columbia, and Puerto Rico, not all specialties had distinct premium data in the rate filings from all states. Additionally, for some specialties, MP premiums were not available from the rate filings in any state. Therefore, for specialties for which there were not premium data for at least 35 states, and specialties for which there were not distinct premium data in the rate filings, we crosswalked the specialty to a similar specialty, either conceptually or by available premium data, for which we did have sufficient and reliable data.

For example, for radiation oncology, data were only available from 23 states, and therefore this specialty does not meet our 35-state threshold, which determines whether or not a specialty is deemed to have premium data sufficient to construct a unique risk factor. However, based on the 23 states' worth of rate filings for radiation oncology, the resource costs for the premiums suggests a similar, though slightly lesser average than that of the premiums for diagnostic radiology. We developed the proposed MP RVUs for radiation oncology by crosswalking the risk factor for diagnostic radiology as a similar specialty with similar premium data. We sought comment as to the appropriateness of this and the other crosswalks used in developing MP RVUs.

For the proposed CY 2018 MP RVU update, sufficient and reliable premium data were available for 43 specialty types, representing over 76 percent of allowed Medicare PFS services, which we used to develop specialty specific malpractice risk factors.

b. Steps for Calculating Malpractice RVUs

Calculation of the proposed MP RVUs conceptually follows the specialty-weighted approach used in the CY 2015 final rule with comment period (79 FR 67591). The specialty-weighted approach bases the MP RVUs for a given service upon a weighted average of the risk factors of all specialties furnishing the service. This approach ensures that all specialties furnishing a given service are accounted for in the calculation of the MP RVUs. The steps for calculating the proposed MP RVUs are described below.

Step (1): Compute a preliminary national average premium for each specialty.

Insurance rating area malpractice premiums for each specialty are mapped to the county level. The specialty premium for each county is then multiplied by its share of the total U.S. population (from the U.S. Census Bureau's 2014 American Community Survey (ACS) estimates). This is in contrast to the method used for creating national average premiums for each specialty in the 2015 update; in that update, specialty premiums were weighted by the total RVU per county, rather than by the county share of the total U.S. population. We refer readers to the CY 2016 PFS final rule with comment period (80 FR 70909) for a discussion of why we have adopted a weighting method based on a share of the total U.S. population. This calculation is then divided by the average MP GPCI across all counties for each specialty to yield a normalized national average premium for each specialty. The specialty premiums are normalized for geographic variation so that the locality cost differences (as Start Printed Page 53002reflected by the GPCIs) would not be counted twice. Without the geographic variation adjustment, the cost differences among fee schedule areas would be reflected once under the methodology used to calculate the MP RVUs and again when computing the service specific payment amount for a given fee schedule area.

Step (2): Determine which premium class(es) to use within each specialty.

Some specialties had premium rates that differed for surgery, surgery with obstetrics, and non-surgery. These premium classes are designed to reflect differences in risk of professional liability and the cost of malpractice claims if they occur. To account for the presence of different classes in the malpractice premium data and the task of mapping these premiums to procedures, we calculated distinct risk factors for surgical, surgical with obstetrics, and nonsurgical procedures. However, the availability of data by surgery and non-surgery varied across specialties. Consistent with the CY 2015 MP RVU update, because no single approach accurately addressed the variability in premium class among specialties, we employed several methods for calculating average premiums by specialty. These methods are discussed below.

(a) Substantial Data for Each Class: For 10 out of 86 specialties, we determined that there were sufficient data for surgery and non-surgery premiums, as well as sufficient differences in rates between classes. Therefore, we calculated a national average surgical premium and non-surgical premium. We noted that, unlike in the CY 2015 MP RVU update, for CY 2018, there were no specialties that fell under the “unspecified dominates” specialty/surgery class scenario; therefore, we omitted that surgical class category.

(b) Major Surgery Dominates: For 9 surgical specialties, rate filings that included non-surgical premiums were relatively rare. For most of these surgical specialties, the rate filing did not include an “unspecified” premium. When it did, the unspecified premium was lower than the major surgery rate. For these surgical specialties, we calculated only a surgical premium and used the premium for major surgery for all procedures furnished by this specialty.

(c) Blend All Available: For the remaining specialties, there was wide variation across the rate filings in terms of whether or not premium classes were reported and which categories were reported. Because there was no clear strategy for these remaining specialties, we blended the available rate information into one general premium rate. For these specialties, we developed a weighted average “blended” premium at the national level, according to the percentage of work RVUs correlated with the premium classes within each specialty. For example, the surgical premiums for a given specialty were weighted by that specialty's work RVUs for surgical services; the nonsurgical premiums were weighted by the work RVUs for non-surgical services and the unspecified premiums were weighted by all work RVUs for the specialty type.

Step (3): Calculate a risk factor for each specialty.

The relative differences in national average premiums between specialties are expressed in our methodology as a specialty risk factor. These risk factors are an index calculated by dividing the national average premium for each specialty by the national average premium for the specialty with the lowest premiums for which we had sufficient and reliable data, allergy and immunology. For specialties with sufficient surgical and non-surgical premium data, we calculated both a surgical and non-surgical risk factor. For specialties with rate filings that distinguished surgical premiums with obstetrics, we calculated a separate surgical with obstetrics risk factor. For all other specialties, we calculated a single risk factor and applied the specialty risk factor to both surgery and non-surgery services.

We noted that for determining the risk factor for suppliers of TC-only services in the CY 2015 update, we updated the premium data for independent diagnostic testing facilities (IDTFs) that we used in the CY 2010 update. These data were obtained from a survey conducted by the Radiology Business Management Association (RBMA) in 2009; we ultimately used these data to calculate an updated TC specialty risk factor. We applied the updated TC specialty risk factor to suppliers of TC-only services. In the CY 2015 final rule with comment period (79 FR 67595), RBMA voluntarily submitted updated MP premium information collected from independent diagnostic testing facilities (IDTFs) in 2014, and requested that we use the data for calculating the CY 2015 MP RVUs for TC services. We declined to utilize the data and stated that we believe further study is necessary and we would consider this matter and propose any changes through future rulemaking. We believed that data for a broader set of technical component services are needed, and sought comment on appropriate, comparable data sources for such information. We also sought comment on whether the data for IDTFs are comparable and appropriate as a proxy for the broader set of TC services. We endeavor to, in the next update of specialty risk factors, collect more data across a broader set of the technical component services, not just for radiology (as is currently reflected in the RBMA data), but data for services performed by other non-physician practitioners including cytotechnologists, and cardiovascular technologists. In the interim, for CY 2018, we proposed to assign a TC risk factor of 1.0, which corresponds to the lowest physician specialty risk factor.

We assigned the risk factor of 1.0 to the TC services because we did not have comparable professional liability premium data for the full range of clinicians that furnish these services. In lieu of comprehensive, comparable data, we used 1.0 as the default minimum risk factor, though we sought information on the best available data sources for use in the next update, as well as empirical information that would support assignment of an alternative risk factor for these services.

Step (4): Calculate malpractice RVUs for each HCPCS code.

Resource-based MP RVUs were calculated for each HCPCS code that has work or PE RVUs. The first step was to identify the percentage of services furnished by each specialty for each respective HCPCS code. This percentage was then multiplied by each respective specialty's risk factor as calculated in Step 3. The products for all specialties for the HCPCS code were then added together, yielding a specialty-weighted service specific risk factor reflecting the weighted malpractice costs across all specialties furnishing that procedure. The service specific risk factor was multiplied by the greater of the work RVU or PE clinical labor index for that service to reflect differences in the complexity and risk-of-service between services.

Low volume service codes: As we discussed in section II.B. of this final rule, we proposed to use a list of expected specialties instead of the claims-based specialty mix for low volume services in order to address stakeholder concerns about the year to year variability in PE and MP RVUs for low volume services. We solicited comments on the proposal to use these service-level overrides to determine the specialty for low volume procedures, as well as on the list of overrides itself.

The proposed list of codes and expected specialties is available on our Web site under downloads for the CY 2018 PFS proposed rule at http://www.cms.gov/​Medicare/​Medicare-Fee-Start Printed Page 53003for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html. In previous MP RVU updates, as discussed in the CY 2015 final rule with comment period (79 FR 40354), we assigned specialty for low volume services based on dominant specialty. As discussed in the CY 2012 final rule with comment period (76 FR 73187 through 73189), we applied an additional list of service-level overrides for purposes of calculating MP RVUs for a number of cardiothoracic surgery codes. Therefore, we noted that there are certain codes for which we have previously applied expected specialty overrides for purposes of calculating MP RVUs based on assumptions regarding low Medicare volume. Because we are consolidating policies for low volume service expected specialty overrides into a single list for PE and MP, and because we did not believe that there is a reason to assume different specialties for purposes of calculating PE RVUs than for MP RVUs for any particular code, we also proposed to assign the specialty mix solely based on the claims data for any code that does not meet the low volume threshold of 99 allowed services or fewer in the previous year, for the purposes of calculating MP RVUs.

Given that we now annually recalibrate MP RVUs based on claims data, and in light of our proposed introduction of the service-level specialty override for low volume services, we believed that there would no longer be a need to apply service-level MP crosswalks in order to assign a specialty-mix risk factor. Contingent on finalizing this proposal, we also proposed to eliminate general use of an MP-specific specialty-mix crosswalk for new and revised codes. However, we would continue to consider, in conjunction with annual recommendations, specific recommendations from the public and the RUC regarding specialty mix assignments for new and revised codes, particularly in cases where coding changes are expected to result in differential reporting of services by specialty, or where the new or revised code is expected to be low-volume. Absent such information, we would derive the specialty mix assumption for the first year for a new or revised code from the specialty mix used for purposes of ratesetting. In subsequent years when claims data are available, we would assign the specialty based on claims data unless the service does not exceed the low volume threshold (99 or fewer allowed services). If the service is low volume, we would assign the expected specialty, establishing a new expected specialty through rulemaking as needed, which is consistent with our approach for developing PE RVUs.

Step (5): Rescale for budget neutrality.

The statute requires that changes to fee schedule RVUs must be budget neutral. Thus, the last step is to adjust for relativity by rescaling the proposed MP RVUs so that the total proposed resource based MP RVUs are equal to the total current resource based MP RVUs scaled by the ratio of current aggregate MP and work RVUs. This scaling is necessary in order to maintain the work RVUs for individual services from year to year while also maintaining the overall relationship among work, PE, and MP RVUs.

Additional information on our proposed methodology for updating the MP RVUs may be found in our contractor's report, “Interim Report on Malpractice RVUs for the CY 2018 PFS Proposed Rule,” which is available on the CMS Web site under the downloads section of the CY 2018 PFS proposed rule located at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

We sought comments on these proposals for calculating the MP RVUs for CY 2018. The following is a summary of the public comments received on our proposals and our responses:

Comment: Several commenters, including the RUC, expressed concerns about the proposed valuation changes, which they believe were not indicative of what is occurring in the professional liability premium market. The RUC stated that, generally, the market has not reflected significant changes in the past several years. The commenters stated that the premium data collected for this update were insufficient, and many noted changes in specialty premiums and risk factors compared to the last update as particularly concerning. Some commenters expressed concern that CMS was unable to obtain sufficient data from all states for common specialties and questioned the validity of the data being used to propose new MP RVUs for CY 2018. The RUC stated that while the crosswalks proposed by CMS appear to be appropriate, they were concerned with the data collection process, and recommended that rather than crosswalking, CMS should acquire adequate premium data. Several commenters, including the RUC, specifically expressed concern about the proposed Cardiology surgical risk factor. The commenters disagreed with the risk factor for Cardiology being classified as a blend rather than split into distinct surgical and non-surgical risk factors as it had been in the past, and recommended that CMS use the Cardiac Surgery Risk Factor as a more appropriate crosswalk to establish a Cardiology surgical risk factor or otherwise maintain the existing risk factors while additional data are gathered. Several commenters, including the RUC, stated that CMS should consider delaying implementation of new premium data until CMS has the opportunity to seek additional data to avoid blending risk factors and crosswalking. While some commenters were generally supportive of more frequent updates of MP premium data and aligning updates of MP RVUs with the triennial MP GPCI updates, they stated that given concerns about accuracy and flaws in the methodology for calculating MP risk factors, that CMS should not accelerate the schedule for updating MP RVUs based on the MP GPCI data at this time. A few commenters recommended that CMS not modify the current 5-year cycle of updating the MP premium data used in the MP RVU calculations to every 3 years; one commenter stated that more frequent updates will cause greater variation in the MP RVU calculations.

Response: We agree that some of the changes are substantial compared to the last update and merit further consideration. However, we believe it is important to delineate the precise cause of these changes, as the shifts were primarily driven by changes in how the rate filings were classified by specialty, rather than inherent deficiencies in the raw rate filing data. We collected malpractice premium data from the NAIC's System for Electronic Rate and Form Filing (SERFF) Access Interface, which is a standardized data source that includes many rate filings from the same insurers that were used in the CY 2015 MP RVU update, as well as additional data. Using SERFF enabled us to collect malpractice data for 32 states. For states that do not participate in the SERFF Access Interface, we contacted state departments of insurance and requested medical malpractice rate filings. Using these methods, we were able to collect a total of 7,212 raw rate filings from all 50 states, the District of Columbia, and Puerto Rico. This is an improvement on the CY 2015 update, for which 3,473 raw rate filings were collected. We note that the number of specialties with sufficient data in this proposed update is very similar to prior years. In the CY 2010 update, sufficient data were found for 44 specialties. In the CY 2015 update, sufficient data were found for 41 specialties, and we found sufficient Start Printed Page 53004data for 43 specialties in the proposed CY 2018 update. Overall, there is very little change in the total number of specialties with sufficient data.

For the the comments that noted differences in which specialties had sufficient data this year, compared to the CY 2015 update, we have determined that this is due to differences in the codes that insurance issuers use to identify the physician speciality on the descriptions on the raw rate filings and/or how these raw data were categorized into CMS specialties. CMS specialty coding information is not available on the raw rate filings, and Insurance Services Office (ISO) codes are only sometimes present. Thus, it is always necessary to use a crosswalk to map malpractice premium data to the CMS specialty classifications. This means that changes in malpractice insurers' premium coding practices or the rate filing categorization process can easily lead to shifts in the number of rate filings across related specialties, which in turn may skew the weighting of the data, which is what we observed in the CY 2018 proposed update.

The Cardiology specialty is illustrative of this issue. In the last update, Cardiology had a surgical risk factor of 6.98 and a non-surgical risk factor of 1.93. In this update, Cardiology did not have sufficient data to compute separate surgical and non-surgical risk factors and was proposed to receive a blended risk factor of 1.90. This change was understandably concerning to several commenters. The reason that Cardiology did not have sufficient data to compute a surgical risk factor was directly due to how the raw rate filings were categorized rather than the data availability itself. In the past, some rate filings that referred to cardiac surgery and interventional cardiology in their specialty descriptions were categorized as Specialty 06: Cardiology, but comparable filings for this year's proposal were categorized as Specialty 78: Cardiac Surgery and C3: Interventional Cardiology. As several commenters suggested, it is possible to mitigate this problem by assigning Cardiology to receive the surgical risk factor of Cardiac Surgery. In the long-term, we understand commenters' concerns and in order to alleviate this issue, we intend to revisit how we categorize all rate filings by specialty. This is particularly important because some physicians may not have updated their specialty codes despite performing surgical and interventional cardiac procedures, and we want to ensure that their rates are properly adjusted if they are still registered as part of the general Cardiology specialty. We also understand that this issue may have occurred for other groups of related specialties and intend to do a comprehensive assessment in the future to avoid potential discrepancies such as those previously described. For these reasons, we are not finalizing our proposal to use the most recent data for the CY 2018 MP RVUs and to align the update of MP premium data and MP GPCIs to once every 3 years. We recognize that, going forward, we need to resolve differences regarding the variances in the descriptions on the raw rate filings as well as how these raw data were categorized to conform with the CMS specialties.

Comment: One commenter expressed concern that the average premiums and risk factors for Interventional Cardiology were not proposed. The Interventional Cardiology specialty code went into effect in January 2015, so the commenter urged CMS to establish risk factors for this specialty.

Response: Because the malpractice rate filings collected for this update were from 2014 and 2015, very little data were available for Interventional Cardiology. Until more data are available, it will be necessary to crosswalk this specialty to receive average premiums and risk factors from cardiac specialties that carry similar levels of risk.

Comment: A few commenters expressed concern about a lack of transparency in the proposed changes to the determination of MP RVUs, and some stated that stakeholders were at a disadvantage and unable to respond to the changes and assumptions used in the proposed update to MP RVUs.

Response: We would like to note that the methodology as well as the steps for calculating MP RVUs were outlined in the preamble text to the proposed rule, and are also included in this final rule; we sought comments on these proposals in the proposed rule. The documentation included in the Downloads section on the CMS Web site support and provide additional technical details and information used in establishing the proposed policies. To the extent that the supporting documentation is material to the proposals we made in the proposed rule, we believe they are within the scope of the rule. Information that provides more context and understanding of the data, and how the data is collected, which can be found in the contractor's report, is material to the rulemaking process, so when stakeholders provide concerns about the supporting documentation we consider those concerns as comments in response to the proposals. We also note that this has been our longstanding process.

Comment: Several commenters, including the RUC, stated that CMS should not crosswalk non-physician specialties to the lowest physician risk factor specialty for which it has premium rates, which is Allergy Immunology. The commenters stated that CMS should collect premium data for the non-physician specialties or otherwise use the data from the AMA's Physician Practice Expense Information Survey from 2006. The commenters expressed that this crosswalk would likely serve as an overestimate of professional liability for non-physician specialties.

Response: We thank commenters for their feedback, and would like to clarify that we did collect whatever data was available for non-physician specialties during our data collection process. This enabled us to find sufficient data for one major non-physician specialty—Nurse Practitioner, which received a blended risk factor of 1.95. Additionally, we note that not all non-physician specialties were mapped to Allergy/Immunology. For example, Certified Nurse Midwife was mapped to Obstetrics and Gynecology, and Certified Registered Nurse Anesthesiologist was mapped to Anesthesiology, which both reflect higher risk than Allergy/Immunology. We revisited the malpractice rate filings we collected for other non-physician specialties, and although they did not meet the 35-state threshold for sufficient data to compute specialty premiums and risk factors, some of the data we do have indicate premiums and risk factors that are close to that of Allergy/Immunology. Therefore, we believe that the proposed crosswalks were reasonable. However, we are not finalizing our proposal.

Comment: One commenter highlighted that the Sleep Medicine specialty did not have sufficient data in this proposed update and was crosswalked to General Practice, which the commenter did not believe was appropriate.

Response: We appreciate the commenter's feedback, and note that this is the same crosswalk that was used in the last update. Additionally, while the surgical risk factor decreases for General Practice in the proposed update, the non-surgical factor increased. We revisited the malpractice rate filings we collected for Sleep Medicine and, although they did not meet the 35-state threshold for sufficient data to compute specialty premiums and risk factors, the data we do have indicate premiums and risk factors that are close to that of General Practice. Start Printed Page 53005Therefore, we believe that the proposed crosswalk was reasonable. However, we are not finalizing our proposal.

Comment: A few specialty societies expressed support for the proposed crosswalks as an appropriate course of action given the lack of available data for most non-physician specialties. One commenter expressed concern that insufficient data was found for Hospice and Palliative Care and it was mapped to Allergy/Immunology. Another commenter expressed support for crosswalking Certified Registered Nurse Anesthesiologist (CRNA) to Anesthesiology, though they question whether Anesthesiology Assistant should have been crosswalked the same way.

Response: We appreciate the commenters' feedback and support. We reviewed the malpractice rate filings that were collected for Hospice and Palliative Care, and although they did not meet the 35-state threshold for sufficient data to compute specialty premiums and risk factors, the data we do have indicate premiums and risk factors that are close to Allergy/Immunology; we also note that insufficient data for this specialty were found in the last update and it was previously crosswalked to Allergy/Immunology. We also reviewed the malpractice rate filings that were collected for Anesthesiology Assistant and similarly, although they did not meet the threshold for sufficient data, the data we do have indicate premium and risk factors that are close to that of Anesthesiology. Therefore, we believe that the proposed crosswalks were reasonable. However, we are not finalizing our proposal.

Comment: A few commenters, including the RUC, questioned whether the 35-state threshold for rate filing data was too high, and suggested that fewer specialties would need to be crosswalked to receive premiums and risk factors from other specialties if that requirement were lowered or removed.

Response: While we agree that lowering the threshold would allow more specialties to receive dedicated premiums and risk factors, we believe that lowering the 35 state threshold would have a direct trade-off with the accuracy and the reliability of the results. Removing or lowering the threshold would increase the likelihood that the resulting premiums and risk factors could fluctuate due to outliers. Additionally, the 35-state threshold is consistent with the past updates to MP RVUs.

Comment: A few commenters urged CMS to use work RVUs instead of regional population counts to weight geographic differences to calculate national average premiums.

Response: We thank the commenters for their feedback, and note this population weighting refinement to the MP RVU methodology was issued through notice and comment rulemaking in the CY 2016 PFS final rule with comment period (80 FR 70909 through 70910), and there were no additional proposals with regard to this matter for CY 2018.

Comment: One commenter recommended that CMS use the phrase “Family Medicine” rather than “Family Practice” on the basis that the latter is considered outdated.

Response: We appreciate the commenter's feedback. We did not propose changes to the specialty nomenclature; however, we will consider this in future updates.

Comment: A commenter requested that we add HCPCS codes 92992 and 92993 to the list of invasive cardiology procedures classified as surgery for purposes of assigning service level risk factors because cardiac catheterization and angioplasty procedures are similar to surgical procedures for the purpose of establishing MP premium rates and risk factors.

Response: HCPCS codes 92992 and 92993 are contractor-priced codes, for which the Medicare Administrative Contractors (MACs) establish RVUs and payment amounts. Therefore, we are not adding HCPCS codes 92992 and 92993 to the “Invasive Cardiology Outside of Surgical Range” list.

Comment: Several commenters, including the RUC, were supportive of the proposal to override claims data for low volume services with an expected specialty for both the PE RVU, and MP RVU valuation process. The commenters also recommended that CMS use the expected specialty overrides lists for codes with no Medicare volume for a given year, as well as low volume codes.

Response: We thank commenters for their support. We refer commenters to section II.B. of this final rule for further discussion of low volume service codes.

After consideration of the comments received, we are not finalizing our proposal to use the most recent data for the CY 2018 MP RVUs and to align the update of MP premium data and MP GPCIs to once every 3 years. Similar to CY 2017, the CY 2018 MP RVUs will continue to be based on the premium data that was collected for the CY 2015 MP RVU update. For CY 2018, the MP RVUs will be calculated based on the existing specialty risk factors (the same risk factors that were used to calculate the CY 2017 MP RVUs); these specialty risk factors are shown in the CY 2018 Final Rule Malpractice Risk Factors and Premium Amounts by Specialty file located on the CMS Web site under the downloads section of the CY 2018 PFS final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

For low volume service codes, we thank the commenters for their support, and we are finalizing the proposal to use a list of expected specialties, instead of a claims-based specialty mix, for low volume, which also includes no volume codes, and to apply these overrides for both PE and MP. We believe that this will simplify the implementation of service-level overrides for PE and MP, and will also address stakeholder concerns about year-to-year variability for low volume services. We refer readers to section II.B. of this final rule for further discussion regarding the low volume service codes.

We note that the next MP update must occur by CY 2020. We continue to believe that updating the MP premium data on a more frequent basis would enable the resulting premiums and RVUs to better reflect market trends in malpractice insurance for different specialties. In principle, more frequent updates are optimal, and we will consider this in future rulemaking.

Many of the commenters expressed concerns regarding the sufficiency of the data. As previously explained, this is not a matter of a lack of sufficient or robust data, but an issue regarding how the rate filings are being classified by specialty. We re-examined the data and after further review, we recognize that going forward we need to resolve differences regarding variances in the descriptions on the raw rate filings as well as how these raw data were categorized to conform with the CMS specialties. Understanding that this is a driver of the fluctuations that were reflected in the updated MP RVUs that we proposed, moving forward we will be able to prioritize reconciling the coding changes and categorizations in the raw rate filings in order to avoid data fluctuations between updates that are not representative of the actual data. We thank the commenters for their detailed feedback, and will continue to take it into consideration as we work to make the MP RVUs as accurate as possible for all specialties. We also note that a few commenters noted concerns regarding potential errors in the proposed MP RVUs for specific codes as a result of the proposed updated specialty risk factors; however, since we are not finalizing those MP RVUs based on the proposed updated specialty risk Start Printed Page 53006factors, we are not responding to those comments in this final rule.

The resource based MP RVUs for CY 2018 are shown in Addendum B, which is available on the CMS Web site under the downloads section of the CY 2018 PFS final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​index.html.

C. Medicare Telehealth Services

1. Billing and Payment for Telehealth Services

Several conditions must be met for Medicare to make payments for telehealth services under the PFS. The service must be on the list of Medicare telehealth services and meet all of the following additional requirements:

  • The service must be furnished via an interactive telecommunications system.
  • The service must be furnished by a physician or other authorized practitioner.
  • The service must be furnished to an eligible telehealth individual.
  • The individual receiving the service must be located in a telehealth originating site.

When all of these conditions are met, Medicare pays a facility fee to the originating site and makes a separate payment to the distant site practitioner furnishing the service.

Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth services to include professional consultations, office visits, office psychiatry services, and any additional service specified by the Secretary, when furnished via a telecommunications system. We first implemented this statutory provision, which was effective October 1, 2001, in the CY 2002 PFS final rule with comment period (66 FR 55246). We established a process for annual updates to the list of Medicare telehealth services as required by section 1834(m)(4)(F)(ii) of the Act in the CY 2003 PFS final rule with comment period (67 FR 79988).

As specified at § 410.78(b), we generally require that a telehealth service be furnished via an interactive telecommunications system. Under § 410.78(a)(3), an interactive telecommunications system is defined as multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication between the patient and distant site physician or practitioner.

Telephones, facsimile machines, and stand-alone electronic mail systems do not meet the definition of an interactive telecommunications system. An interactive telecommunications system is generally required as a condition of payment; however, section 1834(m)(1) of the Act allows the use of asynchronous “store-and-forward” technology when the originating site is part of a federal telemedicine demonstration program in Alaska or Hawaii. As specified in § 410.78(a)(1), asynchronous store-and-forward is the transmission of medical information from an originating site for review by the distant site physician or practitioner at a later time.

Medicare telehealth services may be furnished to an eligible telehealth individual notwithstanding the fact that the practitioner furnishing the telehealth service is not at the same location as the beneficiary. An eligible telehealth individual is an individual enrolled under Part B who receives a telehealth service furnished at a telehealth originating site.

Practitioners furnishing Medicare telehealth services are reminded that these services are subject to the same non-discrimination laws as other services, including the effective communication requirements for persons with disabilities of section 504 of the Rehabilitation Act of 1973 and section 1557 of the Affordable Care Act, as well as and language access for persons with limited English proficiency, as required under Title VI of the Civil Rights Act of 1964 and section 1557 of the Affordable Care Act. For more information, see http://www.hhs.gov/​ocr/​civilrights/​resources/​specialtopics/​hospitalcommunication.

Practitioners furnishing Medicare telehealth services submit claims for telehealth services to the Medicare Administrative Contractors (MACs) that process claims for the service area where their distant site is located. Section 1834(m)(2)(A) of the Act requires that a practitioner who furnishes a telehealth service to an eligible telehealth individual be paid an amount equal to the amount that the practitioner would have been paid if the service had been furnished without the use of a telecommunications system.

Originating sites, which can be one of several types of sites specified in the statute where an eligible telehealth individual is located at the time the service is being furnished via a telecommunications system, are paid a facility fee under the PFS for each Medicare telehealth service. The statute specifies both the types of entities that can serve as originating sites and the geographic qualifications for originating sites. For geographic qualifications, our regulation at § 410.78(b)(4) limits originating sites to those located in rural health professional shortage areas (HPSAs) or in a county that is not included in a metropolitan statistical area (MSA).

Historically, we have defined rural HPSAs to be those located outside of MSAs. Effective January 1, 2014, we modified the regulations regarding originating sites to define rural HPSAs as those located in rural census tracts as determined by the Federal Office of Rural Health Policy of the Health Resources and Services Administration (HRSA) (78 FR 74811). Defining “rural” to include geographic areas located in rural census tracts within MSAs allows for broader inclusion of sites within HPSAs as telehealth originating sites. Adopting the more precise definition of “rural” for this purpose expands access to health care services for Medicare beneficiaries located in rural areas. HRSA has developed a Web site tool to provide assistance to potential originating sites to determine their geographic status. To access this tool, see our Web site at https://www.cms.gov/​Medicare/​Medicare-General-Information/​Telehealth/​index.html.

An entity participating in a federal telemedicine demonstration project that has been approved by, or received funding from, the Secretary as of December 31, 2000 is eligible to be an originating site regardless of its geographic location.

Effective January 1, 2014, we also changed our policy so that geographic status for an originating site would be established and maintained on an annual basis, consistent with other telehealth payment policies (78 FR 74400). Geographic status for Medicare telehealth originating sites for each calendar year is now based upon the status of the area as of December 31 of the prior calendar year.

For a detailed history of telehealth payment policy, see 78 FR 74399.

2. Adding Services to the List of Medicare Telehealth Services

As noted previously, in the CY 2003 PFS final rule with comment period (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 with an ongoing opportunity to submit requests for adding services, which are then reviewed by us. Under this process, we assign any submitted request to make additions to the list of telehealth services to one of two categories. Revisions to the criteria that we use to review requests in the second category were finalized in the CY 2012 Start Printed Page 53007PFS final rule with comment period (76 FR 73102). The two categories are:

  • Category 1: Services that are similar to professional consultations, office visits, and office psychiatry services that are currently on the list of telehealth services. In reviewing these requests, we look for similarities between the requested and existing telehealth services for the roles of, and interactions among, the beneficiary, the physician (or other practitioner) at the distant site and, if necessary, the telepresenter, a practitioner who is present with the beneficiary in the originating site. We also look for similarities in the telecommunications system used to deliver the service; for example, the use of interactive audio and video equipment.
  • 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 service is accurately described by the corresponding code when furnished via telehealth and whether the use of a telecommunications system to furnish the service produces demonstrated clinical benefit to the patient. Submitted evidence should include both a description of relevant clinical studies that demonstrate the service furnished by telehealth to a Medicare beneficiary improves the diagnosis or treatment of an illness or injury or improves the functioning of a malformed body part, including dates and findings, and a list and copies of published peer reviewed articles relevant to the service when furnished via telehealth. Our evidentiary standard of clinical benefit does not include minor or incidental benefits.

Some examples of clinical benefit include the following:

  • Ability to diagnose a medical condition in a patient population without access to clinically appropriate in-person diagnostic services.
  • Treatment option for a patient population without access to clinically appropriate in-person treatment options.
  • Reduced rate of complications.
  • Decreased rate of subsequent diagnostic or therapeutic interventions (for example, due to reduced rate of recurrence of the disease process).
  • Decreased number of future hospitalizations or physician visits.
  • More rapid beneficial resolution of the disease process treatment.
  • Decreased pain, bleeding, or other quantifiable symptom.
  • Reduced recovery time.

The list of telehealth services, including the proposed additions described below, is included in the Downloads section to this final rule at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

Requests to add services to the list of Medicare telehealth services must be submitted and received no later than December 31 of each calendar year to be considered for the next rulemaking cycle. To be considered during PFS rulemaking for CY 2019, qualifying requests must be submitted and received by December 31, 2017. Each request to add a service to the list of Medicare telehealth services must include any supporting documentation the requester wishes us to consider as we review the request. Because we use the annual PFS rulemaking process as a vehicle for making changes to the list of Medicare telehealth services, requesters should be advised that any information submitted is subject to public disclosure for this purpose. For more information on submitting a request for an addition to the list of Medicare telehealth services, including where to mail these requests, see our Web site at https://www.cms.gov/​Medicare/​Medicare-General-Information/​Telehealth/​index.html.

3. Submitted Requests To Add Services to the List of Telehealth Services for CY 2018

Under our existing policy, we add services to the telehealth list on a category 1 basis when we determine that they are similar to services on the existing telehealth list for the roles of, and interactions among, the beneficiary, physician (or other practitioner) at the distant site and, if necessary, the telepresenter. As we stated in the CY 2012 PFS final rule with comment period (76 FR 73098), we believe that the category 1 criteria not only streamline our review process for publicly requested services that fall into this category, but also expedite our ability to identify codes for the telehealth list that resemble those services already on this list.

We received several requests in CY 2016 to add various services as Medicare telehealth services effective for CY 2018. The following presents a discussion of these requests, and our proposals for additions to the CY 2018 telehealth list. Of the requests received, we found that three services were sufficiently similar to services currently on the telehealth list to qualify on a category 1 basis. Therefore, we proposed to add the following services to the telehealth list on a category 1 basis for CY 2018:

  • HCPCS code G0296 (Counseling visit to discuss need for lung cancer screening using low dose ct scan (ldct) (service is for eligibility determination and shared decision making))

We found that the service described by HCPCS code G0296 is sufficiently similar to office visits currently on the telehealth list. We believed that all the components of this service, which include assessment of the patient's risk for lung cancer, shared decision making, and counseling on the risks and benefits of LDCT, can be furnished via interactive telecommunications technology.

  • CPT codes 90839 and 90840 (Psychotherapy for crisis; first 60 minutes) and (Psychotherapy for crisis; each additional 30 minutes (List separately in addition to code for primary service))

We proposed to add CPT codes 90839 and 90840 on a Category 1 basis. We found that these services are sufficiently similar to the psychotherapy services currently on the telehealth list, even though these codes describe patients requiring more urgent care and psychotherapeutic interventions to minimize the potential for psychological trauma. However, we identified one specific element of the services as described in the CPT prefatory language that we concluded may or may not be able to be furnished via telehealth, depending on the circumstances of the particular service. The CPT prefatory language specifies that the treatment described by these codes requires, “mobilization of resources to defuse the crisis and restore safety.” In many cases, we believed that a distant site practitioner would have access (via telecommunication technology, presumably) to the resources at the originating site that would allow for the kind of mobilization required to restore safety. However, we also believed that it would be possible that a distant site practitioner would not have access to such resources. Therefore we proposed to add the codes to the telehealth list with the explicit condition of payment that the distant site practitioner be able to mobilize resources at the originating site to defuse the crisis and restore safety, when applicable, when the codes are furnished via telehealth. “Mobilization of resources” is a description used in the CPT prefatory language. We believed the critical element of “mobilizing resources” is the ability to communicate with and inform staff at the originating site to the extent necessary to restore safety. We solicited comment on whether our assumption that the remote practitioner is able to mobilize resources at the originating site Start Printed Page 53008to defuse the crisis and restore safety is valid.

Although we did not receive specific requests, we also proposed to add four additional services to the telehealth list based on our review of services. All four of these codes are add-on codes that describe additional elements of services currently on the telehealth list and would only be considered telehealth services when billed as an add-on to codes already on the telehealth list. The four codes are:

  • CPT code 90785 (Interactive complexity (List separately in addition to the code for primary procedure))
  • CPT codes 96160 and 96161 (Administration of patient-focused health risk assessment instrument (e.g., health hazard appraisal) with scoring and documentation, per standardized instrument) and (Administration of caregiver-focused health risk assessment instrument (e.g., depression inventory) for the benefit of the patient, with scoring and documentation, per standardized instrument))
  • HCPCS code G0506 (Comprehensive assessment of and care planning for patients requiring chronic care management services (list separately in addition to primary monthly care management service))

In the case of CPT codes 96160 and 96161, and HCPCS code G0506, we recognized that these services may not necessarily be ordinarily furnished in-person with a physician or billing practitioner. Ordinarily, services that are typically not considered to be face-to-face services do not need to be on the list of Medicare telehealth services; however, these services would only be considered Medicare telehealth services when billed with a base code that is also on the telehealth list and would not be considered Medicare telehealth services when billed with codes not on the Medicare telehealth list. We believed that by adding these services to the telehealth list it will be administratively easier for practitioners who report these services in association with a visit code that is furnished via telehealth as both the base code and the add-on code would be reported with the telehealth place of service.

We also received requests to add services to the telehealth list that do not meet our criteria for Medicare telehealth services. We did not propose adding the following procedures for physical, occupational, and speech therapy, initial hospital care, and online E/M by physician/qualified healthcare professional to the telehealth list, or changing the requirements for ESRD procedure codes furnished via telehealth, for the reasons noted in the paragraphs that follow.

a. Physical and Occupational Therapy and Speech-Language Pathology Services: CPT Codes—

  • CPT code 97001: Now deleted and reported with CPT codes 97161, 97162, or 97163, as follows: CPT code 97161 (Physical therapy evaluation: Low complexity, requiring these components: A history with no personal factors and/or comorbidities that impact the plan of care; An examination of body system(s) using standardized tests and measures addressing 1-2 elements from any of the following: Body structures and functions, activity limitations, and/or participation restrictions; A clinical presentation with stable and/or uncomplicated characteristics; and Clinical decision making of low complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome); CPT code 97162 (Physical therapy evaluation: Moderate complexity, requiring these components: A history of present problem with 1-2 personal factors and/or comorbidities that impact the plan of care; An examination of body systems using standardized tests and measures in addressing a total of 3 or more elements from any of the following: Body structures and functions, activity limitations, and/or participation restrictions; An evolving clinical presentation with changing characteristics; and Clinical decision making of moderate complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome); or CPT code 97163 (Physical therapy evaluation: High complexity, requiring these components: A history of present problem with 3 or more personal factors and/or comorbidities that impact the plan of care; An examination of body systems using standardized tests and measures addressing a total of 4 or more elements from any of the following: Body structures and functions, activity limitations, and/or participation restrictions; A clinical presentation with unstable and unpredictable characteristics; and Clinical decision making of high complexity using standardized patient assessment instrument and/or measurable assessment of functional outcome.)
  • CPT code 97002: Now deleted and reported as CPT code 97164 (Re-evaluation of physical therapy established plan of care, requiring these components: An examination including a review of history and use of standardized tests and measures is required; and Revised plan of care using a standardized patient assessment instrument and/or measurable assessment of functional outcome.)
  • CPT code 97003: Now deleted and reported with CPT codes 97165, 97166, or 97167, as follows: CPT code 97165 (Occupational therapy evaluation, low complexity, requiring these components: An occupational profile and medical and therapy history, which includes a brief history including review of medical and/or therapy records relating to the presenting problem; An assessment(s) that identifies 1-3 performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and Clinical decision making of low complexity, which includes an analysis of the occupational profile, analysis of data from problem-focused assessment(s), and consideration of a limited number of treatment options. Patient presents with no comorbidities that affect occupational performance. Modification of tasks or assistance (e.g., physical or verbal) with assessment(s) is not necessary to enable completion of evaluation component); CPT code 97166 (Occupational therapy evaluation, moderate complexity, requiring these components: An occupational profile and medical and therapy history, which includes an expanded review of medical and/or therapy records and additional review of physical, cognitive, or psychosocial history related to current functional performance; An assessment(s) that identifies 3-5 performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and Clinical decision making of moderate analytic complexity, which includes an analysis of the occupational profile, analysis of data from detailed assessment(s), and consideration of several treatment options. Patient may present with comorbidities that affect occupational performance. Minimal to moderate modification of tasks or assistance (e.g., physical or verbal) with assessment(s) is necessary to enable patient to complete evaluation component)); or CPT code 97167 (Occupational therapy evaluation, Start Printed Page 53009high complexity, requiring these components: An occupational profile and medical and therapy history, which includes review of medical and/or therapy records and extensive additional review of physical, cognitive, or psychosocial history related to current functional performance; An assessment(s) that identifies 5 or more performance deficits (i.e., relating to physical, cognitive, or psychosocial skills) that result in activity limitations and/or participation restrictions; and Clinical decision making of high analytic complexity, which includes an analysis of the patient profile, analysis of data from comprehensive assessment(s), and consideration of multiple treatment options. Patient presents with comorbidities that affect occupational performance. Significant modification of tasks or assistance (e.g., physical or verbal) with assessment(s) is necessary to enable patient to complete evaluation component.)
  • CPT code 97004: Now deleted and reported as CPT code 97168 (Re-evaluation of occupational therapy established plan of care, requiring these components: An assessment of changes in patient functional or medical status with revised plan of care; An update to the initial occupational profile to reflect changes in condition or environment that affect future interventions and/or goals; and a revised plan of care. A formal reevaluation is performed when there is a documented change in functional status or a significant change to the plan of care is required.)
  • CPT code 97110 (Therapeutic procedure, 1 or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility)
  • CPT code 97112 (Therapeutic procedure, 1 or more areas, each 15 minutes; neuromuscular reeducation of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception for sitting and/or standing activities)
  • CPT code 97116 (Therapeutic procedure, 1 or more areas, each 15 minutes; gait training (includes stair climbing))
  • CPT code 97535 (Self-care/home management training (e.g., activities of daily living (ADL) and compensatory training, meal preparation, safety procedures, and instructions in use of assistive technology devices/adaptive equipment) direct one-on-one contact, each 15 minutes)
  • CPT code 97750 (Physical performance test or measurement (e.g., musculoskeletal, functional capacity), with written report, each 15 minutes)
  • CPT code 97755 (Assistive technology assessment (e.g., to restore, augment or compensate for existing function, optimize functional tasks and/or maximize environmental accessibility), direct one-on-one contact, with written report, each 15 minutes)
  • CPT code 97760 (Orthotic(s) management and training (including assessment and fitting when not otherwise reported), upper extremity(s), lower extremity(s) and/or trunk, each 15 minutes)
  • CPT code 97761 (Prosthetic training, upper and/or lower extremity(s), each 15 minutes)
  • CPT code 97762 (Checkout for orthotic/prosthetic use, established patient, each 15 minutes)

Section 1834(m)(4)(E) of the Act specifies the types of practitioners who may furnish and bill for Medicare telehealth services as those practitioners under section 1842(b)(18)(C) of the Act. Physical therapists, occupational therapists and speech-language pathologists are not among the practitioners identified in section 1842(b)(18)(C) of the Act. We stated in the CY 2017 PFS final rule (81 FR 80198) that because these services are predominantly furnished by physical therapists, occupational therapists and speech-language pathologists, we did not believe it would be appropriate to add them to the list of telehealth services at this time. In a subsequent submission for 2018, the original requester suggested that we might propose these services to be added to the list so that they can be furnished via telehealth when furnished by eligible distant site practitioners. We considered that possibility; however, since the majority of the codes are furnished by therapy professionals over 90 percent of the time, we believed that adding therapy services to the telehealth list that explicitly describe the services of the kinds of professionals not included on the statutory list of distant site practitioners could result in confusion about who is authorized to furnish and bill for these services when furnished via telehealth. We also noted that several of these services, such as CPT code 97761, require directly physically manipulating the beneficiary, which is not possible to do through telecommunications technology. Therefore, we did not propose adding these codes to the list of Medicare telehealth services.

b. Initial Hospital Care Services: CPT Codes—

  • CPT code 99221 (Initial hospital care, per day, for the evaluation and management of a patient, which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and Medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission are of low severity.)
  • CPT code 99222 (Initial hospital care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission are of moderate severity.)
  • CPT code 99223 (Initial hospital care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of high complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission are of high severity.)

We previously considered a request to add these codes to the telehealth list. As we stated in the CY 2011 PFS final rule with comment period (75 FR 73315), while initial inpatient consultation services are currently on the list of approved telehealth services, there are no services on the current list of telehealth services that resemble initial hospital care for an acutely ill patient by the admitting practitioner who has ongoing responsibility for the patient's treatment during the course of the hospital stay. Therefore, consistent with prior rulemaking, we did not propose that initial hospital care services be Start Printed Page 53010added to the Medicare telehealth services list on a category 1 basis.

The initial hospital care codes describe the first visit of the hospitalized patient by the admitting practitioner who may or may not have seen the patient in the decision-making phase regarding hospitalization. Based on the description of the services for these codes, we believed it is critical that the initial hospital visit by the admitting practitioner be conducted in person to ensure that the practitioner with ongoing treatment responsibility comprehensively assesses the patient's condition upon admission to the hospital through a thorough in-person examination. Additionally, the requester submitted no additional research or evidence that the use of a telecommunications system to furnish the service produces demonstrated clinical benefit to the patient; therefore, we also did not propose adding initial hospital care services to the Medicare telehealth services list on a category 2 basis.

We note that Medicare beneficiaries who are being treated in the hospital setting can receive reasonable and necessary E/M services using other HCPCS codes that are currently on the Medicare telehealth list including those for subsequent hospital care, initial and follow-up telehealth inpatient and emergency department consultations, as well as initial and follow-up critical care telehealth consultations.

Therefore, we did not propose to add the initial hospital care services to the list of Medicare telehealth services for CY 2018.

c. Online E/M by physician/QHP: CPT Code—

  • CPT code 99444 (Online evaluation and management service provided by a physician or other qualified health care professional who may report evaluation and management services provided to an established patient or guardian, not originating from a related E/M service provided within the previous 7 days, using the Internet or similar electronic communications network)

As we indicated in the CY 2016 final rule with comment period (80 FR 71061), CPT code 99444 is assigned a status indicator of “N” (Non-covered service). Under section 1834(m)(2)(A) of the Act, Medicare pays the physician or practitioner furnishing a telehealth service an amount equal to the amount that would have been paid if the service was furnished without the use of a telecommunications system. Because CPT code 99444 is currently non-covered, there would be no Medicare payment if this service were furnished without the use of a telecommunications system. Because this code is a non-covered service for which no Medicare payment may be made under the PFS, we did not propose adding online E/M services to the list of Medicare telehealth services for CY 2018.

d. Monthly Capitation Payment (MCP) for ESRD-Related Services for Home Dialysis, by Age: CPT Codes—

  • CPT codes 90963 (End-stage renal disease (ESRD) related services for home dialysis per full month, for patients younger than 2 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents); 90964 (End-stage renal disease (ESRD) related services for home dialysis per full month, for patients 2-11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents); 90965 (End-stage renal disease (ESRD) related services for home dialysis per full month, for patients 12-19 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents); and 90966 (End-stage renal disease (ESRD) related services for home dialysis per full month, for patients 20 years of age and older)
  • 90967 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients younger than 2 years of age); 90968 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 2-11 years of age); and 90969 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 12-19 years of age); and 90970 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 20 years of age and older).

In the CY 2004 PFS final rule with comment period (68 FR 63216), we established HCPCS G-codes for ESRD monthly capitation payments (MCPs), which were replaced by CPT codes in CY 2009 (73 FR 69898). The services described by CPT codes 90963 through 90966 were added to the Medicare telehealth list in CY 2005 (69 FR 66276) and CPT codes 90967 through 90970 were added to the Medicare telehealth list in the CY 2017 PFS final rule (81 FR 80194); however, we specified that the required clinical examination of the vascular access site must be furnished face-to-face “hands on” (without the use of an interactive telecommunications system) by a physician, clinical nurse specialist (CNS), nurse practitioner (NP), or physician assistant (PA). The American Telemedicine Association (ATA) submitted a new request for CY 2018 requesting that we allow telehealth coverage of ESRD procedure codes without in-person exam of the catheter access site monthly. Our current policy reflects our understanding that evaluation of the integrity and functionality of the access site is a critical element of the services described by the codes and that this element cannot be performed via telecommunications technology. The requester did not submit evidence to support the assertion that effective examination of the access site can be executed via telecommunications technology. Therefore, for CY 2018, we did not propose any changes to the policy requiring that the MCP practitioner must furnish at least one face-to-face encounter with the home dialysis patient per month for clinical examination of the catheter access site. However, we are interested in more information about current clinically accepted care practices and to what extent telecommunications technology can be used to examine the access site. We are also interested in information about the clinical standards of care regarding the frequency of the evaluation of the access site.

In summary, we proposed adding the following codes to the list of Medicare telehealth services beginning in CY 2018 on a category 1 basis:

  • HCPCS code G0296 (Counseling visit to discuss need for lung cancer screening using low dose CT scan (ldct) (service is for eligibility determination and shared decision making))
  • HCPCS code G0506 (Comprehensive assessment of and care planning for patients requiring chronic care management services (list separately in addition to primary monthly care management service))
  • CPT code 90785 (Interactive complexity (List separately in addition to the code for primary procedure))
  • CPT codes 90839 and 90840 (Psychotherapy for crisis; first 60 minutes) and (Psychotherapy for crisis; each additional 30 minutes (List separately in addition to code for primary procedure))
  • CPT codes 96160 and 96161 (Administration of patient-focused health risk assessment instrument Start Printed Page 53011 (e.g., health hazard appraisal) with scoring and documentation, per standardized instrument) and (Administration of caregiver-focused health risk assessment instrument (e.g., depression inventory) for the benefit of the patient, with scoring and documentation, per standardized instrument)

The following is a summary of the comments we received regarding the proposed addition of services to the list of Medicare telehealth services:

Comment: Many commenters supported one or more of our proposals to add the counseling visit to discuss need for lung cancer screening using low dose CT scan (LDCT) (HCPCS code G0296) and psychotherapy for crisis (CPT codes 90839 and 90840) to the Medicare telehealth list for CY 2018. Commenters also supported one or more of our proposals to add comprehensive assessment of and care planning for patients requiring chronic care management services (HCPCS code G0506), interactive complexity (CPT code 90785) and administration of health risk assessment (CPT codes 96160 and 96161). Commenters noted that by adding these services to the Medicare telehealth list, CMS was enhancing access and quality of care for Medicare beneficiaries.

Response: We thank commenters for their support of the proposed additions to the list of Medicare telehealth services. After consideration of the public comments received, we are finalizing our proposal to add these services to the list of Medicare telehealth services for CY 2018 on a Category 1 basis.

Comment: Several commenters were supportive of CMS's proposed requirement that the distant site practitioner be able to mobilize resources at the originating site to defuse the crisis and restore safety, when applicable, when furnishing psychotherapy for crisis. One commenter stated that CMS' requirements for mobilization of resources are very important and the distant site practitioner should be aware of available services where the beneficiary is located in the event of a crisis. Another commenter pointed out that social workers who provide telehealth services are required by the National Association of Social Workers to be familiar with the resources in the state in which the patient resides. Several commenters requested that CMS clarify what was meant by “mobilization of resources” and provide applicable examples.

Response: We appreciate commenters' responses to the explicit requirement regarding mobilization of resources for the psychotherapy for crisis codes (CPT codes 90839 and 90840). As noted above, “mobilization of resources” is a description used in the CPT prefatory language. We would reiterate that, according to CPT, the critical element of “mobilizing resources” is the ability to communicate with and inform staff at the originating site to the extent necessary to restore safety.

Comment: Several commenters disagreed with the proposal not to add CPT codes 99221-99223 (inpatient hospital care) to the Medicare telehealth list. One commenter stated that they believe these services could be furnished via Medicare telehealth. They pointed to the fact that for CY 2017, CMS valued the critical care consultation G-codes (HCPCS codes G0508 and G0509) with RVUs similar to those for the inpatient hospital care codes as evidence that CMS believes they are essentially the same service.

Response: As we discussed in the 2018 PFS proposed rule, we do not believe that the full range of services described by CPT codes 99221-99223 can be furnished via telecommunications technology as we believe it is critical that the initial hospital visit by the admitting practitioner be conducted in person to ensure that the practitioner with ongoing treatment responsibility comprehensively assesses the patient's condition upon admission to the hospital through a thorough in-person examination.

We believe that the telehealth critical care consultation codes (HCPCS codes G0508 and G0509) more accurately describe the kind of services that can be furnished to patients via telehealth than the initial inpatient hospital visit E/M codes that describe services with elements that can only be furnished in-person. The valuation for HCPCS codes G0508 and G0509 was developed based on our assessment that the overall work (resources in time and intensity) involved in furnishing the services is similar to the in-person critical care service codes, not that all elements of the services are the same. Many services paid under the PFS share similar, if not exactly the same work RVUs, without necessarily describing the exact same elements of the service. For more on the critical care consultation codes in the context of telehealth, please see the CY 2017 PFS final rule (81 FR 80196 through 80197 and 81 FR 80352).

Comment: Several commenters disagreed with our decision not to add various physical and occupational therapy, and speech language pathology services to the Medicare telehealth list.

Response: As noted above, the majority of the codes requested are furnished by therapy professionals over 90 percent of the time, and we believe that adding therapy services to the telehealth list that are furnished by professionals not included on the statutory list of distant site practitioners could result in confusion about who is authorized to bill for these services when furnished via telehealth. Additionally, some of the codes involve physical manipulation of the patient, which cannot be accomplished via an interactive telecommunications system.

Comment: Several commenters responded to our decision not to remove the requirement for a monthly in-person visit to examine the catheter access site for ESRD services conducted via telehealth. Another commenter encouraged CMS to lessen the requirements by making the in-person visit a quarterly, as opposed to monthly, requirement. Other commenters stated that the examination of the catheter access site could be conducted remotely via telecommunications technology.

Response: We appreciate the feedback on our proposal and we will consider the comments on the frequency of the examination of the catheter access site and whether the examination could be conducted remotely for future rulemaking.

Comment: One commenter disagreed with the decision not to propose to add CPT code 99444 (online E/M) to the Medicare telehealth list, stating that this service would increase access to care, especially for follow-up visits and medication management.

Response: As we noted above, CPT code 99444 is currently non-covered, so there is no Medicare payment for this service. As such, there would be no payment for this service even if we were to add it to the telehealth list. Additionally, because this service does not describe a service typically furnished in-person, it would not be considered a telehealth service under the applicable provisions of law. For both of these reasons, we continue to believe that it would not be appropriate to add CPT code 99444 to the Medicare telehealth list.

Comment: Many commenters provided recommendations for additional services that could be added to the Medicare telehealth list, such as an add-on code for patients requiring care planning for cognitive impairment, follow-up care for liver transplant patients, emergency department visits, oncology and podiatric-specific services, eConsult services, Medical Nutrition Therapy (MNT), and Diabetes Self Management Training (DSMT).Start Printed Page 53012

Response: We thank commenters for these suggestions and will consider these for future notice and comment rulemaking. We also wish to remind commenters that requests for specific services to be added to the Medicare telehealth list can be submitted until December 31st of each calendar year to be considered for the next rulemaking cycle. For more information on submitting a request for an addition to the list of Medicare telehealth services, including where to mail these requests, see our Web site at https://www.cms.gov/​Medicare/​Medicare-General-Information/​Telehealth/​index.html.

Since several commenters requested that we add MNT and DSMT to the telehealth list, we also wish to remind commenters that codes for both MNT and DSMT are currently on the Medicare telehealth list. The current list of Medicare telehealth services can be viewed on our Web site, https://www.cms.gov/​Medicare/​Medicare-General-Information/​Telehealth/​Telehealth-Codes.html.

4. Elimination of the Required Use of the GT Modifier on Professional Claims

We have required distant site practitioners to report one of two longstanding HCPCS modifiers when reporting telehealth services. Current guidance instructs practitioners to submit claims for telehealth services using the appropriate CPT or HCPCS code for the professional service along with the telehealth modifier GT (via interactive audio and video telecommunications systems). For federal telemedicine demonstration programs in Alaska or Hawaii, practitioners are instructed to submit claims using the appropriate CPT or HCPCS code for the professional service along with the telehealth modifier GQ if telehealth services are performed “via an asynchronous telecommunications system.” By coding and billing these modifiers with a service code, practitioners are certifying that both the broad and code-specific telehealth requirements have been met.

In the CY 2017 PFS final rule (81 FR 80201), we finalized payment policies regarding Medicare's use of a new Place of Service (POS) Code describing services furnished via telehealth. The new POS code became effective January 1, 2017, and we believe its use is redundant with the requirements to apply the GT modifier for telehealth services. We did not propose to implement a change to the modifier requirements during CY 2017 rulemaking because at the time of the CY 2017 PFS proposed rule, we did not know whether the telehealth POS code would be made effective for January 1, 2017. However, we noted in the CY 2017 PFS final rule that, like the modifiers, use of the telehealth POS code certifies that the service meets the telehealth requirements.

Because a valid POS code is required on professional claims for all services, and the appropriate reporting of the telehealth POS code serves to indicate both the provision of the service via telehealth and certification that the requirements have been met, we believe that it is unnecessary to also require the distant site practitioner report the GT modifier on the claim. Therefore, we proposed to eliminate the required use of the GT modifier on professional claims. Because institutional claims do not use a POS code, we proposed for distant site practitioners billing under CAH Method II to continue to use the GT modifier on institutional claims. For purposes of the federal telemedicine demonstration programs in Alaska or Hawaii, we proposed to retain the GQ modifier to maintain the distinction between synchronous and asynchronous telehealth services, as reflected in statute.

The following is a summary of the public comments received on our proposal to eliminate the required use of the GT modifier on professional claims:

Comment: The majority of the commenters were supportive of eliminating the required use of the GT modifier on professional claims and agreed that this would reduce administrative burden.

Response: We thank the commenters for their support of the proposal. After considering the public comments, we are finalizing the proposal to eliminate the required use of the GT modifier on professional claims.

Comment: One commenter supported the proposal to no longer require the GT modifier on professional claims, but requested that we not delete the GT modifier because other payers who receive Medicare crossover claims might still require its use.

Response: We appreciate the commenters' concerns and reiterate that the GT modifier will be retained for Medicare for use in CAH Method II billing. Our decision to no longer use the modifier for professional claims will not affect its use in other appropriate circumstances.

Comment: One commenter stated that there is significant effort involved in updating computer systems to use the new POS code rather than a modifier, and encouraged CMS to consider that in future rulemaking.

Response: We appreciate the comment. We note that the required use of the telehealth POS code was finalized for CY 2017; however, we have a continuing interest in reducing administrative burden and will consider this for future rulemaking.

Comment: One commenter urged CMS to adopt a uniform method for identification of telehealth services and suggested that we use the 95 modifier, the new CPT modifier for CY 2017.

Response: We appreciate the comment, especially with the possibility that this could reduce administrative burdens associated with multiple modifiers. We will consider use of the 95 modifier for this purpose for future rulemaking.

Comment: A few commenters noted that the policy on the telehealth place of service (POS) code that was finalized for CY 2017 and took effect on January 1, 2017 resulted in a decrease in payment for some distant site practitioners furnishing services via telehealth in the non-facility setting and one commenter requested that we reverse the policy to pay the facility rate for all services furnished via telehealth.

Response: We understand the concerns raised about the current policy of using the facility rate for payment to distant site telehealth practitioners for telehealth services and will also further consider this policy for future rulemaking.

5. Comment Solicitation on Medicare Telehealth Services

We have received numerous requests from stakeholders to expand access to telehealth services. As noted above, Medicare payment for telehealth services is restricted by statute, which establishes the services initially eligible for Medicare telehealth and limits the use of telehealth by defining both eligible originating sites (the location of the beneficiary) and the distant site practitioners who may furnish and bill for telehealth services. Originating sites are limited both by geography and provider setting. We have the authority to add to the list of telehealth services based on our annual process, but cannot change the limitations relating to geography, patient setting, or type of furnishing practitioner because these requirements are specified in statute. For CY 2018, we sought information regarding ways that we might further expand access to telehealth services within the current statutory authority and pay appropriately for services that take full advantage of communication technologies.

Comment: We received many thoughtful comments in response to the Start Printed Page 53013comment solicitation. Commenters were very supportive of CMS expanding access to telehealth services. Many commenters noted that Medicare payment for telehealth services is restricted by statute, but encouraged CMS to continue to explore alternate means to recognize and support technological developments in healthcare. Commenters provided many suggestions for how CMS could expand access to telehealth services within the current statutory authority and pay appropriately for services that take full advantage of communication technologies, such as waiving portions of the statutory restrictions using demonstration authority.

Response: We thank the commenters for their input. We reiterate our commitment to expanding access to telehealth services consistent with statutory authority, and paying appropriately for services that maximize telecommunications technology. We will carefully review the comments and consider commenters' suggestions for future rulemaking and any appropriate sub-regulatory changes.

6. Comment Solicitation on Remote Patient Monitoring

In addition to the broad comment solicitation regarding Medicare telehealth services, we also specifically solicited comment on whether to make separate payment for CPT codes that describe remote patient monitoring. We note that remote patient monitoring services would generally not be considered Medicare telehealth services as defined under section 1834(m) of the Act. Rather, like the interpretation by a physician of an actual electrocardiogram or electroencephalogram tracing that has been transmitted electronically, these services involve the interpretation of medical information without a direct interaction between the practitioner and beneficiary. As such, they are paid under the same conditions as in-person physicians' services with no additional requirements regarding permissible originating sites or use of the telehealth place of service code.

We noted we were particularly interested in comments regarding CPT code 99091 (Collection and interpretation of physiologic data (e.g., ECG, blood pressure, glucose monitoring) digitally stored and/or transmitted by the patient and/or caregiver to the physician or other qualified health care professional, qualified by education, training, licensure/regulation (when applicable) requiring a minimum of 30 minutes of time). This code is currently assigned a procedure status of B (bundled). As with many other bundled codes, we currently assign RVUs for this code based on existing RUC recommendations, even though we have considered the services described by the code to be bundled with other services. In addition to comments on the payment status and valuation for this code (the RUC-recommended value, specifically) we sought information about the circumstances under which this code might be reported for separate payment, including how to differentiate the time related to these services from other services, including care management services. For example, PFS payment for analysis of patient-generated health data is considered included in chronic care management (CCM) services (CPT codes 99487, 99489, and 99490) to the extent that this activity is medically necessary and performed as part of CCM (see the CY 2015 PFS final rule (79 FR 67727), CY 2016 PFS final rule (81 FR 80244), and the CMS FAQ available at: https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​Downloads/​Payment_​for_​CCM_​Services_​FAQ.pdf). We also sought comment from beneficiaries and beneficiary advocacy organizations on the value of such services and what protections might be necessary to assure that beneficiaries are properly informed that they are receiving a remote monitoring service, since beneficiaries would be required to pay standard cost sharing for such services. Finally, regarding CPT code 99091, we sought available information regarding potential utilization assumptions we might make for the service for purposes of PFS ratesetting, were we to make it payable for CY 2018 or in the future; since making such assumptions would be necessary to implement separate payment. We noted that since the PFS is a budget neutral system, any increase in payment made for particular services would result in decreases in payment for other services, and the degree of that decrease would depend, in large part, on the utilization assumptions.

We also sought comment on other existing codes that describe extensive use of communications technology for consideration for future rulemaking, including CPT code 99090 (Analysis of clinical data stored in computers (e.g., ECGs, blood pressures, hematologic data)). CPT code 99090 is also assigned a procedure status of B (bundled). CPT code 99090 also has a payment status of bundled; and we do not have RUC-recommended values for this service, and therefore, currently do not assign RVUs.

The following is a summary of the public comments received on our proposals and our responses:

Comment: Commenters were generally supportive of CMS recognizing the increasing importance of remote patient monitoring. Several commenters recommended that CMS make separate payment for CPT code 99091. Other commenters acknowledged that the current code, which has not been separately payable for some time, may not optimally describe the services furnished using current technology. Some of these commenters encouraged CMS to make the services separately payable for CY 2018, but also noted that the CPT Editorial Panel is currently working on codes that more accurately describe remote monitoring.

A few commenters expressed opposition to making CPT codes 99090 and/or 99091 separately payable, noting that these are generic codes and are duplicative of other codes that are more specific, such as CPT codes 93297 ((Interrogation device evaluation(s), (remote) up to 30 days; implantable cardiovascular monitor system, including analysis of 1 or more recorded physiologic cardiovascular data elements from all internal and external sensors, analysis, review(s) and report(s) by a physician or other qualified health care professional)) and CPT code 93228 (External mobile cardiovascular telemetry with electrocardiographic recording, concurrent computerized real time data analysis and greater than 24 hours of accessible ECG data storage (retrievable with query) with ECG triggered and patient selected events transmitted to a remote attended surveillance center for up to 30 days; review and interpretation with report by a physician or other qualified health care professional)). Several commenters encouraged CMS to wait for the CPT Editorial Panel to complete its work of reviewing and revising the CPT codes and consider valuing the new codes in the future. Of the commenters who were supportive of unbundling and making separate payment for CPT code 99091, a few suggested that CPT code 99091 could be billed in association with chronic care management (CCM) services.

Response: We agree with commenters that monitoring services can be a significant part of ongoing medical care and that we should recognize these services for separate payment as soon as practicable. However, we also agree with commenters that the two codes in question may not optimally describe these services as currently furnished. In order to reconcile these concerns, Start Printed Page 53014especially considering the expectation that CPT coding revisions are expected in the immediate future, we believe that activating CPT code 99091 for separate payment under Medicare for 2018 will serve to facilitate appropriate payment for these services in the short term. Unlike CPT code 99090, CPT code 99091 specifies that the information is interpreted by a physician or other qualified health care professional, and it specifies that this activity requires a minimum of 30 minutes of time. After consideration of these differences between the two CPT codes, and after consideration of the public comments recommending that we make separate payment for CPT code 99091, we were persuaded to change the status of CPT code 99091 from bundled to active for CY 2018. In addition, as noted in the CY 2018 PFS proposed rule, the RUC had already provided CMS with RVUs for CPT code 99091, whereas it did not provide CMS with RVUs for CPT code 99090. Also, we did not receive specific comments to suggest reasons for changing CPT code 99090 to “active” status, so we are retaining the “bundled” status for that code. We will consider whether to adopt and establish relative value units for CPT codes that may be developed by the CPT Editorial Panel under our standard process for future years through notice and comment rulemaking. However, the comments make it clear to us that separate payment for this code will not mitigate the need for coding revisions. In order to account for some of the concerns raised by commenters regarding the broad nature of the code that describes professional collection and interpretation of the stored patient data, we believe that we can apply some of the current requirements regarding chronic care management services (CCM) to identify circumstances appropriate for reporting the code. Specifically, given the non face-to-face nature of the services described by CPT code 99091, we are requiring that the practitioner obtain advance beneficiary consent for the service and document this in the patient's medical record. Additionally, for new patients or patients not seen by the billing practitioner within 1 year prior to billing CPT code 99091, we are requiring initiation of the service during a face-to-face visit with the billing practitioner, such as an Annual Wellness Visit or Initial Preventive Physical Exam, or other face-to-face visit with the billing practitioner. Levels 2 through 5 E/M visits (CPT codes 99212 through 99215) would qualify as the face-to-face visit. However, services that do not involve a face-to-face visit by the billing practitioner or are not separately payable under the PFS (such as CPT code 99211, anticoagulant management, online services, telephone and other E/M services) do not qualify as initiating visits. The face-to-face visit included in transitional care management (TCM) services (CPT codes 99495 and 99496) would also qualify. We are also adopting the prefatory language for CPT code 99091, including the requirement that it “should be reported no more than once in a 30-day period to include the physician or other qualified health care professional time involved with data accession, review and interpretation, modification of care plan as necessary (including communication to patient and/or caregiver), and associated documentation.”

Finally, because we believe the kind of analysis involved in furnishing this service is complementary to CCM and other care management services, for the purposes of Medicare billing, we are allowing that CPT code 99091 can be billed once per patient during the same service period as CCM (CPT codes 99487, 99489, and 99490), TCM (CPT codes 99495 and 99496), and behavioral health integration (BHI) (CPT codes 99492, 99493, 99494, and 99484). We note that under current billing rules, time counted toward the CCM codes generally refers to time spent by clinical staff furnishing care management services; while CPT code 99091 refers to practitioner time. We note that time spent furnishing these services could not be counted towards the required time for both codes for a single month.

We also note that the new separate payment for CPT code 99091 will be excluded from the calculation of the net reduction in expenditures due to changes in coding and valuation for purposes of the misvalued code target, consistent with policies finalized in the CY 2016 PFS final rule with comment period (80 FR 70926). CPT code 99091 describes a service that is newly separately reportable, but for which no corresponding reduction is being made to existing codes and instead reductions under the PFS are being taken exclusively through a budget neutrality adjustment.

We look forward to forthcoming coding changes through the CPT process that we anticipate will better describe the role of remote patient monitoring in contemporary practice and potentially mitigate the need for the additional billing requirements associated with these services.

7. Telehealth Originating Site Facility Fee Payment Amount Update

Section 1834(m)(2)(B) of the Act established the Medicare telehealth originating site facility fee for telehealth services furnished from October 1, 2001 through December 31, 2002, at $20.00. For telehealth services furnished on or after January 1 of each subsequent calendar year, the telehealth originating site facility fee is increased by the percentage increase in the Medicare Economic Index (MEI) as defined in section 1842(i)(3) of the Act. The originating site facility fee for telehealth services furnished in CY 2017 is $25.40. The MEI increase for 2018 is 1.4 percent and is based on the most recent historical update through 2017Q2 (1.8 percent), and the most recent historical MFP through calendar year 2016 (0.4 percent). Therefore, for CY 2018, the payment amount for HCPCS code Q3014 (Telehealth originating site facility fee) is 80 percent of the lesser of the actual charge or $25.76. The Medicare telehealth originating site facility fee and the MEI increase by the applicable time period is shown in Table 8.

Table 8—The Medicare Telehealth Originating Site Facility Fee

Time periodMEI increaseFacility fee
10/01/2001-12/31/2002N/A$20.00
01/01/2003-12/31/2003320.60
01/01/2004-12/31/20042.921.20
01/01/2005-12/31/20053.121.86
01/01/2006-12/31/20062.822.47
01/01/2007-12/31/20072.122.94
01/01/2008-12/31/20081.823.35
01/01/2009-12/31/20091.623.72
01/01/2010-12/31/20101.224.00
01/01/2011-12/31/20110.424.10
Start Printed Page 53015
01/01/2012-12/31/20120.624.24
01/01/2013-12/31/20130.824.43
01/01/2014-12/31/20140.824.63
01/01/2015-12/31/20150.824.83
01/01/2016-12/31/20161.125.10
01/01/2017-12/31/20171.225.40
01/01/2018-12/31/20181.425.76

E. Potentially Misvalued Services Under the Physician Fee Schedule

1. Background

Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a periodic review, not less often than every 5 years, of the RVUs established under the PFS. Section 1848(c)(2)(K) of the Act requires the Secretary to periodically identify potentially misvalued services using certain criteria and to review and make appropriate adjustments to the relative values for those services. Section 1848(c)(2)(L) to the Act also requires the Secretary to develop a process to validate the RVUs of certain potentially misvalued codes under the PFS, using the same criteria used to identify potentially misvalued codes, and to make appropriate adjustments.

As discussed in section II.H. of this final rule, each year we develop appropriate adjustments to the RVUs taking into account recommendations provided by the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC), the Medicare Payment Advisory Commission (MedPAC), and others. For many years, the RUC has provided us with recommendations on the appropriate relative values for new, revised, and potentially misvalued PFS services. We review these recommendations on a code-by-code basis and consider these recommendations in conjunction with analyses of other data, such as claims data, to inform the decision-making process as authorized by law. We may also consider analyses of work time, work RVUs, or direct PE inputs using other data sources, such as Department of Veteran Affairs (VA), National Surgical Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons (STS), and the Physician Quality Reporting System (PQRS) databases. In addition to considering the most recently available data, we assess the results of physician surveys and specialty recommendations submitted to us by the RUC for our review. We also consider information provided by other stakeholders. We conduct a review to assess the appropriate RVUs in the context of contemporary medical practice. We note that section 1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and other techniques to determine the RVUs for physicians' services for which specific data are not available and requires us to take into account the results of consultations with organizations representing physicians who provide the services. In accordance with section 1848(c) of the Act, we determine and make appropriate adjustments to the RVUs.

In its March 2006 Report to the Congress (http://www.medpac.gov/​docs/​default-source/​congressional-testimony/​testimony-report-to-the-congress-medicare-payment-policy-march-2006-.pdf?​sfvrsn=​0), MedPAC discussed the importance of appropriately valuing physicians' services, noting that misvalued services can distort the market for physicians' services, as well as for other health care services that physicians order, such as hospital services. In that same report, MedPAC postulated that physicians' services under the PFS can become misvalued over time. MedPAC stated, “When a new service is added to the physician fee schedule, it may be assigned a relatively high value because of the time, technical skill, and psychological stress that are often required to furnish that service. Over time, the work required for certain services would be expected to decline as physicians become more familiar with the service and more efficient in furnishing it.” We believe services can also become overvalued when PE declines. This can happen when the costs of equipment and supplies fall, or when equipment is used more frequently than is estimated in the PE methodology, reducing its cost per use. Likewise, services can become undervalued when physician work increases or PE rises.

As MedPAC noted in its March 2009 Report to Congress (http://www.medpac.gov/​docs/​default-source/​reports/​march-2009-report-to-congress-medicare-payment-policy.pdf), in the intervening years since MedPAC made the initial recommendations, CMS and the RUC have taken several steps to improve the review process. Also, section 1848(c)(2)(K)(ii) of the Act augments our efforts by directing the Secretary to specifically examine, as determined appropriate, potentially misvalued services in the following categories:

  • Codes that have experienced the fastest growth.
  • Codes that have experienced substantial changes in practice expenses.
  • Codes that describe new technologies or services within an appropriate time period (such as 3 years) after the relative values are initially established for such codes.
  • Codes which are multiple codes that are frequently billed in conjunction with furnishing a single service.
  • Codes with low relative values, particularly those that are often billed multiple times for a single treatment.
  • Codes that have not been subject to review since implementation of the fee schedule.
  • Codes that account for the majority of spending under the physician fee schedule.
  • Codes for services that have experienced a substantial change in the hospital length of stay or procedure time.
  • Codes for which there may be a change in the typical site of service since the code was last valued.
  • Codes for which there is a significant difference in payment for the same service between different sites of service.
  • Codes for which there may be anomalies in relative values within a family of codes.
  • Codes for services where there may be efficiencies when a service is furnished at the same time as other services.
  • Codes with high intra-service work per unit of time.
  • Codes with high practice expense relative value units.
  • Codes with high cost supplies.
  • Codes as determined appropriate by the Secretary.Start Printed Page 53016

Section 1848(c)(2)(K)(iii) of the Act also specifies that the Secretary may use existing processes to receive recommendations on the review and appropriate adjustment of potentially misvalued services. In addition, the Secretary may conduct surveys, other data collection activities, studies, or other analyses, as the Secretary determines to be appropriate, to facilitate the review and appropriate adjustment of potentially misvalued services. This section also authorizes the use of analytic contractors to identify and analyze potentially misvalued codes, conduct surveys or collect data, and make recommendations on the review and appropriate adjustment of potentially misvalued services. Additionally, this section provides that the Secretary may coordinate the review and adjustment of any RVU with the periodic review described in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of the Act specifies that the Secretary may make appropriate coding revisions (including using existing processes for consideration of coding changes) that may include consolidation of individual services into bundled codes for payment under the physician fee schedule.

2. Progress in Identifying and Reviewing Potentially Misvalued Codes

To fulfill our statutory mandate, we have identified and reviewed numerous potentially misvalued codes as specified in section 1848(c)(2)(K)(ii) of the Act, and we plan to continue our work examining potentially misvalued codes in these areas over the upcoming years. As part of our current process, we identify potentially misvalued codes for review, and request recommendations from the RUC and other public commenters on revised work RVUs and direct PE inputs for those codes. The RUC, through its own processes, also identifies potentially misvalued codes for review. Through our public nomination process for potentially misvalued codes established in the CY 2012 PFS final rule with comment period, other individuals and stakeholder groups submit nominations for review of potentially misvalued codes as well.

Since CY 2009, as a part of the annual potentially misvalued code review and Five-Year Review process, we have reviewed approximately 1,700 potentially misvalued codes to refine work RVUs and direct PE inputs. We have assigned appropriate work RVUs and direct PE inputs for these services as a result of these reviews. A more detailed discussion of the extensive prior reviews of potentially misvalued codes is included in the CY 2012 PFS final rule with comment period (76 FR 73052 through 73055). In the CY 2012 PFS final rule with comment period (76 FR 73055 through 73958), we finalized our policy to consolidate the review of physician work and PE at the same time, and established a process for the annual public nomination of potentially misvalued services.

In the CY 2013 PFS final rule with comment period, we built upon the work we began in CY 2009 to review potentially misvalued codes that have not been reviewed since the implementation of the PFS (so-called “Harvard-valued codes”). In CY 2009 (73 FR 38589), we requested recommendations from the RUC to aid in our review of Harvard-valued codes that had not yet been reviewed, focusing first on high-volume, low intensity codes. In the fourth Five-Year Review (76 FR 32410), we requested recommendations from the RUC to aid in our review of Harvard-valued codes with annual utilization of greater than 30,000 services. In the CY 2013 PFS final rule with comment period, we identified specific Harvard-valued services with annual allowed charges that total at least $10,000,000 as potentially misvalued. In addition to the Harvard-valued codes, in the CY 2013 PFS final rule with comment period we finalized for review a list of potentially misvalued codes that have stand-alone PE (codes with physician work and no listed work time and codes with no physician work that have listed work time).

In the CY 2016 PFS final rule with comment period, we finalized for review a list of potentially misvalued services, which included eight codes in the neurostimulators analysis-programming family (CPT 95970-95982). We also finalized as potentially misvalued 103 codes identified through our screen of high expenditure services across specialties.

In the CY 2017 PFS final rule, we finalized for review a list of potentially misvalued services, which included eight codes in the end-stage renal disease home dialysis family (CPT codes 90963-90970). We also finalized as potentially misvalued 19 codes identified through our screen for 0-day global services that are typically billed with an evaluation and management (E/M) service with modifier 25.

3. CY 2018 Identification and Review of Potentially Misvalued Services

In the CY 2012 PFS final rule with comment period (76 FR 73058), we finalized a process for the public to nominate potentially misvalued codes. The public and stakeholders may nominate potentially misvalued codes for review by submitting the code with supporting documentation by February 10 of each year. Supporting documentation for codes nominated for the annual review of potentially misvalued codes may include the following:

  • Documentation in peer reviewed medical literature or other reliable data that there have been changes in physician work due to one or more of the following: Technique, knowledge and technology, patient population, site-of-service, length of hospital stay, and work time.
  • An anomalous relationship between the code being proposed for review and other codes.
  • Evidence that technology has changed physician work.
  • Analysis of other data on time and effort measures, such as operating room logs or national and other representative databases.
  • Evidence that incorrect assumptions were made in the previous valuation of the service, such as a misleading vignette, survey, or flawed crosswalk assumptions in a previous evaluation.
  • Prices for certain high cost supplies or other direct PE inputs that are used to determine PE RVUs are inaccurate and do not reflect current information.
  • Analyses of work time, work RVU, or direct PE inputs using other data sources (for example: Department of Veteran Affairs (VA) National Surgical Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons (STS) National Database, and the Physician Quality Reporting System (PQRS) databases).
  • National surveys of work time and intensity from professional and management societies and organizations, such as hospital associations.

We evaluate the supporting documentation submitted with the nominated codes and assess whether the nominated codes appear to be potentially misvalued codes appropriate for review under the annual process. In the following year's PFS proposed rule, we publish the list of nominated codes and indicate whether we proposed each nominated code as a potentially misvalued code. The public has the opportunity to comment on these and all other proposed potentially misvalued codes. In that year's final rule, we finalize our list of potentially misvalued codes.Start Printed Page 53017

a. Public Nomination of Arthrodesis of Sacroiliac Joint (CPT Code 27279)

After we issued the CY 2017 PFS final rule, we received a nomination and supporting documentation for one code to be considered as potentially misvalued. We evaluated the supporting documentation for this nominated code to ascertain whether the submitted information demonstrated that the code should be proposed as potentially misvalued.

CPT code 27279 (Arthrodesis, sacroiliac joint, percutaneous or minimally invasive (indirect visualization), with image guidance, includes obtaining bone graft when performed, and placement of transfixing device) was nominated for review as a potentially misvalued code because the current work RVU is potentially undervalued and stakeholders recommended that it should be increased to 14.23. We proposed this code as a potentially misvalued code in the CY 2018 PFS proposed rule.

The following is a summary of the public comments received on whether CPT code 27279 should be reviewed under the misvalued code initiative and our responses:

Comment: One commenter disagreed with CMS' proposal of CPT code 27279 as potentially misvalued, while many other commenters supported the proposal because they believe the service is significantly undervalued relative to other PFS services. While some commenters suggested the work RVU should be increased relative to other joint replacement procedures, like CPT code 63030 (Laminotomy (hemilaminectomy), with decompression of nerve root(s), including partial facetectomy, foraminotomy and/or excision of herniated intervertebral disc; 1 interspace, lumbar) which has a work RVU of 13.18, other commenters recommended increasing the work RVU to 14.23 because they stated that value better reflects the technical difficulty and increased time required to perform the procedure. Other commenters suggested specific work RVUs that were higher than 14.23 for similar reasons.

A few commenters noted that CPT code 27279 is scheduled for review by the RUC in October 2018 as part of its standard review process. As a result, some commenters suggested that CMS should wait until the RUC makes a recommendation regarding the appropriate valuation of the code. Some commenters noted that the RUC intends to review this service in October 2018 and suggested that the timeframe for that review would mean that the code could not be appropriately valued prior to CY 2020.

Response: After reviewing the range of public comments, we agree with commenters that CPT code 27279 is a potentially misvalued, and believe that a comprehensive review of the code values is warranted.

While we appreciate the comments that included suggestions regarding the specific work RVUs that might represent more appropriate valuation, we agree with those commenters that urged us to wait for the code to be reviewed by the RUC. We note that should the RUC and other relevant stakeholders expedite their review process, we would be able to consider making changes during next year's rulemaking. If the RUC review process is not completed in time, we may not be able to make changes in next year's rulemaking and would wait for the RUC to complete its process before making changes in subsequent rulemaking.

b. Comment Solicitation on Dialysis Vascular Access Codes (CPT Codes 36901-36909)

In the CY 2017 PFS final rule, we noted that the assertions by some commenters regarding appropriate values for the dialysis vascular access codes newly created in CY 2017 (CPT codes 36901 through 36909) did not include data that would warrant increases to the work RVUs we proposed and finalized in that rule (81 FR 80290-80297). However, we urged interested stakeholders to consider submitting robust data regarding costs for these and other services (81 FR 80290-80297). We have continued to receive feedback from stakeholders regarding the work valuation of these codes. Stakeholders have expressed concerns regarding the typical patient for these procedures as reflected in the information included in the RUC recommendations for CY 2017 and the importance of appropriate payment for ensuring access to care for Medicare beneficiaries. Therefore, we sought additional comment and requested robust data regarding the potentially misvalued work RVUs for CPT codes 36901 through 36909 and considered alternate work valuations for CY 2018, such as the RUC-recommended work RVUs from CY 2017, or other potential values based on submission of data through the public comment process. We noted that the RUC-recommended work RVUs for these services were displayed in the CY 2017 PFS final rule (81 FR 80290 through 80296).

The following is a summary of the public comments received on CPT codes 36901-36909 and our responses:

Comment: Many commenters were concerned that the values currently assigned to the dialysis circuit family of codes have already and will continue to compromise patient access to vascular access services; with one commenter specifically requesting that CMS promptly reevaluate these codes. Several commenters supported increases to the work RVUs and explained that the greater complexity of the patient population for these services involved greater relative intensity than other services, especially since the codes involve obtaining new access as well as secondary access to the dialysis circuit, while the codes used as crosswalks for the current valuation involve colonoscopy through an existing access.

The overwhelming majority of commenters suggested we finalize the CY 2017 RUC-recommended work RVUs for CPT codes 36901-36909.

Response: We appreciate commenters' responses to our request for new information. After further reflection, we are persuaded by commenters' explanations regarding the complexities of care related to this patient population specifically and after reviewing these additional remarks, agree that these services are currently misvalued. Therefore for CY 2018, we are finalizing the CY 2017 RUC-recommended work RVUs for CPT codes 36901-36909, consistent with the requests of public commenters.

c. CMS Nomination of Flow Cytometry Codes (CPT Codes 88184 and 88185)

We have received conflicting information about the direct PE inputs for CPT codes 88184 (Flow cytometry, cell surface, cytoplasmic, or nuclear marker, technical component only; first marker) and 88185 (Flow cytometry, cell surface, cytoplasmic, or nuclear marker, technical component only; each additional marker (List separately in addition to code for first marker)). In the CY 2018 PFS proposed rule, we proposed these codes as potentially misvalued so that they can be reviewed again because some stakeholders have suggested the clinical labor and supplies that were previously finalized are no longer accurate.

Comment: We received several comments regarding various clinical labor and supply inputs for CPT codes 88184 and 88185 urging CMS to use the RUC recommendations for CY 2017 in developing final PE RVUs for these services instead of recommending additional review of these codes under the misvalued code initiative.

Response: We appreciate these comments and, based on this Start Printed Page 53018suggestion, we have re-examined the CY 2017 RUC-recommended direct PE inputs for these services in light of specific comments. We refer readers to section II.H of this final rule. This section describes the direct PE input changes between CY 2017 and CY 2018 for specific services.

d. Comment Solicitation on Emergency Department Payment Rates (CPT Codes 99281-99385)

We received information suggesting that the work RVUs for emergency department visits did not appropriately reflect the full resources involved in furnishing these services. Specifically, stakeholders expressed concerns that the work RVUs for these services have been undervalued given the increased acuity of the patient population and the heterogeneity of the sites, such as freestanding and off-campus emergency departments, where emergency department visits are furnished. Therefore, we sought comment on whether CPT codes 99281-99385 (Emergency department visits for the evaluation and management of a patient) should be reviewed under the misvalued code initiative.

The following is a summary of the public comments received on whether CPT codes 99281-99385 should be reviewed under the misvalued code initiative and our responses:

Comment: Most commenters had no objection to review of these codes. Several commenters stated that the work RVUs for the emergency department evaluation and management (E/M) services, like most other E/M services, are undervalued given the increased acuity of the patient population and the heterogeneity of the sites where emergency department visits are furnished. One commenter suggested that CMS evaluate alternatives to the misvalued code initiative for review of these codes, but another commenter explicitly stated that review of these services should be undertaken by the RUC rather than CMS. In its comment, the RUC stated if CMS finalizes the codes as potentially misvalued, it will add these codes to its list of potentially misvalued services.

In contrast, one commenter stated that the problem of under-reimbursement for these services would be better addressed by streamlining the E/M process for documenting the higher level of care. Another commenter stated that given the significant changes to documentation guidelines for E/M services that may be forthcoming in this rule cycle, it is premature and somewhat difficult to advise on potential revaluation of any E/M codes, pending details on how the documentation guideline revisions are resolved.

Response: We agree with the majority of commenters that these services may be potentially misvalued given the increased acuity of the patient population and the heterogeneity of the sites where emergency department visits are furnished. As a result, we look forward to reviewing the RUC's recommendations regarding the appropriate valuation of these services for our consideration in future notice and comment rulemaking. Additionally, regarding the commenters' concerns about documentation guidelines for E/M services, we refer readers to section II.I for details regarding our comment solicitation on documentation for E/M guidelines more generally.

e. Comment Solicitation on New Potentially Misvalued Code Screens

For over a decade, CMS has collaborated with the RUC to regularly prioritize codes for review by using the categories specified in the statute or as determined appropriate. We generally have referred to these categories as “misvalued code screens.” To supplement ongoing RUC identification of potentially misvalued codes through established screens, CMS regularly uses PFS rulemaking to identify other screens for use in identifying potentially misvalued codes. For example, in recent years, CMS has prioritized the following screens:

  • Codes with low work RVUs commonly billed in multiple units per single encounter.
  • Codes with high volume and low work RVUs.
  • Codes with site-of-service-anomalies.
  • E/M codes.
  • PFS high expenditure services.
  • Services with standalone PE procedure time.
  • Services with anomalous time.
  • Contractor Medical Director identified potentially misvalued codes.
  • Codes with higher total Medicare payments in office than in hospital or ASC.
  • Publicly nominated potentially misvalued codes.
  • 0-day global services that are typically billed with an evaluation and management (E/M) service with modifier 25.

Although we did not propose a new screen for CY 2018, we continue to believe that it is important to prioritize codes for review under the misvalued code initiative. As a result, we solicited public comment on the best approach for developing screens, as well as what particular new screens we might consider. We will consider these comments for future rulemaking.

The following is a summary of the public comments received on the best approach for developing screens, as well as what particular new screens we might consider and our responses:

Comment: One commenter suggested revisiting two recent efforts funded by CMS, reports by the Urban Institute and RAND, for prioritization of codes for review under the misvalued code initiative. Both reports include examination on the relationship between service times and work RVUs, in some cases for specific services. One commenter suggested that we no longer utilize potentially misvalued code screens due to the burden it causes the specialty societies. Other commenters suggest that CMS work in collaboration with the RUC to identify potentially misvalued codes and to not re-review codes that were recently reviewed by the RUC.

Response: We thank commenters for their input and will consider all recommendations for future rulemaking.

F. Payment Incentive for the Transition from Traditional X-Ray Imaging to Digital Radiography and Other Imaging Services

Section 502(a)(1) of Division O, Title V of the Consolidated Appropriations Act of 2016 (Pub. L. 114-113) amended section 1848(b) of the Act by establishing a new paragraph (9) of subsection (b). Section 1848(b)(9)(B) of the Act provides for a 7 percent reduction in payments for the technical component (TC) for imaging services made under the PFS that are X-rays (including the technical component portion of a global service) taken using computed radiography technology furnished during CYs 2018 through 2022, and for a 10 percent reduction for the technical component of such imaging services furnished during CY 2023 or a subsequent year. Computed radiography technology is defined for purposes of this paragraph as cassette-based imaging that utilizes an imaging plate to create the image involved. Section 1848(b)(9) of the Act also requires implementation of the reduction in payments through appropriate mechanisms, which can include the use of modifiers. In accordance with section 1848(c)(2)(B)(v)(X) of the Act, the adjustments under section 1848(b)(9)(A) of the Act are exempt from the budget neutrality requirement.

We stated in the CY 2017 PFS proposed rule that because the required reductions in PFS payment for the TC Start Printed Page 53019of imaging services (including the TC portion of a global service) that are X-rays taken using computed radiography technology did not apply for CY 2017, we would address implementation of section 1848(b)(9)(B) of the Act in future rulemaking. Therefore, to implement the provisions of section 1848(b)(9)(B) of the Act relating to the payment reduction for the TC (including the TC portion of a global service) of X-rays taken using computed radiography technology during CY 2018 or subsequent years, we proposed in the CY 2018 PFS proposed rule to establish a new modifier to be used on claims for these services.

We proposed that beginning January 1, 2018, this modifier would be required to be used when reporting imaging services for which payment is made under the PFS that are X-rays (including the X-ray component of a packaged service) taken using computed radiography technology. The modifier would be required on claims for the technical component of the X-ray service, including when the service is billed globally because the PFS payment adjustment is made to the technical component regardless of whether it is billed globally, or billed separately using the TC modifier. The modifier must be used to report the specific services that are subject to the payment reduction and accurate use is subject to audit. The use of this proposed modifier to indicate an X-ray taken using computed radiography would result in a 7 percent reduction for CYs 2018 through 2022 and a 10 percent reduction for CY 2023 or a subsequent calendar year to the payments for the TC for such imaging services furnished as specified under section 1848(b)(9)(B) of the Act.

The following is a summary of the public comments received and our responses:

Comment: One commenter noted support for the computed radiography to digital X-ray payment differential but sought clarification regarding its implementation. The commenter stated that a new modifier will be designated to denote the CPT codes for computed radiography and HCPCS X-ray codes that are subject to the payment reduction; however, no listing of such codes was provided in the proposed rule. The commenter noted that similarly last year it requested a listing of the X-ray codes to which the modifier would apply. CMS declined to provide such a list on the basis that the payment differential would apply to any service performed using the film X-rays. The commenter stated that the listing of the film and computed radiography CPT and HCPCS codes would facilitate easy implementation, prevent ambiguity, be less burdensome, and prevent risk of audit.

Response: We considered the commenter's concerns and recommendation that we maintain a list of CPT and HCPCS codes to which the policy applies. However, we do not agree that such a list would facilitate easy implementation, prevent ambiguity, be less burdensome, or prevent the risk of audit. We believe that the professionals who furnish and bill for these services are in the best position to determine whether a particular imaging service is appropriately described as X-rays taken using computed radiography.

Comment: Some commenters expressed concern that rural and underserved areas are particularly penalized by this provision and that the use of a modifier places a burden on all providers and creates another opportunity for miscoding.

Response: We appreciate the commenters' concerns, but under current law, we do not currently believe that we have authority to provide exemptions from the policy. We believe that the use of a modifier is the least burdensome method to identify the services to which the payment reduction applies, and to implement the required payment reduction for services that are X-rays taken using computed radiography.

Comment: One commenter opined that the continued overall trend in imaging payment reductions is not sustainable for any quality imaging provider and that CMS should look for more creative solutions such as the AUC program, as well as reductions in mandated reporting.

Response: We thank the commenter for the suggestions and will take these recommendations into consideration for future rulemaking.

Comment: One commenter requested that CMS work with Congress to delay or eliminate the payment reductions, and ensure that clinicians are thoroughly educated and outreach is provided to ensure that stakeholders are thoroughly aware of the new requirements.

Response: We will include information to educate clinicians regarding the new modifier requirement for services that are X-rays taken using computed radiography as part of ongoing provider education activities, though we acknowledge that we also appreciate assistance from private, national organizations, such as medical specialty societies in educating their membership. We appreciate the commenters' concerns regarding the overall merits of the statutory provision, but we do not believe that we have the authority to alter the application of the provision.

Comment: Some commenters urged that physician practices be held harmless from financial and criminal penalties if the new modifiers are omitted or incorrectly applied at least for the first 3 years of the program (2017-2019). In addition, the commenter stated that audits by the Recovery Audit Contractors (RACs) related to the implementation of the transition from traditional X-ray imaging to digital radiology using the modifier should not be approved for the same time period.

Response: We appreciate these suggestions and concerns but note that this final rule specifically addresses the payment policies related to the statutory provision. The kinds of enforcement activities addressed by these commenters are outside the scope of this final rule.

Comment: Some commenters supported the use of the modifier to implement this requirement, but requested that the modifier be released as soon as possible in order to allow radiology practices to work out the logistics associated with compliance with the new requirement.

Response: To implement this provision, we created modifier “FY” (X-ray taken using computed radiography technology/cassette-based imaging). Beginning in 2018, claims for X-rays taken using computed radiography/cassette-based imaging must include modifier “FY” that will result in the applicable payment reduction.

Comment: One commenter supported the use of the modifier as the best indicator for the use of traditional X-rays or digital radiology. Another commenter supported the transition to digital imaging services because, according to the commenter, it is essential to reach widespread interoperability.

Response: We thank commenters for their support.

After consideration of the public comments, we are finalizing the proposal without modification.

G. Payment Rates Under the Medicare Physician Fee Schedule for Nonexcepted Items and Services Furnished by Nonexcepted Off-Campus Provider-Based Departments of a Hospital

1. Background

Sections 1833(t)(1)(B)(v) and (t)(21) of the Act require that certain items and Start Printed Page 53020services furnished by certain off-campus provider-based departments (PBDs) (collectively referenced here as nonexcepted items and services furnished by nonexcepted off-campus PBDs) shall not be considered covered OPD services for purposes of payment under the OPPS, and payment for those nonexcepted items and services furnished on or after January 1, 2017 shall be made under the applicable payment system. In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79713), we finalized the PFS as the “applicable payment system” for most nonexcepted items and services furnished by off-campus PBDs.

As part of that discussion, we indicated that, in response to public comments received on the proposed payment policies for nonexcepted items and services, we would issue an interim final rule with comment period (the CY 2017 interim final rule, 81 FR 79720 through 79729) to establish payment policies under the PFS for nonexcepted items and services furnished on or after January 1, 2017. In the following paragraphs, we summarize what we proposed for the payment policies under the PFS for nonexcepted items and services furnished during CY 2018. The CY 2017 interim final rule can be found on the Internet at https://www.gpo.gov/​fdsys/​pkg/​FR-2016-11-14/​pdf/​2016-26515.pdf.

2. Payment Mechanism

Coding and payment policies under the PFS have long recognized the differences between the portions of services for which direct costs generally are incurred by practitioners and the portions of services for which direct costs generally are incurred by facilities. At present, the coding and RVUs established for particular groups of services under the PFS generally reflect such direct cost differences. As described in section II.B of this final rule, we establish separate nonfacility and facility RVUs for many HCPCS codes describing particular services paid under the PFS. For many other services, we establish separate RVUs for the professional component and the technical component of the service described by the same HCPCS code. For other services, we establish RVUs for the different HCPCS codes that segregate and describe the discrete professional and technical aspects of particular services.

Because hospitals with nonexcepted off-campus PBDs that furnish nonexcepted items and services are likely to furnish a broader range of services than other provider or supplier types for which there is a separately valued technical component under the PFS, for CY 2017, we established a new set of payment rates under the PFS that reflected the relative resource costs of furnishing the technical component of a broad range of services to be paid under the PFS specific to the nonexcepted off-campus PBD of a hospital with packaging (bundling) rules that are unique to the hospital outpatient setting under the OPPS.

In principle, the coding and billing mechanisms required to make appropriate payment to hospitals for nonexcepted items and services furnished by nonexcepted off-campus PBDs are parallel to those used to make payment for the technical component services for a range of supplier types paid under the PFS. That is, payments to hospitals are made for the technical aspect of services, while physicians and other practitioners report the professional aspect of these same services. In some cases, the entities reporting the technical aspect of services use the same coding that is used by the individuals reporting the professional services. In other cases, different coding applies. We proposed to maintain this coding and billing mechanism for CY 2018.

Comment: A number of commenters supported our proposal to continue to allow hospitals to bill using an institutional claim with the modifier “PN” to indicate that the nonexcepted items and services are furnished by nonexcepted PBDs.

Response: We appreciate the comments in support of our proposal to allow hospitals to continue to bill for nonexcepted items and services furnished by nonexcepted off-campus PBDs using an institutional claim for CY 2018.

3. Establishment of Payment Rates

Using the relativity among OPPS payments to establish rates for the nonexcepted items and services furnished by nonexcepted off-campus PBDs and billed by hospitals under the PFS was only one aspect of establishing the necessary relativity of these services under the PFS more broadly. It was necessary to estimate the relativity of these services compared to PFS services furnished in other settings paid under the PFS. For CY 2017, we used our best estimate of the more general relativity between the technical component of PFS services furnished in nonexcepted off-campus PBDs and all other PFS services furnished in other settings using the limited information available to us at that time. As described in the CY 2017 interim final rule (81 FR 79722 through 79726), we estimated that for CY 2017, scaling the OPPS payment rates downward by 50 percent would strike an appropriate balance that avoided potentially underestimating the relative resources involved in furnishing services in nonexcepted off-campus PBDs as compared to the services furnished in other settings for which payment was made under the PFS. Specifically, we established site-specific rates under the PFS for the technical component of the broad range of nonexcepted items and services furnished by nonexcepted off-campus PBDs to be paid under the PFS that was based on the OPPS payment amount for the same items and services, scaled downward by 50 percent. We called this adjustment the “PFS Relativity Adjuster.” The PFS Relativity Adjuster refers to the percentage of the OPPS payment amount paid under the PFS for a nonexcepted item or service to the nonexcepted off-campus PBD under this policy.

a. Methodology for Establishing CY 2017 PFS Relativity Adjuster

In developing the CY 2017 interim final rule, we began by analyzing hospital outpatient claims data from January 1 through August 26, 2016, that contained the “PO” modifier signifying that they were billed by an off-campus department of a hospital paid under the OPPS other than a remote location, a satellite facility, or a dedicated emergency department (ED). We noted that the use of the “PO” modifier was a new mandatory reporting requirement for CY 2016. We limited our analysis to those claims billed on the 13X Type of Bill because those claims were used for Medicare Part B billing under the OPPS. We then identified the top (most frequently billed) 25 major codes that were billed by claim line; that is, items and services that were separately payable or conditionally packaged. Specifically, we restricted our analysis to codes with OPPS status indicators “J1”, “J2”, “Q1”, “Q2”, “Q3”, “S”, “T”, or “V”. We did not include separately payable drugs or biologicals in this analysis because those drugs or biologicals were not paid under the PFS under the CY 2017 interim final rule. As such, under the CY 2017 interim final rule, the PFS Relativity Adjuster did not apply to separately payable drugs and biologicals furnished by a nonexcepted off-campus PBD. Similarly, we excluded codes assigned an OPPS status indicator “A” because the services described by those codes were already paid at a rate under a fee schedule other than the OPPS and payment for those nonexcepted items and services was not changed by the rates established under Start Printed Page 53021the CY 2017 interim final rule. Next, for the same major codes (or analogous codes in the rare instance that different coding applies under the OPPS than the PFS), we compared the CY 2016 payment rate under the OPPS to a CY 2016 payment rate under the PFS attributable to the nonprofessional relative resource costs involved in furnishing the services.

The most frequently billed service with the “PO” modifier was described by HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient), which is paid under APC 5012; the total number of CY 2016 claim lines for that service was approximately 6.7 million as of August 2016. In CY 2016, the OPPS payment rate for APC 5012 was $102.12. Because there were multiple CPT codes (CPT codes 99201 through 99215) used under the PFS for billing that service, an exact comparison between the $102.12 OPPS payment rate for APC 5012 and the payment rate for a single CPT code billed under the PFS was not possible. Therefore, for purposes of the analysis, we examined the difference between the nonfacility payment rates and the facility payment rates under the PFS for CPT codes 99213 and 99214, which were the billing codes for a Level III and a Level IV office visit. Although we did not have data to precisely determine the equivalent set of PFS visit codes to use for the comparison, we believed that, based on the distribution of services billed for the visit codes under the PFS and the distribution of the visit codes under the OPPS from the last time period the CPT codes were used under the OPPS in CY 2014, those two codes provided reliable points of comparison. For CPT code 99213, the difference between the nonfacility payment rate and the facility payment rate under the PFS in CY 2016 was $21.86, which was 21 percent of the OPPS payment rate for APC 5012 of $102.12. For CPT code 99214, the difference between the nonfacility payment rate and the facility payment rate under the PFS in CY 2016 was $29.02, which was 28 percent of the OPPS payment rate for APC 5012. However, we recognized that, due to the more extensive packaging that occurred under the OPPS for services provided along with clinic visits relative to the more limited packaging that occurred under the PFS for office visits, those payment rates were not entirely comparable.

We then assessed the next 24 major codes most frequently billed on the 13X claim form by hospitals. We removed HCPCS code 36591 (Collection of blood specimen from a completely implantable venous access device) because, under current PFS policies, the code is used only to pay separately under the PFS when no other service was on the claim. We also removed HCPCS code G0009 (Administration of Pneumococcal Vaccine) because there was no payment for the code under the PFS. For the remaining 22 major codes most frequently billed, we estimated the amount that would have been paid to the physician in the office setting under the PFS for practice expenses not associated with the professional component of the service. As indicated in Table 9, this amount reflected (1) the difference between the PFS nonfacility payment rate and the PFS facility rate, (2) the technical component, or (3) in instances where payment would have been made only to the facility or only to the physician, the full nonfacility rate. This estimate ranged from zero percent to 137.8 percent of the OPPS payment rate for a code. Overall, the average (weighted by claim line volume times rate) of the nonfacility payment rate estimate for the PFS compared to the estimate for the OPPS for the 22 remaining major codes was 45 percent.

Table 9—Comparison of CY 2016 OPPS Payment Rate to CY 2016 PFS Payment Rate for Top Hospital Codes Billed Using the “PO” Modifier

HCPCS codeCode descriptionTotal claim linesCY 2016 OPPS payment rateCY 2016 applicable PFS technical payment amount estimateCol (5) as a percent of OPPSPFS estimate
(1)(2)(3)(4)(5)(6)
96372Injection beneath the skin or into muscle for therapy, diagnosis, or prevention338,444$42.31$25.4260.1Single rate paid exclusively to either practitioner or facility: Full nonfacility rate.
71020X-ray of chest, 2 views, front and side333,20360.8016.8327.7Technical component: Full nonfacility rate.
93005Routine electrocardiogram (EKG) with tracing using at least 12 leads318,09955.948.5915.4Technical component: Full nonfacility rate.
96413Infusion of chemotherapy into a vein up to 1 hour254,704280.27136.4148.7Single rate paid exclusively to either practitioner or facility: Full nonfacility rate.
93798Physician services for outpatient heart rehabilitation with continuous EKG monitoring per session203,926103.9211.1010.7Nonfacility rate—Facility rate.
96375Injection of different drug or substance into a vein for therapy, diagnosis, or prevention189,14042.3122.5653.3Single rate paid exclusively to either practitioner or facility: Full nonfacility rate.
93306Ultrasound examination of heart including color-depicted blood flow rate, direction, and valve function179,840416.80165.7739.8Technical component: Full nonfacility rate.
77080Bone density measurement using dedicated X-ray machine155,513100.6931.1530.9Technical component: Full nonfacility rate.
77412Radiation treatment delivery137,241194.35267.86137.8Technical component (Full nonfacility rate) based on weighted averages for the following PFS codes: G6011; G6012; G6013; and G6014.
90853Group psychotherapy123,28269.650.360.5Nonfacility rate—Facility rate.
96365Infusion into a vein for therapy, prevention, or diagnosis up to 1 hour122,641173.1869.8240.3Nonfacility rate—Facility rate.
20610Aspiration and/or injection of large joint or joint capsule106,769223.7613.966.2Nonfacility rate—Facility rate.
11042Removal of skin and tissue first 20 sq cm or less99,134225.5554.7824.3Nonfacility rate—Facility rate.
Start Printed Page 53022
96367Infusion into a vein for therapy prevention or diagnosis additional sequential infusion up to 1 hour98,93042.3130.7972.8Single rate paid exclusively to either practitioner or facility: Full nonfacility rate.
93017Exercise or drug-induced heart and blood vessel stress test with EKG tracing and monitoring96,312220.3539.7418.0Technical component: Full nonfacility rate.
77386Radiation therapy delivery81,925505.51347.3068.7Technical component: Nonfacility rate for CPT code G6015 (analogous code used under the PFS).
78452Nuclear medicine study of vessels of heart using drugs or exercise—multiple studies79,2421,108.46412.8237.2Technical component: Full nonfacility rate.
74177CT scan of abdomen and pelvis with contrast76,393347.72220.2063.3Technical component: Full nonfacility rate.
71260CT scan chest with contrast75,052236.86167.2170.6Technical component: Full nonfacility rate.
71250CT scan chest74,570112.49129.61115.2Technical component: Full nonfacility rate.
73030X-ray of shoulder, minimum of 2 views71,33060.8019.3331.8Technical component: Full nonfacility rate.
90834Psychotherapy, 45 minutes with patient and/or family member70,524125.040.360.3Nonfacility rate—Facility rate.
Weighted Average (claim line volume * rate) of the PFS payment compared to OPPS payment for the 22 major codes:45%

As noted with the clinic visits, we recognized that there were limitations to our data analysis, including that OPPS payment rates include the costs of packaged items or services billed with the separately payable code, and therefore the comparison to rates under the PFS was not a one-to-one comparison. Also, we included only a limited number of services, and noted that additional services may have different patterns than the services described. After considering the payment differentials for major codes billed by off-campus departments of hospitals with the “PO” modifier and based on the data limitations of our analysis, we adopted, with some exceptions noted below, a set of PFS payment rates that were based on a 50 percent PFS Relativity Adjuster to the OPPS payment rates (inclusive of packaging) for nonexcepted items and services furnished by nonexcepted off-campus PBDs in the CY 2017 interim final rule. Generally speaking, we arrived at the 50 percent PFS Relativity Adjuster by examining the 45 percent comparison noted above, the ASC payment rate—which was roughly 55 percent of the OPPS payment rate on average—and the payment rate differential for the large number of OPPS and PFS E/M services, as described above. We recognized that the equivalent PFS nonfacility rates may be higher or lower on a code-specific basis than the rates that result from applying the overall PFS Relativity Adjuster to the OPPS payment rates on a code-specific basis. However, we believed that, on the whole, the percentage reduction did not underestimate the overall relativity between the OPPS and the PFS based on the limited data that were available. We were concerned, however, that the 50 percent PFS Relativity Adjuster might overestimate PFS nonfacility payments relative to OPPS payments. For example, if we were able at the time to sufficiently estimate the effect of the packaging differences between the OPPS and PFS, we suspected that the equivalent portion of PFS payments for evaluation and management codes, and for PFS services on average, would likely have been less than 50 percent for the same services. We considered the 50 percent PFS Relativity Adjuster for CY 2017 to be a transitional policy until such time that we had more precise data to better identify and value nonexcepted items and services furnished by nonexcepted off-campus PBDs and billed by hospitals.

We established several significant exceptions to the application of the 50 percent PFS Relativity Adjuster. For example, we did not apply the 50 percent PFS Relativity Adjuster to services that are currently paid under the OPPS based on payment rates from other Medicare fee schedules (including the PFS) on an institutional claim. The items and services that are assigned status indicator “A” in Addendum B to the CY 2017 OPPS/ASC final rule with comment period (available on the CMS Web site at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Hospital-Outpatient-Regulations-and-Notices-Items/​CMS-1656-FC.html) continue to be reported on an institutional claim and paid under the required Medicare fee schedule such as the PFS, the CLFS, or the Ambulance Fee Schedule without a payment reduction. Similarly, drugs and biologicals that are separately payable under the OPPS (identified by status indicator “G” or “K” in Addendum B to the CY 2017 OPPS/ASC final rule with comment period) are paid in accordance with section 1847A of the Act (that is, typically ASP + 6 percent), consistent with payment rules in the physician office setting. Drugs and biologicals that are unconditionally packaged under the OPPS and are not separately payable (that is, those drugs and biologicals assigned status indicator of “N” in Addendum B to the CY 2017 OPPS/ASC final rule with comment period) are bundled into the PFS payment and are not separately paid to hospitals billing for nonexcepted items and services furnished by nonexcepted off-campus PBDs. The full range of exceptions and adjustments to the otherwise applicable OPPS payment rate that were adopted in the new PFS site-of-service payment rates in the CY 2017 interim final rule can be found on the CMS Web site at https://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​HospitalOutpatientPPS/​Downloads/​Start Printed Page 53023CMS-1656-FC-2017-OPPS-Status-Indicator.zip.

All nonexcepted items and services furnished by nonexcepted off-campus PBDs and billed by a hospital on an institutional claim with modifier “PN” (Nonexcepted service provided at an off-campus, outpatient, provider-based department of a hospital) are currently paid under the PFS at the rate established in the CY 2017 interim final rule. Specifically, nonexcepted off campus PBDs must report modifier “PN” on each UB-04 claim line to indicate a nonexcepted item or service, and otherwise continue to bill as they currently do. Further billing instructions on the PN modifier can be found in the January 2017 OPPS Quarterly Update (transmittal 3685, Change Request 9930) released December 22, 2016, available on the CMS Web site at https://www.cms.gov/​Regulations-and-Guidance/​Guidance/​Transmittals/​Downloads/​R3685CP.pdf.

b. PFS Relativity Adjuster

As noted in the CY 2017 interim final rule, we considered the CY 2017 PFS Relativity Adjuster of 50 percent to be a transitional policy until such time that we had more precise data to better identify and value nonexcepted items and services furnished by nonexcepted off-campus PBDs and billed by hospitals. At present, we do not have more precise data than were available when we established the PFS Relativity Adjuster in the CY 2017 interim final rule, and we do not anticipate having such data until after the end of CY 2017, at the earliest. However, in developing a policy for CY 2018, we have continued to explore options for modifying the calculation of the CY 2018 PFS Relativity Adjuster.

There is no consensus among stakeholders regarding the appropriate PFS Relativity Adjuster. Many stakeholders have suggested that making separate facility fee payments to hospitals under the PFS for all services that are separately paid under the OPPS itself undermines site neutral payment because practitioners are only paid a single combined fee for many services when furnished in an office setting, while there are two separate fees (professional and facility) paid when the service is furnished in the hospital setting. We acknowledge that there are many cases where single fees are paid to practitioners for services furnished in an office setting while fees for comparable services when furnished in the hospital setting are paid to both the professional and facility entities. However, we do not agree that this necessarily means that overall payment cannot be site neutral. We point out that the sum of the professional and the facility portions of payment for a service furnished in a nonexcepted off-campus PBD or in a different institutional setting could be equivalent to a single fee paid to the professional in the office setting. In the case of some services, in fact, the single payment made under the PFS at the nonfacility rate exceeds the sum of the separate payments Medicare makes to the professional at the facility rate under the PFS and to the facility under the OPPS. We also note that there are many separately reportable services under the PFS (for example, the vast majority of services described by add-on codes) for which separate payment is made to physician offices but no separate payment is made under either the OPPS or under the site-specific PFS payments made to hospitals billing for nonexcepted items and services furnished by nonexcepted off-campus PBDs. For these reasons, we believe that the overall total payment made for services is more relevant to the goal of site neutrality than the quantity of individual payments made. Nonetheless, we continue to recognize and share stakeholders' concerns regarding the importance of equivalent overall payment for services, regardless of setting.

In considering the appropriate PFS Relativity Adjuster for CY 2018, we continue to believe that claims data from CY 2017, which are not yet available, are needed to guide potential changes to our general approach. In the absence of such data, however, we have continued to consider the appropriate PFS Relativity Adjuster based on the information that is available. In the analysis we used to establish the PFS Relativity Adjuster for CY 2017, we attempted to identify the appropriate value by comparing OPPS and PFS payment rates for services frequently reported in off-campus departments of a hospital and described by the same codes under the two payment systems. As we acknowledged in the CY 2017 interim final rule, that data analysis did not include the most frequently billed service furnished in off-campus departments of a hospital, outpatient clinic visits. Outpatient clinic visits are reported using a single G-code under the OPPS and by one of ten different codes under the PFS.

Consistent with our previously stated concern that the PFS Relativity Adjuster for CY 2017 might be too small, generally resulting in greater overall payments to hospitals for services furnished by nonexcepted off-campus PBDs than would otherwise be paid under the PFS in the non-facility setting, we believed it was appropriate to propose changing the PFS Relativity Adjuster in order to ensure that payment made to these nonexcepted off-campus PBDs better aligns with these services that are the most frequently furnished in this setting.

In the CY 2018 PFS proposed rule, we proposed to revise the PFS Relativity Adjuster for nonexcepted items and services furnished by nonexcepted off-campus PBDs to be 25 percent of the OPPS payment rate. We arrived at this PFS Relativity Adjuster by making a code-level comparison for the service most commonly billed in the off-campus PBD setting under the OPPS: A clinic visit reported using HCPCS code G0463. In order to determine the analogous payment for the technical aspects of this service under the PFS in nonfacility settings, we compared the CY 2017 OPPS national payment rate for HCPCS code G0463 ($102.12) to the difference between the nonfacility and facility PFS payment amounts under the PFS using CY 2016 rates for the weighted average of outpatient visits (CPT codes 99201-99205 and CPT codes 99211-99215) billed by physicians and other professionals in an outpatient hospital department as the place of service.

The proposed PFS Relativity Adjuster of 25 percent was based solely on the comparison for the single service that reflects more than 50 percent of services billed in off-campus PBDs. We continue to recognize that the comparison between the OPPS and PFS rates for other services varies greatly, and that there are other factors, including the specific mix of services furnished by nonexcepted off-campus PBDs, policies related to packaging of codes under OPPS, and payment adjustments like MPPRs and bundling under the PFS that rely on empirical information about whether or not codes are billed on the same day, that contribute to the differences in aggregate payment amounts for a broader range of services. However, for CY 2018, as for CY 2017, we are setting the PFS Relativity Adjuster using currently available data from CY 2016 because we have not had the opportunity to study the CY 2017 claims data that may allow us to consider and incorporate many more factors, including the ones stated above. When we established the PFS Relativity Adjuster for CY 2017 at 50 percent, we stated that we did so with the goal of ensuring adequate payment but remained concerned that the resulting reduction was too conservative. For CY 2018, we were focused on ensuring that we did not overestimate the appropriate overall payment relativity for these nonexcepted items and services. Until Start Printed Page 53024we are able to analyze the CY 2017 claims data, we believed that the comparison between PFS and OPPS payment for the most common services furnished in off-campus PBDs, an outpatient clinic visit, was a better proxy to base the adjuster than our previous approach.

We welcomed stakeholder input with regard to this analysis and the resulting PFS Relativity Adjuster. We also requested comment on whether we should adopt a different PFS Relativity Adjuster, such as 40 percent, that represents a relative middle ground between the CY 2017 PFS Relativity Adjuster, selected to ensure adequate payment to hospitals and our proposed CY 2018 PFS Relativity Adjuster, selected to ensure that hospitals are not paid more than others would be paid through the PFS nonfacility rate. We intend to continue to study this issue and welcomed comments regarding potential future refinements to payment rates for nonexcepted items and services furnished by nonexcepted off-campus PBDs as we gain more experience with these new site-of-service PFS rates.

Finally, we noted that for CY 2018, as in recent years, the annual update to OPPS payments exceeds the annual update to PFS payments. Because we proposed to make a single, across-the-board and, by necessity, imprecise adjustment to OPPS payment rates to establish PFS payment rates for nonexcepted items and services furnished by nonexcepted off-campus PBDs, we expected that the actual difference between OPPS and PFS payment rates for nonexcepted items and services furnished by nonexcepted off-campus PBDs falls in a range which includes our proposed PFS Relativity Adjuster (that is, the actual differential may differ from our proposed PFS Relativity Adjuster). As such, taking into account the differential between the OPPS and PFS annual updates by making an adjustment to the PFS Relativity Adjuster, our proposal for CY 2018 presumed a level of precision in our estimates that is simply not present in our analysis. Therefore, we did not adjust our proposal to reflect the relative updates to PFS and OPPS between CY 2017 and CY 2018, and instead noted that the differential between the OPPS and PFS payment update for CY 2018 is a factor that suggests that the PFS Relativity Adjuster may underestimate PFS nonfacility payment relative to OPPS payments; in future years, we intend to more precisely account for any differential between these two update factors.

c. Geographic Adjustments

For CY 2017, we established class-specific geographic practice cost indices (GPCIs) under the PFS exclusively used to adjust these site-specific, technical component rates for nonexcepted items and services furnished in nonexcepted off-campus PBDs. These class-specific GPCIs are parallel to the geographic adjustments made under the OPPS based on the hospital wage index. We believed it was appropriate to adopt the hospital wage index areas for purposes of geographic adjustment because nonexcepted off-campus PBDs are still considered to be part of a hospital, and the PFS payments to these entities will be limited to the subset of PFS services furnished by hospitals. We also believed it was appropriate, as an initial matter for CY 2017, to adopt the actual wage index values for these hospitals in addition to the wage index areas. The PFS GPCIs that would otherwise currently apply are not based on the hospital wage index areas. For CY 2018, we proposed to continue using the authority under section 1848(e)(1)(B) of the Act to maintain a class-specific set of GPCIs for these site-specific technical component rates that are based both on the hospital wage index areas and the hospital wage index value themselves. For purposes of payment to hospitals, this means that the geographic adjustments used under the OPPS continue to apply.

d. Coding Consistency

For most services, the same HCPCS codes are used to describe services paid under both the PFS and the OPPS. There are two notable exceptions that describe high-volume services. The first is the set of codes that describe evaluation and management (E/M) services which are reported under the PFS using the 5 levels of CPT codes describing new or established patient visits (for a total of 10 codes). However, since CY 2014, these visits have been reported under the OPPS using the single HCPCS code G0463 (Hospital Outpatient Clinic Visit) (see 78 FR 75042). We proposed to maintain the current coding and PFS payment rate for HCPCS code G0463 based on the OPPS payment rate modified by the PFS Relativity Adjuster.

The second exception is a set of radiation treatment delivery and imaging guidance services that are reported using different codes under the PFS and the OPPS. CMS established HCPCS Level II G-codes to describe radiation treatment delivery services when furnished in the physician office setting (see 79 FR 67666 through 67667). However, these HCPCS G-codes are not recognized under the OPPS; rather, CPT codes are used to describe these services when furnished in the HOPD. Both sets of codes were implemented for CY 2015 and were maintained for CY 2016. Under the PFS, there is a statutory provision under section 1848(c)(2)(K) of the Act that requires maintenance of the CY 2016 coding and payment inputs for these services for CY 2017 and also for CY 2018. Accordingly, the CY 2018 PFS rates for these services are calculated based on the maintenance of the CY 2016 coding and payment inputs. Because nonexcepted items and services furnished by a nonexcepted off-campus PBD are paid under the PFS starting in CY 2017, and we are required to maintain the CY 2016 coding and payment inputs for these services under the CY 2018 PFS, we proposed to maintain coding and payment amounts for nonexcepted items and services furnished by a nonexcepted off-campus PBD consistent with the payments that would be made to other facilities under the PFS. That is, nonexcepted off-campus PBDs submitting claims for these nonexcepted items and services will continue to bill the HCPCS G-codes established under the PFS to describe radiation treatment delivery services. Under this proposal, the nonexcepted off-campus PBD must append modifier “PN” to each applicable claim line for these nonexcepted items and services, even though the PFS Relativity Adjuster will not apply, on the institutional claim. The payment amount for these services would be set to reflect the technical component rate for the code under the PFS.

4. OPPS Payment Adjustments

In the CY 2017 interim final rule, we adopted the packaging payment rates and MPPR percentage that applied under the OPPS to establish the PFS payment rates for nonexcepted items and services furnished by nonexcepted off-campus PBDs and billed by hospitals. That is, the claims processing logic that was used for payments under the OPPS for comprehensive APCs (C-APCs), conditionally and unconditionally packaged items and services, and major procedures, was incorporated into the newly established PFS rates. We continue to believe it is necessary to incorporate the OPPS payment policies for C-APCs, packaged items and services, and the MPPR in order to maintain the integrity of the PFS Relativity Adjuster because the adjuster is intended, in part, to account for the methodological differences between the OPPS and the PFS rates that would otherwise apply. We also Start Printed Page 53025direct interested stakeholders to related policies under the OPPS, since prospective changes in the applicable adjustments and policies would generally apply to nonexcepted items and services furnished by nonexcepted off-campus PBDs for CY 2018. We were interested in comments regarding the applicability of particular prospective OPPS adjustments to nonexcepted items and services.

In order to apply these OPPS payment policies and adjustments to nonexcepted items and services, we proposed that hospitals continue to bill on an institutional claim form that will pass through the Outpatient Code Editor and into the OPPS PRICER for calculation of payment. This approach will yield data based on claims for nonexcepted items and services furnished by nonexcepted off-campus PBDs, which can be used to refine PFS payment rates for these services in future years.

There were several OPPS payment adjustments that we did not adopt in the CY 2017 interim final rule, including, but not limited to, outlier payments, the rural sole community hospital (SCH) adjustment, the cancer hospital adjustments, transitional outpatient payments, the hospital outpatient quality reporting payment adjustment, and the inpatient hospital deductible cap to the cost-sharing liability for a single hospital outpatient service. We believed these payment adjustments were expressly authorized for, and should be limited to, hospitals that are paid under the OPPS for covered OPD services in accordance with section 1833(t) of the Act. We believed that these policies should not apply to nonexcepted items and services furnished by nonexcepted off-campus PBDs, and did not propose that they apply for CY 2018.

5. Partial Hospitalization Services

For partial hospitalization programs (PHP), which are intensive outpatient psychiatric day treatment programs furnished to patients as an alternative to inpatient psychiatric hospitalization or as a stepdown to shorten an inpatient stay and transition a patient to a less intensive level of care, section 1861(ff)(3)(A) of the Act specifies that a PHP is a program furnished by a hospital, to its outpatients, or by a Community Mental Health Center (CMHC). In the CY 2017 OPPS/ASC proposed rule (81 FR 45690), in the discussion of the proposed implementation of section 603 of Bipartisan Budget Act of 2015, we noted that because CMHCs also furnish PHP services and are ineligible to be provider-based to a hospital, a nonexcepted off-campus PBD would be eligible for PHP payment if the entity enrolls and bills as a CMHC for payment under the OPPS. We further noted that a hospital may choose to enroll a nonexcepted off-campus PBD as a CMHC, provided it meets all Medicare requirements and conditions of participation.

Commenters expressed concern that without a clear payment mechanism for PHP services furnished by nonexcepted off-campus PBDs, access to partial hospitalization services would be limited, and pointed out the critical role PHPs play in the continuum of mental health care. Many commenters believed that Congress did not intend for partial hospitalization services to no longer be paid for by Medicare when such services are furnished by nonexcepted off-campus PBDs. Several commenters disagreed with the notion of enrolling as a CMHC in order to receive payment for PHP services. These commenters stated that hospital-based PHPs and CMHCs are inherently different in structure, operation, and payment, and noted that the conditions of participation for hospital departments and CMHCs are different. Several commenters requested that CMS find a mechanism to pay hospital-based PHPs in nonexcepted off-campus PBDs.

Because we shared the commenters' concerns, in the CY 2017 OPPS/ASC final rule with comment period and interim final rule with comment period (81 FR 79715, 79717, and 79727), we adopted payment for partial hospitalization items and services furnished by nonexcepted off-campus PBDs under the PFS. When billed in accordance with the CY 2017 interim final rule, these partial hospitalization services are paid at the CMHC per diem rate for APC 5853, for providing three or more partial hospitalization services per day (81 FR 79727).

In the CY 2017 OPPS/ASC proposed rule (81 FR 45681), the CY 2017 OPPS/ASC final rule with comment period, and interim final rule with comment period (81 FR 79717 and 79727), we noted that when a beneficiary receives outpatient services in an off-campus department of a hospital, the total Medicare payment for those services is generally higher than when those same services are provided in a physician's office. Similarly, when partial hospitalization services are provided in a hospital-based PHP, Medicare pays more than when those same services are provided by a CMHC. Our rationale for adopting the CMHC per diem rate for APC 5853 as the PFS payment amount for nonexcepted off-campus PBDs providing PHP services is because CMHCs are freestanding entities that are not part of a hospital, but they provide the same PHP services as hospital-based PHPs (81 FR 79727). This is similar to the differences between freestanding entities paid under the PFS that furnish other services also provided by hospital-based entities. Similar to other entities currently paid for their technical component services under the PFS, we believe CMHCs would typically have lower cost structures than hospital-based PHPs, largely due to lower overhead costs and other indirect costs such as administration, personnel, and security. We believe that paying for nonexcepted hospital-based partial hospitalization services at the lower CMHC per diem rate aligns with section 603 of Bipartisan Budget Act of 2015, while also preserving access to PHP services. In addition, nonexcepted off-campus PBDs will not be required to enroll as CMHCs in order to bill and be paid for providing partial hospitalization services. However, a nonexcepted off-campus PBD that wishes to provide PHP services may still enroll as a CMHC if it chooses to do so and meets the relevant requirements. Finally, we recognize that because hospital-based PHPs are providing partial hospitalization services in the hospital outpatient setting, they can offer benefits that CMHCs do not have, such as an easier patient transition to and from inpatient care, and easier sharing of health information between the PHP and the inpatient staff.

In the CY 2018 PFS proposed rule, we did not propose to require these PHPs to enroll as CMHCs but instead we proposed to continue to pay nonexcepted off-campus PBDs providing PHP items and services under the PFS. Further, in that CY 2018 PFS proposed rule, we proposed to continue to adopt the CMHC per diem rate for APC 5853 as the PFS payment amount for nonexcepted off-campus PBDs providing three or more PHP services per day in CY 2018.

The following is a summary of the public comments received on potential changes to our methodology and our responses:

Comment: We received several comments in response to the CY 2018 PFS proposals pertaining to nonexcepted off-campus PBDs providing PHP services. Many of the commenters believed that paying nonexcepted off-campus PBDs providing PHP services at the CMHC per diem rate does not compensate enough for financial viability and would jeopardize access to critically needed mental health services. Other Start Printed Page 53026commenters were concerned that the payment rate under section 603 of the Bipartisan Budget Act of 2015 or the lower CMHC payment rate would affect access by hindering needed expansion of PHPs or limiting the ability of PHPs to address the growing substance abuse/opioid crisis. One commenter stated that now is not the time to reduce resources and treatments for behavioral health, and expressed concern that payment reductions could push some behavioral health care providers beyond the point of financial viability. One commenter suggested that the proposed cuts could force outpatients requiring intensive services, like beneficiaries in PHPs, back into the inpatient setting.

One commenter had concerns about the accuracy and stability of the CMHC claims data or CMHC rates, and asked for fair and equitable payments. A few commenters suggested alternatives, such as exempting PHP APC codes from section 603 of the Bipartisan Budget Act of 2015 entirely, researching other payment methods, or paying at the hospital-based PHP rate.

Response: We believe that the CMHC per diem rate provides appropriate payment for partial hospitalization services. In the CY 2017 OPPS/ASC proposed rule (81 FR 45681) and earlier in this section of this CY 2018 MPFS final rule, we noted that when a beneficiary receives services in an excepted off-campus PBD, the Medicare payment for those services is generally higher than when those same services are provided in a physician's office. Similarly, when partial hospitalization services are provided in a hospital-based PHP, Medicare pays more than when those same services are provided by a CMHC. CMHCs are freestanding providers that are not part of a hospital, and that have lower cost structures than hospital-based PHPs. This is similar to the differences between freestanding entities paid under the MPFS that furnish other services also provided by hospital-based entities. We believe that the cost structure for nonexcepted off-campus PBDs providing PHP items and services is similar to CMHCs. We continue to believe that paying for nonexcepted hospital-based partial hospitalization services at the lower CMHC per diem rate is in alignment with section 603 of Bipartisan Budget Act of 2015 and results in fair and equitable payments, while also preserving access to the PHP benefit. As such, we do not believe that the lower CMHC payments made to nonexcepted off-campus PBDs providing PHP services would result in these PHP patients being shifted into inpatient care.

Regarding the comment about the accuracy of CMHC claims and rates, we refer readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70462 through 70466) and the CY 2017 OPPS/ASC final rule with comment period (81 FR 79680 through 79686) for details on the ratesetting methodology, including policies that we believe result in stable and accurate PHP payment rates. Furthermore, we note that the final CY 2018 CMHC per diem rate is higher than that proposed in the CY 2018 OPPS/ASC proposed rule (82 FR 33639). The final CY 2018 CMHC per diem rate is 68.8 percent of the final CY 2018 hospital-based PHP per diem rate under the OPPS (see the CY 2018 OPPS/ASC final rule with comment period for details). This is a significantly higher percentage of payment than was proposed for most other items or services provided in nonexcepted off-campus PBDs that derive their payment amount from CY 2018 OPPS APC rates, and we believe it will help to address commenters' concerns about ensuring access to valuable PHP services.

In response to the alternatives that commenters suggested, we are unable to pay nonexcepted off-campus PBDs that are PHPs at the same rate that hospital-based PHPs are paid under the OPPS or to exempt PHP APC codes from the requirements of section 603 of the Bipartisan Budget Act of 2015 because doing so would not meet the requirements of the amendments made by section 603 of the Bipartisan Budget Act of 2015. Regarding the comment about considering other payment methodologies for PHP services, we will take these comments under advisement in considering whether to propose a different methodology for PHP services in future rulemaking.

In summary, after considering the public comments, we are finalizing our proposals as proposed. Therefore, in CY 2018, we are identifying the PFS as the applicable payment system for PHP services furnished by a nonexcepted off campus PBDs, and we are setting the PFS payment rate for these PHP services as the per diem rate that would be paid to a CMHC in CY 2018.

6. Supervision Rules

The supervision rules that apply for hospitals continue to apply for nonexcepted off-campus PBDs that furnish nonexcepted items and services. The amendments made by section 603 of the Bipartisan Budget Act of 2015 did not change the status of these PBDs, only the status of, and payment mechanism for, the services they furnish. These supervision requirements are specified in § 410.27.

7. Beneficiary Cost-Sharing

Under the PFS, the beneficiary copayment is generally 20 percent of the fee schedule amount, unless there is an applicable exception in accordance with the statute. All cost-sharing rules that apply under the PFS in accordance with section 1848(g) of the Act and section 1866(a)(2)(A) of the Act continue to apply for all nonexcepted items and services furnished by nonexcepted off-campus PBDs, regardless of the cost-sharing obligation under the OPPS.

8. CY 2019 and Future Years

We continue to believe the amendments made to the statute by section 603 of the Bipartisan Budget Act of 2015 intended to eliminate the Medicare payment incentive for hospitals to purchase physician offices, convert them to off-campus PBDs, and bill under the OPPS for items and services they furnish there. Therefore, we continue to believe the payment policy under this provision should ultimately equalize payment rates between nonexcepted off-campus PBDs and physician offices to the greatest extent possible, while allowing nonexcepted off-campus PBDs to bill in a straight-forward way for services they furnish.

We note that a full year of claims data regarding the mix of services reported using the “PN” modifier (from CY 2017) will first be available for use in PFS ratesetting for CY 2019. Under the current methodology, we would expect to use that data in order to ensure that Medicare payment to hospitals billing for nonexcepted items and services furnished by nonexcepted off-campus PBDs under the PFS would reflect the relative resources involved in furnishing the items and services relative to other PFS services. We recognize that under our current approach, payment rates would not be equal on a procedure-by-procedure basis. However, the application of the PFS Relativity Adjuster would move toward equalizing payment rates in the aggregate between physician offices and nonexcepted off-campus PBDs to the extent appropriate. Therefore, for certain specialties, service lines, and nonexcepted off-campus PBD types, total Medicare payments for the same services might be either higher or lower when furnished by a nonexcepted off-campus PBD rather than in a physician office.

Depending on the mix of services for particular off-campus PBDs, we remain concerned that such specialty-specific patterns in payment differentials could result in continued incentives for hospitals to buy certain types of Start Printed Page 53027physician offices and convert them to excepted off-campus PBDs; these are the incentives we believe Congress intended to avoid. However, continuing a policy similar to the one we proposed in the proposed rule would allow hospitals to continue billing through a facility claim form and would allow for continuation of the packaging rules and cost report-based relative payment rate determinations under OPPS, which we believe are preferable to using the current valuation methodologies under the PFS that are not well-suited for nonexcepted items and services furnished by nonexcepted off-campus PBDs. Therefore, for CY 2019 and for future years, we intend to examine the claims data in order to determine not only the appropriate PFS Relativity Adjuster(s), but also to determine whether additional adjustments to the methodology are appropriate—especially with the goal of attaining site neutral payments to promote a level playing field under Medicare between physician office settings and nonexcepted off-campus PBD settings, without regard to the kinds of services furnished by particular off-campus PBDs. We solicited comments on potential changes to our methodology that would better account for these specialty-specific patterns.

The following is a summary of the public comments received on the potential changes to our methodology and the PFS Relativity Adjuster.

Comment: We received many comments from stakeholders opposing our proposal to reduce the PFS Relativity Adjuster to 25 percent. The majority of commenters questioned why CMS would propose a different PFS Relativity Adjuster for CY 2018 than is currently in place for CY 2017 given the absence of any additional data to inform a more precise estimate. A number of commenters, including MedPAC, also mentioned the large variation in the rate differential between the PFS and the OPPS across the top 22 services, and stated that a PFS Relativity Adjuster calculated from a single outpatient clinic visit does not represent the mix of services provided by PBDs.

In addition, several commenters stated their concern that CMS's approach in developing the PFS Relativity Adjuster fails to account for the extensive packaging that occurs for outpatient clinic visits (billed using HCPCS code G0463 under the OPPS) and other common services. They stated that additional services are often provided with a single code, and that the PFS Relativity Adjuster does not account for the resources required to furnish these additional services. They note that CMS does not account for packaging that occurs under the OPPS, despite recognizing the importance of such differences between the payment systems. Some commenters offered their own estimates of the value of packaging that occurs under the OPPS for the top 22 HCPCS codes and provided suggestions for incorporating those estimates into our analysis.

Response: We agree with the commenters' concerns about the proposed change to the PFS Relativity Adjuster for CY 2018, specifically that the single code level comparison of the service most commonly billed in the off-campus setting under the OPPS doesn't adequately reflect the large variation in services furnished in off-campus PBDs. Furthermore, we recognize the possibility that our proposed PFS Relativity Adjuster of 25 percent may overcorrect for the possibility that the CY 2017 PFS Relativity Adjuster of 50 percent was an overestimate of the relativity between the OPPS and PFS. We also agree with commenters who stressed the need to account for packaging rules that apply under the OPPS. However, we have clearly outlined the challenges we face in calibrating the PFS Relativity Rate to account for the effect of packaging.

After consideration of the public comments, we believe that an approach in which we integrate the code-level comparison for the service most commonly billed in the off-campus PBD setting under the OPPS (a clinic visit reported using HCPCS code G0463), which was the basis of our proposed PFS Relativity Adjuster for CY 2018 of 25 percent, with the comparison of relative PFS to OPPS rates for the top 25 (most frequently billed) major codes, which was the basis of our PFS Relativity Adjuster for CY 2017 of 50 percent, addresses many of the concerns and comments we received.

For this approach, we updated the list of the 25 major codes billed by off-campus hospital departments using the “PO” modifier to reflect a full year of claims data for CY 2016 (see Table 10). We did not exclude HCPCS code G0463 from the analysis, but we retained all other parameters that we described in the CY 2017 interim final rule, including the exclusion of separately payable drugs and biologics, services assigned an OPPS status indicator “A”. We removed HCPCS code 36591 (Collection of blood specimen from a completely implantable venous access device) because, under PFS policies, the code is used only to pay separately under the PFS when no other service was on the claim. We also removed HCPCS code G0009 (Administration of Pneumococcal Vaccine) and HCPCS code G0008 (Administration of influenza vaccine) because there is no payment for these codes under the PFS. Two of these codes, CPT 36591 and HCPCS G0009, were also removed from our calculation of the top major codes when we calculated the PFS Relativity Adjuster in the CY 2017 interim final rule. HCPCS code G0008 was not on the list of the top major codes when we initially analyzed claims data for CY 2016 available through August 26, 2016, but it appears on the list of the top codes that contained a “PO” modifier when we analyzed the same data through the end of CY 2016.

We determined the analogous payment for each of the top major HCPCS codes, including HCPCS code G0463, using the same logic that we applied in our calculation of the top 22 codes for the CY 2017 interim final rule. Table 10 shows data for the OPPS rates, the analogous PFS rates, and the full year utilization for these codes. The resulting utilization-weighted average comparison between the PFS and the OPPS for the top 22 codes, following the approach described above, is 35 percent. In other words, on average, the applicable payment amount under the PFS is 35 percent of the amount that would have been paid under the OPPS.

In the CY 2018 PFS proposed rule, we sought comment on whether a different PFS Relativity Adjuster, such as 40 percent, would reflect a middle ground between the CY 2017 PFS Relativity Adjuster of 50 percent, selected to ensure adequate payment to hospitals, and our proposed CY 2018 PFS Relativity Adjuster of 25 percent, selected to ensure that hospitals are not paid more than others would be paid through the PFS nonfacility rate. Since, as we acknowledged in response to public comments, we are unable at this time to fully calculate the effects of packaging under the OPPS, we believe that a 40 percent PFS Relativity Adjuster, which is an upward adjustment to the 35 percent calculation described above, is appropriate. We are, therefore, finalizing a PFS Relativity Adjuster of 40 percent for CY 2018.

Comment: Several commenters requested clarification with regard to payment for drugs that are packaged under the OPPS. One commenter stated its belief that many drugs and biological therapies are not paid separately under the OPPS and therefore would be subject to the adjuster in the PBD setting. The commenter suggested that the new Level I and II drug administration codes conditionally packaged under the OPPS, as finalized in the OPPS CY 2018, would be subject Start Printed Page 53028to the PFS Relativity Adjuster. Other commenters requested clarification regarding how CMS will handle 340B drug payment for nonexcepted off-campus PBDs under section 603 of the Bipartisan Budget Act of 2015. One commenter wrote that CMS did not specify whether it will reduce the payment for 340B drugs furnished in nonexcepted off-campus PBDs, and that there could be a large payment differential for these drugs furnished in nonexcepted vs. excepted off-campus PBDs.

Response: We appreciate the commenters' request for clarification. In prior rulemaking, we established the policy that drugs and biologicals that are separately payable under the OPPS (identified by status indicator “G” or “K” under the OPPS) are paid in accordance with section 1847A of the Act, consistent with payment rules in the physician office setting. Drugs and biologicals that are unconditionally packaged under the OPPS will continue to be packaged when furnished in a nonexcepted off-campus PBD. Drug administration services subject to conditional packaging (identified by status indicator “Q1” under the OPPS) will be packaged under the OPPS if the relevant criteria are met; otherwise they are separately paid. We refer commenters to the file “Nonexcepted Items and Services Payment by OPPS Status Indicator”, available on the CMS Web site under downloads for the CY 2018 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html, for information about the services, by OPPS status indicator, which are subject to the PFS Relativity Adjuster. Drugs that are acquired under the 340B program and furnished by nonexcepted off-campus PBDs are paid under the PFS and are not subject to the OPPS drug payment policies. We did not propose to adjust payment for 340B-acquired drugs in nonexcepted off-campus PBDs in CY 2018 but will be monitor drug utilization in these PBDs. Please refer to section V.B.7 of the CY 2018 OPPS/ASC final rule with comment for a detailed discussion of the 340B payment policy.

Comment: Several commenters stated their belief that the appropriate comparison between the PFS and OPPS for purpose of determining the PFS Relativity Adjuster is the full PFS nonfacility rate rather than the difference between the facility and the nonfacility rate.

Response: We disagree with commenters that the total PFS nonfacility rate should be used to assess relativity between the PFS and OPPS. As we have stated previously, the practice expense portion of the nonfacility rate reflects both direct and indirect costs that would be incurred by the physician in furnishing the service. The facility rate reflects the relative resources involved in furnishing the service in a facility setting, where the billing professional does not incur practice expense costs because they are incurred by the facility. We believe the most appropriate code-level comparison between the PFS and the OPPS would reflect the technical component (TC) of each HCPCS code under the PFS. However, we do not currently calculate a separate technical component rate for all HCPCS codes under the PFS—only for those for which the professional and technical components of the service are distinct and can be separately billed by two different practitioners or other suppliers under the PFS. We continue to believe that, for HCPCS codes for which there is a different payment for facility and nonfacility settings, it is appropriate to compare the difference under the PFS between the nonfacility and the facility rate with the OPPS rate.

Comment: We received a few comments suggesting that the PFS rate for services should be established as a payment floor for nonexcepted items and services furnished by nonexcepted off-campus PBDs or, alternatively, that some items and services should be excluded from the PFS Relativity Adjuster. A few commenters noted that the reduced rate from applying the PFS Relativity Adjuster would be lower, for certain services, than what is paid for the technical component for these services under the PFS. A few commenters specifically cited CPT codes for PET imaging procedures (CPT codes 78459, 79491, 78492, 78608, and 78811-78816), which are subject to payment policies under the Deficit Reduction Act (DRA) of 2005.

Response: We appreciate the commenters' concerns. We recognize that the PFS payment for some services will be lower or higher, on a code by code basis, than the PFS payment for nonexcepted items and services furnished by nonexcepted PBDs calculated using the PFS Relativity Adjuster. We also recognize that there are certain CPT codes that are subject to payment rules limiting the payment amount for services. We will consider whether it would be appropriate to set a floor using the PFS, or otherwise address codes subject to statutory payment restrictions, in future rulemaking.

Comment: We received support from several commenters about our proposal to reduce the PFS Relativity Adjuster to 25 percent. Generally, the commenters indicated that the proposed rate more accurately represents the intent of the statute, which is to reduce financial incentives for hospitals to purchase freestanding physician practices. Several commenters, including a major national health insurer, were supportive of efforts in general to establish more equitable payment across sites of service.

Response: We thank commenters for their support. We are encouraged by the amount of interest generated in response to the implementation of section 603 of the Bipartisan Budget Act of 2015. As we stated above, we were persuaded by commenters that the establishment of the proposed PFS Relativity Adjuster of 25 percent derived from a single HCPCS code for outpatient clinic visits may overcorrect for the risk that the CY 2017 PFS adjuster overstated relativity between the OPPS and the PFS. We believe that our revised approach, which builds the relative payment for clinic visits between the PFS and the OPPS into our prior analysis of the top 22 HCPCS codes, is a more appropriate approach for payment in CY 2018, in response to these concerns. Therefore, using such an approach, we are finalizing a PFS Relativity Adjuster of 40 percent for CY 2018.

Comment: Several commenters pointed out that nonexcepted off-campus PBDs face higher operational and regulatory costs than freestanding physician offices, and that intent of the statute could not have been to equalize payments between nonexcepted off-campus PBDs and freestanding physician offices.

Response: We do not disagree that there may be additional regulatory and operational costs faced by off-campus PBDs. However, we continue to believe that the amendments made to the statute by section 603 of the Bipartisan Budget Act of 2015 are intended to eliminate the Medicare payment incentive for hospitals to purchase physician offices and bill under the OPPS for items and services furnished there. We believe that, by removing the financial incentive for hospitals to purchase freestanding facilities, we allow market forces to determine the appropriate number and distribution of hospital PBDs and physician offices based on regional costs, practice patterns, patient needs.

Comment: We received comments expressing general frustration with the longstanding differences in payment policies between the PFS and the OPPS. The commenters stated their belief that the PFS underpays for the value of services furnished in nonfacility Start Printed Page 53029settings, thereby driving physicians into hospital employment agreements. They stated that this general pattern detracts from developing and implementing more cost efficient models of care. Moreover, disparate payments between OPPS and PFS drive the creation of health system monopolies, which generally increase the overall cost of care for the population and reduce the feasibility of operating independent physician practices.

Response: We appreciate the perspectives of the commenters. We note that payments made under the PFS and the OPPS are established under different statutory authorities using wholly different bases and methodologies, and therefore often result in differential payment amounts for similar services. We do not have the legal authority, with limited exceptions such as section 603 of the Bipartisan Budget Act of 2015, to develop or implement modified payment rates that would broadly reduce the differences in payment between physician offices and hospital outpatient departments.

Comment: Many commenters described the importance of hospital off-campus PBDs in meeting the needs of rural and high risk patients. They maintained that payments made using the PFS Relativity Adjuster, particularly at the proposed rate of 25 percent, would be so low as to prohibit hospitals from providing needed services to high risk populations and may even require some hospital locations to close. A commenter specifically requested that CMS conduct an impact assessment before continuing with implementation of the statute.

Response: We appreciate the comment and understand the stakeholders' concerns about access to care for rural populations. As you know, section 603 amended the statute at section 1833(t) of the Act to carve out certain items and services furnished by certain off-campus outpatient departments of a provider from the definition of covered outpatient services, and from payment under the OPPS beginning on January 1, 2017. We do not believe that section 603 of the Bipartisan Budget Act of 2015 restricts options for patients in rural and underserved areas, and moreover, we do not believe the statutory amendments have been implemented in a manner that restricts access to care for rural populations.

We have previously stated that we consider the PFS Relativity Adjuster to be an interim policy until a complete year of claims data from CY 2017 are available for analysis. Once such data are available, we expect to calculate and propose a more precise payment rate. Additionally, we continue to consider options for nonexcepted off-campus PBDs to bill for nonexcepted items and services using a PFS claim, effectively allowing us to develop and pay a code-specific amount representing the technical component of furnishing a service.

Comment: A couple of commenters indicated their belief that CMS is making drastic changes to payment policies for nonexcepted items and services furnished by nonexcepted off-campus PBDs and that this adversely impacts the ability of hospitals and physician offices to conduct long term planning. One commenter stated that our proposal to change the PFS Relativity Adjuster for CY 2018 contradicts CMS's statement in the CY 2017 interim final rule (81 FR 79720 through 79729) in which we articulated that, unless there are significant changes to the policies set forth in the interim final rule, we anticipate continuing to use the same method to determine PFS payment amounts for nonexcepted items and services furnished by nonexcepted off-campus PBDs in the near term. Several commenters indicated that they had interpreted CMS's statements as a promise that the PFS Relativity Adjuster would remain at 50 percent until such time that we had required data available to more precise calculation. The commenters, representing hospital stakeholders, suggested that they may not have moved forward with planned expansions of new off-campus PBDs if they had known we would change the PFS Relativity Adjuster.

Response: We thank commenters for their concerns. We do not agree that our statements in the CY 2017 interim final rule reflected a promise not to change the PFS Relativity Adjuster over the next two to three years. Rather, we stated that the general approach, in which we calculate an overall reduction—the PFS Relativity Adjuster—to nonexcepted items and services furnished by nonexcepted off-campus PBDs when billed with a “PN” modifier, would remain in place until we were able to establish code-specific reductions that represent the technical component of services furnished under the PFS or until we were able to implement system changes needed to enable nonexcepted off-campus PBDs to bill for the technical component of nonexcepted items and services using a professional claim. We are required by law to implement payment changes for nonexcepted PBDs. Through notice and comment rulemaking in the CY 2017 interim final rule and the CY 2018 PFS proposed rule, we have been as transparent as possible in our methodology for determining the PFS Relativity Adjuster, including limitations related to data availability. We believe we have given sufficient information about our underlying concerns and objectives, including the transitory nature of this payment policy until we have the opportunity to analyze CY 2017 claims data. In addition, while we currently lack both the data and the infrastructure to require hospitals to bill for nonexcepted items and services furnished by nonexcepted off-campus PBDs using a professional claim, we are continuing to explore the changes that would be needed to do so for future years. This change would allow nonexcepted off-campus PBDs to report services using the same coding as would be used by practitioners and suppliers under the PFS and to bill specifically for nonexcepted items and services at rates that represent the technical component of services furnished under the PFS.

Comment: Several stakeholders commented on topics related to policies we addressed in prior rulemaking or policies that are outside the scope of this final rule. Commenters urged CMS to expand excepted status of an off-campus PBD that is changing location or ownership. Other commenters, however, suggested that we remove the excepted status for off-campus PBDs entirely, even for those billing as a PBD prior to November 2, 2015.

Response: We appreciate commenters' concerns regarding these topics. However, we note that the implementation of section 603 of the Bipartisan Budget Act of 2015 was finalized in the CY 2017 CY OPPS/ASC final rule with comment period (81 FR 79699 through 79719), and we did not make any proposals in the CY 2018 PFS proposed rule related to defining the applicable items and services furnished by certain off-campus outpatient departments of a provider, which will not be considered covered OPD services on or after January 1, 2017 (that is, how we defined nonexcepted items and services furnished by nonexcepted off-campus PBDs). Thus, comments addressing such issues are outside the scope of this rulemaking. Comments submitted with technical billing questions are addressed through applicable program instructions. For policies related to patient cost sharing under the OPPS and for guidance related to cost reporting for nonexcepted items and services furnished by nonexcepted PBDs, we direct commenters to the OPPS CY 2018 final rule.Start Printed Page 53030

Comment: We received several comments questioning why we have not responded to comments on the CY 2017 OPPS interim final rule in which we implemented the CY 2017 PFS Relativity Adjuster of 50 percent. The same commenters also questioned whether our proposal to reduce the PFS Relativity Adjuster to 25 percent might be a violation of our rulemaking obligations under the Administrative Procedure Act (APA) (5 U.S.C. 553) insofar as we indicated our intention to develop a revised PFS relativity adjuster based on claims data when they became available, and there are not yet claims data available to develop a more appropriate payment adjustment. Some commenters further suggested that our policies regarding the PFS relativity adjuster, made in the absence of specific data to support them as explained in the CY 2017 interim final rule, are arbitrary and capricious.

Response: We appreciate the commenters' concerns about adhering to the rulemaking requirements of the APA. To meet our rulemaking obligations, we generally respond to comments on an interim final rule at the time that we adopt final policies relating to that interim final rule. On the whole, commenterson the CY 2017 interim final rule who disagreed with setting the CY 2017 PFS Relativity Adjuster at 50 percent articulated concerns about the approach we used to arrive at that rate. In particular, commenters highlighted the differences in packaging rules under the PFS and the OPPS, and suggested that CMS should use the total nonfacility rate (rather than the nonfacility minus facility rate) to compare relative payments between PFS and OPPS. We are currently addressing, through notice and rulemaking for CY 2018, the concerns raised by commenters and stakeholders related to the policies that we proposed and are finalizing for CY 2018. However, we note that the public comments on the CY 2017 interim final rule and on the CY 2018 PFS proposed rule express many of the same views and concerns about how we should set the PFS relativity adjuster.

We presented the analysis and reasons that led us to the proposed PFS Relativity Adjuster of 25 percent for CY 2018; and we responded to public comments on that proposal with a revised analysis and the final PFS Relativity Adjuster of 40 percent for CY 2018. We have provided the data required to replicate our analysis, consistently based upon CY 2016 payment rates under the PFS and OPPS, for the CY 2017 interim final, and for the proposed and final CY 2018 PFS relativity adjusters. Furthermore, we have been as transparent as possible in our approach, including the limitations related to data availability, and our inability to develop a precise adjustment to the relative payment rates that would account for differences between the two payment systems, including packaging. We believe we are moving as judiciously as possible, given these limitations, to meet the requirements of the statute, providing public transparency into our policy considerations, and in full accordance with our notice and comment rulemaking obligations. We are finalizing a PFS Relativity Adjuster of 40 percent for CY 2018 as discussed earlier in this section.

Comment: Several commenters requested that CMS move all of the rulemaking, including requests for comments, comment summaries and our responses, for policies relating to the implementation of section 603 of the Bipartisan Budget Act of 2015 from the PFS rule to the OPPS rule. They cited the additional burden of responding to such interrelated policies in different rules.

Response: We appreciate the commenters' concern about the challenges presented by addressing policies that implicate two payment systems that are issued in two separate rulemaking processes. However, because the policies included in this final rule relate to payments that are made under the PFS to nonexcepted off-campus PBDs furnishing nonexcepted items and services, we believe it is appropriate that these issues be addressed in rulemaking for the PFS. We note that policies related to interpretation of the OPPS statute will continue to be addressed in OPPS rulemaking.

Table 10—Comparison of CY 2016 OPPS Payment Rate to CY 2016 PFS Payment Rate for Top Hospital Codes Billed Using the “PO” Modifier

HCPCS codeCode descriptionCY 2016 total claim linesCY 2016 OPPS payment rateCY 2016 applicable PFS technical payment amount estimateCol (5) as a percentage of OPPSPFS estimate
(1)(2)(3)(4)(5)(6)
G0463Hospital outpt clinic visit13,835,921$102.12$26.7126.16Nonfacility rate—Facility rate based on the average of ten PFS CPT codes: 99201—99205 and 99211 0 99215.
96372Ther/proph/diag inj sc/im725,66542.3125.4260.1Single rate paid exclusively to either practitioner or facility; full nonfacility rate.
71020Chest x-ray 2vw frontal&latl719,45160.8016.8327.7Technical component: Full nonfacility rate.
93005Electrocardiogram tracing662,76355.948.5915.4Single rate paid exclusively to either practitioner or facility; full nonfacility rate.
96413Chemo iv infusion 1 hr563,245280.27136.4148.7Single rate paid exclusively to either practitioner or facility: Full nonfacility rate.
93798Cardiac rehab/monitor448,130103.9211.1010.7Nonfacility rate—Facility rate.
96375Tx/pro/dx inj new drug addon408,75142.3122.5653.3Single rate paid exclusively to either practitioner or facility; full nonfacility rate.
93306Tte w/doppler complete369,856416.80165.7739.8Technical component: full nonfacility rate.
77080Dxa bone density axial344,118100.6931.1530.9Technical component: full nonfacility rate.
90853Group psychotherapy299,44669.650.360.5Nonfacility rate—Facility rate.
77412Radiation treatment delivery296,601194.35266.86137.3Technical component (Full nonfacility rate) based on weighted averages for the following PFS codes: G6011; G6012; G6013; and G6014.
96365Ther/proph/diag iv inf init269,899173.1869.8240.3Single rate paid exclusively to either practitioner or facility: Full nonfacility rate.
20610Drain/inj joint/bursa w/o us221,922223.7613.966.2Nonfacility rate—Facility rate.
Start Printed Page 53031
96367Tx/proph/dg addl seq iv inf217,09842.3130.7972.8Single rate paid exclusively to either pracitioner or facility: Full nonfacility rate.
11042Deb subq tissue 20 sq cm/<215,734225.5554.7824.3Nonfacility rate—Facility rate.
93017Cardiovascular stress test196,183220.3539.7418.0Single rate paid exclusively to either practitioner or facility; full nonfacility rate.
77386Ntsty modul rad tx dlvr cplx182,989505.51347.3068.7Technical component: Nonfacility rate for CPT code G6015 (analogous code used under the PFS).
74177Ct abd & pelv w/contrast167,549347.72220.2063.3Technical component: Full nonfacility rate.
71260Ct thorax w/dye163,756236.86167.2170.6Technical component: Full nonfacility rate.
71250Ct thorax w/o dye160,956112.49129.61115.2Technical component: Full nonfacility rate.
78452Ht muscle image spect mult159,2191,108.46412.8237.2Technical component: Full nonfacility rate.
96415Chemo iv infusion addl hr151,70042.3128.6467.7Single rate paid exclusively to either practitioner or facility; full nonfacility rate.
Weighted Average (claim line volume * rate) of the PFS payment compared to OPPS payment for the 22 major codes:35%

H. Valuation of Specific Codes

1. Background: Process for Valuing New, Revised, and Potentially Misvalued Codes

Establishing valuations for newly created and revised CPT codes is a routine part of maintaining the PFS. Since the inception of the PFS, it has also been a priority to revalue services regularly to make sure that the payment rates reflect the changing trends in the practice of medicine and current prices for inputs used in the PE calculations. Initially, this was accomplished primarily through the 5-year review process, which resulted in revised work RVUs for CY 1997, CY 2002, CY 2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY 2011. Under the 5-year review process, revisions in RVUs were proposed and finalized via rulemaking. In addition to the 5-year reviews, beginning with CY 2009, CMS and the RUC have identified a number of potentially misvalued codes each year using various identification screens, as discussed in section II.E.4 of this final rule. Historically, when we received RUC recommendations, our process had been to establish interim final RVUs for the potentially misvalued codes, new codes, and any other codes for which there were coding changes in the final rule for a year. Then, during the 60-day period following the publication of the final rule, we accepted public comment about those valuations. For services furnished during the calendar year following the publication of interim final rates, we paid for services based upon the interim final values established in the final rule. In the final rule with comment period for the subsequent year, we considered and responded to public comments received on the interim final values, and typically made any appropriate adjustments and finalized those values.

In the CY 2015 PFS final rule with comment period, we finalized a new process for establishing values for new, revised and potentially misvalued codes. Under the new process, we include proposed values for these services in the proposed rule, rather than establishing them as interim final in the final rule with comment period. Beginning with the CY 2017 PFS proposed rule, the new process was applicable to all codes, except for new codes that describe truly new services. For CY 2017, we proposed new values in the CY 2017 PFS proposed rule for the vast majority of new, revised, and potentially misvalued codes for which we received complete RUC recommendations by February 10, 2016. To complete the transition to this new process, for codes for which we established interim final values in the CY 2016 PFS final rule with comment period, we reviewed the comments received during the 60-day public comment period following release of the CY 2016 PFS final rule with comment period, and re-proposed values for those codes in the CY 2017 PFS proposed rule.

We considered public comments received during the 60-day public comment period for the proposed rule before establishing final values in the CY 2017 PFS final rule. As part of our established process, we will adopt interim final values only in the case of wholly new services for which there are no predecessor codes or values and for which we do not receive recommendations in time to propose values. For CY 2017, we did not identify any new codes that described such wholly new services. Therefore, we did not establish any code values on an interim final basis.

2. Methodology for Establishing Work RVUs

For each code identified in this section, we conducted a review that included the current work RVU (if any), RUC-recommended work RVU, intensity, time to furnish the preservice, intraservice, and postservice activities, as well as other components of the service that contribute to the value. Our reviews of recommended work RVUs and time inputs have generally included, but have not been limited to, a review of information provided by the RUC, the Health Care Professionals Advisory Committee (HCPAC), and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, consultation with other physicians and health care professionals within CMS and the federal government, as well as Medicare claims data. We have also assessed the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. In the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329), we discussed a variety of methodologies and approaches used to develop work RVUs, Start Printed Page 53032including survey data, building blocks, crosswalks to key reference or similar codes, and magnitude estimation (see the CY 2011 PFS final rule with comment period (75 FR 73328 through 73329) for more information). When referring to a survey, unless otherwise noted, we mean the surveys conducted by specialty societies as part of the formal RUC process. We have used the building block methodology to construct, or deconstruct, the work RVU for a CPT code based on component pieces of the code.

Components that we have used in the building block approach may have included preservice, intraservice, or postservice time and post-procedure visits. When referring to a bundled CPT code, the building block components could include the CPT codes that make up the bundled code and the inputs associated with those codes. Magnitude estimation refers to a methodology for valuing work that determines the appropriate work RVU for a service by gauging the total amount of work for that service relative to the work for a similar service across the PFS without explicitly valuing the components of that work. In addition to these methodologies, we have frequently utilized an incremental methodology in which we value a code based upon its incremental difference between another code and another family of codes. The statute specifically defines the work component as the resources in time and intensity required in furnishing the service. Also, the published literature on valuing work has recognized the key role of time in overall work. For particular codes, we have refined the work RVUs in direct proportion to the changes in the best information regarding the time resources involved in furnishing particular services, either considering the total time or the intraservice time.

Several years ago, to aid in the development of preservice time recommendations for new and revised CPT codes, the RUC created standardized preservice time packages. The packages include preservice evaluation time, preservice positioning time, and preservice scrub, dress and wait time. Currently there are preservice time packages for services typically furnished in the facility setting (for example: Preservice time packages reflecting the different combinations of straightforward or difficult procedure, and straightforward or difficult patient). Currently, there are three preservice time packages for services typically furnished in the nonfacility setting.

We developed several standard building block methodologies to value services appropriately when they have common billing patterns. In cases where a service is typically furnished to a beneficiary on the same day as an evaluation and management (E/M) service, we believe that there is overlap between the two services in some of the activities furnished during the preservice evaluation and postservice time. Our longstanding adjustments have reflected a broad assumption that at least one-third of the work time in both the preservice evaluation and postservice period is duplicative of work furnished during the E/M visit.

Accordingly, in cases where we have believed that the RUC has not adequately accounted for the overlapping activities in the recommended work RVU and/or times, we have adjusted the work RVU and/or times to account for the overlap. The work RVU for a service is the product of the time involved in furnishing the service multiplied by the intensity of the work. Preservice evaluation time and postservice time both have a long-established intensity of work per unit of time (IWPUT) of 0.0224, which means that 1 minute of preservice evaluation or postservice time equates to 0.0224 of a work RVU.

Therefore, in many cases when we have removed 2 minutes of preservice time and 2 minutes of postservice time from a procedure to account for the overlap with the same day E/M service, we have also removed a work RVU of 0.09 (4 minutes × 0.0224 IWPUT) if we have not believed the overlap in time had already been accounted for in the work RVU. The RUC has recognized this valuation policy and, in many cases, now addresses the overlap in time and work when a service is typically furnished on the same day as an E/M service.

We note that many commenters and stakeholders have expressed concerns over time with our ongoing adjustment of work RVUs based on changes in the best information we have had regarding the time resources involved in furnishing individual services. We have been particularly concerned with the RUC's and various specialty societies' objections to our approach given the significance of their recommendations to our process for valuing services and since much of the information we have used to make the adjustments is derived from their survey process. We are statutorily obligated to consider both time and intensity in establishing work RVUs for PFS services. As explained in the CY 2016 PFS final rule with comment period (80 FR 70933), we recognize that adjusting work RVUs for changes in time is not always a straightforward process, so we have applied various methodologies to identify several potential work values for individual codes.

We have observed that for many codes reviewed by the RUC, recommended work RVUs have appeared to be incongruous with recommended assumptions regarding the resource costs in time. This has been the case for a significant portion of codes for which we have recently established or proposed work RVUs that are based on refinements to the RUC-recommended values. When we have adjusted work RVUs to account for significant changes in time, we have begun by looking at the change in the time in the context of the RUC-recommended work RVU. When the recommended work RVUs have not appeared to account for significant changes in time, we have employed the different approaches to identify potential values that reconcile the recommended work RVUs with the recommended time values. Many of these methodologies, such as survey data, building block, crosswalks to key reference or similar codes, and magnitude estimation have long been used in developing work RVUs under the PFS. In addition to these, we have sometimes used the relationship between the old time values and the new time values for particular services to identify alternative work RVUs based on changes in time components.

In so doing, rather than ignoring the RUC-recommended value, we have used the recommended values as a starting reference and then applied one of these several methodologies to account for the reductions in time that we believe had not otherwise been reflected in the RUC-recommended value. When we have believed that such changes in time have already been accounted for in the RUC recommendation, then we have not made such adjustments. Likewise, we have not arbitrarily applied time ratios to current work RVUs to calculate proposed work RVUs. We have used the ratios to identify potential work RVUs and considered these work RVUs as potential options relative to the values developed through other options.

We do not imply that the decrease in time as reflected in survey values must equate to a one-to-one or linear decrease in newly valued work RVUs. Instead, we have believed that, since the two components of work are time and intensity, absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has increased, significant decreases in time should be reflected in decreases to work RVUs. If the RUC recommendation had appeared to disregard or dismiss the Start Printed Page 53033changes in time, without a persuasive explanation of why such a change should not be accounted for in the overall work of the service, then we have generally used one of the aforementioned methodologies to identify potential work RVUs, including the methodologies intended to account for the changes in the resources involved in furnishing the procedure.

Several stakeholders, including the RUC, in general have objected to our use of these methodologies and deemed our actions in adjusting the recommended work RVUs as inappropriate; other stakeholders have also expressed concerns with CMS refinements to RUC recommended values in general. In the CY 2017 PFS final rule (81 FR 80272 through 80277) we responded in detail to several comments that we received regarding this issue. In the CY 2017 PFS proposed rule, we requested comments regarding potential alternatives to making adjustments that would recognize overall estimates of work in the context of changes in the resource of time for particular services; however, we did not receive any specific potential alternatives as requested.

In developing proposed values for new, revised, and potentially misvalued codes for CY 2018, we considered the lack of alternative approaches to making the adjustments, especially since many stakeholders have routinely urged us to propose and finalize the RUC-recommended values. We also considered the RUC's consistent reassurance that these kinds of concerns (regarding changes in time, for example) had already been considered, and either incorporated or dismissed, as part of the development of their recommended values. These have led us to shift our approach to reviewing RUC recommendations, especially as we believe that the majority of practitioners paid under the PFS, though not necessarily those in any particular specialty, would prefer CMS rely more heavily on RUC recommended values in establishing payment rates under the PFS.

For CY 2018, we generally proposed the RUC-recommended work RVUs for new, revised, and potentially misvalued codes. We proposed these values based on our understanding that the RUC generally considers the kinds of concerns we have historically raised regarding appropriate valuation of work RVUs. However, during our review of these recommended values, we identified some concerns similar to those we have recognized in prior years. Given the relative nature of the PFS and our obligation to ensure that the RVUs reflect relative resource use, we included descriptions of potential approaches we might have taken in developing work RVUs that differ from the RUC-recommended values. We sought comment on both the RUC-recommended values as well as the alternatives considered.

The following is a summary of the public comments received on both the RUC-recommended values as well as the alternatives we considered in developing work RVUs and our responses:

Comment: Several commenters generally support the proposed use of the RUC-recommended work RVUs, without refinement. One commenter encouraged further collaboration between the RUC and CMS to improve the relativity within the payment system.

Response: We thank the commenters for their input and support of the proposals. We also agree that collaboration is a critical element in our establishment of work RVUs. In our review of work RVUs and time inputs, we have and will continue to consider information from various public commenters, medical literature, the HCPAC, information provided by the RUC, Medicare claims data, and other relevant sources.

Comment: One commenter stated that the RUC thoroughly vets the times and values of the procedures it reviews, applies the right valuation methodology to appropriately value the procedures that are being reviewed, and usually adjusts the times identified by the survey if the times seem unreasonable. Another commenter stated that recommendations by the RUC remain the most robust mechanism for collecting data and establishing relative values. A few commenters stated that CMS should depend on RUC-recommended values instead of trying to create an arbitrary, new methodology that lacks reliability or reflects significantly flawed rationales. A few commenters stated that CMS work value reductions are done with complete disregard for the rigorous process conducted by the RUC with input from medical specialty societies to develop data driven recommendations for physician work values and without presenting data to support these reductions.

Response: We agree that the RUC provides critically important information for our review process. However, our review of recommended work RVUs and time inputs also generally includes review of various sources, in addition to the RUC, such as information provided by other public commenters, comparative databases, and medical literature which are also vital sources of information. We disagree with the commenters that CMS has created arbitrary, unreliable work value reductions that have disregarded the RUC process. We have historically used the RUC-recommended values or existing values as a starting point in our review, and then applied adjustments as necessary, particularly when we find that the RUC recommendation does not appropriately account for recommended changes in time, and provides no explanation as to why this would be appropriate.

Comment: One commenter expressed disappointment with situations where CMS rejects recommended work valuations and direct PE inputs that would have resulted in expenditure decreases, and was concerned that all professionals are impacted. The commenter stated that CMS should accept RUC-recommended values and inputs that would result in expenditure decreases or hold all other healthcare professionals harmless for the decision to reject them.

Response: We appreciate the commenter's views, but note that we are required to establish appropriate valuations and ensure that RVUs are reflective of relative resources involved in furnishing a service. In reviewing specific codes, we make these decisions the same way regardless of whether the decisions would result in increases or decreases to overall expenditures under the PFS. Additionally, we do not have authority to exempt the rates for particular services from budget neutrality adjustments, relativity adjustments, or the effects of the misvalued code target recapture adjustments based on differences between what the RUC recommends and what CMS finalizes through notice and comment rulemaking.

Comment: Some commenters expressed concern about the effect of the misvalued code reviews on particular specialties and settings. The commenters recommended insulating particular settings or specialties from the impact of the code reviews.

Response: We are required to periodically review the accuracy of RVUs for all services furnished under the PFS. We do not believe it would be appropriate, nor do we have any specific authority, to insulate particular settings or specialties from the impact of this review. We also note that most misvalued code reviews and revaluations are triggered by the identification of codes under the potentially misvalued code categories that are enumerated in the statute.Start Printed Page 53034

Comment: One commenter stated that it is open to supporting our alternative methods of valuation if the methods are disclosed and there is ample time to review, comment, and iterate on suggestions. The commenter stated that the RUC process currently allows for this. Another commenter stated that it appreciates CMS providing stakeholders with discussion of alternative approaches that the agency might have used to reach a different value, rather than proposing those values. The commenter stated that this gives specialties an opportunity to consider the alternative values, while also providing a pathway for us to finalize an alternative value based on information provided by stakeholders. The commenter also stated that it believes many of these alternative methods could be raised during deliberations at RUC meetings when specialties and their expert physician advisors are available to engage in a dialogue with CMS representatives. In addition, the commenter stated that CMS representatives who attend the RUC meetings should engage more actively in discussion with society representatives about the agency's issues and concerns with work and direct PE inputs, rather than first sharing concerns in the proposed rule when dialogue is restricted due to the rulemaking process.

Response: While the comment period does not provide for an iterative process as suggested by one of the commenters, it does provide an opportunity for all interested parties to review and have an opportunity to comment on the proposals and alternative valuations considered. While we acknowledge that discussion and consideration of different valuations occurs during the RUC process, we also note that not all interested parties have the opportunity to participate in the RUC process, and not all relevant stakeholders are members of the RUC. Additionally, we would like to reiterate that, while we appreciate that some commenters believe that CMS staff could offer useful perspectives by regularly attending and participating more fully in the RUC meetings, we do not believe that would be appropriate for many reasons, not least of which is that CMS staff participation in the RUC process cannot supplant our obligation to establish through notice and comment rulemaking what we determine to be appropriate RVUs for each reviewed code. Accordingly, we disagree with the commenter's suggestion that CMS staff should preemptively address the concerns of work and PE values during the RUC meeting, instead of through notice and comment rulemaking. Formal notice and comment rulemaking allows all interested parties the opportunity to review our proposals and provide feedback, as well as to submit supplemental information about our proposals, and address any concerns or alternatives we have expressed in making our proposals.

Comment: Several commenters expressed concern and disappointment with our proposed approach for valuing codes for CY 2018. MedPAC stated that it believes CMS is moving in the wrong direction by proposing to accept all of the RUC recommendations for work RVUs for CY 2018 without modification, and that this approach is inconsistent with MedPAC's longstanding view that CMS relies too heavily on input from the RUC, which is made up of practitioners who have a financial stake in the payment rates for services paid under the PFS. MedPAC stated that the Secretary is responsible for establishing RVUs for services, and this authority should not be delegated to a private entity; therefore, CMS should independently evaluate the RUC-recommended RVUs based on objective data and revise them when they are inaccurate. MedPAC also stated that CMS should collect data from a set of efficient practices to validate the time estimates and establish more accurate RVUs. Other commenters stated that from their perspective, CMS is abandoning its responsibility to set work RVUs under the PFS. One commenter stated that CMS should actively supervise and take responsibility for setting physician payments based on reliable, objective evidence. Another commenter stated that while it appreciates the work of the RUC, they had concerns that primary care is undervalued by the RUC, and stated that the RUC tends to favor more procedural and specialty-based services. The commenter stated that if CMS steps away from taking an active role in determining RVUs under its own PFS, the agency would be inflating the role of the RUC and thus underemphasizing primary care in the process. The commenter also stated that the RUC's final recommendations do not necessarily strike the balance across different provider types and services, and that it is the responsibility of CMS, not the RUC, to set RVUs under the PFS; and therefore, CMS should retain an active role in evaluating information and data and setting reimbursement rates for services across the PFS.

Response: We would like to clarify that we are not relinquishing our obligation to independently establish appropriate RVUs for services paid under the PFS. We will continue to thoroughly review and consider information we receive from the RUC, the HCPAC, public commenters, medical literature, Medicare claims data, comparative databases, comparison with other codes within the PFS, as well as consultation with other physicians and healthcare professionals within CMS and the federal government as part of our process for establishing valuations. We also note that given the critical role of the resource of time in establishing work RVUs and the concerns that have been raised about time values used in rate-setting, we contracted with the Urban Institute to develop empirical time estimates based on data collected from several health systems with multispecialty group practices. We refer readers to the CY 2017 PFS final rule for discussion of the Urban Institute report (81 FR 80203). While generally proposing the RUC-recommended work RVUs for new, revised, and potentially misvalued codes was our approach for CY 2018, we note that we also included alternative values where we believed there was a possible opportunity for increased precision.

We also want to clarify that as part of our obligation to establish RVUs for the PFS, we annually make an independent assessment of the available recommendations, supporting documentation, and other available information from the RUC and other commenters to determine the appropriate valuations. Where we concur that the RUC recommendations, or recommendations from other commenters, are reasonable and appropriate and are consistent with the time and intensity paradigm of physician work, we propose those values as recommended. Additionally, we will continue to engage with stakeholders, including the RUC, with regard to our approach for accurately valuing codes.

CMS appreciates the efforts of the RUC to deliberate on highly technical matters involving clinical care. The RUC is comprised of 31 physicians, the majority of whom are appointed by major medical specialty societies. Commenters have noted concerns with the range of expertise represented in the RUC membership and have advocated for more balanced representation from across the medical community. Commenters have also suggested that the RUC should consider how to further engage the public in its deliberative processes. CMS encourages the RUC to consider acting on these comments and suggestions in its ongoing deliberations. Start Printed Page 53035This action could involve improving the ability of stakeholders or the public to meaningfully participate in or learn about the deliberations, considering the balance of primary care and specialty expertise on the committee, and examining how payers are included in this process. Stakeholder input could include surveying retired physicians and nurses in addition to physicians, and receiving additional information about how payers view relative resource use for services. CMS may also consider updating its internal review of RUC recommendations in the future.

Comment: One commenter stated that data obtained through the RUC survey process, based on subjective physician perceptions of work and time, may not always be the most accurate data available. The commenter stated that CMS should be open to reviewing additional sources of objective and validated work time data furnished by stakeholders. Such sources might include peer reviewed and published studies of comparative surgery times among different procedures in the same institution using standardized metrics.

Response. We continue to be open to reviewing additional and supplemental sources of data furnished by stakeholders. We encourage stakeholders to continue to provide such information for CMS consideration in establishing work RVUs.

Comment: One commenter stated that nurse practitioners have had little opportunity to participate in RUC activities, and since the fee schedule recommendations from the RUC impact all clinicians, it is important that all clinicians, including nurse practitioners, have input in that process. Another commenter stated that the process for setting the fee schedule should be accurate and robust, include input from multiple stakeholders, and be an open process that should have oversight from, and be transparent to, the many stakeholders who are affected by the PFS.

Response: We concur that the process of valuing codes should be accurate and robust, and, as previously stated, we consider input from various sources when determining the appropriate valuation. Notice and comment rulemaking provides for an open process whereby we welcome input from all interested parties, and encourage the commenters to provide feedback regarding our annual proposed valuations.

We look forward to continuing to engage with stakeholders and commenters, including the RUC, as we prioritize our obligation to value new, revised, and potentially misvalued codes, and will continue to welcome feedback from all interested parties regarding valuation of services for consideration through our rulemaking process. We refer readers to section II.H.4 of this final rule for detailed discussion of the proposed valuation, and alternative valuation considered for specific codes. Table 12 contains a list of codes for which we proposed work RVUs; this includes all codes for which we received RUC recommendations by February 10, 2017. The proposed work RVUs, work time and other payment information for all proposed CY 2018 payable codes are available on the CMS Web site under downloads for the CY 2018 PFS final rule. Table 12 also contains the CPT code descriptors for all proposed, new, revised, and potentially misvalued codes discussed in this section.

3. Methodology for the Direct PE Inputs To Develop PE RVUs

a. Background

On an annual basis, the RUC provides us with recommendations regarding PE inputs for new, revised, and potentially misvalued codes. We review the RUC-recommended direct PE inputs on a code by code basis. Like our review of recommended work RVUs, our review of recommended direct PE inputs generally includes, but is not limited to, a review of information provided by the RUC, HCPAC, and other public commenters, medical literature, and comparative databases, as well as a comparison with other codes within the PFS, and consultation with physicians and health care professionals within CMS and the federal government, as well as Medicare claims data. We also assess the methodology and data used to develop the recommendations submitted to us by the RUC and other public commenters and the rationale for the recommendations. When we determine that the RUC's recommendations appropriately estimate the direct PE inputs (clinical labor, disposable supplies, and medical equipment) required for the typical service, are consistent with the principles of relativity, and reflect our payment policies, we use those direct PE inputs to value a service. If not, we refine the recommended PE inputs to better reflect our estimate of the PE resources required for the service. We also confirm whether CPT codes should have facility and/or nonfacility direct PE inputs and refine the inputs accordingly.

Our review and refinement of RUC-recommended direct PE inputs includes many refinements that are common across codes, as well as refinements that are specific to particular services. Table 13 details our refinements of the RUC's direct PE recommendations at the code-specific level. In this final rule, we address several refinements that are common across codes, and refinements to particular codes are addressed in the portions of this section that are dedicated to particular codes. We note that for each refinement, we indicate the impact on direct costs for that service. We note that, on average, in any case where the impact on the direct cost for a particular refinement is $0.30 or less, the refinement has no impact on the PE RVUs. This calculation considers both the impact on the direct portion of the PE RVU, as well as the impact on the indirect allocator for the average service. We also note that nearly half of the refinements listed in Table 13 result in changes under the $0.30 threshold and are unlikely to result in a change to the RVUs.

We also note that the direct PE inputs for CY 2018 are displayed in the CY 2018 direct PE input database, available on the CMS Web site under the downloads for the CY 2018 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html. The inputs displayed there have also been used in developing the proposed CY 2018 PE RVUs as displayed in Addendum B.

b. Common Refinements

(1) Changes in Work Time

Some direct PE inputs are directly affected by revisions in work time. Specifically, changes in the intraservice portions of the work time and changes in the number or level of postoperative visits associated with the global periods result in corresponding changes to direct PE inputs. The direct PE input recommendations generally correspond to the work time values associated with services. We believe that inadvertent discrepancies between work time values and direct PE inputs should be refined or adjusted in the establishment of proposed direct PE inputs to resolve the discrepancies.

(2) Equipment Time

Prior to CY 2010, the RUC did not generally provide CMS with recommendations regarding equipment time inputs. In CY 2010, in the interest of ensuring the greatest possible degree of accuracy in allocating equipment minutes, we requested that the RUC provide equipment times along with the other direct PE recommendations, and we provided the RUC with general Start Printed Page 53036guidelines regarding appropriate equipment time inputs. We continue to appreciate the RUC's willingness to provide us with these additional inputs as part of its PE recommendations.

In general, the equipment time inputs correspond to the service period portion of the clinical labor times. We have clarified this principle over several years of rulemaking, indicating that we consider equipment time as the time within the intraservice period when a clinician is using the piece of equipment plus any additional time that the piece of equipment is not available for use for another patient due to its use during the designated procedure. For those services for which we allocate cleaning time to portable equipment items, because the portable equipment does not need to be cleaned in the room where the service is furnished, we do not include that cleaning time for the remaining equipment items, as those items and the room are both available for use for other patients during that time. In addition, when a piece of equipment is typically used during follow-up post- operative visits included in the global period for a service, the equipment time would also reflect that use.

We believe that certain highly technical pieces of equipment and equipment rooms are less likely to be used during all of the preservice or postservice tasks performed by clinical labor staff on the day of the procedure (the clinical labor service period) and are typically available for other patients even when one member of the clinical staff may be occupied with a preservice or postservice task related to the procedure. We also note that we believe these same assumptions would apply to inexpensive equipment items that are used in conjunction with and located in a room with non-portable highly technical equipment items since any items in the room in question would be available if the room is not being occupied by a particular patient. For additional information, we refer readers to our discussion of these issues in the CY 2012 PFS final rule with comment period (76 FR 73182) and the CY 2015 PFS final rule with comment period (79 FR 67639).

(3) Standard Tasks and Minutes for Clinical Labor Tasks

In general, the preservice, intraservice, and postservice clinical labor minutes associated with clinical labor inputs in the direct PE input database reflect the sum of particular tasks described in the information that accompanies the RUC-recommended direct PE inputs, commonly called the “PE worksheets.” For most of these described tasks, there are a standardized number of minutes, depending on the type of procedure, its typical setting, its global period, and the other procedures with which it is typically reported. The RUC sometimes recommends a number of minutes either greater than or less than the time typically allotted for certain tasks. In those cases, we review the deviations from the standards and any rationale provided for the deviations. When we do not accept the RUC-recommended exceptions, we refine the proposed direct PE inputs to conform to the standard times for those tasks. In addition, in cases when a service is typically billed with an E/M service, we remove the preservice clinical labor tasks to avoid duplicative inputs and to reflect the resource costs of furnishing the typical service.

We refer readers to section II. B. of this final rule for more information regarding the collaborative work of CMS and the RUC in improvements in standardizing clinical labor tasks.

(4) Recommended Items That Are Not Direct PE Inputs

In some cases, the PE worksheets included with the RUC recommendations include items that are not clinical labor, disposable supplies, or medical equipment or that cannot be allocated to individual services or patients. We have addressed these kinds of recommendations in previous rulemaking (78 FR 74242), and we do not use items included in these recommendations as direct PE inputs in the calculation of PE RVUs.

(5) New Supply and Equipment Items

The RUC generally recommends the use of supply and equipment items that already exist in the direct PE input database for new, revised, and potentially misvalued codes. Some recommendations, however, include supply or equipment items that are not currently in the direct PE input database. In these cases, the RUC has historically recommended that a new item be created and has facilitated our pricing of that item by working with the specialty societies to provide us copies of sales invoices. For CY 2018, we received invoices for several new supply and equipment items. Tables 13 and 14 detail the invoices received for new and existing items in the direct PE database. As discussed in section II.B. of this final rule, we encourage stakeholders to review the prices associated with these new and existing items to determine whether these prices appear to be accurate. Where prices appear inaccurate, we encourage stakeholders to provide invoices or other information to improve the accuracy of pricing for these items in the direct PE database during the 60-day public comment period for this final rule. We expect that invoices received outside of the public comment period would be submitted by February 10th of the following year for consideration in future rulemaking, similar to our new process for consideration of RUC recommendations.

We remind stakeholders that due to the relativity inherent in the development of RVUs, reductions in existing prices for any items in the direct PE database increase the pool of direct PE RVUs available to all other PFS services. Tables 13 and 14 also include the number of invoices received, as well as the number of nonfacility allowed services for procedures that use these equipment items. We provide the nonfacility allowed services so that stakeholders will note the impact the particular price might have on PE relativity, as well as to identify items that are used frequently, since we believe that stakeholders are more likely to have better pricing information for items used more frequently. A single invoice may not be reflective of typical costs and we encourage stakeholders to provide additional invoices so that we might identify and use accurate prices in the development of PE RVUs.

In some cases, we do not use the price listed on the invoice that accompanies the recommendation because we identify publicly available alternative prices or information that suggests a different price is more accurate. In these cases, we include this in the discussion of these codes. In other cases, we cannot adequately price a newly recommended item due to inadequate information. Sometimes, no supporting information regarding the price of the item has been included in the recommendation. In other cases, the supporting information does not demonstrate that the item has been purchased at the listed price (for example, vendor price quotes instead of paid invoices). In cases where the information provided on the item allows us to identify clinically appropriate proxy items, we might use existing items as proxies for the newly recommended items. In other cases, we have included the item in the direct PE input database without any associated price. Although including the item without an associated price means that the item does not contribute to the calculation of the proposed PE RVU for particular services, it facilitates our ability to incorporate a price once we obtain information and are able to do so.Start Printed Page 53037

(6) Service Period Clinical Labor Time in the Facility Setting

Generally speaking, our proposed inputs did not include clinical labor minutes assigned to the service period because the cost of clinical labor during the service period for a procedure in the facility setting is not considered a resource cost to the practitioner since Medicare makes separate payment to the facility for these costs. We address proposed code-specific refinements to clinical labor in the individual code sections.

(7) Procedures Subject to the Multiple Procedure Payment Reduction (MPPR) and the OPPS Cap

We note that the public use files for the PFS proposed and final rules for each year display both the services subject to the MPPR lists on diagnostic cardiovascular services, diagnostic imaging services, diagnostic ophthalmology services and therapy services and the list of procedures that meet the definition of imaging under section 1848(b)(4)(B) of the Act, and therefore, are subject to the OPPS cap for the upcoming calendar year. The public use files for CY 2018 are available on the CMS Web site under downloads for the CY 2018 PFS final rule at For more information regarding the history of the MPPR policy, we refer readers to the CY 2014 PFS final rule (78 FR 74261-74263). For more information regarding the history of the OPPS cap, we refer readers to the CY 2007 PFS final rule (71 FR 69659-69662).

4. Proposed Valuation of Specific Codes for CY 2018

(1) Anesthesia Services for Gastrointestinal (GI) Procedures (CPT Codes 00731, 00732, 00811, 00812, and 00813)

In the CY 2016 PFS proposed rule (80 FR 41686), we discussed that in reviewing Medicare claims data, a separate anesthesia service is typically reported more than 50 percent of the time that various colonoscopy procedures are reported. We discussed that given the significant change in relative frequency with which anesthesia codes are reported with colonoscopy services, we believed the relative values of the anesthesia services should be reexamined and proposed to identify CPT codes 00740 (Anesthesia for upper gastrointestinal endoscopic procedures, endoscope introduced proximal to duodenum) and 00810 (Anesthesia for lower intestinal endoscopic procedures, endoscopy introduced distal to duodenum) as potentially misvalued.

For CY 2018, the CPT Editorial Panel is deleting CPT codes 00740 and 00810 and creating new codes for anesthesia services furnished in conjunction with and in support of gastrointestinal endoscopic procedures: Two codes for upper GI procedures, CPT code 00731 (Anesthesia for upper gastrointestinal endoscopic procedures, endoscope introduced proximal to duodenum; not otherwise specified) and CPT code 00732 (Anesthesia for upper gastrointestinal endoscopic procedures, endoscopy introduced proximal to duodenum; endoscopic retrograde cholangiopancreatography (ERCP)); and two codes for lower GI procedures, CPT code 00811 (Anesthesia for lower intestinal endoscopic procedures, endoscope introduced distal to duodenum; not otherwise specified) and CPT code 00812 (Anesthesia for lower intestinal endoscopic procedures, endoscope introduced distal to duodenum; screening colonoscopy); and one code for upper and lower GI procedures, CPT code 00813 (Anesthesia for combined upper and lower gastrointestinal endoscopic procedures, endoscope introduced both proximal to and distal to the duodenum).

In the CY 2018 PFS proposed rule, we proposed the RUC-recommended base units without refinement for CPT codes 00731 (5.00 base units), 00732 (6.00 base units), 00811 (4.00 base units), 00812 (4.00 base units) and 00813 (5.00 base units). We considered 3.00 base units for CPT code 00812 based on our comparison of the surveyed post-induction anesthesia-intensity allocation for CPT code 00812 to codes with similar allocations, such as CPT code 01382 (Anesthesia for diagnostic arthroscopic procedures of knee joint). We found that CPT code 01382, which was also valued with 3 base units, had similar allocations compared to the survey results for CPT code 00812. We received comments from anesthesia providers and professional specialty societies, including the RUC that specifically addressed the codes in this family.

Comment: Regarding CPT code 00812, the RUC stated that its recommendation of 4.00 base units was made on an interim basis since the initial survey response rate did not meet the RUC's required minimum threshold based on the high utilization of predecessor CPT code 00810. Subsequently, the RUC included as part of its public comments a revised final recommendation of 3.00 base units for CPT code 00812 based on its review of new survey data, with the majority of survey respondents choosing CPT code 00910 (3.00 base units) as the key reference code more closely related to the work of CPT code 00812. Some commenters suggested that CMS should finalize its proposed values for each code in this family, including the proposed 4.00 base units for CPT code 00812, and suggested that CPT codes 00812 and 00811 represent similar work. A few commenters indicated that CPT code 00410 (4.00 base units) was a better comparator and crosswalk than the alternative crosswalk to CPT code 01382 that CMS considered for CPT code 00812.

Response: We reviewed additional information submitted by the RUC as part of its public comment, which included an analysis of new survey data. We find this additional data persuasive and believe that 3.00 base units better reflects the work of CPT code 00812.

Comment: Several commenters expressed concerns about the process used for identifying CPT codes 00740 and 00810 as potentially misvalued. Commenters requested that we maintain the CY 2017 payment levels for CY 2018, suggesting that if we were to finalize the proposed base units for each code in this family, it would discourage use of anesthesia during GI procedures.

Response: We continue to believe that the physician performing the GI procedure is in the best position to consider the beneficiary's needs when determining whether to utilize moderate sedation or anesthesia services. Additionally, while we understand the commenters' concerns, section 1848(c)(2)(K) of the Act requires the Secretary to periodically identify potentially misvalued services and to review and make appropriate adjustments to the relative values for those services. Section 1848(c)(2)(K) of the Act identifies several categories of services as potentially misvalued, including codes that have experienced the fastest growth, along with codes as determined appropriate by the Secretary. Therefore, as discussed in the CY 2016 PFS proposed rule (80 FR 41686), we indicated that given the significant change in relative frequency with which anesthesia codes are reported with colonoscopy services, we believed the relative values of the anesthesia services should be reexamined as potentially misvalued.

Comment: Commenters raised concerns about how a change in valuation for anesthesia services would affect payments made by private insurers.

Response: While we appreciate commenters' concerns, this final rule Start Printed Page 53038addresses valuation of services for purposes of Medicare payments made under the PFS. Valuation and payment determinations made by private insurers are outside the scope of this final rule.

After consideration of comments received that specifically addressed the codes in this family, for CY 2018, we are finalizing 5.00 base units for CPT codes 00731, 6.00 base units for CPT code 00732, 4.00 base units for CPT code 00811, 3.00 base units for CPT code 00812, and 5.00 base units for CPT code 00813.

(2) Acne Surgery (CPT Code 10040)

CPT code 10040 (Acne surgery (e.g., marsupialization, opening or removal of multiple milia, comedones, cysts, pustules) was identified as potentially misvalued on a screen of Harvard-valued codes with utilization over 30,000 in CY 2014. In the CY 2018 PFS proposed rule, we proposed the RUC-recommended work RVU of 0.91 for CPT code 10040 and the RUC-recommended work time values. We considered using the current number of 0.5 post-procedure office visits of CPT code 99212 (Office/outpatient visit est) rather than the RUC-recommended number of 1.0 post-procedure office visits. For CPT code 10040, the RUC stated that it is a low intensity service that can be performed by a nurse under a physician's supervision, and that the average number of office visits in the follow-up period of acne surgery is 0.4. We sought public comments regarding the typical number of postoperative visits for this code, considering there have been no changes made to the code descriptor and we have not found evidence of changes to the typical patient population.

We proposed the RUC-recommended direct PE inputs for CPT code 10040 without refinement. We considered refinements to the clinical labor for “Assist physician in performing procedure” from 10 minutes to 3 minutes. CPT code 10040 previously used about one third of the intraservice work time for this clinical labor activity (5 minutes out of 14 minutes), and the RUC-recommended value of 10 minutes would have increased this to 100 percent of the intraservice work time without rationale for the change. We considered 3 minutes for this clinical labor activity, which is about one third of the intraservice work time (3 minutes out of 10 minutes) and would have maintained the current ratio between clinical labor time and work time. For CY 2018, we proposed the RUC-recommended work RVUs and direct PE inputs for CPT code 10040 and sought comment on our proposed and alternative values.

Comment: Commenters supported the proposed values for CPT code 10040 but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for CPT code 10040 as proposed.

(3) Muscle Flaps (CPT Codes 15734, 15736, 15738, 15730, and 15733)

CPT codes 15732 and 15736 were identified via a screen of high level E/M visits included in their global periods. This screen identified that a CPT code 99214 office visit was included for CPT codes 15732 and 15736 but not included in the other codes in this family. During the CPT Editorial Panel's review process for this family of codes, CPT code 15732 was deleted and replaced with two new codes, CPT codes 15730 and 15733, to better differentiate and describe the work of large muscle flaps performed on patients with head and neck cancer depending on the site where the service was performed.

For CY 2018, we proposed the RUC-recommended work RVUs of 23.00 for CPT code 15734, 17.04 for CPT code 15736, 19.04 for CPT code 15738, 13.50 for CPT code 15730, and 15.68 for CPT code 15733. For CPT code 15730, we considered a work RVU of 12.03, crosswalking to CPT code 36830 (Creation of arteriovenous fistula by other than direct arteriovenous anastomosis (separate procedure); nonautogenous graft (e.g., biological collagen, thermoplastic graft)). We had concerns because the RUC-recommended work RVU of 13.50 would represent nearly double the intensity of CPT codes 15734 through 15738, as well as nearly double the intensity of deleted CPT code 15732. The RUC-recommended work RVU for CPT code 15730 is also based on a direct crosswalk to CPT code 36832 (Revision, open, arteriovenous fistula; without thrombectomy, autogenous or nonautogenous dialysis graft (separate procedure)), which has the same intraservice time, but with 20 additional minutes of total time. We considered a potential crosswalk to another code in the same family, CPT code 36830, which also shares the same intraservice time with CPT code 15730 but differs by only 8 minutes of total time. However, we sought comment on whether the RUC recommendation was appropriate given the significant variation in intensity among these services.

We considered a work RVU of 14.63 for CPT code 15733 (survey 25th percentile), crosswalking to CPT code 36833 (Revision, open, arteriovenous fistula; with thrombectomy, autogenous or nonautogenous dialysis graft (separate procedure)), which has the same intraservice time, 1 minute of additional total time, and a work RVU of 14.50. We sought comment on the effect that an alternative work RVU of 14.50 would have on relativity among the codes in this family.

We considered refining the clinical labor time for “Check dressings & wound/home care instructions” for CPT code 15730 from 10 minutes to 5 minutes. We sought comment on the typical time input for checking dressings, and whether removing and replacing dressings would typically take place during the intraservice or postservice period.

We also sought comments regarding the use of the new “plate, surgical, mini-compression, 4 hole” (SD189) supply included in CPT code 15730, including whether use of this supply would be typical, and if so, whether it should be included in the work description. We noted that SD189 is mentioned in the direct PE recommendations, but the supply does not appear in the work description. In the work description, the fixation screws are applied to the orbital rim and lateral nasal wall, not the surgical plate.

Comment: Several commenters supported the proposed values for all five of the codes but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: Several commenters stated that the use of the “plate, surgical, mini-compression, 4 hole” (SD189) supply was typical in CPT code 15730. Commenters mentioned that this supply had a number of clinical benefits, such as greater stability, less risk of infection, fewer screws, and a wide area of support. Commenters stated that the recommendation forms that accompany the work descriptor do not normally list all supplies or materials used before, during, or after the surgery in great detail.Start Printed Page 53039

Response: We appreciate the additional information supplied by the commenters regarding the use of the SD189 supply. While we agree that the work descriptor for a procedure would not necessarily list all of the supplies used before, during, or after a surgery, we remain puzzled at the lack of any mention of the surgical plate in the description of work for this service. The surgical plate is an expensive ($226) supply that appears to be integral to the work being performed in this service. The deleted predecessor code for this service, CPT code 15732, did not include a surgical plate among its direct PE inputs, and if the use of the surgical plate is now typical for the new CPT code 15730, we believe that the description of work for this service would more accurately explain the work taking place by detailing the use of the supply. We agree with the commenters regarding the clinical benefits of the surgical plate, and believe that this should be reflected in the description of work for this service.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the muscle flaps family as proposed.

(4) Application of Rigid Leg Cast (CPT Code 29445)

CPT code 29445 (Application of rigid total contact leg cast) appeared on a high growth screen of all services with total Medicare utilization of 10,000 or more services that increased by at least 100 percent from 2008 through 2013. This screen also indicated that the code was last surveyed more than 10 years previously, and that the dominant specialty had changed during that time.

For CY 2018, we proposed the RUC-recommended work RVU of 1.78 for CPT code 29445. For the direct PE inputs, we proposed to refine the clinical labor time for “Check dressings & wound/home care instructions” from 5 minutes to 3 minutes. We believed that the additional 2 minutes of clinical labor time that we proposed to remove would take place during the monitoring time following the procedure and be accounted for in that clinical labor time.

We also considered refining the clinical labor time for “Remove cast” from 22 minutes to 11 minutes: 1 minute for room prep, 10 minutes for assisting the physician, and 0 minutes for the additional activities described in the RUC recommendations, which would have only taken place during the initial casting. We had concerns that the RUC-recommended clinical labor regarding the “remove cast” task is based only on an initial visit where a new cast would be applied and 22 minutes may be an appropriate length of time. However, the RUC recommendations suggested that four to twelve cast changes are common for patients, and we sought comment on whether the initial application of a new cast would be typical for CPT code 29445. We reviewed the Medicare claims data for CPT code 29445 and found that three or more castings took place for 52 percent of beneficiaries, which suggests that three or more castings may be the typical case. A single casting only took place for 30 percent of services reported with CPT code 29445.

Comment: Several commenters supported the proposed values for CPT code 29445 but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: One commenter stated that they disagreed with our proposal to refine the clinical labor time for “Check dressings & wound/home care instructions” from 5 minutes to 3 minutes. The commenter did not supply any rationale for its disagreement.

Response: We continue to believe that the additional 2 minutes of clinical labor time that we proposed to remove would take place during the monitoring time following the procedure and be accounted for in that clinical labor time, since we did not receive any information to suggest otherwise for CPT code 29445.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for CPT code 29445 as proposed.

(5) Strapping Multi-Layer Compression (CPT Codes 29580 and 29581)

The RUC reviewed CPT code 29580 since it appeared on the screen for high expenditure services and reviewed CPT code 29581 as part of this family of codes. For CY 2018, the CPT Editorial Panel is deleting two additional codes in the family: CPT codes 29582 (Application of multi-layer compression system; thigh and leg, including ankle and foot, when performed) and 29583 (Application of multi-layer compression system; upper arm and forearm).

For CY 2018, we proposed the RUC-recommended work RVUs for CPT code 29580 (a work RVU of 0.55) and CPT code 29581 (a work RVU of 0.60).

However, we were concerned about the changes in preservice time reflected in the specialty surveys compared to the RUC-recommended work RVUs. For instance, for CPT code 29580, we considered a work RVU of 0.46, crosswalking to CPT code 98925 (Osteopathic manipulative treatment (OMT); 1-2 body regions involved)), which has a work RVU of 0.46 and shares a similar intraservice time. Compared to the specialty survey times, the RUC recommended a slight decrease (9 minutes) in preservice time for CPT code 29580, with the intraservice and immediate postservice times remaining unchanged.

For CPT code 29581, we considered a work RVU of 0.51 [we note that in the CY 2018 PFS proposed rule (82 FR 33991), this was cited as 0.50] by using the RUC-recommended work RVU increment between CPT codes 29580 and 29581 (+0.05), added to the work RVU we considered for CPT code 29580 (0.46), and crosswalking to CPT code 97597 (Debridement (e.g., high pressure waterjet with/without suction, sharp selective debridement with scissors, scalpel and forceps), open wound, (e.g., fibrin, devitalized epidermis and/or dermis, exudate, debris, biofilm), including topical application(s), wound assessment, use of a whirlpool, when performed and instruction(s) for ongoing care, per session, total wound(s) surface area; first 20 sq cm or less)), which has similar intraservice and total times to the RUC-recommended services times for CPT code 29581. We sought comment on whether a work RVU of 0.51 would improve relativity among the codes in this family.

For CY 2018, we proposed the RUC-recommended work RVUs for CPT codes 29580 and 29581 and sought comment on whether the alternative values we considered would be more appropriate.

Comment: In general, commenters were supportive of our proposal of the RUC-recommended work RVUs. Some expressed opposition to the alternative work RVUs.

Response: We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: Several commenters were supportive of the RUC-recommended PE inputs for these services.

Response: We disagree with the RUC-recommended PE inputs for these services. We proposed to refine the L037D clinical labor time for “Provide pre-service education/obtain consent” from 3 minutes to 2 minutes to conform to the standard for this clinical labor Start Printed Page 53040activity. The RUC recommendation did not include a written justification for additional clinical labor time beyond the standard 2 minutes for this activity. As a result, we also proposed to refine the recommended equipment times for the exam table (EF023) and exam light (EQ168) to conform to changes in clinical labor time. Thus, we proposed to refine the equipment times for EF023 and EQ168 to 34 minutes for CPT code 29580 and to 36 minutes for CPT code 29581, to reflect the service period time associated with these codes. We continue to believe that the use of clinical labor standards provides greater consistency among codes that share the same clinical labor tasks and can improve relativity of values among codes.

After consideration of comments received, we are finalizing the work RVUs and direct PE inputs for these services as proposed.

(6) Resection Inferior Turbinate (CPT Code 30140)

CPT code 30140 (Submucous resection inferior turbinate, partial or complete, any method) was identified as potentially misvalued on a screen of Harvard-valued codes with utilization over 30,000 in CY 2014. During the review process, the RUC re-surveyed the code as a 0-day global period, based on the presence of a negative intensity value in the initial survey and highly variable postoperative office visits.

For CY 2018, we proposed the RUC-recommended work RVU of 3.00 for CPT code 30140 as a 0-day global code. We also considered a work RVU of 2.68 for CPT code 30140 and sought comment on changes in practice patterns since the code was previously reviewed, service times of comparable services, and whether a work RVU of 2.68 would better maintain relativity among similar codes. We noted that the RUC-recommended work RVU of 3.00 nearly doubles the derived intensity of the code as currently valued. We noted that the RUC recommendations referenced services that had similar service times to CPT code 30140 (CPT code 31240 (Nasal/sinus endoscopy, surgical; with concha bullosa resection), with a work RVU of 2.61; and CPT code 31295 (Nasal/sinus endoscopy, surgical; with dilation of maxillary sinus ostium (e.g., balloon dilation), transnasal or via canine fossa), with a work RVU of 2.70.

We noted that the initial survey for CPT code 30140 as a 90-day global resulted in a RUC-recommended work RVU of 3.57, while the second survey for the code as a 0-day global resulted in a RUC-recommended work RVU of 3.00, despite the removal of two postoperative office visits of CPT code 99212 and a half discharge visit of CPT code 99238. These removed postoperative visits have a total work RVU of 2.58, which is notably higher than the difference in the RUC-recommended work RVUs between the two surveys.

We also proposed to create equipment codes for three new equipment items based on invoices submitted with the RUC recommendations for CPT code 30140. We proposed to create three new equipment codes based on the invoices submitted for this code family: The 2mm reusable shaver blade (EQ383) at a price of $790, the microdebrider handpiece (EQ384) at a price of $4,760, and the microdebrider console (EQ385) at a price of $9,034.

Comment: Several commenters supported the proposed values for CPT code 30140 but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: One commenter requested that CMS add a new supply named the “turbinate reduction wand” to the supply inputs associated with this procedure when performed in the physician office setting. The commenter stated that this device is designed to ablate, coagulate, and remove a core of tissue that provides the desired volumetric reduction of the anatomy, and supplied several invoices for use in pricing the new supply.

Response: We note that the suggested turbinate reduction wand has a price of nearly $200, which would add substantially to the costs of CPT code 30140. Before including such significant resource costs in the code, we believe that we should see input from the physician community such as the RUC. At present, we do not have any information to suggest that the use of this new supply is typical for CPT code 30140, and the RUC did not recommend the inclusion of this supply on either of the two occasions when this code was reviewed in CY 2017. For these reasons, we do not believe that it would be appropriate to add the turbinate reduction wand to CPT code 30140 at this time. We welcome the submission of additional information regarding this use of this supply from stakeholders.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for CPT code 30140 as proposed.

(7) Control Nasal Hemorrhage (CPT Codes 30901, 30903, 30905, and 30906)

In the CY 2018 PFS proposed rule, we proposed the RUC-recommended work RVU of 1.10 for CPT code 30901, 1.54 for CPT code 30903, 1.97 for CPT code 30905, and 2.45 for CPT code 30906. We also proposed the RUC-recommended direct PE inputs for CPT codes 30901, 30903, 30905, and 30906, with standard refinements to the equipment times to account for patient monitoring times. We noted that as part of its recommendation, the RUC informed us that the specialty societies presented evidence stating that the 1995 valuations for these services factored in excessive times, specifically to account for infection control procedures that were necessary at that time due to the prevalence of HIV/AIDS. The specialty societies also noted that increased availability and use of blood thinner medications compared to those available in 1995, has increased the difficulty and intensity of these procedures. We sought additional information regarding the presumption that the relative resource intensity of these services specifically would be affected by the commercial availability of additional blood thinner medications. We stated in the CY 2018 PFS proposed rule that we believe blood thinner medications were widely available before 1995 when these codes were last valued. We also sought comments on the prevalence of HIV/AIDS and whether the work related to infection control procedures would be relative across many PFS services or specifically related to nasal hemorrhage control procedures.

For CPT code 30901 (Control nasal hemorrhage, anterior, simple (limited cautery and/or packing) any method), we considered a work RVU of 1.00 (the 25th percentile survey result), crosswalking to CPT code 20606 (Arthrocentesis, aspiration and/or injection, intermediate joint or bursa (e.g., temporomandibular, acromioclavicular, wrist, elbow or ankle, olecranon bursa); with ultrasound guidance, with permanent recording and reporting), which has similar service times. The median survey total time (24 minutes) dropped by 2 minutes (from preservice time), to 24 minutes compared to the existing total time. The difference in total time reflected a small decrease in preservice time, with no change in intraservice time (10 minutes). Among codes with similar service times, we found only three codes that had a higher work RVU than the RUC-recommended value.Start Printed Page 53041

For CPT code 30903 (Control nasal hemorrhage, anterior, complex (extensive cautery and/or packing) any method), we considered a work RVU of 1.30 (the 25th percentile survey result), which would have been further supported by CPT codes 36584 and 51710, which have similar service times to the median survey results. The RUC recommended a decreased total time of 39 minutes compared to the existing total time (70 minutes), with intraservice time dropping from 30 to 15 minutes.

For CPT code 30905 (Control nasal hemorrhage, posterior, with posterior nasal packs and/or cautery, any method; initial), we considered a work RVU of 1.73, using the RUC-recommended work RVU increment between CPT codes 30903 and 30905 (0.43), added to the work RVU we considered for CPT code 30903 (1.30), and crosswalking to CPT code 45321 (Proctosigmoidoscopy, rigid; with decompression of volvulus), which has similar service times. The surveyed intraservice time dropped from 48 minutes to 20 minutes. The RUC recommendations indicated that surveyed service times for CPT code 30905 are longer than for CPT code 30903 since the service is performed to control an arterial posterior bleed. According to the specialty society, arterial posterior bleeds are more difficult to treat and require a more extensive procedure in comparison to services reported with CPT code 30903. We considered using the RUC-recommended work RVU increment between CPT codes 30903 and 30905 (0.43), added to the work RVU we considered for CPT code 30903 (1.30), resulting in a work RVU of 1.73. We sought comment on whether a work RVU of 1.73 would potentially affect relativity among the codes in this family.

For CPT code 30906 (Control nasal hemorrhage, posterior, with posterior nasal packs and/or cautery, any method; subsequent), we considered a work RVU of 2.21, using the RUC-recommended work RVU increment between CPT codes 30905 and 30906 (0.48), added to the work RVU we considered for CPT code 30905 (1.73), and crosswalking to services with similar service times (CPT codes 19281 (Placement of breast localization device(s) (e.g., clip, metallic pellet, wire/needle, radioactive seeds), percutaneous; first lesion, including mammographic guidance), 51727 (Simple Cystometrogram (CMG) (e.g., spinal manometer); with urethral pressure profile studies (i.e., urethral closure pressure profile), any technique), 49185 (Sclerotherapy of a fluid collection (e.g., lymphocele, cyst, or seroma), percutaneous, including contrast injection(s), sclerosant injection(s), diagnostic study, imaging guidance (e.g., ultrasound, fluoroscopy) and radiological supervision and interpretation when performed), and 62305 (Myelography via lumbar injection, including radiological supervision and interpretation; 2 or more regions (e.g., lumbar/thoracic, cervical/thoracic, lumbar/cervical, lumbar thoracic/cervical)). The surveyed median intraservice time dropped from 60 minutes to 30 minutes. We sought comment on whether a work RVU of 2.21 would potentially improve relativity among the codes in this family.

Given the RUC's consensus, for CY 2018, we proposed the RUC-recommended work RVUs for each code in this family and sought comment on whether our alternative values would be more appropriate.

Comment: We received a few comments that specifically addressed our proposed values for this code family from professional specialty societies, including the RUC. Commenters expressed support for CMS' proposed values including the proposed direct PE inputs with standard refinements to equipment times.

Response: We appreciate the commenters' support and, after consideration of the comments received that specifically address the codes in this family, we are finalizing a work RVU of 1.10 for CPT code 30901, a work RVU of 1.54 for CPT code 30903, a work RVU of 1.97 for CPT code 30905, and a work RVU of 2.45 for CPT code 30906. We are also finalizing the direct PE inputs as proposed, with standard refinements to equipment times to account for patient monitoring times.

(8) Nasal Sinus Endoscopy (CPT Codes 31254, 31255, 31256, 31267, 31276, 31287, 31288, 31295, 31296, 31297, 31241, 31241, 31253, 31257, 31259, and 31298)

In October 2016, the CPT Editorial Panel created five new codes (CPT codes 31241, 31241, 31253, 31257, 31259 and 31298) and revised CPT codes 31238, 31254, 31255, 31276, 31287, 31288, 31296, and 31297. CPT codes 31253—31298 are newly bundled services representing services that are frequently reported together. CPT code 31241 represents a new service. The RUC reviewed this family of codes at its January 2017 meeting. For CY 2018, we proposed the RUC-recommended work RVUs for all 15 CPT codes in this family as follows: 4.27 for CPT code 31254, 5.75 for CPT code 31255, 3.11 for CPT code 31256, 4.68 for CPT code 31267, 6.75 for CPT code 31276, 3.50 for CPT code 31287, 4.10 for CPT code 31288, 2.70 for CPT code 31295, 3.10 for CPT code 31296, 2.44 for CPT code 31297, 8.00 for CPT code 31241, 9.00 for CPT code 31253, 8.00 for CPT code 31257, 8.48 for CPT code 31259, and 4.50 for CPT code 31298.

For CPT code 31296, we considered a work RVU of 2.82, supported by a crosswalk to CPT code 36901 (Intro cath dialysis circuit) with an intraservice time of 25 minutes and total time of 66 minutes, similar to the service times for CPT code 31296. We were concerned about the decrease in service time compared to the work RVU and sought comment on whether or not a work RVU of 2.82 might improve relativity with other PFS services.

For CPT code 31256, we considered a work RVU of 2.80, supported by a crosswalk to CPT code 43231 (Esophagoscopy, flexible, transoral; with endoscopic ultrasound examination), which has 30 minutes of intraservice time and 81 minutes of total time, similar to the RUC-recommended service times. We were concerned about the difference in total time between CPT code 31256 and the RUC-recommended crosswalk to CPT code 43247. CPT code 43247 has 30 minutes intraservice time and 58 minutes total time), and CPT code 31256 (30 minutes intraservice time and 83 minutes total time).

For CPT code 31254, we noted the RUC's explanation that this service is more intense than the functional endoscopic sinus surgery on the maxillary or sphenoid sinuses due to the risk of major complications such as injury to the eye muscles, bleeding into the eye or brain fluid leak and, consequently, that the RUC concluded that it should be valued higher than either CPT code 31256 or CPT code 31287. Since CPT code 31256 has the same total time (30 minutes) and intraservice time (30 minutes) as CPT code 31254, we considered whether the incremental difference recommended by the RUC between these two codes (work RVU of 1.16) would reflect the intensity of the service. We considered a work RVU of 2.80 for CPT code 31256, and also considered an alternative work RVU of 3.97 for CPT code 31254.

For CPT code 31287, we considered a work RVU of 3.19 based on the difference between the RUC-recommended work RVU for the maxillary sinus surgery (CPT code 31256) and the sphenoid sinus surgery (CPT code 31287) (difference = 0.28) added to the work RVU that we considered for the base code (CPT code 31256, a work RVU of 2.80). We noted that the magnitude of decreases in Start Printed Page 53042service times is greater than those for the work RVU, which potentially could affect relativity among PFS services.

For CPT code 31255, we considered a work RVU of 5.30, based on a crosswalk to CPT codes 36475 (Endovenous rf 1st vein) and 36478 (Endovenous laser 1st vein) since both of these services have the same intraservice times, total times, and work RVUs. We noted that there are several CPT codes with similar total and intraservice times as CPT code 31255 that have lower work RVUs than the RUC's recommended work RVU of 5.75, such as CPT code 36246 (Ins cath abd/l-ext art 2nd), which has 45 minutes intraservice time, 96 minutes total time and a work RVU of 5.02

For CPT code 31276 (Nasal/sinus endoscopy, surgical; with frontal sinus exploration, including removal of tissue from frontal sinus, when performed), we considered a work RVU of 6.30, which is similar to other functional endoscopic surgeries. We noted that the services reported with CPT code 31276 are the most intense and complex of the functional endoscopic surgeries due to the risks of working in the narrow confines in the frontal recess. However, we had concerns regarding the RUC-recommended crosswalk to CPT code 52352 (Cystourethroscopy, with ureteroscopy and/or pyeloscopy; with removal or manipulation of calculus (ureteral catheterization is included)), and sought comment on whether the RUC-recommended decrease in service times was appropriate since CPT code 52352 has 20 minutes more total time than CPT code 31276.

For CPT code 31241 (nasal/sinus endoscopy, surgical; with ligation of Sphenopalatine artery), we had concerns and sought comment regarding the accuracy and applicability of the surveys as the RUC indicated that the specialty society did not use the survey instrument that contained questions about the number and types of visits and that this service requires including a half day discharge day management as the patients typically stay overnight to be monitored for further bleeding. We sought comment on whether inclusion of a half day discharge day visit was typical for this service since services assigned 0-day global periods do not typically include discharge visits. We considered reducing the total time from 142 minutes to 123 minutes by removing the half day discharge. Using the alternative total time of 123 minutes, we found services with similar total and intraservice time (60 minutes) and total time (123 minutes).

We considered a work RVU of 7.30 for CPT code 31241, supported by a direct crosswalk to CPT code 36253 (Superselective catheter placement (one or more second order or higher renal artery branches) renal artery and any accessory renal artery(s) for renal angiography, including arterial puncture, catheterization, fluoroscopy, contrast injection(s), image postprocessing, permanent recording of images, and radiological supervision and interpretation, including pressure gradient measurements when performed, and flush aortogram when performed; unilateral), since CPT code 36253 has a similar total time compared to our alternative total time.

For CPT code 31257, we considered a work RVU of 7.30, based on a crosswalk to CPT code 36253 (Superselective catheter placement (one or more second order or higher renal artery branches) renal artery and any accessory renal artery(s) for renal angiography, including arterial puncture, catheterization, fluoroscopy, contrast injection(s), image postprocessing, permanent recording of images, and radiological supervision and interpretation, including pressure gradient measurements when performed, and flush aortogram when performed; unilateral). We had similar concerns regarding the service times for this service, including the cited reference codes, compared to the RUC-recommended work RVU. We sought comment on whether a work RVU of 7.30 for CPT code 31257 would improve consistency among the combined CPT codes in this family.

CPT code 31259 is a new code representing a combination of the services previously described by CPT codes 31255 and 31288. We noted the changes in overall service times compared to other codes in this family and other PFS services. We considered a work RVU of 7.85 for CPT code 31259, crosswalking to CPT code 93461 (R&l hrt art/ventricle angio), which has identical intraservice times. We sought comment on the effect that this alternative work RVU might have on consistency and rank order compared to the other bundled codes in this family.

CPT code 31298 represents a combination of CPT codes 31296 and 31297. We had concerns about the use of the RUC-recommended comparison codes, CPT codes 47532 and 58558, due to differences in both intraservice and total time compared to the service times for CPT code 31298. We considered a work RVU of 4.10 for CPT code 31298, crosswalking to CPT code 44406 (Colonoscopy w/ultrasound), which has similar service times.

In the CY 2018 PFS proposed rule, we proposed the RUC-recommended work RVUs for each code in this family and sought comment on our alternative values.

Comment: In general, commenters supported the work RVUs for existing CPT codes in this family as proposed. One commenter expressed concern about the proposed work RVUs for the newly bundled CPT codes: CPT code 31253, 31257, 31259, and 31298. The commenter encouraged CMS to adopt a payment rate for the newly bundled codes that more closely aligns with the payment if the individual codes are reported separately on the same claim. Valuing the newly bundled codes as the sum of the component codes would yield a work RVU of 12.50 for CPT 31253 instead of the proposed 9.00; a work RVU of 9.25 for CPT 31257 instead of the proposed 8.00; a work RVU of 9.85 for 31259 instead of the proposed 8.48; and a work RVU of 5.44 for CPT 31298 instead of the proposed 4.50.

Response: We believe that certain efficiencies occur when certain services are furnished together. From a payment perspective, those efficiencies are reflected in the multiple procedure payment reduction. Similarly, when services that used to be described by two separate codes are combined, those efficiencies are reflected in the work RVU for the combined code. Therefore, we are finalizing all work RVUs for the CPT codes in this family, including the newly combined services, as proposed.

Comment: One commenter noted that a few of the CPT codes have work RVUs that are decreasing by more than 20 percent and requested that CMS phase-in these rate reductions.

Response: Section 1848(c)(7) of the Act requires that, if the total RVUs for a service for a year would otherwise be decreased by an estimated 20 percent or more as compared to the total RVUs for the previous year, the applicable adjustments in work, PE, and MP RVUs shall be phased-in over a 2- year period. We note that the phase-in requirement does not apply to codes that are new or revised. Therefore, the CPT codes in this code family with work RVU reductions of greater than 20 percent are not subject to the phase-in requirement. Please see section II.F of the CY 2016 PFS final rule with comment period (80 FR 70930) for more information regarding the phase-in of significant RVU reductions. The document is available on the CMS Web site under downloads for the CY 2016 PFS final rule with comment period at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

Regarding the recommended direct PE inputs, we expressed concern about one of the supply items used in furnishing Start Printed Page 53043services for several CPT codes in this family: “sinus surgery balloon (maxillary, frontal, or sphenoid) kit” (SA106). In the current recommendations, half of one kit (each kit has sufficient supply for two sinuses) is included in the PE inputs for CPT codes 31295, 31296, and 31297. The new CPT code 31298 has one full kit, reflecting a service consisting of two sinuses, according to the RUC's explanation. The price of the full kit (two sinuses) of this disposable supply is $2,599.06. Our analysis of 2016 Medicare claims data indicated that 48 percent of the time one of the three CPT codes (31295, 31296, and 31297) is billed, it is reported on a claim with either one or both of the other codes. Ten percent of the time one of the three CPT codes is billed, it is reported on a claim with both of the other two codes. Effectively, 10 percent of claims reporting these CPT codes are being paid for three sinuses. We sought comments on the number of units of this supply item that are used for each service. We welcomed suggestions about improved methodologies for identifying the quantity of this disposable supply used during these procedures and will continue to monitor utilization and reporting of these services.

Comment: We received several comments in response to our request for input about the number of units of supply item “sinus surgery balloon (maxillary, frontal, or sphenoid) kit” (SA106) that are appropriate for CPT codes 31295, 31296, 31297, and 31298. Commenters, including the RUC, noted that each kit includes one balloon, and each sinus requires 0.5 of a balloon, and that the current PE input of 0.5 of SA106 is appropriate for CPT 31295, 31296, and 31297. Commenters also noted that, since CPT code 31298 bundles CPT codes 31296 and 31297, an entire balloon kit is appropriate. The RUC also reiterated support for CMS to develop a standalone HCPCS supply code for the balloon kit.

Response: We are finalizing the PE input for supply item SA106 as proposed, which includes 0.5 kit for CPT codes 31295, 31296, and 31297, and one kit for CPT code 31298.

Comment: One commenter suggested that several PE inputs for CPT code 31254 are either missing, insufficient, or have an incorrect price. The commenter also requested that CMS develop nonfacility PE inputs for CPT code 31255.

Response: After reviewing the commenter's suggestions regarding supply items for CPT code 31254, we believe that the current supplies and prices, as developed by the RUC in concert with the specialty societies, account for the items that are typically involved in furnishing this service. We refer the commenter to the process by which additional information for consideration of prices for supply items can be provided to CMS through the annual rulemaking cycle, in particular through invoices. Regarding the request to establish nonfacility values for this code, we have historically proposed payment rates for specific settings that have been vetted through the RUC process. We also consider information on Medicare utilization that may indicate trends on where the service is being furnished to identify when it might be appropriate to value a code in the nonfacility setting. If stakeholders are interested in submitting information about PE inputs that reflect resource costs typical for a particular setting, we encourage collaboration with the RUC in addressing such inputs. We note that the valuation of a service under the PFS in particular settings does not address whether those services are medically reasonable and necessary in the case of individual patients, including being furnished in a setting appropriate to the patient's medical needs and condition. We are finalizing the PE inputs for CPT codes in this family as proposed.

In reviewing the RUC recommendations for this family of CPT codes, we noted that the CPT codes in this family are subject to the standard payment adjustment for multiple surgeries. In our analysis of the claims data, we noted that the average number of HCPCS codes in this family reported together on a claim line is approximately 2.89. In addition, about 15 percent of claims have two of the newly bundled CPT codes reported together on a claim line. We expressed concern about the frequency with which the nasal sinus endoscopy CPT codes in this family are billed together. We sought comments on whether we should consider the endobase code adjustments as a better approach to adjusting payment for these services instead of the current multiple procedure payment reduction. For additional information about the payment adjustment under the special rule for multiple endoscopic services, we refer readers to the Medicare Claims Processing Manual, Chapter 23 (available on the CMS Web site at https://www.cms.gov/​Regulations-and-Guidance/​Guidance/​Manuals/​Internet-Only-Manuals-IOMs-Items/​CMS018912.html.

Comment: There was no consensus among commenters about whether we should consider the endobase code adjustments as a better approach to adjusting payment for these services instead of the multiple procedure payment reduction. A few commenters stated their opposition, noting that in cases where multiple endoscopies are provided on the same date of service, this would result in the base procedure not being reimbursed, and that this would be grossly inappropriate because these are therapeutic procedures and each sinus represents very different work and risks. Other commenters supported the application of the payment reduction for multiple endoscopic procedures.

Response: We will consider these comments. We welcome feedback from stakeholders regarding these and other services for which a change in the indicator status designating the applicable type of multiple procedure payment reduction might be appropriate. We are finalizing our proposal to maintain the standard multiple procedure payment reduction for this group of nasal sinus endoscopy services.

To estimate utilization for new or newly bundled services in this group of complex codes, we used a different crosswalk to current services than was recommended by the RUC. We believe that the RUC did not sufficiently account for utilization changes that occur when several newly bundled CPT codes describe formerly separate services. We direct readers to the file called “CY 2017 Analytic Crosswalk to CY 2018” on the CMS Web site under downloads for the CY 2018 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

(9) Tracheostomy (CPT Codes 31600, 31601, 31603, 31605, and 31610)

CPT code 31600 was identified as part of a screen of high expenditure services with Medicare allowed charges of $10 million or more that had not been recently reviewed. CPT codes 31601, 31603, 31605, and 31610 were added and reviewed as part of the code family.

We proposed the RUC-recommended work RVUs for all five codes in this family. We proposed work RVUs of 5.56 for CPT code 31600, 8.00 for CPT code 31601, 6.00 for CPT code 31603, 6.45 for CPT code 31605, and 12.00 for CPT code 31610.

We considered a work RVU of 6.50 for CPT code 31601. We sought comment on the effect that this alternative value would have on relativity compared to other PFS services, especially since the survey data do not suggest an increase in the time required to perform the procedure.Start Printed Page 53044

We considered a work RVU of 4.77 for CPT code 31605, based on the survey 25th percentile from the combined survey total. We also considered an intraservice work time of 15 minutes, based on the median intraservice work time from the combined survey total for CPT code 31605. We sought comments on the methodology used to determine the RUC-recommended work RVU and intraservice work time. We were concerned that the number of respondents (20) was below the threshold typically required for submission of a survey, and the effect of using survey results only from physicians who had personal experience performing the procedure. CPT code 31605 has a lower intraservice and total time, but a higher work RVU than comparable codes under the PFS. We noted that the next highest 0-day global code with 20 minutes of intraservice time is CPT code 16035 (Escharotomy; initial incision) at a work RVU of 3.74. All other 0-day global codes with a work RVU of 6.45 or greater have at least 40 minutes of intraservice time.

We sought comment on the effect that an alternative work RVU of 4.77 would have on the relativity of this service compared to other services in this family of codes and compared to other PFS services, taking into account that CPT code 31605 describes a difficult and dangerous life-threatening emergency procedure.

We considered a work RVU of 6.50 for CPT code 31610 based on a direct crosswalk to CPT code 31601 (Incision of windpipe). We understand that the RUC considered the possibility of recommending this code be assigned a 0-day global period based on concerns about negative derived intensity. We shared the RUC's concerns with the current construction of CPT code 31610, particularly with the 242 minutes of work time included in the postoperative visits, which is an unusually large amount for a procedure with only 45 minutes of intraservice time. We did not identify any other comparable codes under the PFS with 45 minutes of intraservice time and more than 300 minutes of total time. We sought comment on whether the unusually high volume of physician work time included in the postoperative visits for CPT code 31610 contributed to the negative derived intensity reported by the survey data. Considering that the other codes in this family have 0-day global periods, we considered and sought comment on whether a 0-day global period should be assigned to CPT code 31610. Removal of the postoperative E/M visits from CPT code 31610 would result in an intraservice time of 45 minutes and a total time of 125 minutes, similar to CPT code 31601 with 45 minutes of intraservice time and 135 minutes of total time.

We proposed the RUC-recommended direct PE inputs for all five CPT codes in this family without refinements. As discussed earlier, we considered a 0-day global period for CPT code 31610, which would also have resulted in removal of the clinical labor associated with the postoperative E/M visits, along with the supplies and equipment utilized during those visits. While we remained concerned about the global period assigned to CPT code 31610 and the changes in service times reflected in the specialty surveys compared to the RUC-recommended work RVUs, for CY 2018, we proposed the RUC-recommended work RVUs and direct PE inputs for each code in this family and sought comment on our proposed and alternative values.

Comment: The commenters supported the proposed values for all five of the codes but disagreed with the alternative values.

Response: We appreciate the feedback from the commenters. We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs, direct PE inputs, and global periods for the codes in the tracheostomy family as proposed.

(10) Bronchial Aspiration of Tracheobronchial Tree (CPT Codes 31645 and 31646)

CPT code 31645 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed with therapeutic aspiration of tracheobronchial tree, initial) was identified as potentially misvalued on a screen of Harvard-valued codes with utilization over 30,000 in CY 2014. CPT code 31646 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed with therapeutic aspiration of tracheobronchial tree, subsequent, same hospital stay) was added for review as part of the family of codes, and both were revised to reflect recent changes in how the services are typically performed. For CY 2018, we proposed the RUC-recommended work RVUs of 2.88 for CPT code 31645 and 2.78 for CPT code 31646.

We considered a work RVU of 2.72 for CPT code 31645, crosswalking to CPT code 45347 (Sigmoidoscopy, flexible; with placement of endoscopic stent). We had concerns regarding the decrease in intraservice and total time compared to the current values; we also believe that it is important to note how these related codes have been affected by the creation of separately billable codes for moderate sedation (see the CY 2017 PFS final rule (81 FR 80339)). The RUC recommended a work RVU for CPT code 31645 that is higher than the work RVU for CPT code 31622 (Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when performed; diagnostic, with cell washing, when performed), which is the base procedure for this broader group of codes. We agreed that CPT code 31645 should be valued at a higher work RVU than CPT code 31622; however, we sought comment on whether the work of moderate sedation was inadvertently included in the development of the recommended work RVU. We noted that as part of the CY 2017 PFS final rule (81 FR 80339), we finalized separate payment for moderate sedation. Following the creation of separately billable codes for moderate sedation, CPT code 31622 is currently valued at a work RVU of 2.53, not 2.78 as it was previously valued, and we did not believe it would be appropriate to continue to value CPT code 31645 as though moderate sedation was still an inherent part of the work of this service. As a result, we considered a direct crosswalk to CPT code 45347, which has the same intraservice time and 8 additional minutes of total time, at a work RVU of 2.72.

We considered a work RVU of 2.53 for CPT code 31646, crosswalking to CPT code 31622 (Dx bronchoscope/wash). The RUC recommendation for CPT code 31646 indicated that the code was comparable to CPT code 31622, since they share the same intraservice time and similar total time, and that the recommended work RVU of 2.78 for CPT code 31646 was equal to the work RVU of CPT code 31622 before the CY 2017 changes to reporting of moderate sedation. We agreed with the survey participants that these two codes are comparable to one another, but had concerns about valuation of CPT code 31646 using a cross reference to a code that included moderate sedation. We considered crosswalking CPT code 31646 using the current CY 2017 valuation for CPT code 31622 (a work RVU of 2.53).

For the direct PE inputs, we proposed to remove the oxygen gas (SD084) from CPT code 31645. This supply is included in the separately billable moderate sedation codes, and we proposed to remove the oxygen gas as recommended by the RUC's PE Subcommittee as part of the removal of Start Printed Page 53045oxygen from non-moderate sedation post-procedure monitoring codes. We also proposed to remove the equipment time for the IV infusion pump (EQ032) from CPT code 31645. We did not agree that there would typically be a need for a separate infusion pump in CPT code 31645, as the infusion pump is contained in the separately reportable moderate sedation codes. We also proposed to remove the equipment time for the CO2 respiratory profile monitor (EQ004) and the mobile instrument table (EF027) from CPT code 31645. These equipment items are not contained in the current composition of the code, and there was no rationale provided in the RUC recommendations for their inclusion. As a result, we did not believe that their use would be typical for CPT code 31645.

We proposed to increase the equipment time for the flexible bronchoscopy fiberscope (ES017) for CPT code 31645 consistent with standard equipment times for scopes. We also proposed to increase the equipment time for the Gomco suction machine (EQ235) and the power table (EF031) consistent with standard equipment times for non-highly technical equipment. For CY 2018, we proposed the RUC-recommended work RVUs for both codes in this family and sought comment on whether we should finalize refined values consistent with the implementation of separately billable codes for moderate sedation.

Comment: Several commenters supported the proposed values for both of the codes but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: One commenter disagreed with our proposal to remove the oxygen gas (SD084) and the equipment time for the CO2 respiratory profile monitor (EQ004) from CPT code 31645. The commenter stated that although the separately reported moderate sedation codes do include some oxygen, the new codes fail to include enough oxygen for the entire procedure, and there would be an unacceptable risk to the patient population if insufficient quantities of oxygen were allotted for this service. The commenter indicated that the use of these direct PE inputs was the standard of care for bronchoscopies.

Response: After reviewing the information supplied by the commenter, we agree that the removal of these two direct PE inputs from CPT code 31645 could create a risk for the patient population. Therefore, we are finalizing the inclusion of 175 liters of oxygen gas and 58 minutes of equipment time for the CO2 respiratory profile monitor for CPT code 31645.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the bronchial aspiration of tracheobronchial tree family as proposed, with the exception of the proposed removal of the oxygen gas and CO2 respiratory profile monitor as detailed above.

(11) Cryoablation of Pulmonary Tumor (CPT Codes 32998 and 32994)

For CY 2018, the CPT Editorial Panel modified the descriptor for CPT code 32998 (Ablation therapy for reduction or eradication of 1 or more pulmonary tumor(s) including pleura or chest wall when involved by tumor extension, percutaneous, including imaging guidance when performed, unilateral; radiofrequency) to include imaging guidance. In addition, the panel deleted Category III CPT Code 0304T and replaced it with a new CPT code 32994, to describe ablation therapy for reduction of pulmonary tumor using cryoablation with imaging guidance. In the CY 2018 PFS proposed rule, we proposed the RUC-recommended work RVUs for CPT codes 32998 (a work RVU of 9.03) and 32994 (a work RVU of 9.03).

However, we expressed concerns about the descriptions of the codes and the recommended valuations assuming that imaging guidance is inherent to the procedure. Based on our analysis of claims data from 2014, existing CPT code 32998 is currently reported with one of the three imaging guidance codes (CPT codes 76940, 77013, or 77022) less than 50 percent of the time. We sought comment on whether there is additional information that would help explain why the codes are being bundled despite what is reflected in the Medicare claims data. We considered a work RVU of 7.69 for CPT code 32998, that included approximately one half the value of the imaging guidance in the new codes that describe the work of both the procedure and the image guidance (that is, the sum of the current work RVU for CPT code 32998 and one-half of the work RVU for CPT code 77013 (the imaging guidance code most frequently billed with CPT code 32998 according to 2014 claims data)). We applied the same general rationale regarding the use of imaging guidance for new CPT code 32994. Since the RUC recommended identical work RVUs for these codes, we also considered a work RVU of 7.69 for CPT code 32994.

For CPT codes 32998 and 32994, we proposed to use the RUC-recommended direct PE inputs with standard refinements and sought comment on our proposed values.

Comment: Commenters generally supported the work RVUs for these codes, as proposed. Some commenters expressed concerns about our analysis of utilization data related to the bundling of imaging guidance services with ablation therapy. In addition, commenters disagreed with our refinement to times for several equipment items.

Response: We continue to remain interested in ensuring that, when two services are combined into a single CPT code, that they are furnished together so frequently that the resulting resource valuation is not inadvertently overestimating resource costs.

After consideration of the public comments, we are finalizing the work RVUs as proposed. With regard to the PE inputs, we note that we applied the standard formulas for equipment times, and we continue to believe that these refinements are reasonable for these codes. An explanation of the standards and formulas for equipment related to direct PE inputs is in the CY 2014 PFS final rule with comment period (79 FR 67557). We are also finalizing the direct PE inputs with standard refinements for these services, as proposed.

(12) Artificial Heart System Procedures (CPT Codes 33927, 33929, and 33928)

For CY 2018, the CPT Editorial Panel deleted Category III CPT Codes 0051T through 0053T and created CPT codes 33927 (Implantation of a total replacement heart system (artificial heart) with recipient cardiectomy), 33929 (Removal of a total replacement heart system (artificial heart) for heart transplantation), and 33928 (Removal and replacement of total replacement heart system (artificial heart)) to report artificial heart system procedures. We proposed the RUC-recommended work RVU of 49.00 for CPT code 33927, and proposed to assign contractor-priced status to CPT codes 33929 and 33928, as recommended by the RUC. We considered assigning contractor-priced status for CPT code 33927. We had concerns regarding the accuracy of the RUC-recommended work valuation for CPT code 33927, due to its low utilization and the resulting difficulties in finding enough practitioners with direct experience of the procedure for the specialty societies to survey. We sought comment on the sufficiency of the survey data, especially since new Start Printed Page 53046technologies and those with lower utilization are typically contractor-priced. For CY 2018, we proposed the RUC-recommended work RVUs for CPT code 33927. We sought comment on this alternative pricing for this CPT code 33927. We did not propose any direct PE inputs, as we did not receive RUC-recommended PE information for CPT codes 33927, 33929, and 33928. These three codes will be placed on the RUC's new technology list and will be re-reviewed by the RUC in 3 years.

Comment: Several commenters supported the proposed values for CPT code 33927 but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

After consideration of comments received for CY 2018, we are finalizing the work RVU of 49.00 for CPT code 33927 and finalizing contractor-priced status for CPT codes 33929 and 33928 as proposed.

(13) Endovascular Repair Procedures (CPT Codes 34701, 34702, 34703, 34704, 34705, 34706, 34707, 34708, 34709, 34710, 34711, 34712, 34713, 34812, 34714, 34820, 34833, 34834, 34715, and 34716)

The CPT/RUC joint workgroup on codes recommended in October 2015 to bundle endovascular abdominal aortic aneurysm repair (EVAR) codes together with radiologic supervision and interpretation codes, since these codes were typically reported together at least 50 percent of the time. The CPT Editorial Panel bundled these services together in September 2016, creating 16 new codes, revising four existing codes, and deleting 14 other codes related to endovascular repair procedures.

We proposed the RUC-recommended work RVUs for all 20 codes in this family. We proposed work RVUs of 23.71 for CPT code 34701, 36.00 for CPT code 34702, 26.52 for CPT code 34703, 45.00 for CPT code 34704, 29.58 for CPT code 34705, 45.00 for CPT code 34706, 22.28 for CPT code 34707, 36.50 for CPT code 34708, 6.50 for CPT code 34709, 15.00 for CPT code 34710, 6.00 for CPT code 34711, 12.00 for CPT code 34712, 2.50 for CPT code 34713, 4.13 for CPT code 34812, 5.25 for CPT code 34714, 7.00 for CPT code 34820, 8.16 for CPT code 34833, 2.65 for CPT code 34834, 6.00 for CPT code 34715, and 7.19 for CPT code 34716. We also proposed the RUC-recommended direct PE inputs without refinement for all 20 codes in the family.

We considered a work RVU of 32.00 for CPT code 34702 based on the survey 25th percentile, and further supported with a crosswalk to CPT code 48000 (Placement of drains, peripancreatic, for acute pancreatitis), which has the same intraservice time of 120 minutes and a work RVU of 31.95. When we compared the RUC-recommended work RVU to similar codes valued under the PFS, we were unable to find any 90-day global services with 120 minutes of intraservice time and approximately 677 minutes of total time that had a work RVU greater than 36.00.

We considered a work RVU of 40.00 for CPT code 34704 based on the survey 25th percentile, crosswalking to CPT code 33534 (Coronary artery bypass, using arterial graft(s); 2 coronary arterial grafts) which has a work RVU of 39.88. CPT code 33534 has 193 minutes of intraservice time, but a lower total time of 717 minutes. When we compared the RUC-recommended work RVU for CPT code 34704 to similar codes paid under the PFS, we were unable to find any 90-day global services with 180 minutes of intraservice time and approximately 737 minutes of total time that had a work RVU greater than 45.00.

We considered a work RVU of 40.00 for CPT code 34706 based on the survey 25th percentile. CPT code 34706 has nearly identical time values to CPT code 34704, with 2 fewer minutes of intraservice time and total time, and the RUC-recommended work RVU was the same for both of these codes. The survey respondents also believed that these two codes had a comparable amount of work, as the survey 25th percentile work RVU was 40.00 for both codes.

We considered a work RVU of 30.00 for CPT code 34708 based on the survey 25th percentile and sought comment on whether a work RVU of 30.00 would improve relativity among the codes in this family. CPT code 34708 has identical intraservice and total times as CPT code 34702. However, we noted that the RUC-recommended work RVU of 36.50 for CPT code 34708 is higher than the RUC-recommended work RVU of 36.00 for CPT code 34702. This is the inverse of the relationship between CPT codes 34707 and 34701, which describe the same procedures in a non-emergent state when a rupture does not take place. CPT code 34707 has a RUC-recommended work RVU of 22.28, while CPT code 34701 has a RUC-recommended work RVU of 23.71. We sought comment on whether the RUC-recommended work RVUs would create a rank order anomaly within the family by reversing the relationship between these paired codes when performed in an emergent state. We noted that if CPT codes 34708 and 34702 were valued at the survey 25th percentile, this potential rank order anomaly disappears; in this scenario, we considered valuing CPT code 34708 at a work RVU of 30.00 and CPT code 34702 at a work RVU of 32.00. We sought comment on whether these alternative work values would improve relativity with the RUC-recommended work RVUs for CPT code 34707 (22.28) and CPT code 34701 (23.71), with an increment of approximately 1.50 to 2.00 RVUs between the two code pairs.

For the eight remaining codes that describe endovascular access procedures, we considered assignment of a 0-day global period, instead of the RUC-recommended add-on (ZZZ) global period and subsequently adding back the preservice and immediate postservice work time, and increasing the work RVU of each code accordingly using a building block methodology. We noted that as add-on procedures, these eight codes would not be subject to the multiple procedure payment discount. We were concerned that the total payment for these services will be increasing in the aggregate based on changes in coding that alter MPPR adjustments, despite the information in the surveys that reflects a decrease in the intraservice time required to perform the procedures, and a decrease in their overall intensity as compared to the current values.

We considered a work RVU of 3.95 for CPT code 34713, based on the RUC-recommended work RVU of 2.50 plus an additional 1.45 work RVUs. This additional work results from the addition of 38 total minutes of preservice work time and 30 minutes of postservice work time based on a crosswalk to CPT code 37224 (Revascularization, endovascular, open or percutaneous, femoral, popliteal artery(s), unilateral; with transluminal angioplasty) as valued by using the building block methodology. Using the same method, we considered a work RVU of:

  • 6.48 for CPT code 34812 based on maintaining the current 75 minutes of preservice work time and the current 30 minutes of postservice work time, with a total work RVU of 2.35, added to the RUC-recommended work RVU of 4.13;
  • 7.53 for CPT code 34714 with the addition of 75 minutes of preservice work time and 27 minutes of postservice work time to match CPT code 34833;
  • 9.46 for CPT code 34820 based on maintaining the current 80 minutes of preservice work time and the current 30 minutes of postservice work time;Start Printed Page 53047
  • 10.44 for CPT code 34833 based on maintaining the current 75 minutes of preservice work time and the current 27 minutes of postservice work time;
  • 5.00 for CPT code 34834 based on maintaining the current 70 minutes of preservice work time and the current 35 minutes of postservice work time;
  • 8.35 for CPT code 34715 with the addition of 70 minutes of preservice work time and 35 minutes of postservice work time to match CPT code 34834; and
  • 9.47 for CPT code 34716 with the addition of 75 minutes of preservice work time and 27 minutes of postservice work time to match CPT code 34833.

We proposed the RUC-recommended work RVUs and direct PE inputs for each code in this family and sought comment on whether our alternative values would be more appropriate.

Comment: Several commenters supported the proposed values for all 20 of the codes but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the endovascular repair procedures family as proposed.

(14) Selective Catheter Placement (CPT Codes 36215, 36216, 36217, and 36218)

CPT code 36215 was identified as potentially misvalued on a screen of Harvard-valued codes with utilization over 30,000 in CY 2014, as well as on a screen of high expenditure services across specialties with Medicare allowed charges of over $10 million. CPT codes 36216, 36217, and 36218 were added to the family to be reviewed together with CPT code 36215.

We proposed the RUC-recommended work RVUs for each code in this family. We proposed work RVUs of 4.17 for CPT code 36215, 5.27 for CPT code 36216, 6.29 for CPT code 36217, and 1.01 for CPT code 36218.

We also considered refinements to the intraservice work time for CPT code 36217 from 60 minutes to 50 minutes, consistent with the RUC's usual use of the survey median intraservice work time. We had concerns that the use of the recommended survey 75th percentile intraservice work time will not be clinically appropriate for this code, as the 75th percentile time was identical for CPT codes 36216 and 36217, and therefore, the use of this value would not preserve the incremental, linear consistency between the work RVU and the intraservice time within the family.

For the direct PE inputs, we proposed to refine the clinical labor time for the “Post-procedure doppler evaluation (extremity)” activity from 3 minutes to 1 minute for CPT codes 36215, 36216, and 36217. We believed that 1 minute would be more typical for this task, as the practitioner would be able to quickly evaluate if there was an issue with the extremity because there would be visual signs of arterial insufficiency resulting from the procedure.

We proposed to remove the equipment time for the mobile instrument table (EF027) from CPT codes 36215, 36216, and 36217. We believed that the mobile instrument table would be used for moderate sedation, which was removed from these procedures in CY 2017 (see the CY 2017 PFS final rule (81 FR 80339). While we recognized that 180 minutes of post-procedure monitoring time remains in these codes during which the stretcher (EF018), IV infusion pump (EQ032), and 3-channel ECG (EQ011) would remain in use, we did not agree that the mobile instrument table would typically be in use during this period of monitoring. As a result, we proposed to remove this equipment time from these three codes.

While we remained concerned about the use of the survey 75th percentile intraservice work time for CPT code 36217, for CY 2018, we proposed the RUC-recommended work RVUs for each code in this family and sought comment on whether our alternative values would be more appropriate.

Comment: Commenters supported the proposed values for all four of the codes but disagreed with the alternative values. We did not receive any comments specifically requesting the use of the alternative values for this family of codes.

Response: We appreciate the feedback from the commenters. We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: Several commenters disagreed with the CMS proposal to refine the clinical labor time for the “Post-procedure doppler evaluation (extremity)” activity from 3 minutes to 1 minute for CPT codes 36215, 36216, and 36217. Commenters stated that CMS picked another time under the impression that clinical staff should be able to perform this task more quickly and that this was not a reason to change the recommended clinical labor time.

Response: The response from the commenters did not provide any rationale as to why a clinical labor time of 3 minutes would be typical for this activity. We continue to believe that 1 minute would be more typical for this task, as the practitioner would be able to quickly evaluate if there was an issue with the extremity via visual signs of arterial insufficiency.

Comment: Several commenters disagreed with the proposal to remove equipment time for the mobile instrument table (EF027) from CPT codes 36215, 36216, and 36217. Commenters stated that the office still needed the instrument table during the postoperative period, outside of moderate sedation, to house all of the monitoring items.

Response: While we appreciate the concerns raised by the commenters, we disagree. Storage equipment is a form of indirect PE that is not individually allocable to services and therefore is not separately payable. Our methodology incorporates the costs of non-medical infrastructure, such as cabinets and counter space, as part of the office rent expenses contained as part of indirect PE. Because the mobile instrument table is analogous to storage equipment in this particular circumstance, we continue to believe that it would be classified as a form of indirect PE and would not typically be in use during this period of monitoring.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the selective catheter placement family as proposed.

(15) Treatment of Incompetent Veins (CPT Codes 36470, 36471, 36482, 36483, 36465, and 36466)

In September 2016, the CPT Editorial Panel created four new codes to describe the treatment of incompetent veins, and revised existing CPT codes 36470 and 36471. These six codes were reviewed together as part of the same family of procedures. For CY 2018, we proposed the RUC-recommended work RVU for all six codes. We proposed work RVUs of 0.75 for CPT code 36470, 1.50 for CPT code 36471, 3.50 for CPT code 36482, 1.75 for CPT code 36483, 2.35 for CPT code 36465, and 3.00 for CPT code 36466.

We considered a work RVU of 4.38 for CPT code 36482, which would have been based on the RUC-recommended work RVU of 3.50 plus half of the RUC-recommended work RVU of CPT code Start Printed Page 5304836483. We also considered assigning CPT code 36483 a status indicator of “bundled.” The services that would be reported using CPT codes 36482 and 36483 in CY 2018 are currently reported with unlisted CPT code 37799 (Unlisted procedure, vascular surgery). We had concerns about how frequently the current services include treatment of an initial vein (CPT code 36482) as compared to the treatment of initial and subsequent veins (CPT codes 36482 and 36483 together). We believed it may be more accurate to describe these services through the use of a single code, as in the rest of this code family, instead of a base code and add-on code pair. Under this potential scenario, we looked at the RUC-recommended crosswalk and noted that the add-on CPT code 36483 was estimated to be billed 50 percent of the time together with CPT code 36482. We therefore considered adding half of the RUC-recommended work RVU of CPT code 36483 (0.88) to the RUC-recommended work RVU of CPT code 36482 (3.50), which would result in a work RVU of 4.38.

We proposed to remove the 2 minutes of clinical labor for the “Setup scope” (CA015) activity and add the same 2 minutes of clinical labor for the “Prepare room, equipment and supplies” (CA013) activity for CPT codes 36482, 36465, and 36466. The RUC-recommended materials stated that these 2 minutes were a proxy for setting up the ultrasound machine, and we believe that this 2 minutes was more accurately described by the “Prepare room, equipment and supplies” (CA013) activity code, since there is no scope equipment utilized in these procedures. We proposed to maintain the Vascular Tech (L054A) clinical labor type for these 2 minutes. We also proposed to refine the clinical labor for the “Check dressings, catheters, wounds” (CA029) activity for CPT codes 36470, 36471, 36482, 36465, and 36466, consistent with the standard times for this clinical labor activity.

We proposed to remove the six individual 4x4 sterile gauze (SG055) supplies and replace them with a 4x4 sterile gauze pack of 10 (SG056) for CPT codes 36470, 36471, 36482, 36465, and 36466. The pack of 10 sterile gauze is cheaper than six individual pieces of sterile gauze, and we did not agree that it would be typical to pay a higher cost for fewer supplies. We also proposed to create three new supply codes in response to the invoices submitted for this family of codes. We proposed to establish a price of $1,495 for the Venaseal glue (SD323) supply, a price of $3,195 for the Varithena foam (SD324) supply, and a price of $40 for the Varithena admin pack (SA125) supply.

We proposed to adjust the equipment times for the surgical light (EF014), the power table (EF031), and the portable ultrasound unit (EQ250) for CPT codes 36482, 36465, and 36466, consistent with the standards for non-highly technical equipment and to reflect the changes in the clinical labor described in this section of the final rule.

While we remained concerned about the creation of a base code and add-on code pairing (CPT codes 36482 and 36483) out of services that are currently reported using an unlisted code, for CY 2018, we proposed the RUC-recommended work RVUs for each code in this family and sought comment on whether our alternative values would be more appropriate.

Comment: Several commenters supported the proposed values for all six of the codes but disagreed with the alternative values.

Response: We appreciate the feedback from the commenters.

Comment: One commenter stated that they agreed with the direct PE refinements as proposed.

Response: We appreciate the support from the commenter.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the treatment of incompetent veins family as proposed.

(16) Therapeutic Apheresis (CPT Codes 36511, 36512, 36513, 36514, 36516, and 36522)

CPT code 36516 was nominated as potentially misvalued in the CY 2016 PFS proposed rule. The CPT Editorial Panel deleted CPT code 36515 and made revisions to CPT code 36516 to include immunoabsorption. CPT codes 36511, 36512, 36513, 36514, and 36522 were added to CPT code 36516 to be reviewed together as part of the therapeutic apheresis family.

For CY 2018, we proposed the RUC-recommended work RVUs for all six codes in the family. We proposed work RVUs of 2.00 for CPT code 36511, 2.00 for CPT 36512, 2.00 for CPT code 36513, 1.81 for CPT code 36514, 1.56 for CPT code 36516, and 1.75 for CPT code 36522.

We proposed to use the RUC-recommended direct PE inputs for these codes without refinement. We considered refining the clinical labor time for the “Prepare room, equipment, supplies” activity from 20 minutes to 10 minutes for CPT codes 36514 and 36522, and from 30 minutes to 10 minutes for CPT code 36516. We also considered refining the clinical labor for the “Prepare and position patient/monitor patient/set up IV” activity from 15 minutes to 10 minutes for these same three codes. In both cases, we considered maintaining the current clinical labor time for CPT codes 36514 and 36516, and adjusting the clinical labor time for CPT code 36522 to match the other two codes in the family. We had concerns about the lack of a rationale provided for these changes in clinical labor time, and whether these clinical labor tasks would typically require this additional time.

We proposed the RUC-recommended work RVUs and to use the RUC-recommended direct PE inputs for each code in this family and sought comment on whether our alternative values would be more appropriate. We also sought comment on whether these procedures were creating a new point of venous access or utilizing a previously placed access.

Comment: Several commenters supported the proposed values for all six of the codes but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: Several commenters stated that a cell separator system (EQ084) was mistakenly left out of the RUC's recommendation for CPT code 36516. The commenters stated that this particular equipment item is critical for all of the therapeutic apheresis services and that CPT code 36516 uses a piece of equipment (the Liposorber system) that attaches to this missing equipment item. The commenters recommended adding this piece of equipment (EQ084) to CPT code 36516 with 324 minutes of use.

Response: We disagree with the commenters. Based on the information that we currently have available, we do not believe that the cell separator system (EQ084) was mistakenly left out of the RUC recommendation for CPT code 36516. We note that the RUC did not include the cell separator system in its recommendations for this procedure, and also made no mention of an error in the recommended direct PE inputs for CPT code 36516 in its comments on the CY 2018 PFS proposed rule. We are also confused by the statement from one commenter that the cell separator system is critical for all of the therapeutic apheresis services, since this equipment item is not included in the current direct PE inputs for CPT Start Printed Page 53049code 36516, nor was it recommended for CPT code 36522 in the same family. We welcome additional feedback from stakeholders regarding whether the use of the cell separator system is typical in CPT code 36516.

Comment: Many commenters responded to the request for additional information regarding whether these procedures were creating a new point of venous access or utilizing a previously placed access point. Commenters agreed that both of the vignettes for these services, as well as the descriptions of work, stated that the typical patient has a previously placed venous access that is then utilized. While in some cases, a revision to the access site may need to be made, or initial access achieved, these cases were not representative of the typical patient scenario. There was widespread agreement from the commenters on the utilization of a previously placed access point in these services.

Response: We appreciate the feedback from the commenters in clarifying the clinical details surrounding the point of venous access.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the therapeutic apheresis family as proposed.

(17) Insertion of Catheter (CPT Codes 36555, 36556, 36620, and 93503)

CPT code 36556 was identified as part of a screen of high expenditure services with Medicare allowed charges of $10 million or more that had not been recently reviewed. CPT codes 36555, 36620, and 93503 were added for review by the RUC as part of the code family. We proposed the RUC-recommended work RVUs for each code in this family. We proposed work RVUs of 1.93 for CPT code 36555, 1.75 for CPT code 36556, 1.00 for CPT code 36620, and 2.00 for CPT code 93503.

We proposed to remove the clinical labor time for the “Monitor pt. following procedure” activity and the equipment time for the 3-channel ECG (EQ011) for CPT code 36555. CPT code 36555 no longer includes moderate sedation as part of the procedure (see the CY 2017 PFS final rule (81 FR 80339). We proposed to remove the direct PE inputs related to moderate sedation from CPT code 36555 as they would now be included in the separately reported moderate sedation services. We also proposed to refine the equipment times for the exam table (EF023) and the exam light (EQ168) to reflect changes in the clinical labor time.

Comment: Several commenters requested that CMS not finalize its proposal to accept the RUC's recommendations for CPT codes 36555, 36556, 36620 and 93503 and instead finalize higher work RVUs that the specialty had provided to the RUC. The commenters stated that these work RVUs maintained relativity within the resource-based relative value scale (RBRVS) range of services and represented a more accurate valuation of these procedures. One commenter stated that the RUC-recommended work RVUs create a rank order anomaly in the intensity of the services in this family of codes.

Response: As we stated in the background of this code valuation section, we generally proposed RUC-recommended work RVUs for new, revised, and potentially misvalued codes for CY 2018. We believe that in the absence of other data regarding the appropriate valuation of these codes, the RUC-recommended work RVUs represent the most accurate valuation of the procedures. We continue to be open to reviewing additional and supplemental sources of data furnished by stakeholders. We encourage stakeholders to continue to provide such information for consideration in establishing work RVUs.

Comment: Several commenters disagreed with the proposal to remove the direct PE inputs related to moderate sedation from CPT code 36555. The commenters stated that any PE refinement necessary to address separate reporting of moderate sedation would have already taken place, so no further refinement to PE as it relates to this change should be necessary. Another commenter indicated agreement with the proposed direct PE refinements.

Response: We appreciate the support from the commenter for our proposed direct PE refinements. Regarding the other comments, we continue to believe that further refinements are needed to address the separate reporting of moderate sedation. CPT code 36555 does not currently contain any clinical labor for post procedure clinical labor monitoring related to moderate sedation; however, 7.5 minutes of monitoring time was added back into the procedure as part of the RUC-recommended direct PE inputs for CY 2018. Since this clinical labor for the monitoring time would be included in the separately reported moderate sedation code, we believe that it would be duplicative to include the same monitoring clinical labor time, or the equipment time for the 3-channel ECG, in CPT code 36555.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the insertion of catheter family as proposed.

(18) Insertion of PICC Catheter (CPT Code 36569)

CPT code 36569 was identified as part of a screen of high expenditure services with Medicare allowed charges of $10 million or more that had not been recently reviewed. For CY 2018, we proposed the RUC-recommended work RVU of 1.70 for CPT code 36569.

We proposed to remove the equipment time for the exam table (EF023), as this equipment item is a component part of the radiographic-fluoroscopic room (EL014) included in CPT code 77001 (Fluoroscopic guidance for central venous access device placement, replacement (catheter only or complete), or removal). Because CPT code 36569 is typically billed together with CPT code 77001, we believed that including the additional equipment time for the exam table in CPT code 36569 would be duplicative.

Comment: Several commenters disagreed with the proposal to remove the equipment time for the exam table (EF023). Commenters stated that CMS' rationale for removing the exam table, that it is a component part of the radiographic-fluoroscopic room (EL014), was incorrect. Commenters pointed out that the radiographic-fluoroscopic room only includes a radiographic machine and camera, and requested that the exam table should be reinstated consistent with the RUC's recommendation.

Response: We appreciate the clarification regarding the contents of the radiographic-fluoroscopic room from the commenters. After reviewing the room's contents, we agree with the commenters that the radiographic-fluoroscopic room only includes a radiographic machine and camera. While we believe that the radiographic machine likely incorporates an exam table on which to place the patient, we concede that this is not specifically stated in the documentation for the radiographic-fluoroscopic room from the commenters. As a result, we are not finalizing our proposal to remove the equipment time for the exam table. We are restoring the exam table to CPT code 36569 at an equipment time of 32 minutes in accordance with our standard formula for non-highly technical equipment time.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes for CPT code 36569 as proposed, with the exception of the Start Printed Page 53050change for the exam table as detailed above.

(19) Bone Marrow Aspiration (CPT Codes 38220, 38221, 38222, and 20939)

CPT code 38221 was identified as part of a screen of high expenditure services with Medicare allowed charges of $10 million or more that had not been recently reviewed. The descriptors for CPT codes 38220 and 38221 were revised to reflect changes in practice patterns, and two new CPT codes (38222 and 20939) were created to more accurately describe new services that are now available. For CY 2018, we proposed the RUC-recommended work RVUs for each code in this family. We proposed a work RVU of 1.20 for CPT code 38220, 1.28 for CPT code 38221, 1.44 for CPT code 38222, and 1.16 for CPT code 20939.

We also received a recommendation from the RUC to change the global periods for CPT codes 38220, 38221, and 38222 from XXX global periods to 0-day global periods, even though these codes were surveyed under the XXX global period. We agreed with the recommendation that for these three particular codes, their services were more accurately described when assigned 0-day global periods as opposed to the XXX global status. Therefore, we proposed to assign a 0-day global period to all three codes in this family. We noted, however, that we believed that global period changes must be addressed on an individual basis, especially when the routine survey methodologies rely on assumptions regarding global periods for particular codes. Subsequently, we proposed to refine the preservice work time from 15 minutes of evaluation time to 9 minutes of evaluation time, 1 minute of positioning time, and 5 minutes of scrub, dress, and wait time. We proposed these refinements to the work times for these three codes to more closely align with the preservice times of other recently reviewed 0-day global procedures, such as CPT code 30903 (Control nasal hemorrhage, anterior, complex (extensive cautery and/or packing) any method). We also noted that given our proposal to value CPT code 38222, we proposed to eliminate payment using HCPCS code G0364 for CY 2018 since the changes to the set of CPT codes will now accurately describe the services currently reported by HCPCS code G0364. For CPT code 20939, we considered a work RVU of 1.00 based on a direct crosswalk to CPT codes 64494 (Injection(s), diagnostic or therapeutic agent, paravertebral facet (zygapophyseal) joint (or nerves innervating that joint) with image guidance (fluoroscopy or CT), lumbar or sacral; second level) and 64495 (Injection(s), diagnostic or therapeutic agent, paravertebral facet (zygapophyseal) joint (or nerves innervating that joint) with image guidance (fluoroscopy or CT), lumbar or sacral; third and any additional level(s)). CPT code 20939 is a global ZZZ add-on code for CPT code 38220, and we were concerned with maintaining relativity among PFS services, considering that an add-on code typically has significantly less intraservice time and total time compared to the base code. We considered an alternative crosswalk to CPT codes 64494 and 64495, which share the same intraservice and total time with CPT code 20939 and have work RVUs of 1.00.

We also proposed to refine the clinical labor for “Lab Tech activities” from 12 minutes to 9 minutes for CPT code 38220, from 7.5 minutes to 7 minutes for CPT code 38221, and from 12.5 minutes to 10 minutes for CPT code 38222. We maintained the current time value for the two existing codes, as we had no reason to believe that the typical duration has increased for these lab activities. We assigned 10 minutes for CPT code 38222 based on the statement in the RUC-recommended materials for the direct PE inputs that this activity takes 0.5 minutes longer than it does in the current version of CPT code 38220. We also proposed to remove the breakout lines for the lab activities. We believe that the breakout of activities into numerous subactivities generally tends to inflate the total time assigned to clinical labor activities and results in values that are not consistent with the analogous times for other PFS services.

We considered refining the clinical labor time for “Provide preservice education/obtain consent” for CPT codes 38220, 38221, and 38222 from 12 minutes to 6 minutes. We had concerns regarding whether 12 minutes would be typical for education and consent prior to these procedures, as much of the patient education takes place following the procedure, in the clinical labor activity described under the “Check dressings & wound/home care instructions” heading. We proposed the RUC-recommended work RVUs for each code in this family and sought comment on whether our alternative values would be more appropriate.

Comment: Several commenters agreed with the proposal to change the global period for CPT codes 38220, 38221, and 38222 from XXX global periods to 0-day global periods. These commenters also supported the proposed change to the preservice work times to more closely align with the preservice times of other recently reviewed 0-day global procedures.

Response: We appreciate the support for our proposal from the commenters.

Comment: Other commenters disagreed with the proposed change in global period. Commenters stated that maintaining these codes as XXX globals was consistent with the survey methodology used to generate the RUC-recommended work RVUs, as these codes were surveyed under the XXX global period. The commenters stated that these codes are billed less than 25 percent of the time with an E/M service, and that since an E/M service being performed on the same day is not typical, there was not a compelling reason to change the global period.

Response: We appreciate the additional responses from commenters requesting that the XXX global period should be retained for these three CPT codes. As these codes were surveyed and valued under XXX global status and the RUC has maintained that there is a need to resurvey when the global period changes, we will not finalize our proposal to change CPT codes 38220, 38221, and 38222 from XXX global periods to 0-day global periods. In the absence of compelling evidence that the 0-day global status would be more typical for these services, we believe that the current XXX global period should be maintained. We will also not finalize our related proposal to refine the preservice work time from 15 minutes of evaluation time to 9 minutes of evaluation time, 1 minute of positioning time, and 5 minutes of scrub, dress, and wait time. We welcome additional feedback from stakeholders regarding the global period that should be assigned to these codes.

Comment: Several commenters supported the proposed values for all four of the codes but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: Several commenters disagreed with the proposal to refine the clinical labor for “Lab Tech activities” in CPT codes 38220, 38221, and 38222. Commenters stated that each CPT code is unique and the recommended clinical labor reflects the typical time of those activities associated with each service. Commenters also disagreed with the proposal to remove the breakout lines for the lab activities, stating that the Start Printed Page 53051methodology at the time of review was to provide as much detail as possible and that just because these subactivities were fully displayed did not mean that they had been double counted. Several of the commenters supplied clinical information describing the activities that took place in additional detail.

Response: We appreciate the additional information supplied by the commenters. We agree with the commenters that each service is unique and must be valued on an individual basis. We also agree that the lab activities taking place in these services are important and that they must be performed. Our concern is that the individual accounting of clinical labor activities can lead to PE proliferation, and that this breakout of activities into numerous subactivities generally tends to inflate the total time assigned to clinical labor activities and results in values that are not consistent with the analogous times for other PFS services. In the case of these codes, we believe that maintaining the current clinical labor times as proposed will better serve the purposes of ensuring relativity. We will continue to look for additional information related to the clinical labor assigned to lab activities, and we welcome additional feedback from stakeholders.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the bone marrow aspiration family as proposed. We are not finalizing the proposal to change CPT codes 38220, 38221, and 38222 from XXX global periods to 0-day global periods, and we are not finalizing the related proposal to refine the preservice work time from 15 minutes of evaluation time to 9 minutes of evaluation time, 1 minute of positioning time, and 5 minutes of scrub, dress, and wait time for these three codes.

(20) Esophagectomy (CPT Codes 43107, 43112, 43117, 43286, 43287, and 43288)

CPT codes 43286, 43287, and 43288 were created by the CPT Editorial Panel to report esophagectomy via laparoscopic and thoracoscopic approaches. CPT codes 43107, 43112, and 43117 were also reviewed as part of the family with the three new codes. CPT code 43112 was revised to clarify the nature of the service being performed. We proposed the RUC-recommended work RVUs for all six codes in the family. We proposed work RVUs of 52.05 for CPT code 43107, 62.00 for CPT code 43112, 57.50 for CPT code 43117, 55.00 for CPT code 43286, 63.00 for CPT code 43287, and 66.42 for CPT code 43288.

We also proposed the RUC-recommended work times for all six codes in this family. We considered removing 20 minutes from the preservice evaluation work time from all six of the codes in this family. We had concerns as to whether this additional evaluation time should be included for surgical procedures, due to the lack of evidence indicating that it takes longer to review outside imaging and lab reports for surgical services than for non-surgical services. We also considered refining the preservice positioning work time and the immediate postservice work time for all six of the codes in this family consistent with standard preservice and postservice work times allocated to other PFS services.

We had concerns about the presence of two separate surveys conducted for the three new CPT codes. We noted that CPT codes 43286, 43287, and 43288 were surveyed initially in January 2016, and then were surveyed again in October 2016 together with CPT codes 43107, 43112, and 43117 due to concerns about the description of the typical patient in the original vignette and a change in the codes on the reference service list (RSL). We noted that CPT codes 43286 and 43287 had the same median intraservice time on both surveys, while CPT code 43288 had a median intraservice time that was an hour longer on its second survey (420 minutes) as compared to its first survey (360 minutes). We also noted that the total survey time for CPT code 43286 decreased from 1,058 minutes in the first survey to 972 minutes in the second survey, while the median work RVU increased from 50.00 to 65.00. We did not understand how the survey median intraservice time could increase so significantly from the first survey to the second survey for CPT code 43288, or how the surveyed times for CPT code 43286 could be decreasing while the work RVU was simultaneously increasing by 15.00 work RVUs.

Based on our analysis, it appeared that the accompanying RSL was the main difference between the two surveys; the codes on the initial RSL had a median work RVU of 44.18, while the codes on the second RSL had a median work RVU of 59.64. This increase of 15.00 work RVUs between the two RSLs that accompanied the surveys appeared to account for the increase in the work RVUs for the three new codes. We were concerned that the second survey may have overestimated the work required to perform these procedures, as the 25th percentile work RVU of the second survey was higher than the median work RVU of the initial survey for all three codes, despite no change in the median intraservice work time for CPT codes 43286 and 43287.

Given these concerns, we considered a work RVU of 50.00 for CPT code 43286, a work RVU of 60.00 for CPT code 43287, and a work RVU of 61.00 for CPT code 43288, by using the survey median work RVU from the first survey for the three new codes. For CPT codes 43107 and 43117, we considered employing the intraservice time ratio between the laparoscopic version of the procedure represented by the new code and the open version of the same procedure represented by the existing code.

We considered a work RVU of 45.00 for CPT code 43107 based on the intraservice time ratio with CPT code 43286 and a work RVU of 55.00 for CPT code 43117 based on the intraservice time ratio with CPT code 43287. CPT code 43107 has 270 minutes of intraservice time as compared with 300 minutes of intraservice time for CPT code 43286, which produces a ratio of 0.9, and when multiplied by a work RVU of 50.00 (CPT code 43286), results in the proposed work RVU of 45.00. We considered using the same methodology for CPT codes 43117 and 43287.

Finally, we considered a work RVU of 58.94 for CPT code 43112 based on a direct crosswalk to CPT code 46744 (Repair of cloacal anomaly by anorectovaginoplasty and urethroplasty, sacroperineal approach). We noted that the intraservice time ratio when applied to CPT codes 43112 and 43288, the paired McKeown esophagectomy procedures, would have produced a potential work RVU of 52.29, creating a rank order anomaly within the family by establishing a higher work RVU for CPT code 43117 than CPT code 43112, and we were concerned with whether this was an appropriate valuation for the code.

We sought comment on whether the alternative work RVUs that we considered might reflect the relative difference in work more accurately between the six codes in the family. We noted, for example, that these valuations corrected the rank order anomaly between CPT codes 43112 and 43121 as noted in the RUC recommendations.

We proposed the RUC-recommended direct PE inputs for all six codes in the family without refinement. We considered changing the preservice clinical labor type for all six codes from an RN (L051) to an RN/LPN/MTA blend (L037D). We had concerns about whether the use of RN clinical labor would be typical for filling out referral forms or for scheduling space and equipment in the facility. We also Start Printed Page 53052considered removing the additional clinical labor time for the “Additional coordination between multiple specialties for complex procedures (e.g., tests, meds, scheduling)” activity, consistent with preservice standards for codes with 90-day global periods. We were concerned that this time would not typically be included in non-surgical procedures performed by other specialties even when additional coordination is required. We sought comment regarding the changes in the valuation between the two surveys, the preservice and immediate postservice work times, and the RN staffing type employed for routine preservice clinical labor.

Comment: Several commenters supported the proposed values for all six of the codes but disagreed with the alternative values.

Response: We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the esophagectomy family as proposed.

(21) Transurethral Electrosurgical Resection of Prostate (CPT Code 52601)

CPT code 52601 appeared on a screen of potentially misvalued codes, which indicated that it was performed less than 50 percent of the time in the inpatient setting, yet included inpatient hospital E/M services within the global period. For CY 2018, we proposed the RUC-recommended work RVU of 13.16 for CPT code 52601 and proposed to use the RUC-recommended direct PE inputs without refinements.

We considered a work RVU of 12.29 for CPT code 52601 based on a direct crosswalk to CPT code 58541 (Laparoscopy, surgical, supracervical hysterectomy, for uterus 250 g or less), which is one of the reference codes. CPT code 58541 may potentially be a more accurate crosswalk for CPT code 52601 than the RUC-recommended direct crosswalk to CPT code 29828 (Arthroscopy, shoulder, surgical; biceps tenodesis). Although all three of these codes share the same intraservice time of 75 minutes, CPT code 58541 is a closer match in terms of the total time at only 10 minutes difference. CPT code 58541 also shares the same postoperative office visits as CPT code 52601, a pair of CPT code 99213 office visits, while CPT code 29828 also contains two CPT code 99212 office visits that are not present in the reviewed code.

We noted that if we were to use a reverse building block methodology for CPT code 52601 and subtract out the value of the E/M visits being removed, the proposed work RVU would be 11.21. We did not propose this work RVU; however, because as we noted in the CY 2017 PFS final rule (81 FR 80274), we agree that the per-minute intensity of work is not necessarily static over time or even necessarily during the course of a procedure. Instead, we utilize time ratios and building block methodologies to identify potential values that account for changes in time and compare these values to other PFS services for estimates of overall work. When the values we develop reflect a similar derived intensity, we agree that our values are the result of our assessment that the relative intensity of a given service has remained similar. For CPT code 52601, we were concerned about how the RUC-recommended derived intensity of the procedure could be increasing by 30 percent over the current derived intensity, while at the same time the typical site of service was changing from inpatient to outpatient status. In other words, if it was now typical for CPT code 52601 to be performed on an outpatient basis, then we would generally expect the intensity of the procedure to be decreasing, not increasing. We considered a work RVU of 12.29 for CPT code 52601 based on a direct crosswalk to CPT code 58541 (Lsh uterus 250 g or less), and sought comment on whether this alternative value might better reflect relativity.

Comment: Several commenters supported the proposed values for CPT code 52601 but disagreed with the alternative values.

Response: We appreciate the feedback from the commenters. We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for CPT code 52601 as proposed.

(22) Peri-Prostatic Implantation of Biodegradable Material (CPT Code 55874)

In October 2016, the CPT Editorial Panel deleted CPT Category III code 0438T and created a new CPT code 55874 (Transperineal placement of biodegradable material, peri-prostatic, single or multiple injection(s), including image guidance, when performed). For CY 2018, we proposed the RUC-recommended work RVU of 3.03 for CPT code 55874.

In reviewing the RUC recommendations, we noted a decrease in preservice time (30 minutes) compared to the current value. In order to account for this change in time, we considered calculating the intraservice time ratio between the key reference code (CPT code 49411), which has an intraservice time of 40 minutes, and the RUC-recommended intraservice time (30 minutes) and multiplying that by the work RVU for CPT code 49411 (3.57), which would have resulted in a work RVU of 2.68. A work RVU of 2.68 would have been further supported by a bracket of two crosswalk codes, CPT code 65779 (Placement of amniotic membrane on the ocular surface; single layer, sutured), which has a work RVU of 2.50 and CPT code 43252 (Esophagogastroduodenoscopy, flexible, transoral; with optical endomicroscopy), which has a work RVU of 2.96. Compared with CPT code 55874, these codes have identical intraservice and similar total times. We sought comment on whether these alternative values should be considered, especially given the changes in time reflected in the survey data.

We received invoices with pricing information regarding two new supply items: “endocavity balloon” and “biodegradeable material kit—periprostatic.” The invoice for the endocavity balloon was $399.00 and the input price on the PE spreadsheet for this supply item was noted as such. We believed that the input price noted on the PE spreadsheet was an error, given that the invoice noted that the price of $399.00 was for a box of ten and the specialty society requested a single unit of this supply item. Therefore, we proposed to use this information to propose for supply item “endocavity balloon” a price of $39.90. The invoice for the “biodegradeable material kit—periprostatic” totaled $2,850.00. We proposed to use this information to propose for the supply item “biodegradeable material kit—periprostatic” a price of $2850.00. We also received an invoice with pricing information regarding the new equipment item “endocavitary US probe” which totaled $16,146.00. We proposed to use this information to propose for equipment item “endocavitary US probe”, a per-minute price of $0.0639. We questioned, given an invoice price of $29,999.00 for this existing equipment item EQ250 (portable ultrasound unit), whether this equipment item includes probes. We sought public comments related to Start Printed Page 53053whether equipment item EQ250 (portable ultrasound) includes probes.

Comment: In general, commenters were supportive of our proposal of the RUC-recommended work RVUs. Some commenters expressed opposition to the alternative work RVUs we considered.

Response: We are appreciative of the commenters' feedback. We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: The RUC stated that CMS acknowledges that physician work intensity per minute is not typically linear and also that making reductions to RVUs in strict proportion to changes in time is inappropriate. The RUC further noted that for several comment periods they have laid out a compelling case to justify this position on work intensity per minute. They noted that they appreciate CMS's agreeing with the RUC's assertion that the usage of time ratios to reduce work RVUs is typically not appropriate, as often a change in the work time coincides with a change in the work intensity per minute.

Response: We do not agree with the commenter's characterization of our statements. We stated in the CY 2017 PFS final rule (81 FR 80273) that we are not implying that the decrease in time as reflected in survey values must necessarily equate to a one-to-one or linear decrease in newly valued work RVUs, given that intensity for any given procedure may change over several years or within the intraservice period. Nevertheless, we believe that since the two components of work are time and intensity, absent an obvious or explicitly stated rationale for why the relative intensity of a given procedure has specifically increased or that the reduction in time is disproportionally from less intensive portions of the procedure, significant decreases in time should generally be reflected in decreases to work RVUs.

Comment: The RUC noted that they wanted to remind CMS of its and the RUC's longstanding position that treating all components of physician time as having identical intensity is incorrect, and inconsistently applying this treatment to only certain services under review creates inherent payment disparities in a payment system that is based on relative valuation. The commenter stated that when physician times are updated in the fee schedule, the ratio of intraservice time to total time, the number and level of bundled post-operative visits, the length of pre-service, and the length of immediate post-service time may all potentially change for the same service. These changing components of physician time result in the physician work intensity per minute often changing when physician time also changes, and the commenters recommended that CMS always account for these nuanced variables. The RUC highlighted that their recommendations now explicitly state when physician time has changed and address whether and to what magnitude these changes in time impact the work involved.

Response: We stated in the CY 2017 PFS final rule (81 FR 80275) that we understand that not all components of physician time have identical intensity and are mindful of this point when determining what the appropriate work RVU values should be. We agree that the nuanced variables involved in the changing components of physician time must be accounted for, and it is our goal to do so when determining the appropriate valuation. We appreciate when the RUC recommendations provide as much detailed information regarding the recommended valuations as possible, including thorough discussions regarding physician time changes and how the RUC believes such changes should or should not impact the work involved, and we consider that information when conducting our review of each code.

Comment: The RUC noted that its support of the proposed refinements for EF031, EQ250, EQ386, ER061, ER062, and L037D, was contingent on the assumption that the proposed PE refinements were because of the change in time for the clinical labor task, “Obtain vital signs”.

Response: The proposed PE refinements for EF031, EQ250, EQ386, ER061, ER062, L037D, are a result of our proposal to refine the L037D clinical labor time for “Obtain vital signs” from 3 minutes to 5 minutes, to conform to the proposed standard for this clinical labor activity. As a result, we proposed to refine the equipment times for the power table (EF031) from 63 minute to 65 minutes and from 48 minutes to 50 minutes for the following: Portable ultrasound unit (EQ250), endocavitary US probe (EQ386), stepper stabilizer, template (for brachytherapy treatment) (ER061), and stirrups (for brachytherapy table) (ER062) to reflect the service period time associated with this code.

Comment: Several commenters, including the RUC, were supportive of our proposed price updates for the “endocavity balloon” (SD325), biodegradeable material kit—periprostatic” (SA126), and “endocavitary US probe” (EQ386) and urged CMS to finalize the proposal.

Response: We appreciate the support from commenters.

After consideration of comments received, we are finalizing the following supply and equipment prices: SD325, at a price of $39.90; SA126, at a price of $2850.00; and EQ386, at a price of $16,146.00 (a per-minute price of $0.0639).

Comment: Several commenters, including the RUC, noted that “portable ultrasound unit” (EQ250), which has a cost of $29,999.00, does not include an intracavitary probe. These commenters further noted that the probe is necessary to perform this procedure and recommended that both the portable unit and the intracavitary probe be recognized as direct PE inputs for this service. One commenter included pricing information in its comment letter, noting that the probe should be added as an additional direct PE input at a cost of $20,700.

Response: While we appreciate the submission of this pricing information from the commenter, we are unable to consider this pricing information for the CY 2018 final rule without documentation of invoices. We request that commenters submit invoices for pricing updates and that the invoices contain clear documentation regarding the item in question: Its name, the CMS supply/equipment code that it references (if any), the unit quantity if the item is shipped in boxes or batches, and any other information relevant for pricing. To be considered for a given year's proposed rule, we generally need to receive invoices by February. In similar fashion, we generally need to receive invoices by the end of the comment period for the proposed rule in order to consider them for the supply and equipment pricing for the final rule for that calendar year. We note that both the “endocavitary US probe” (EQ386) and “portable ultrasound unit” (EQ250) are included in the PE inputs for this service, which are displayed in the CY 2018 PFS final rule direct PE input database, available on the CMS Web site under the downloads for the CY 2018 PFS final rule at http://www.cms.gov/​Medicare/​Medicare-Fee-for-Service-Payment/​PhysicianFeeSched/​PFS-Federal-Regulation-Notices.html.

After consideration of comments received, we are finalizing the work RVUs and direct PE inputs for CPT code 55874 as proposed.Start Printed Page 53054

(23) Colporrhaphy With Cystourethroscopy (CPT Codes 57240, 57250, 57260 and 57265)

In October 2015, CPT code 57240 was identified by analysis of the Medicare data from 2011-2013 that indicated that services reported with CPT code 57240 were performed less than 50 percent of the time in the inpatient setting, yet include inpatient hospital E/M services within the global period. The RUC recommended that CPT codes 57240 (Anterior colporrhaphy, repair of cystocele with or without repair of urethrocele), 57250 (Posterior colporrhaphy, repair of rectocele with or without perineorrhaphy), 57260 (Combined anteroposterior colporrhaphy), and 57265 (Combined anteroposterior colporrhaphy; with enterocele repair) be referred to the CPT Editorial Panel. In September 2016, the CPT Editorial Panel revised CPT codes 57240, 57260 and 57265 to preclude separate reporting of follow up cystourethroscopy after colporrhaphy (CPT code 52000).

For CY 2018, we proposed the RUC-recommended work RVUs for CPT code 57240 (a work RVU of 10.08), CPT code 57250 (a work RVU of 10.08), CPT code 57260 (a work RVU of 13.25), and CPT code 57265 (a work RVU of 15.00).

We note that there were changes in service times reflected in the specialty surveys compared to the RUC-recommended work RVUs for CPT code 57240. Specifically, we note that the RUC recommended a 48 minute decrease in total time, compared to the specialty survey total time of 259 minutes. The difference in total time reflected a decrease in preservice time (29 minutes) and inpatient visits (0.5 visits = 19 minutes). We considered a work RVU of 9.77 for CPT code 57240, crosswalking to CPT code 50590 (Lithotripsy, extracorporeal shock wave), which has similar service times. We sought comment on whether CPT code 57250 would be a relevant comparator for CPT code 57240, based on the described elements of each service and existing or surveyed service times, compared to CPT code 57240. We considered a work RVU of 11.47 for CPT code 57260 [we note that in the CY 2018 PFS proposed rule (82 FR 34000), this was cited as CPT code 57265], crosswalking to CPT code 47563 (Laparoscopy, surgical; cholecystectomy with cholangiography) with similar service times. We sought comment on how an alternative work RVU of 11.47 for CPT code 57260 [we note that in the CY 2018 PFS proposed rule (82 FR 34000), this was cited as CPT code 57260] would affect relativity among PFS services, and on whether CPT code 57265 [we note that in the CY 2018 PFS proposed rule (82 FR 34000), this was cited as CPT code 57260] is a relevant comparator for CPT code 57260 [we note that in the CY 2018 PFS proposed rule (82 FR 34000), this was cited as CPT code 57265], considering differences in the described procedures and service times.

We proposed the RUC-recommended direct PE inputs for CPT codes 57240, 57250, 57260 and 57265 without refinements.

Comment: In general, commenters were supportive of our proposal of the RUC-recommended work RVUs. We continue to welcome information from all interested parties regarding valuation of services for consideration through our rulemaking process. Some expressed opposition to the alternative work RVUs we considered.

Response: We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

After consideration of comments received, we are finalizing the work RVUs as proposed. We are finalizing the proposed direct PE inputs for CPT codes 57240, 57250, 57260 and 57265, without refinement.

(24) Injection of Anesthetic Agent (CPT Code 64418)

CPT code 64418 (Injection, anesthetic agent; suprascapular nerve) was identified by the AMA through their screen of Harvard-valued codes with utilization over 30,000. We proposed the RUC-recommended work RVU of 1.10 and RUC-recommended direct PE inputs without refinement.

Comment: We received one comment that expressed support for CMS' proposed value.

Response: We appreciate the commenter's support.

After consideration of the comment received that specifically addressed this code, for CY 2018, we are finalizing a work RVU of 1.10 and the proposed direct PE inputs without refinement for CPT code 64418.

(25) Nerve Repair With Nerve Allograft (CPT Codes 64910, 64911, 64912, and 64913)

The CPT Editorial Panel created two new Category I CPT codes (64912 and 64913) to report the repair of a nerve using a nerve allograft. CPT codes 64910 and 64911 were also reviewed as part of this code family. CPT codes 64912 and 64913 will be placed on the new technology list to be re-reviewed by the RUC in 3 years to ensure correct valuation and utilization assumptions.

For CY 2018, we proposed the RUC-recommended work RVUs for the following codes: A work RVU of 10.52 for CPT code 64910, a work RVU of 14.00 for CPT code 64911, a work RVU of 12.00 for CPT code 64912, and a work RVU of 3.00 for CPT code 64913.

We noted a decrease in preservice time (7 minutes) for CPT code 64910 and considered an alternate work RVU of 10.15, crosswalking to CPT code 15120 (Split-thickness autograft, face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; first 100 sq cm or less, or 1 percent of body area of infants and children (except 15050)), which has similar service times. We sought comments on whether an alternative work RVU of 10.15 for CPT code 64910 would better reflect relativity among PFS services with similar service times.

For CPT code 64911 (Nerve repair; with autogenous vein graft (includes harvest of vein graft), each nerve)), we considered a work RVU of 13.50, by crosswalking to CPT code 31591 (Laryngoplasty, medicalization, unilateral), which has similar service times and a work RVU of 13.56. We sought comments on whether a work RVU of 13.50 for CPT code 64911 would better reflect relativity among other PFS services with similar service times.

The new coding structure for these services increases granularity by including add-on codes that describe each strand of nerve repair. While we recognize that additional granularity may be important and useful for purposes of data collection, the advantages to Medicare for such granularity for purposes of payment are unclear, especially since we are unaware of a payment-related reason for such coding complexity. We considered proposing a bundled status to the new add-on codes and incorporating the relative resources in furnishing the add-on code (CPT code 64913) into the base code (CPT code 64912) based on the utilization assumptions that accompanied the RUC's recommendations. The RUC estimated that CPT code 64912 would have 750 Medicare allowed services in CY 2018, and that the corresponding add-on CPT code 64913 would have 150 Medicare allowed services in CY 2018. Therefore, the RUC estimated that CPT code 64912 will be billed without add-on CPT code 64913 for 80 percent (750/900) of the Medicare allowed services, and that CPT code 64912 will be billed with add-on CPT code time 64913 for 20 percent (150/900) of the Medicare allowed services in CY 2018. To account for the additional work involved in 20 percent of the allowed services, we added a Start Printed Page 53055work RVU of 0.60 (20 percent of the work RVU of 3.00 for CPT code 64913) to the work RVU of 12.00 for CPT code 64912, to derive an alternative work RVU of 12.60 for CPT code 64912 and increased the intraservice time by 6 minutes to account for the bundling of services from CPT code 64913. The alternative work RVU of 12.60 would have been further supported by a crosswalk to CPT code 14301 (Adjacent tissue transfer or rearrangement, any area; defect 30.1 sq cm to 60.0 sq cm), which has similar intraservice and total times.

We proposed the RUC-recommended direct PE inputs for CPT codes 64910, 64911, 64912 and 64913 without refinements.

Comment: In general commenters were supportive of our proposal of the RUC-recommended work RVUs. Some expressed opposition to the alternative work RVUs.

Response: We will continue to consider alternative work RVUs as we propose the valuation of services for future notice and comment rulemaking.

Comment: Some commenters disagreed with our proposal to bundle CPT codes 64912 and 64913. Several commenters, including the RUC, noted that bundling the service would place a financial burden on the patients who do not require multiple strands because they would be charged 120 percent of what they should be charged. One commenter cited this as the payment-related reason to not bundle the services, and further noted that bundling would undermine the premise of coding and relative reimbursement. The RUC noted that CPT code 64913 is an add-on code for the additional work related to insertion of an additional nerve allograft for the same nerve. They stated that the additional work is not typically performed with the base code and therefore would not be appropriate to bundle into the work of the base code.

Response: We note that section 1848(c)(2)(K)(iii)(V) of the Act specifies that the Secretary may make appropriate coding revisions (including using existing processes for consideration of coding changes) that may include consolidation of individual services into bundled codes for payment under the physician fee schedule. We will continue to consider these options as we propose the valuation of services for future notice and comment rulemaking.

Comment: The RUC stated that it is atypical for CMS to question the coding structure of newly proposed services via rulemaking. In the future, they requested that CMS voice concerns regarding coding structure as part of the agency's participation in the CPT Editorial Panel review process.

Response: While we acknowledge that the discussion and consideration of different coding structures occurs during the CPT Editorial Panel review process, we also note that not all interested parties have the opportunity to participate in the CPT Editorial Panel review process, and not all relevant stakeholders are members of the CPT Editorial Panel. Additionally, we would like to reiterate that, while we appreciate that some commenters believe that CMS staff could offer useful perspectives by regularly attending and participating more fully in the CPT Editorial Panel review process, we do not believe that would be appropriate for many reasons, not least of which is that CMS staff participation in the CPT Editorial Panel review process cannot supplant our obligation to establish through notice and comment rulemaking what we determine to be appropriate coding structures for each reviewed code. Accordingly, we disagree with the commenter's suggestion that CMS staff should preemptively address the concerns of coding structures during the CPT Editorial Panel review process, instead of through notice and comment rulemaking. Formal notice and comment rulemaking allows all interested parties the opportunity to review our proposals and provide feedback, as well as to submit supplemental information about our proposals, and address any concerns or alternatives we have expressed in making our proposal.

Comment: A commenter questioned why CMS would be concerned with a code pair that is not typically reported for Medicare-aged patients, but instead is a service for younger patients that have better nerve healing capacity.

Response: As discussed in the CY 2017 PFS final rule (82 FR 80172), the statute requires us to establish, by regulation, each year's payment amounts for all physicians' services paid under the PFS. Although we prioritize high volume services when we routinely examine the valuation and coding for existing services under the misvalued code initiative, we also value low-volume services in accordance with the statute.

After consideration of comments received, we are finalizing the work RVUs for CPT codes 64910, 64911, 64912, and 64913 as proposed. We are also finalizing the proposed direct PE inputs for these codes, without refinement.

(26) Correction of Trichiasis (CPT Code 67820)

In CY 2016, CPT code 67820 was identified by the screen for high expenditure services across specialties with Medicare allowed charges of $10 million or more. The screen identified the top 20 codes by specialty in terms of allowed charges, excluding 10- and 90-day global services, anesthesia and E/M services and services reviewed since CY 2010. During the review process, the RUC re-surveyed the code and recommended a work RVU of 0.32, which we proposed in the CY 2018 PFS proposed rule.

The RUC also recommended 15 minutes of preservice time in the facility setting to complete preservice diagnostic and referral forms, coordinate pre-surgery services, schedule space and equipment in the facility, provide preservice education/obtain consent, and follow-up phone calls and prescriptions. We believed it to be atypical for a physician's staff to be performing these activities in a facility-setting with a procedure that has a 0-day global period. Therefore, we proposed removing the time associated with these activities.

We also note that in the course of refining the times associated with the clinical activities referenced above, we inadvertently reduced the time associated with the screening lane (EL006) from 11 minutes to 5 minutes.

Comment: Commenters stated that a default policy of allowing zero minutes of preservice time in the facility setting was inappropriate as ambulatory practices often expend staff time to coordinate with the facility in order to bring their patients in to perform procedures. Commenters also acknowledged that it may be atypical for epilation of eyelashes to require pre-surgery coordination, follow-up phone calls or prescriptions and that by removing these two activities, the total clinical staff preservice time would be more appropriate for the service.

Response: We appreciate the information provided by commenters regarding the preservice clinical activities and agree that certain activities are typical for this service. Therefore, for CY 2018, we will finalize a total of 9 minutes of preservice time which corresponds with coordinating pre-surgery services, scheduling space and equipment in the facility, and providing preservice education/obtain consent.

Comment: Commenters stated their disagreement with the reduction of time from 11 to 5 minutes for the screening lane (EL006), as the physician would be Start Printed Page 53056treating the patient in the screening lane for all aspects of the procedure and therefore, it would be unavailable for any other use during the procedure.

Response: As we stated above, we inadvertently reduced the time of the screening lane and did not intend to make a proposal regarding this equipment item. Therefore, for CY 2018, we will finalize the RUC-recommended 11 minutes for the screening lane.

Comment: Another commenter expressed their support for the RUC process, but opposed the RUC-recommended work RVU of 0.32 for CPT code 67820. The commenter recommended CMS increase the work RVU to the 0.40 to align with 25th percentile of the survey.

Response: We believe the RUC's recommend valuation of 0.32 for CPT code 67820 is appropriate due to the overall reduction in total time and it having less intensity than its key reference code, CPT code 11900, Injection, intralesional; up to and including 7 lesions (work RVU = 0.52, intra time = 8 minutes). Therefore, after consideration of the comments, we will finalize the RUC-recommended work RVU of 0.32 for CPT code 67820 for CY 2018.

(27) CT Soft Tissue Neck (CPT Codes 70490, 70491, and 70492)

CPT codes 70490 and 70492 were identified through the high expenditure services across specialties with Medicare allowed charges of $10 million or more screen. CPT code 70491 was also included for review as part of this code family. For CY 2018, we proposed the RUC-recommended work RVUs of 1.28 for CPT code 70490, 1.38 for CPT code 70491, and 1.62 for CPT code 70492. For CPT code 70490, we considered a work RVU of 1.07 based on a crosswalk to CPT code 72125 (Computed tomography, cervical spine; without contrast material). CPT code 72125 is a non-contrast CT service on a similar anatomical area and has identical intraservice and total times to those recommended by the RUC for CPT code 70490. We also considered work RVUs of 1.17 for CPT code 70491 and 1.41 for CPT code 70492. We sought comment on how relativity among other CT services paid under the PFS would be affected by applying the alternative work RVUs described above for CPT codes in this family.

Comment: Commenters disagreed with our alternative values and supported our proposal to implement the RUC-recommended values.

Response: We appreciate the comments regarding our proposals.

After consideration of the public comments, we are finalizing the RUC-recommended work RVUs as proposed.

(28) Magnetic Resonance Angiography (MRA) Head (CPT Codes 70544, 70545, and 70546)

CPT code 70544 was identified by a screen of services across specialties with Medicare allowed charges of $10 million or more. Subsequently, CPT codes 70545 and 70546 were also reviewed as part of this code family. We proposed the RUC-recommended work RVUs of 1.20 for CPT code 70544, 1.20 for CPT code 70545, and 1.48 for CPT code 70546. We also proposed the following refinements to the RUC-recommended direct PE inputs. For the service period clinical labor activity “Provide preservice education/obtain consent,” we proposed 5 minutes for CPT code 70544, 7 minutes for CPT code 70545, and 7 minutes for CPT code 70546 so that the times for this activity are consistent with other magnetic resonance (MR) services performed without-contrast materials, with-contrast materials, and without-and-with contrast materials, respectively. For the clinical labor task “Acquire images,” we proposed using the RUC-recommended clinical time of 26 minutes for CPT code 70544. We considered proposing 20 minutes of clinical time to maintain the relativity among the three codes in this family and for consistency with other MRA and magnetic resonance imaging (MRI) codes, which do not typically assign more clinical labor time to this task for services without contrast material than for services with contrast material. We sought comment as to the appropriate time value for this clinical labor task. For the clinical labor task “Technologist QCs images in PACS, checking all images, reformats, and dose page,” we proposed to refine the clinical labor time from the RUC recommended 4 minutes to 3 minutes to comply with the standards.

Comment: A commenter disagreed with our proposed clinical labor time for the task “Technologist QCs images in PACS, checking all images, reformats, and dose page,” and stated that CMS had previously determined that the amount of clinical labor needed to check images in a PACS workstation may vary depending on the service, and that CMS would agree to times above the standard if a compelling rationale is presented.

Response: We believe that MRA services are analogous to MRI services in that they are most accurately considered procedures of intermediate complexity.

Comment: One commenter did not agree with our alternative value for the clinical labor task “acquire images.”

Response: We appreciate the comment, and we are finalizing as proposed the RUC-recommended clinical labor time value for this task.

After consideration of the comments, we are finalizing these PE refinements as well as the RUC-recommended work RVUs, as proposed.

(29) Magnetic Resonance Angiography (MRA) Neck (CPT Codes 70547, 70548, and 70549)

CPT code 70549 was identified through a high expenditure screen. CPT codes 70547 and 70748 were also reviewed as part of this family of codes. We proposed the RUC-recommended work RVUs of 1.20 for CPT code 70547, 1.50 for CPT code 70548, and 1.80 for CPT code 70549. We also proposed several refinements to the RUC-recommended direct PE inputs for these services. For the service period clinical labor activity “Provide preservice education/obtain consent,” we proposed 5 minutes for CPT code 70547, 7 minutes for CPT code 70548, and 7 minutes for CPT code 70549 so that the times for this activity are consistent with other MR services performed without contrast material, with contrast material, and without-and with contrast material, respectively. For the intraservice clinical labor task acquire images, for CPT code 70547, we proposed to use the RUC-recommended 26 minutes. We considered applying 20 minutes to this clinical labor task, which would have maintained consistency with the 20 minutes recommended by the RUC for CPT code 70548 (the service that includes with-contrast material). We stated concern about the lack of evidence that a non-contrast MRA would require more clinical labor time than the with-contrast MRA service. We sought comment as to the appropriate time value for this clinical labor task. For the clinical labor task “Technologist QCs images in PACS, checking all images, reformats, and dose page,” we proposed to refine the clinical labor time from the RUC recommended 4 minutes to 3 minutes to comply with the standards.

Comment: A commenter did not agree with our alternative time value for the task “acquire images.”

Response: We appreciate the comment, and we are finalizing the RUC-recommended time value for this clinical labor task as proposed.

Comment: A commenter disagreed with our proposed clinical labor time for the task “Technologist QCs images in PACS, checking all images, reformats, Start Printed Page 53057and dose page,” stating that CMS had previously determined that the amount of clinical labor needed to check images in a PACS workstation may vary depending on the service, and that we will agree to times above the standard if a compelling rationale is presented.

Response: We believe that MRA services are analogous to MRI services in that they are most accurately considered procedures of intermediate complexity. Therefore, for CPT codes 70547, 70548, and 70549, we are finalizing these PE refinements as well as the RUC-recommended work RVUs, as proposed.

(30) CT Chest (CPT Codes 71250, 71260, and 71270)

CMS identified this code family through the high expenditures screen. We proposed the RUC-recommended work RVUs of 1.16 for CPT code 71250, 1.24 for CPT code 71260, and 1.38 for CPT code 71270. For CPT code 71250, we considered maintaining the CY 2017 work RVU of 1.02. We stated that we are concerned with the lack of evidence that the physician time or intensity of furnishing this service has changed since it was last valued. In addition, we noted that a comparison to other CT codes indicated that the RUC-recommended work values could be overvalued relative to other CT services and compared to similar, non-contrast CT studies such as CPT codes 72131 (Computed tomography, lumbar spine; without contrast material) and 73700 (Computed tomography, lower extremity; without contrast material), both of which have work RVUs of 1.00. For CPT code 71260, we considered proposing a work RVU of 1.10 by applying the RUC-recommended increment between CPT code 71250 and 71260 (0.08) to CPT code 71260. For CPT code 71270, we considered a work RVU of 1.24 by applying the RUC-recommended increment between CPT codes 71260 and 71270 (0.22) to CPT code 71270. In addition to maintaining relatively among the codes in this family, we considered further supporting these alternative values based on a comparison to other CT studies, such as with-contrast material CT studies, and without-and-with contrast CT studies. While noting our concerns, we proposed the RUC recommended work RVUs for CPT code 71250, 71260, and 71270 and sought comment on whether our alternative values would improve relativity.

Comment: Commenters supported the proposed values for these codes but disagreed with the alternative values.

Response: We appreciate the comments in support of our proposals.

After consideration of the public comments, we are finalizing the RUC-recommended values as proposed.

(31) MRI of Abdomen and Pelvis (CPT Codes 72195, 72196, 72197, 74181, 74182, and 74183)

CPT codes 74182 and 72196 were identified as part of the screen of high expenditure services across specialties with Medicare allowed charges of $10 million or more. CPT codes 74181, 74183, 72195, and 72197 were also reviewed as part of this code family. We proposed the RUC-recommended work RVUs of 1.46 for CPT code 72195, 1.73 for CPT code 72196, 2.20 for CPT code 72197, 1.46 for CPT code 74181, 1.73 for CPT code 74182, and 2.20 for CPT code 74183. While we proposed the RUC-recommended direct PE inputs, we considered 30 minutes for clinical labor task “Acquire images” for CPT codes 74181 and 74182, which we stated appeared to be more consistent with the codes in this family and more consistent with other MR codes. We also noted that for CPT codes 74181 and 74182, the clinical labor time for acquired images appears to have been developed through a consensus panel from the specialty society over 15 years ago. Given that these times are estimates based on expert panel consensus rather than survey data, we sought comment on whether using a structure that matches other MR code families would be more appropriate to value these clinical labor times.

Comment: A commenter stated that all clinical labor time inputs are based on an expert panel, and our expression of concern for this code family is thus inconsistent with our review of other services in current and past rulemaking.

Response: We appreciate the comment and we are finalizing the RUC-recommended work RVUs, as proposed.

(32) MRI Lower Extremity (CPT Codes 73718, 73719, and 73720)

CPT codes 73718 and 73720 were identified as part of the screen of high expenditure services, and CPT code 73719 was included for review as part of the code family. We proposed the RUC-recommended work RVUs of 1.35 for CPT code 73718, 1.62 for CPT code 73719, and 2.15 for CPT code 73720. We are also proposing the following refinements to the RUC-recommended direct PE inputs. For the service period clinical labor activity “Provide preservice education/obtain consent,” we proposed 5 minutes for CPT code 73718, 7 minutes for CPT code 73719, and 7 minutes for CPT code 73720. Likewise, for the service period task “Prepare room, equipment, supplies,” we proposed 3 minutes for CPT code 73718, 5 minutes for CPT code 73719, and 5 minutes for CPT code 73720. We proposed these changes to maintain consistency with other MR services without contrast materials, with contrast materials, and without-and-with contrast materials, respectively.

Comment: A commenter disagreed with our proposed PE refinements to the clinical labor activity “Prepare room, equipment, supplies,” stating that the RUC-recommended clinical labor time paralleled other recent MRI codes, including MRI brain and MRI face, and that MR involves strong magnetic fields and ensuring patient safety is important. More specifically, all objects in the room must be MRI compatible. MR exams involve the use of MR coils which vary based on the body part studied and are specifically selected to fit the patient. These coils must be prepared for the intended exam, positioned, and attached to the MR unit. In addition, the examinations involving the use of contrast require setup of the injector apparatus and preparation of the contrast material.

Response: We agree that the RUC-recommended clinical labor times for this activity appear consistent with those for the code family mentioned by the commenter. Therefore, we are not finalizing our proposed time values for this activity, and are instead finalizing the RUC-recommended values of 5 minutes, 7 minutes, and 7 minutes for CPT codes 73718, 73719, and 73720, respectively, to maintain consistency among similar services.

(33) Abdominal X-Ray (CPT Codes 74022, 74018, 74019, and 74021)

CPT codes 74000 (Radiologic examination, abdomen; single anteroposterior view) and 74022 (Radiologic examination, abdomen; complete acute abdomen series, including supine, erect, and/or decubitus views, single view chest) were identified via a high expenditure screen. The CPT Editorial Panel created CPT codes 7401874018, 7401974019, and 7402174021to replace CPT codes 74000, 74010, and 74020. The RUC suggested a utilization scenario that assumes that 25 percent of services currently reported with CPT code 74010 will be reported with CPT code 74019 and 75 percent will be reported with CPT code 74021; and 75 percent of services currently reported with CPT code 74020 will be reported with CPT code 74019 and 25 percent will be reported with CPT code 74021. In the CY 2018 PFS proposed rule, we stated that we did not identify evidence or a rationale for these assumptions. For Start Printed Page 53058purposes of calculating the proposed RVUs, we used an even distribution of services previously reported as CPT codes 74010 and 74020 to CPT codes 740X2 and 740X3 instead of the RUC-recommended distribution because we thought that the services previously reported with codes 74010 and 74020 will be reported in equal volume between the code representing two views and the code representing three views, and we sought comment on information that would help us improve on this distribution for purposes of developing final RVUs, including rationale for the distribution reflected in the RUC's utilization crosswalk.

Comment: The RUC commented that its utilization assumptions are based on expert panel consensus, and said that its utilization assumptions will result in savings that would be reapplied to the Medicare conversion factor. The RUC also requested clarity regarding our utilization assumptions and their relationship to the work RVUs we proposed for this code family.

Response: We appreciate the RUC's input regarding utilization assumptions. We note that we are finalizing the RUC-recommended work RVUs as proposed, and our utilization assumptions do not determine the valuation of work RVUs, which will be incorporated into overall budget neutrality calculations.

(34) Angiography of Extremities (CPT Codes 75710 and 75716)

This code family was identified through the $10 million or more screen of high expenditure services. We proposed the RUC-recommended work RVUs of 1.75 for CPT code 75710 and 1.97 for CPT code 75716. We also proposed to use the RUC-recommended direct PE inputs for CPT codes 75710 and 75716, with the following refinements. For the clinical labor task “Technologist QC's images in PACS, checking for all images, reformats, and dose page,” we proposed refinements consistent with the standard clinical labor times for tasks associated with the PACS Workstation. We also proposed to refine the clinical labor by removing the 2 minutes associated with the task “prepare room, equipment, and supplies.” CPT codes 75710 and 75716, which represent radiological supervision and interpretation, are billed with codes that include activities such as needle placement and imaging, and the “prepare room, equipment, supplies,” activity will be accounted for with the codes that are billed with these interpretation codes.

Comment: A commenter disagreed with our proposed clinical labor time for the task “Technologist QCs images in PACS, checking all images, reformats, and dose page,” stating that CMS had previously determined that the amount of clinical labor needed to check images in a PACS workstation may vary depending on the service, and that we would agree to times above the standard if a compelling rationale is presented.

Response: We believe that MRA services are analogous to MRI services in that they are most accurately considered procedures of intermediate complexity.

After consideration of the comment we received, we are finalizing these PE refinements as well as the RUC-recommended work RVUs, as proposed.

(35) Ophthalmic Biometry (CPT Codes 76516, 76519, and 92136)

In the CY 2016 PFS final rule with comment period, CMS identified CPT codes 76519 and 92136 as potentially misvalued on the high expenditure screen. For CY 2018, we proposed the RUC-recommended work RVUs for each code in this family as follows: 0.40 for CPT code 76516, 0.54 for CPT code 76519, and 0.54 for CPT code 92136.

For CPT codes 76519 and 92136, the RUC recommended adding an additional 8 minutes of immediate postservice time for dictating the report of the procedure for the medical record, review and sign report, communicate results to the patient, discussing lens implant options for desired postoperative refractive result, and entering an order for the intraocular lens implant. We considered time and work values that would not include the additional 8 minutes of immediate postservice time in either of these codes, due to the concern that the additional time may not reflect the typical case. Were we to not include those 8 minutes, each of these procedures would have a total time of 14 minutes. We considered applying the total time ratio (decrease from 17 minutes to 14 minutes; ratio of 0.824) to the RUC-recommended work RVU of 0.54, which would have resulted in a work RVU of 0.44 for CPT codes 76519 and 92136. We sought comment on whether these alternative values would improve relativity.

Comment: Several commenters, including the RUC, stated the additional immediate postservice time for CPT codes 76519 and 92136 was appropriate due to the need for the provider to discuss the multiple lens options and refractive outcomes with the patient; as many of these medical options were not available when the code was last surveyed.

Response: We appreciate the feedback from the commenters regarding the relativity of our alternative value. After considering these comments, we are finalizing the RUC-recommended values of 0.54 RVUs for CPT codes 76519 and 92136, for CY 2018.

(36) Ultrasound of Extremity (CPT Codes 76881 and 76882)

The RUC identified CPT codes 76881 and 76882 for review only of PE inputs. For CPT code 76881, we proposed the RUC-recommended inputs with refinements. We proposed to remove 1 minute from the clinical labor task “Exam documents scanned into PACS. Exam completed in RIS system to generate billing process and to populate images into Radiologist work queue,” because this code does not include any equipment time for the PACS workstation proxy or professional PACS workstation. We noted that the RUC-recommended inputs shift the general ultrasound room from the PE inputs for CPT code 76881 to the PE inputs for CPT code 76882. We proposed to make this change, consistent with the RUC recommendations; however, we sought comment on whether a portable ultrasound unit would be a more accurate PE input for both codes, given that the dominant specialty for both of these services is podiatry, based on available 2016 Medicare claims data. As noted in the CY 2018 PFS proposed rule, we proposed that these codes would not be subject to the phase-in of significant RVU reductions given the significance of this shift of resource costs between codes in the same family and sought comment on this proposed application of the phase-in policy.

Comment: Many commenters disagreed with the RUC recommendations for the direct PE inputs, stating that the shift of PE from CPT code 76881 to CPT code 76882 is based on inaccurate assumptions regarding the typical equipment used in furnishing these services. These commenters noted that the equipment used to furnish the two procedures is identical. These commenters stated that the RUC-recommended direct PE inputs for CPT code 76881, which were developed based on the assumption that the dominant specialty furnishing the service is podiatry, do not reflect the equipment inputs utilized by rheumatologists such as an ultrasound room and PACS workstation.

Furthermore, these commenters stated that valuing CPT code 76882, which is the limited ultrasound procedure, at a higher price than CPT code 76881, which is the complete ultrasound procedure, represents a rank order anomaly. The RUC disagreed with our statement that podiatry is the dominant Start Printed Page 53059specialty for both codes and re-affirmed its recommendation.

Response: Examination of 2016 claims indicates that the dominant specialty for both codes, when considering the volume of global and TC services in aggregate, is podiatry. Therefore, we are finalizing the RUC-recommended direct PE inputs with refinements for CPT code 76881 as proposed. For CPT code 76882, we are not finalizing our proposal to include an ultrasound room, and we are instead finalizing the RUC-recommended equipment, with the exception of the ultrasound room, which we are replacing with a portable ultrasound unit. This is based on the RUC's determination, as expressed through its recommendations for CY 2018, that a portable unit is the equipment type that is typical for podiatry, which is the dominant specialty furnishing CPT code 76882. We are thus applying the PE inputs that the RUC has determined are typical for the dominant specialty for both codes in order to maintain consistency and rank order.

Comment: A commenter requested that CMS reconsider our proposal not to subject these codes to the phase-in of significant RVU reductions.

Response: The significant RVU reductions that will result from the PE inputs that we are finalizing comprise a change in resource costs overall for the code family. This is in contrast to our proposal, which would have shifted costs within codes of the same family. Therefore, we are not finalizing our proposal to exempt these codes from the phase-in, and the reduction in the PE for CPT code 76881 will thus be limited to 19 percent for the first year. This transition period will allow us to obtain more stakeholder input on the appropriate PE inputs and specialty assumptions for these services, and we expect to consider this input for future rulemaking.

Comment: A commenter disagreed with our decision to remove from CPT code 76881 the one minute of clinical labor assigned to the task “Exam document scanned into PACS. Exam completed in RIS system to generate billing process and to populate images into Radiologist work queue,” stating that regardless of whether the service includes a PACS workstation, there is still documentation to be entered.

Response: The task of entering documentation, when not applied to a code that includes a PACS workstation as an equipment item, is most appropriately considered indirect PE; therefore, we are finalizing this refinement as proposed.

(37) Flow Cytometry Codes (CPT Codes 88184 and 88185)

The flow cytometry interpretation family of codes is split into a pair of codes used to describe the technical component of flow cytometry (CPT codes 88184 and 88185) that do not have a work component, and a trio of codes (CPT codes 88187, 88188, and 88189) that do not have direct PE inputs, as they are professional component only services. CPT codes 88184 and 88185 were reviewed by the RUC in April 2014, and their CMS-refined values were included in the CY 2016 PFS final rule with comment period. These codes were reviewed again at the January 2016 RUC meeting, and new recommendations were submitted to CMS as part of the CY 2017 PFS rulemaking cycle. In the CY 2017 PFS final rule (81 FR 80325), we finalized all of the direct PE inputs for CPT codes 88184 and 88185, as proposed, except for the proposed refinement to the dye sublimation printer.

As discussed in the potentially misvalued services section of this final rule (section II.E), we have received conflicting information about the direct PE inputs for CPT codes 88184 (Flow cytometry, cell surface, cytoplasmic, or nuclear marker, technical component only; first marker) and 88185 (Flow cytometry, cell surface, cytoplasmic, or nuclear marker, technical component only; each additional marker). Therefore, in the CY 2018 PFS proposed rule, we proposed these codes as potentially misvalued so that they can be reviewed again because some stakeholders have suggested the clinical labor and supplies that were previously finalized are no longer accurate. In response to the CY 2018 PFS proposed rule, several commenters urged CMS to use the RUC's recommendations for CY 2017 in developing final PE RVUs for these services instead of recommending additional review under the misvalued code initiative. Based on this suggestion from the commenters, which appears to reflect a broad consensus, we have re-examined the CY 2017 RUC-recommended direct PE inputs for these services, in light of the specific comments. In the paragraphs below, we summarize the direct PE inputs that we are changing based on these comments.

Comment: Several commenters urged CMS to use the RUC-recommended 15 minutes for the clinical labor activity “Instrument start-up, quality control functions, calibration, centrifugation, maintaining specimen tracking, logs and labeling.” from CY 2017 for this clinical labor activity. Commenters stated that the CMS comparison to CPT code 88182 was not appropriate, as that code uses older/simpler technology, and that the more robust testing described in these codes requires a higher level of skill, experience, and continuing education in the laboratory staff than in CPT code 88182.

Response: After reviewing this additional information, we agree with the commenters that 15 minutes would be typical for this task. We are finalizing a clinical labor time of 15 minutes for the “Instrument start-up, quality control functions . . .” clinical labor activity for CPT code 88184.

Comment: Several commenters stated that the RUC-recommended time of 10 minutes for “Load specimen into flow cytometer, run specimen, monitor data acquisition, and data modeling, and unload flow cytometer” activity for CPT code 88184 reflects the typical case. Commenters stated that the time it takes for data capture, data modeling, data acquisition, and computational analysis is significantly longer for CPT code 88184 than for CPT code 88182, since additional colors result in more complicated profiles which are more difficult and time consuming to evaluate.

Response: After reviewing this additional information, we agree with the commenters that 10 minutes would be typical for this task. We were persuaded by the additional information that the commenters supplied regarding the need for extra clinical labor time in CPT code 88184 as compared to CPT code 88182 due to the additional colors used in flow cytometry. Therefore, we are finalizing a clinical labor time of 10 minutes for the “Load specimen into flow cytometer . . .” clinical labor activity for CPT code 88184.

Comment: Several commenters objected to the finalized supply quantity of 1 for the flow cytometry antibody (SL186) in CPT codes 88184 and 88185. Commenters stated that although it is standard practice to use a single antibody multiple times during the analysis, each antibody or marker can only be billed once per analysis. According to commenters, multiple uses of such antibodies are not reportable or billable, but are critical to the overall analysis and interpretation of results and are part of the total cost for each procedure performed. A commenter stated that for a typical immunophenotyping panel, it takes 38 units of different antibody reagents to identify 24 distinct cell surface markers across 10-12 separately analyzed tubes, and therefore a ratio of 1.6 units of antibody reagent for each reportable and billable surface marker is required, not Start Printed Page 53060the 1:1 ratio in the finalized CY 2017 values. All of the commenters requested using the CY 2017 RUC recommendation of 1.6 supply quantity for this input.

Response: We appreciate the additional information supplied by the commenters regarding the flow cytometry antibody (SL186) in CPT codes 88184 and 88185, and in particular the extensive data provided to explain why the supply quantity of 1.6 would be typical for these procedures. After reviewing this additional information, we agree with the commenters and we are finalizing a supply quantity of 1.6 for the flow cytometry antibody in these two CPT codes.

Comment: Several commenters disagreed with the finalized equipment time for the dye sublimation printer (ED031). One commenter stated that printing is not performed all at one time, with 25-30 pages of information and data printed over a 5-minute time span. One commenter indicated that this time cannot be linked directly to one particular clinical labor task line, and the printer cannot be used for any other task during these 5 minutes even while it is not actively printing, and urged CMS to adopt the RUC-recommended 5 minutes of equipment time. Another commenter stated that this process takes usually 10 minutes for their most technically advanced personnel.

Response: We note that in the CY 2017 PFS final rule, due to the presentation of new information detailing how the equipment time for the printer was disassociated from any clinical labor tasks, we increased the finalized equipment time to the RUC-recommended 5 minutes for CPT code 88184 and 2 minutes for CPT code 88185. Regarding the request to increase the equipment time for the dye sublimation printer to 10 minutes, we have no data to indicate that this amount of equipment time would be typical. The information that we received from commenters during the CY 2017 rule cycle, which was again echoed by additional commenters in this rule cycle, indicated that 5 minutes was the typical length of time required to print the 25-30 pages of materials used in this service. The commenter who disagreed and suggested 10 minutes of equipment time included time for the pathologist to review the printed materials, and we do not agree that the printer would typically need to remain in use while the pathologist conducted this review. We continue to believe that the RUC-recommended equipment times for the dye sublimation printer would be typical for these services.

After consideration of the comments received as part of the CY 2018 rule cycle, we are updating the direct PE inputs finalized in CY 2017 for CPT codes 88184 and 88185 with the changes detailed above.

(38) Pathology Consultation During Surgery (CPT Codes 88333 and 88334)

CPT codes 88333 and 88334 were surveyed for both work and PE for the CY 2018 rule cycle. We proposed the RUC-recommended work RVU of 1.20 for CPT code 88333 and the RUC-recommended work RVU of 0.73 for CPT code 88334. For the direct PE inputs, we proposed to remove the clinical labor for the “Prepare room. Filter and replenish stains and supplies (including setting up grossing station with colored stains)” activity from CPT code 88333. This clinical labor is not currently included in the direct PE inputs for CPT code 88333, and we believed that this is a form of indirect PE that is not individually allocable to a particular patient for a particular service. While we agreed that replenishing stains and supplies is a necessary task, under the established methodology, we believed that it is more appropriately classified as indirect PE.

We proposed to refine the clinical labor time for “Clean room/equipment following procedure” activity for CPT code 88333, consistent with the standard clinical labor time assigned for room cleaning when used by laboratory services. We sought comments related to the equipment time assigned to the “grossing station w-heavy duty disposal” (EP015) for CPT codes 88333 and 88334. Although the recommended equipment time of 10 minutes maintains the current equipment time assigned to the grossing station, and we had no reason to believe that this time is incorrect, it was unclear to us how this equipment time was derived.

Comment: Several commenters stated that the RUC recommended that CPT code 88334 should have a ZZZ global period rather than a XXX global period because it is an add-on code and does not include any preservice or postservice work time. These commenters requested the assignment of a ZZZ global period for CPT code 88334.

Response: We appreciate the identification of this issue with the global period for CPT code 88334 from the commenters. Due to a technical error, a global period of XXX was incorrectly assigned to this code in the proposed rule. We are finalizing a global period of ZZZ for CPT code 88334 as the RUC recommended.

Comment: Several commenters disagreed with the proposal to remove the clinical labor for the “Prepare room. Filter and replenish stains and supplies (including setting up grossing station with colored stains)” activity from CPT code 88333. One commenter stated that this was not a form of indirect PE as the clinical labor task was attributable to a specific patient and constituted a necessary function of directly providing patients with important lab services. Another commenter stated that this was not a form of indirect PE because it was akin to a number of recognized direct PE activity codes such as Prepare room, equipment and supplies (CA013) and Provide education/obtain consent (CA011). The commenter stated that to classify these PE activities as indirect expenses would be unintentionally biased against pathology and laboratory services, due to their unique status as a medical specialty in which many procedures can be performed in batches, serving multiple patients simultaneously.

Response: We continue to believe that many of the activities described by the clinical labor task “Prepare room. Filter and replenish stains and supplies (including setting up grossing station with colored stains)” constitute forms of indirect PE. The fact that many clinical labor tasks associated with pathology and laboratory services cannot be allocated to individual patients is the reason why they are classified as indirect PE under our methodology. While some of these issues may be unique to pathology and laboratory services, in many other non-lab cases there are also supplies or clinical labor tasks that are not allocable to individual services that we have assigned to indirect PE. However, we agree with the commenters that some of the clinical labor described in this task is analogous to the clinical labor described in non-laboratory direct PE activity codes such as Prepare room, equipment and supplies (CA013). Since 2 minutes is the standard time allocated for the CA013 clinical labor activity code in non-laboratory services, we will assign 2 minutes for room preparation and equipment setup for CPT code 88333. We continue to believe that the replenishing of stains and supplies constitutes a form of indirect PE, and we do not agree that clinical labor time should be allocated for this task.

Comment: Several commenters disagreed with the proposal to refine the clinical labor time for “Clean room/equipment following procedure” activity for CPT code 88333 from 5 Start Printed Page 53061minutes to 1 minute, consistent with the standard clinical labor time assigned for room cleaning when used by laboratory services. Commenters stated that they were aware of the existence of this specific standard, but indicated that they looked to the typical patient scenario as well as similar services to arrive at a time estimate. The recommended time of 5 minutes included tasks performed when the add-on CPT code 88334 was also provided.

Response: We continue to believe that the standard clinical labor time of 1 minute for room and equipment cleaning in laboratory services should be applied to CPT code 88333, as the commenters did not supply a rationale as to why this time would not be typical. The RUC's recommendations for this clinical labor task stated that cleaning the grossing area was attributable to the first code only (CPT code 88333), and if there is additional clinical labor required when CPT code 88334 is performed, we believe that it should be included in the direct PE inputs for that service.

Comment: Several commenters responded to CMS' request for information regarding the derivation of the recommended equipment time for the “grossing station w-heavy duty disposal” (EP015). Commenters stated that the time assigned to the EP015 grossing station w-heavy duty disposal is derived from a combination of the total clinical labor time for the service and the physician time of reviewing the patient case at the same grossing station.

Response: We appreciate the additional information from the commenters regarding the equipment time. As we stated in the proposed rule, we have no reason to believe that the recommended equipment time is incorrect, it was simply unclear to us how this equipment time was derived.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs and direct PE inputs for the codes in the pathology consultation during surgery family as proposed, with the exception of the refinement to the “Prepare room. Filter and replenish stains and supplies (including setting up grossing station with colored stains)” clinical labor time as detailed above. We are also finalizing an add-on global period (ZZZ) for CPT code 88334 as the RUC recommended.

(39) Radiation Therapy Planning (CPT Codes 77261, 77262, and 77263)

CPT code 77263 was identified through a screen of high expenditure services across specialties. CPT codes 77261 and 77262 were included for review. For CY 2018, we proposed the RUC-recommended work RVUs of 1.30 for CPT code 77261, 2.00 for CPT code 77262, and 3.14 for CPT code 77263. However, we stated that we had concerns regarding the RUC-recommended work RVUs given the decreases in service times as recommended by the RUC and reflected in the survey data compared to the current values. For CPT code 77263, we considered a work RVU of 2.60 based on a crosswalk to CPT code 96111 (Developmental testing, (includes assessment of motor, language, social, adaptive, and/or cognitive functioning by standardized developmental instruments) with interpretation and report), which has an identical intraservice time, and similar total time to the RUC-recommended time values for CPT code 77263. We expressed concern that despite a 15 minute decrease in intraservice time, the RUC did not recommend a work RVU decrease. We noted that the majority of the utilization among the codes in this family would be reported with CPT code 77263. Therefore, we considered using a work RVU of 2.60 for CPT code 77263 as a base for alternative valuations for CPT codes 77261 and 77262 by applying the ratio of the crosswalk work RVU of CPT code 96111 (Developmental test extend) to the RUC-recommended work RVU of CPT code 77263 (that is, 2.60/3.14 = 0.83) to the RUC-recommended work RVU for CPT code 77261 (that is, 0.83 × 1.30 = 1.08) and CPT code 77262 (that is, 0.83 × 2.0 = 1.66), which would have resulted in work RVUs of 1.08 for CPT code 77261 and 1.66 for CPT code 77262. We sought comments on whether the alternative valuation would be more appropriate for these codes.

Comment: Some commenters disagreed with our considered alternative values, and urged us to adopt the RUC-recommendations as proposed.

Response: We appreciate the feedback from commenters on our proposal and our alternative values.

After consideration of the comments, we are finalizing the RUC-recommended work RVUs as proposed.

(40) Tumor Immunohistochemistry (CPT Codes 88360 and 88361)

CPT codes 88360 and 88361 appeared on a high expenditure services screen across specialties with Medicare allowed charges of over $10 million. We proposed the RUC-recommended work RVU of 0.85 for CPT code 88360 and the RUC-recommended work RVU of 0.95 for CPT code 88361.

We proposed to refine the clinical labor time for the “Enter patient data, computational prep for antibody testing, generate and apply bar codes to slides, and enter data for automated slide stainer” activity for both codes, consistent with the standard time for this clinical labor activity across different pathology services. For CPT code 88361, we also proposed to remove the 1 minute of clinical labor time from the “Performing instrument calibration, instrument qc and start up and shutdown” and the “Gate areas to be counted by the machine” activities. These clinical labor activities do not appear in other recently reviewed computer-assisted pathology codes. We believe that these clinical labor activities would not be typical for CPT code 88361 and are already included in the allocation of indirect PE, consistent with our established methodology.

We proposed to remove the clinical labor time for “Clean room/equipment following procedure” for CPT codes 88360 and 88361, as we believed that this clinical labor is duplicative of the 4 minutes of clinical labor assigned to “Clean equipment and work station in histology lab”. We also proposed to remove the clinical labor time for the “Verify results and complete work load recording logs” and the “Recycle xylene from tissue processor and stainer” activities for CPT codes 88360 and 88361. As we stated in previous rules, such as in the CY 2017 PFS final rule (81 FR 80319), we believed these clinical labor activities were already included in the allocation of indirect PE, consistent with our established methodology.

We proposed to refine the equipment time for the “Benchmark ULTRA auto slide prep & E-Bar Label system” (EP112) from 18 minutes to 16 minutes for both codes. The RUC-recommended equipment time of 18 minutes was an increase of 3 minutes from the current EP112 equipment time to incorporate the equipment time of the “E-Bar II Barcode Slide Label System” (EP113), which the recommended materials have clarified is part of the EP112 equipment item. We proposed to add 1 minute over the current value of 15 minutes to the EP112 equipment time to reach the aforementioned 16 minutes, as we believed that this would be more typical for the slide labeling taking place.

For CPT code 88361, we proposed to maintain the current price of $195,000.00 for the DNA image analyzer (EP001) equipment, as the submitted invoice contained a series of unrelated items that have been crossed out, making it difficult to determine the cost of the equipment. We considered refining the equipment time for the DNA image analyzer from 30 minutes to 5 minutes. The equipment literature for Start Printed Page 53062the DNA image analyzer states that the machine can run 50 slides per hour, and CPT code 88361 only requires 3 slides per procedure. This works out to 3.6 minutes of equipment usage (3 slides divided by 50 slides per hour multiplied by 60 minutes in an hour), to which we considered adding 1 minute for preparing the slides. The resulting figure of 4.6 minutes would then round up to 5 minutes, which we considered as the potential equipment time for EP001 assigned to CPT code 88361. We sought comments on additional pricing information for the EP001 DNA image analyzer equipment, specifically, invoices solely for this equipment containing a rationale for each component part, as well as the appropriate equipment time typically required for use in CPT code 88361.

Comment: Several commenters disagreed with our proposal to refine the clinical labor time for the “Enter patient data, computational prep for antibody testing, generate and apply bar codes to slides, and enter data for automated slide stainer” activity for both codes from 5 minutes to 1 minute. One commenter stated that this clinical labor task was unique to immunohistochemistry services and was significantly more complicated than performance of a hematoxylin and eosin stained section in the traditional histology laboratory. Another commenter stated that CMS did not finalize a standardized time for this particular clinical labor activity in the CY 2017 PFS final rule, and expressed concern with the reliance on standardized pathology clinical labor tasks and times. The commenter stated that it would be inappropriate to finalize this particular refinement since there had not been an opportunity for stakeholders to comment on the establishment of this standard.

Response: As we stated in the CY 2017 PFS final rule (81 FR 80324), we agree with the commenters that entering patient data into information systems is an important task, and we agree that it would take more than zero minutes to perform. However, we continue to believe that this is correctly categorized as indirect PE, and therefore, we do not recognize the entry of patient data as a direct PE input, and we do not consider this task as typically performed by clinical labor on a per-service basis.

We also agree with the commenter that we did not finalize a standard clinical labor time for this particular clinical labor task. However, we believe that the clinical labor described here under “generate and apply bar codes to slides” is broadly analogous to the clinical labor task “Complete workload recording logs. Collate slides and paperwork. Deliver to pathologist” in CPT codes 88321, 88323, and 88325, which were addressed in the CY 2017 PFS final rule (81 FR 80325-80326) and were finalized with 1 minute of clinical labor time. Although we agree that the unique nature of pathology and laboratory services can make comparisons across codes more difficult than in other services, we believe the comparison of similar clinical labor activities across different services is important to maintaining the relativity of the direct PE inputs. Since we have typically allocated 1 minute to the labeling of slides in other recently reviewed laboratory services, and we have no reason to believe that CPT codes 88360 and 88361 would not be typical, we are finalizing a clinical labor time of 1 minute for this activity.

Comment: Several commenters disagreed with the proposal to remove the 1 minute of clinical labor time from the “Performing instrument calibration, instrument qc and start up and shutdown” and the “Gate areas to be counted by the machine” activities from CPT code 88361. Commenters stated that the fact that these activities do not appear in other recently reviewed pathology CPT codes should have no bearing on CPT code 88361, as not all pathology services are identical in terms of the individual components involved in their execution and many are unique. Commenters stated that accurate calibration and quality control are key to accurately measuring the cells and this clinical labor should be recognized.

Response: We agree with the commenter that there are distinctions between individual services, and that no two services are identical. We also believe that comparisons across similar services have an important role in allowing for greater transparency and consistency, as well as maintaining the relativity of the direct PE inputs. We are concerned that too much individual accounting of clinical labor activities, such as with these two tasks, can lead to PE proliferation, and that this breakout of activities into numerous subactivities generally tends to inflate the total time assigned to clinical labor activities and results in values that are not consistent with the analogous times for other PFS services. The fact that these clinical labor activities do not appear in other recently reviewed computer-assisted pathology codes is noteworthy since it suggests that these tasks were previously subsumed under other clinical labor activities, rather than being broken out into individual clinical labor tasks. Instead of listing “Performing instrument calibration, instrument qc and start up and shutdown” and “Load slides on automatic image analyzer” as separate clinical labor tasks, we believe that these activities have historically been grouped together under more general headings related to preparation. In other words, we believe that the additional recommended clinical labor time in this case derives from the separate listing of these activities as individual tasks rather than representing a change in practice patterns. We also continue to believe that these clinical labor activities would not be typical for CPT code 88361 and are already included in the allocation of indirect PE, consistent with our established methodology.

Comment: Several commenters disagreed with our proposal to remove the clinical labor time for “Clean room/equipment following procedure” for CPT codes 88360 and 88361. Commenters stated that the histology laboratory prepares the tissue for sectioning by embedding the tissue into blocks while the immunohistochemistry laboratory is typically in a separate and distinct work area. Since these procedures require both of these work areas to be cleaned, the commenters requested the restoration of this clinical labor time.

Response: After reviewing this new information, we agree with the commenters that this clinical labor is not duplicative of the 4 minutes of clinical labor assigned to “Clean equipment and work station in histology lab”. We are finalizing the restoration of this 1 minute of clinical labor time, as recommended.

Comment: Several commenters disagreed with the proposal to remove the clinical labor time for the “Verify results and complete work load recording logs” and the “Recycle xylene from tissue processor and stainer” activities for CPT codes 88360 and 88361. Commenters stated that the time associated with these tasks was a direct expense, not an indirect cost input, and was allocable to a specific patient. One commenter indicated that 1 minute was necessary for these tasks in these services. Another commenter stated that while completion of the work load reporting logs might be an indirect expense, the quality control of results is performed for each and every case, and it should be reported separately as a direct expense.

Response: We appreciate the support from the commenter who agreed that completion of work load recording logs was a form of indirect PE. We continue to believe that both of these clinical labor activities are already included in the allocation of indirect PE consistent Start Printed Page 53063with our established methodology. Other non-laboratory services conduct similar administrative activities, such as filling out electronic health records and recycling supplies, without receiving clinical labor time for individual services.

Comment: Several commenters disagreed with the proposal to refine the equipment time for the “Benchmark ULTRA auto slide prep & E-Bar Label system” (EP112) from 18 minutes to 16 minutes for both codes. Commenters stated that this appeared to be an arithmetic error made when equipment items EP112 and EP113 were combined, and that there was a need to add back minutes that had been removed when EP113 was deleted. The commenters urged CMS to adopt the RUC-recommended EP112 for CPT codes 88360 and 88361, along with CPT codes 88341, 88342, and 88344.

Response: Our proposed value of 16 minutes was not based on an arithmetic error, as we proposed to add 1 minute over the current value of 15 minutes to the EP112 equipment time because we believed that 1 minute would be more typical than 3 minutes for the slide labeling taking place in CPT codes 88360 and 88361. However, after consideration of the additional evidence supplied by the commenters, we agree that there should be 3 additional minutes of EP112 equipment time in these codes as recommended. We were persuaded by the commenters that slide labeling would indeed take the full 3 minutes of additional time previously assigned to EP113, rather than the 1 minute that we proposed to assign for this task. We are finalizing this change to the equipment time for CPT codes 88360 and 88361, along with a correction to the total equipment time reclassified as EP112 for the other three codes mentioned by commenters, as described in Table 11.

Table 11—Benchmark ULTRA Auto Slide Prep & E-Bar Label System (EP112) Equipment Time

CPT codeCurrent EP112 minutesCurrent EP113 minutesTotal equipment time reclassified as EP112
8834115116
8834215318
8834430333
8836015318
8836115318

Comment: Several commenters disagreed with the alternative proposal to refine the equipment time for the DNA image analyzer (EP001) from 30 minutes to 5 minutes. Commenters stated that although the product literature provides information for 20x and 40x (50 slides/hr.) however, this is just the initial step in the analytical process of obtaining an image of the tissue stained for the appropriate antigen. The commenters stated that it was the additional steps of analysis that resulted in the RUC recommending 30 minutes of equipment time, and listed a series of tasks performed by the histotechnologist involving the EP001 equipment. Commenters stated that 30 minutes of equipment time is appropriate for the DNA image analyzer. Commenters also supplied new invoices to address CMS' concerns with the pricing of the EP001 equipment, and requested a name change from “DNA image analyzer” to “DNA/digital image analyzer.”

Response: We appreciate the additional information supplied by the commenters regarding the use of the EP001 equipment.

After consideration of the comments, we are finalizing our proposed equipment time of 30 minutes instead of the alternative equipment time. We are finalizing a price of $248,946.30 for this equipment, based on the submitted price of $258,042.30 minus the price of the user training ($6,800.00), the instructor-led online training ($646.00) and the shipping and handling costs ($1,650.00). These costs are allocated through the indirect allocation under the established PE methodology. We are also finalizing the name change to the EP001 equipment, as requested by the commenters.

Comment: One commenter recommended a series of clinical labor times that were higher than the RUC's recommendations. The commenter stated that these were the average times required to perform the clinical labor tasks based on their internal time studies.

Response: We are supportive of the submission of additional data that can aid in the process of determining the resources that are typically used to furnish these services. However, because we did not receive data on these specific time studies from the commenter to support these increases above the RUC recommendations, we are not incorporating these changes to clinical labor into the tumor immunohistochemistry codes at this time. We urge interested stakeholders to consider submitting robust data for these and other services.

After consideration of comments received, for CY 2018, we are finalizing the work RVUs for the codes in the tumor immunohistochemistry family as proposed. We are finalizing the direct PE inputs for these codes, as proposed, along with the refinements detailed above in response to the comments.

(41) Cardiac Electrophysiology Device Monitoring Services (CPT Codes 93279, 93281, 93282, 93283, 93284, 93285, 93286, 93287, 93288, 93289, 93290, 93291, 93292, 93293, 93294, 93295, 93296, 93297, 93298, and 93299)

As part of the CY 2016 PFS final rule with comment period (80 FR 70914), several services in this family (reported with CPT codes 93288, 93293, 93294, 93295, and 93296) were identified as potentially misvalued through the high expenditure by specialty screen. Seven of the 21 services in this family involve remote monitoring of cardiovascular devices, and two of these services (reported with CPT codes 93296 and 93299) are valued for PE only. In the CY 2018 PFS proposed rule, we proposed the RUC-recommended work RVUs for the 19 CPT codes in this family that are valued with physician work as follows: 0.65 for CPT code 93279, 0.77 for CPT code 93280, 0.85 for CPT code 93281, 0.85 for CPT code 93282, 1.15 for CPT code 93283, 1.25 for CPT code 93284, 0.52 for CPT code 93285, 0.30 for CPT code 93286, 0.45 for CPT code 93287, 0.43 for CPT code 93288, 0.75 for CPT code 93289, 0.43 for CPT code 93290, 0.37 for CPT code 93291, 0.43 for CPT code 93292, 0.31 for CPT code 93293, 0.60 for CPT code 93294, 0.74 for CPT code 93295, 0.52 for CPT code 93297, and 0.52 for CPT code 93298.

For CPT code 93293, we considered a work RVU of 0.91 (25th percentile survey result) and sought comment on Start Printed Page 53064whether this alternative work RVU would better maintain relativity between single and dual lead pacemaker systems and cardioverter defibrillator services. We considered reducing the work RVU for CPT code 93282 by 0.11 work RVUs and sought comments on whether this alternative value would better reflect relativity between the single and dual lead systems that exist within pacemaker services and within cardioverter defibrillator services. We also noted that there is a difference of 0.10 work RVUs between the RUC-recommended values for CPT codes 93289 and 93282. Therefore, we considered a proportionate reduction for CPT code 93289 to a work RVU of 0.69. For CPT code 93283, we considered a work RVU of 0.91, consistent with the 25th percentile from the survey results, and sought comment on whether this value would improve relativity.

As noted in this section of the final rule, several of the CPT codes (99392, 99294, 99295, 99297, and 99298) reviewed by the RUC in January 2017 involve remote monitoring services for cardiac devices. We agreed with the RUC that these services are difficult to value considering that the monitoring duration (number of days between 30 and 90) and the average number of transmissions vary. We also noted that these codes were surveyed twice, and in both cases the intraservice and total times were considered by the specialty societies to be inconsistent with existing times. The RUC explained that it extrapolated total and intraservice time data for these codes and warned against making comparisons. Without additional information about the methods and sources used for extrapolation, however, we had no basis for assuming the imputed values are of higher quality and/or accuracy than those from the survey. We did not agree, therefore, that survey results should not be used as a point of comparison in the context of other factors, particularly when they are used to support other considerations.

Although we proposed the RUC-recommended work RVUs for each of these CPT codes, we considered alternative values. The RUC recommended a work RVU of 0.31 for CPT code 93293, which is 0.01 work RVUs lower than the existing work RVU for this code. We have concerns that the amount of the reduction in the work RVU recommended by the RUC may not be consistent with the decrease in total time of 7 minutes. We considered an alternative crosswalk for CPT code 93293 (Pm phone r-strip device eval) (5 minutes intraservice time and 13 minutes total time) to CPT code 94726 (Pulm funct tst plethysmograp), which has 5 minutes intraservice time and 15 minutes total time and a work RVU of 0.26. We sought comments on our proposed and alternative valuations for this code.

For CPT code 93294, we considered a work RVU of 0.55, crosswalking from CPT code 76706 (Us abdl aorta screen aaa), and sought comments on whether it would better align with the RUC-recommended service times. We were concerned that a work RVU of 0.60 may not account for the difference between existing service times and the RUC-recommended service times. Similarly, the RUC recommended a work RVU for CPT code 93294 of 0.60, which is 0.05 work RVUs less than the existing work RVU. The total time for furnishing services reported with CPT code 93294 decreased by 10 minutes, however, and we believe this reduction in time may not be appropriately reflected by a decrease of 0.05 work RVUs. Compared to services with similar total and intraservice times, we identified CPT code 76706 (Us abdl aorta screen aaa) as a potentially more appropriate crosswalk. CPT code 76706 has identical intraservice and total service times as CPT code 93294, with a work RVU of 0.55. We sought comments on whether our alternative value would better reflect the time and intensity involved in furnishing this service.

For CPT code 93295, we considered a work RVU of 0.69, crosswalking to CPT code 76586, which has identical intraservice and total times compared to CPT code 93295. We considered using a work RVU of 0.69 to maintain the differential between CPT code 93295 and the work RVU we considered for the previous code in this family (a work RVU of 0.11 for CPT code 93295). We were concerned about the decrease in service time compared to the work RVU. We noted that the existing intraservice time is 22.5 minutes, compared to the RUC-recommended intraservice time of 10 minutes. We sought comments on whether our alternative value would better reflect the time and intensity involved in furnishing this service.

For CPT code 93298, the RUC recommended a work RVU of 0.52, which is unchanged from the current work RVU for this code. We were concerned about that recommendation given the reduction in both intraservice and total time for this service. The intraservice time decreased from 24 to 7 minutes, while total time decreased from 44 to 17 minutes. We acknowledged that the current times for this CPT code and others in this family are extrapolations. However, without additional information about the extrapolation of data from survey results, we question whether the survey results should be excluded from consideration altogether. We considered a work RVU of 0.37 for CPT code 93297, crosswalking to CPT code 96446 (Chemotx admn prtl cavity). We also considered a work RVU of 0.37 for CPT code 93298 based on a crosswalk to CPT code 96446, since the RUC indicated that the work RVUs for CPT codes 93297 and 93298 should be the same. We sought comment on our proposed valuation and whether our alternative valuation would be more appropriate for this code.

We proposed the RUC-recommended direct PE inputs with the following refinements. We proposed to remove 2 minutes for “review charts” from CPT codes 93279, 93281, 93282, 93283, 93284, 93285, 93286, 93287, 93288, 93289, 93290, 93291, and 93292 to maintain relativity since it is not typically incorporated for similar PFS codes. We also proposed removing 2 minutes for “complete diagnostic forms, lab & X-ray requisitions” for the labor category “med tech/asst” (L026A) for these services because we believe the same activity is being performed by labor category RN/LPN/MTA (L037D). We sought comments regarding whether this row was included in error. For the same group of CPT codes, we also proposed standard refinements for the time for equipment items EF023 and EQ198.

We proposed to use the RUC-recommended direct PE inputs and times for all other CPT codes in this family (CPT codes 93293, 93294, 93295, 93296, 93297, 93298, and 93299) without refinement.

Comment: We received several comments requesting that CMS retain the contractor priced status of the PE-only CPT code 93299. In general, commenters opposed to the change were concerned that the amount of payment proposed for this code was too low to adequately reimburse practitioners.

Response: After reviewing the range of current prices established by MACs, we agree with concerns that the proposed rate of 0.77 RVUs corresponds to a low reimbursement relative to the range of payments across localities and states. We concur that there is no need, at this time, to establish a national rate, and we defer to individual MACs to set a reimbursement rate for this CPT code that reflects local populations, supply costs, and practice patterns. For these reasons, we are not finalizing our proposal with respect to CPT code 93299, and this code will remain contractor-priced.Start Printed Page 53065

Comment: We received a comment specifically regarding the proposed decrease in work RVUs for CPT code 93295 from 1.29 to 0.74. The commenter maintained that the decrease in work RVUs is inconsistent with the time requirements and focus on patient care required for ongoing review of monitoring reports over a 90-day period. The commenter further noted that the reduction in work RVUs for this code is inconsistent with a shift in paradigm from an office-based patient care model to comprehensive care.

Response: We appreciate the commenters' concerns about the RUC-recommended decrease in work RVUs for this code. However, we note that the survey conducted by the specialty societies as part of the RUC process describes a time period of up to 90 days for this code. For this code, as with many others, these surveys are the best data we have about the time and intensity of work for a particular CPT code, as well as the labor time, supplies, and equipment required in furnishing the service. After consideration of the public comments, we are finalizing a work RVU of 0.74 for CPT code 93295, as proposed. We are also finalizing work RVUs for the remainder of the CPT codes in this family as proposed.

(42) Transthoracic Echocardiography (TTE) (CPT Codes 93306, 93307, and 93308)

In the CY 2016 PFS final rule with comment period (80 FR 70914), CMS identified CPT code 93306 through the high expenditures screen. Subsequently, the RUC reviewed CPT codes 93307 and 93308, in addition to CPT code 93306, as part of this family of codes that describe transthoracic echocardiograms. In the CY 2018 PFS proposed rule, we proposed the RUC-recommended work RVUs for CPT codes 93306 (a work RVU of 1.50), 93307 (a work RVU of 0.92), and 93308 (a work RVU of 0.53), and proposed the RUC-recommended direct PE inputs for CPT codes 93306, 93307, and 93308 without refinement.

For CPT code 93306 (Echocardiography, transthoracic, real-time with image documentation (2D), includes M-mode recording, when performed, complete, with spectral Doppler echocardiography, and with color flow Doppler echocardiography), we considered maintaining the CY 2017 work RVU of 1.30. The surveyed total time for this code dropped slightly due to changes in the immediate postservice time. The median preservice and intraservice time remained unchanged.

For CPT code 93307 (Echocardiography, transthoracic, real-time with image documentation (2D), includes M-mode recording, when performed, complete, without spectral or color Doppler echocardiography), we considered a work RVU of 0.80, crosswalking to services with similar service times (CPT codes 93880 (Duplex scan of Extracranial arteries; complete bilateral study), 93925 (Duplex scan of lower extremity arteries or arterial bypass grafts; complete bilateral study), 93930 (Duplex scan of upper extremity arteries or arterial bypass grafts; complete bilateral study), 93976 (Duplex scan of arterial inflow and venous outflow of abdominal, pelvic, scrotal contents and/or retroperitoneal organs; limited study), and 93978 (Duplex scan of aorta, inferior vena cava, iliac vasculature or bypass grafts; complete study)). The surveyed total time dropped 3 minutes (from the intraservice time) compared to the existing service times for this code.

For CPT code 93308 (Echocardiography, transthoracic, real-time with image documentation (2D), includes M-mode recording, when performed, follow-up or limited study), we considered a work RVU of 0.43, crosswalking to CPT code 93292 (Interrogation device evaluation (in person) with analysis, review and report by a physician or other qualified health care professional, includes connection, recording and disconnection per patient encounter; wearable defibrillator system) based on similar service times. The surveyed total time dropped by 5 minutes (from the intraservice time) compared to the existing service times for this code.

For CY 2018, we proposed the RUC-recommended work RVUs for CPT codes 93306, 93307, and 93308 and sought comments on whether our alternative values would have better reflected the time and intensity of these services.

Comment: A few commenters addressed the codes in this family including the RUC. Commenters expressed support for CMS' proposed values.

Response: We appreciate the commenter's support.

After consideration of the comments received that specifically addressed this code family, for CY 2018, we are finalizing a work RVU of 1.50 for CPT code 93306, a work RVU of 0.92 for CPT code 93307, and a work RVU of 0.53 for CPT code 93308, as proposed. We are also finalizing the proposed direct PE inputs without refinement for all codes in this family.

(43) Stress Transthoracic Echocardiography (TTE) Complete (CPT Codes 93350 and 93351)

CPT code 93351 was identified as potentially misvalued and the RUC reviewed CPT code 93350 as part of the same code family. In the CY 2018 PFS proposed rule, we proposed the RUC-recommended work RVUs for CPT codes 93350 (a work RVU of 1.46) and 93351 (a work RVU of 1.75).

We proposed the following refinements to the RUC-recommended direct PE inputs for CPT codes 93350 and 93351. For both codes, we applied the standard formula in developing the minutes for equipment item ED053 (professional PACS workstation), which results in 18 minutes for CPT code 93350 and 25 minutes for CPT code 93351. We also proposed standard clinical labor times for providing preservice education/obtaining consent. We did not propose to include clinical labor time for the task setup scope since there is no scope used in the procedure and we did not agree with the RUC's statement that this replicates 5 minutes in CPT code 93015 when the RN prepares patients for 10-lead ECG. We found that there was no corresponding time of 5 minutes for setup scope in the PE inputs for CPT code 93015. We proposed refinements to the equipment time for ED050 (PACS workstation proxy) for CPT code 93351, consistent with our standard equipment times for PACS Workstation Proxy.

Comment: Commenters generally supported our proposed work RVUs for CPT codes 93350 and 93351, which are remaining unchanged from CY 2017.

Response: We appreciate the feedback from stakeholders and we are finalizing work RVUs for these two codes, as proposed.

Comment: Several commenters, including the RUC, disagreed with our proposed refinements to PE inputs, particularly with regard to changes in the equipment time to conform to established policies for non-highly technical equipment and PACS workstations.

Response: We note that these refinements are in accordance with the standards and formulas for equipment related to direct PE inputs as described in the CY 2015 PFS final rule with comment period (79 FR 67557). Therefore, we are finalizing the PE inputs and refinements for CPT 93350 and 93351 as proposed.

(44) Peripheral Artery Disease (PAD) Rehabilitation (CPT Code 93668)

We have issued a national coverage determination (NCD) for Medicare Start Printed Page 53066coverage of supervised exercise therapy (SET) for the treatment of peripheral artery disease (PAD). Information regarding the NCD can be found on the CMS Web site at https://www.cms.gov/​medicare-coverage-database/​details/​nca-decision-memo.aspx?​NCAId=​287. CPT code 93668, currently assigned PROCSTAT N (noncovered service by Medicare), will be payable before the end of CY 2017, retroactive to the effective date of the NCD to implement payment under the NCD.

For CY 2018, we proposed to make payment for Medicare-covered SET for the treatment of PAD, consistent with the NCD, reported with CPT code 93668. For CPT code 93668, we proposed to use the most recent RUC-recommended work and direct PE inputs. We are also sought comment on the coding structure and valuation assumptions. Since the RUC has not reviewed CPT code 93668 since 2001, we sought comments on the direct PE inputs assigned to the code, which appear in the direct PE input database. We also noted that CPT code 93668 is a PE-only code and does not include physician work.

CPT prefatory language states that CPT code 93668 may be separately reported with appropriate E/M services, including office and/or outpatient services (CPT codes 99201 through 99215), initial hospital care (CPT codes 99221 through 99223), subsequent hospital care (CPT codes 99231 through 99233), and critical care services (CPT codes 99291 through 99292). Our understanding of CPT's prefatory language is that these E/M codes may only be billed when review or exam of the patient is medically indicated and must conform to all existing E/M documentation requirements. E/M visit codes should not be billed to account for supervision of SET for the treatment of PAD by a physician or other qualified healthcare practitioner. We sought comments on whether to develop professional coding to reflect the supervision of clinical staff, and on the potential overlap with CPT code 99211 (Office or other outpatient visit for the evaluation and management of an established patient, that may not require the presence of a physician or other qualified health care professional. Usually, the presenting problem(s) are minimal. Typically, 5 minutes are spent performing or supervising these services.) and any distinctions between time spent by clinical staff for CPT code 99211 and time spent by clinical staff for CPT code 93668.

Comment: Commenters were supportive of CMS' proposal to make CPT code 93668 active for CY 2018 and payable before the end of CY 2017, retroactive to the effective date of the NCD, to facilitate separate payment for SET. The RUC responded to CMS' request for comment on the coding structure and the valuation assumptions by stating that it intends to work with the specialty societies through the CPT Editorial Panel and the RUC process to evaluate both. The RUC recommended maintaining current PE inputs until they provide recommendations for CY 2019.

Response: We will be maintaining the current PE inputs until we receive a new recommendation from the RUC.

Comment: One commenter stated that advanced practice providers, such as nurse practitioners, clinical nurse specialists, or physician assistants, should be able to refer patients for SET. This commenter noted that these practitioners are often relied up to provide referrals and education for patients.

Response: Under the conditions of the NCD, beneficiaries must have a face-to-face visit with the physician responsible for the overall PAD treatment to obtain a referral for SET.

After consideration of these public comments, we are finalizing the RUC-recommended values for CPT code 93668, as proposed.

(45) INR Monitoring (CPT Codes 93792 and 93793)

In October 2015, AMA staff assembled a list of all services with total Medicare utilization of 10,000 or more that have increased by at least 100 percent from 2008 through 2013, and these services were identified on that list. The RUC recommended that HCPCS codes G0248, G0249 and G0250, which describe related INR monitoring services, be referred to the CPT Editorial Panel to create Category I codes to describe these services.

For CY 2018, the CPT Editorial Panel is deleting CPT codes 99363 and 99364 and creating new CPT codes 93792 (Patient/caregiver training for initiation of home INR monitoring under the direction of a physician or other qualified health care professional, including face-to-face, use and care of the INR monitor, obtaining blood sample, instructions for reporting home INR test results, and documentation of patient's/caregiver's ability to perform testing and report results) and 93793 (Anticoagulant management for a patient taking warfarin, must include review and interpretation of a new home, office, or lab International Normalized Ratio (INR) test result, patient instructions, dosage adjustment (as needed), and-scheduling of additional test(s) when performed). CPT code 93792 is a technical component-only code. With the creation of CPT codes 93792 and 93793, the RUC recommended that CMS delete HCPCS codes G0248, G0249 and G0250.

For CPT code 93793, we proposed the RUC-recommended work RVU of 0.18. Because HCPCS codes G0248, G0249 and G0250 are used to report related services under a Medicare National Coverage Determination, we did not propose to delete the G-codes.

In reviewing the recommended PE inputs for these services, we obtained updated invoices for prices for particular items. We proposed to use the invoices to update the price of the supply “INR test strip” (SJ055). We obtained publically available pricing information from two vendors. The pricing from one vendor indicated the price for a box of 24 of supply item SJ055 item (INR test strip) is $150.00, which equated to a unit price of $6.25. Pricing from a second vendor indicated the price of a box of 48 of the supply item SJ055 to be $233.00, which equated to a unit price of $5.06. The average price of these two unit prices is $5.66.

Therefore, we proposed to re-price SJ055 from $21.86